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Home My WebLink AboutFY 2015 Countywide Law Enforcement District Financial Statements As of and For the Year Ended June 30, 2015 Countywide Law Enforcement District www. debaill� .com Countywide Law Enforcement District Table of Contents June 30, 2015 IndependentAuditor's Report.................................................................................................................................... 1 Management Discussion and Analysis ......................................................................................................................4 Financial Statements Statementof Net Position......................................................................................................................................9 Statementof Activities......................................................................................................................................... 10 BalanceSheet—General Fund............................................................................................................................. 11 Statement of Revenues, Expenditures and Changes in Fund Balance—General Fund....................................... 12 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities............................................................................................ 13 Notesto Financial Statements.............................................................................................................................. 14 Required Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual—General Fund....... 18 Notes to Required Supplementary Information................................................................................................... 19 Other Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual—Reserve (Sub- Fundof General Fund).........................................................................................................................................20 Combining Balance Sheet—General Fund and Reserve Sub-Fund.....................................................................21 Combining Statement of Revenues, Expenditures and Changes in Fund Balances—General Fund and ReserveSub Fund................................................................................................................................................22 Schedule of Property Tax Transactions...............................................................................................................23 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 StandaYds.................................................................................................................................................................24 Audit Comments and Disclosures Required by State Regulations..........................................................................26 Independent Auditor's Report Required by Oregon State Regulations...................................................................27 �� Eic�eBaill : ��-- Y CP�4s�.�Uti1NES5.AnVI5t�R5 Independent Auditor's Report The Deschutes County Commissioners Countywide Law Enforcement District Bend, Oregon Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities and general fund of Countywide Law Enforcement District(the District), a component unit of the Deschutes County, as of and for the year ended June 30, 2015, and the related notes to the financial statements,which collectively comprise the District's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from materia] misstatement,whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 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 inaterial misstatement of the financial statements,whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances,but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. www.eidebailly.com 1 877 W.Main St.,Ste.800 � Boise,ID 83702-5858 � T 208.344.7150 I. F 208.344.7435 � EOE Opinions In our opinion,the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and the general fund of the District, as of June 30, 2015, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and schedule of revenues, expenditures, and changes in fund balances—budget and actual—general fund(budgetary schedule), as listed in the table of contents,be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to management's discussion and analysis and the budgetary schedule in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries,the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on management's discussion and analysis or the budgetary schedule because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's basic financial statements. The budgetary schedule described above is the responsibility of management and was derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. The budgetary schedule has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the budgetary schedule is fairly stated, in all material respects, in relation to the basic financial statements as a whole. 2 Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's financial statements. The schedule of revenues, expenditures, and changes in fund balance—budget and actual—reserve, combining balance sheet and combining stateinent of revenues, expenditures and changes in fund balances for the General Fund and reserve sub-fund(combining statements) and the schedule of property tax transactions are presented for purposes of additional analysis and are not a required part of the financial statements. The schedule of revenues, expenditures, and changes in fund balance—budget and actual—reserve, combining statements and schedule of property tax transactions are the responsibility of management and were derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such inforination has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, schedule of revenues, expenditures, and changes in fund balance—budget and actual—reserve, combining statements and schedule of property tax transactions are 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 November 02, 2015 on our consideration of the District's internal control over financial reporting and on our tests of its compliance with certain provisions of laws,regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control over financial reporting and compliance. Report on Other Legal and Regulatory Requirements In accordance with the Minimum Standards ofAudits of Oregon Municipal Corporations, we have issued our report dated November 02, 2015 on our consideration of the District's compliance with certain provisions of laws and regulations,including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on coinpliance. � � For Eide Bailly LLP Boise, Idaho November 02, 2015 3 Countywide Law Enforcement District Management Discussion and Analysis June 30, 2015 As management of Countywide Law Enforcement District(the District), we offer readers of the District's financial statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended June 30, 2015. Financial Highlights • The assets of Countywide Law Enforcement District exceeded its liabilities at June 30, 2015,by $5,877,131, all of which is unrestricted. • As of June 30,2015, Countywide Law Enforcement District's governmental funds reported combined ending fund balances of$5,423,831. • As of June 30,2015, the unassigned fund balance in the General Fund was $4,793,450, or 22% of total General Fund Fiscal year 2015 revenues. Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to Countywide Law Enforcement District's basic financial statements. These basic financial statements comprise three components: 1) government-wide financial statements; 2) fund financial statements; and 3)notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of Countywide Law Enforcement District's finances, in a manner similar to a private-sector business. The Statement of Net Position presents information on all of Countywide Law Enforcement District's assets and liabilities,with the difference between the two reported as Net Position. Over time, increases or decreases in Net Position may serve as a useful indicator of whether the financial position of Countywide Law Enforcement District is improving or deteriorating. The Statement of Activities presents information showing how Countywide Law Enforcement District's Net Position changed during the fiscal year ended June 30, 2015. Changes in Net Position are reported when the underlying event giving rise to the change occurs, regardless of the timing of the related cash, or other financial assets, flows. Thus, revenues and expenses are reported in this statement for some items, for example,property taxes,that will result in cash flows in future fiscal periods. Each of these government-wide financial statements, Statement of Net Position and Statement of Activities, show the functions of Countywide Law Enforcement District that are supported primarily by taxes and intergovernmental revenues (governmental activities). The governmental activity of Countywide Law Enforcement District is public protection. The government-wide financial statements can be found on pages 9-10 of this report. 4 Countywide Law Enforcement District Management Discussion and Analysis June 30, 2015 Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. Countywide Law Enforcement District, like other state and local government entities,uses fund accounting to ensure and demonstrate compliance with finance-related legal requiretr�ents. Each of the funds of Countywide Law Enforcement District is classified as a governmental fund. Governmental funds Governmental funds are used to account for essentially the same functions as governmental activities in the government-wide financial statements. However,unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. A reconciliation from the Governmental Funds Balance Sheet to the Government-wide Statement of Net Position and a reconciliation from the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government- wide Statement of Activities have been included in this report. Countywide Law Enforcement District reported activity in one governmental fund during the fiscal year ended June 30, 2015. Information on the General Fund and Sub-Fund are shown on the Combining Balance Sheet and in the Combining Schedule of Revenues, Expenditures and Changes in Fund Balances that are presented as Other Supplementary Information. Countywide Law Enforcement District adopts an annual budget for each of its funds. A budgetary comparison statement has been provided for each of these funds to demonstrate compliance with the annual budget. The Basic Governmental Fund Financial Statements can be found on pages 11-13 of this report. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 14- 17 of this report. Government-wide Financial Analysis Net Position, at a specific point in time, serves as a useful indicator of an entity's financial position. In the case of Countywide Law Enforcement District, assets exceed liabilities by $5,877,131 at June 30, 2015. All of the Net Position may be used to meet the District's on-going obligations to citizens and creditors. As of June 30, 2015, Countywide Law Enforcement District reports a positive balance in Net Position for the government as a whole and for the governmental activities. The District's Net Position decreased by$2,255,273 during the year ended June 30, 2015. 5 Countywide Law Enforcement District Management Discussion and Analysis June 30, 2015 A comparison of the summarized government-wide statements to the prior year is as follows: Statements of Net Position June 30, 2015 June 30, 2014 Change Assets Cash and investments $ 5,204,323 $ 6,535,281 $ (1,330,958) Property taxes receivable 507,285 613,370 (106,085) Accounts receivable 198,975 164,765 34,210 Due from Deschutes County - 847,049 (847,049) Total assets 5,910,583 8,160,465 (2,249,882) Liabilities Accounts payable - 93 (93) Unearned revenue 33,452 27,968 5,484 Totalliabilities 33,452 28,061 5,391 Net Position Unrestricted 5,877,131 8,132,404 (2,255,273) Total netposition $ 5,877,131 $ 8,132,404 $ (2,255,273) Statements of Activities Year Ended Year Ended June 30, 2015 June 30, 2014 Chan�e Program revenues Charges for services $ 720,364 $ 650,119 $ 70,245 Operating grants and contributions 2,485,617 2,704,365 (218,748) General revenues Property taxes levied for general purposes 18,039,651 17,101,890 937,761 Earnings on inveshnents 67,512 56,070 11,442 Total revenues 21,3]3,144 20,512,444 800,700 Expenses Public safety 23,568,417 20,897,324 (2,671,093) Change in Net Position (2,255,273) (384,880) (1,870,393) Net Position, Beginning of Year 8,132,404 8,517,284 (384,880) Net Position, End of Year $ 5,877,131 $ 8,132,404 $ (2,255,273) 6 Countywide Law Enforcement District Management Discussion and Analysis June 30, 2015 Governmental Activities Governmental activities, the only type of activity of Countywide Law Enforcement District, decreased Net Position by $2,255,273 during the fiscal year ended June 30, 2015. The payment made to Deschutes County Sheriffs Office,pursuant to an inter-governmental agreement, exceeded tax revenues and payments received from governmental agencies. Financial Analysis of the District's Funds Countywide Law Enforcement District uses fund accounting to ensure and demonstrate compliance with finance- related legal requirements. Governmental funds The focus of Countywide Law Enforcement District's governmental funds is to provide information on near-term inflows, outflows and balances of spendable resources. Such information is useful in assessing Countywide Law Enforcement District's financing requirements. In particular,unreserved fund balance may serve as a useful measure of a government's net resources available for spending as of the end of the fiscal year. As of June 30, 2015, $5,423,831 is the reported combined ending fund balance far Countywide Law Enforcement District's governmental fund. As of June 30, 20]5,the fund balance of Countywide Law Enforcement District's General Fund is $4,793,450, all unassigned. One measure of liquidity is the relationship of both the unassigned balance to the Fund's total expenditures. The fund balance as of June 30, 2015, for the General Fund is 22%of total General Fund Fiscal Year 2015 revenues. The fund balance of the Countywide Law Enforcement District's General Fund decreased by $1,426,298 during the fiscal year ended June 30, 2015. General Fund Budgetary Highlights There were differences between the Countywide Law Enforcement District's General Fund and Sub-Fund budgets as originally adopted and the final amended budget. A loan made, in previous fiscal years, to Deschutes Counry was converted to a grant in FY 2015. As a grant is an expenditure, it was necessary to increase the appropriation in the Materials & Services category. Actual revenues exceeded estimated revenues by $1,031,808. This is due to generally conservative estimates used for the Fiscal Year 2015 budget. Property tax revenue exceeded the amount estimated by$473,213. The District contracts with Deschutes County for its operational activities. The amount paid pursuant to the contract is based on the actual cost of providing such services, $22,630,194, which is $2,577,7761ess than the amount appropriated. Capital Asset and Debt Administration Capital Assets Countywide Law Enforcement District owns no capital assets. 7 Countywide Law Enforcement District Management Discussion and Analysis June 30, 2015 Long-term Debt Countywide Law Enforcement District has no long-term debt; therefore, the District has not been separately rated by any of the bond rating agencies. Key Economic Factors and Budgets Information for the Future The tax rate approved by the voters will allow the District to build sufficient reserves to finance its operations without needing to issue tax anticipation notes. Requests for Information This financial report is designed to provide a general overview to those parties interested in Countywide Law Enforcement District's finances. Questions concerning any of the information provided in this report or requests for additional information should be addressed to Deschutes County Finance Department,PO Box 6005, Bend, Oregon, 97708. 8 Countywide Law Enforcement District Statement of Net Position June 30, 2015 Primary Government- Governmental Activities Assets Cash and investments $ 5,204,323 Property taxes receivable 507,285 Accounts receivable 198,975 Total assets 5,910,583 Liabilities Unearned revenue 33,452 Net Position Unrestricted $ 5,877,131 See Notes to Financial Statements 9 Countywide Law Enforcement District Statement of Activities Year Ended June 30, 2015 Primary Government- Governmental Activities Expenses Public safery $ 23,568,417 Program Revenues Charges for services 720,364 Operating grants and contributions 2,485,617 Total program revenues 3,205,981 Net program expenses 20,362,436 General Revenues Property taxes levied for general purposes 18,039,651 Earnings on investments 67,512 Total general revenues 18,107,163 Changes in Net Position (2,255,273) Net Position, Beginning of Year 8,132,404 Net Position, End of Year $ 5,877,131 See Notes to Financial Statements 10 Countywide Law Enforcement District Balance Sheet—General Fund June 30, 2015 Assets Cash and investments $ 5,204,323 Property taxes receivable 507,285 Accounts receivable 198,975 Total assets $ 5,910,583 Liabilities Unearned revenue $ 33,452 Total liabilities 33,452 Deferred Inflow of Resources Unavailable revenue -property taxes 453,300 Total deferred inflow of resources 453,300 Fund Balance Assigned for future expenditures 630,381 Unassigned 4,793,450 Total fund balance 5,423,831 Total Liabilities, Deferred Inflow of Resources, and Fund Balance $ 5,910,583 Fund Balance $ 5,423,831 Amounts reported for governmental activities in the Statement of Net Position are different because: Some of the District's taxes will be collected after year-end,but are not currently available resources and,therefore, are deferred in the funds. 453,300 Net Position of Governmental Activities $ 5,877,131 See Notes to Financial Statements 11 Countywide Law Enforcement District Statement of Revenues, Expenditures and Changes in Fund Balance—General Fund Year Ended June 30, 2015 Revenues Taxes and assessments $ 18,126,157 Fines, forfeitures and penalties 485,243 Interest and rents 67,512 Charges for services 188,848 Other 46,273 Intergovernmental revenues Local 98,466 State 2,377,079 Federal 10,072 Total revenues 21,399,650 Expenditures Public safety 23,568,417 Total expenditures 23,568,417 Net Change in Fund Balance (2,168,767) Fund Balance, Beginning of Year 7,592,598 Fund Balance, End of Year $ 5,423,831 See Notes to Financial Statements 12 Countywide Law Enforcement District Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of Governmental Funds to the Statement of Activities Year Ended June 30,2015 Net Change in Fund Balance -Total Governmental Fund $ (2,168,767) Amounts reported for governmental activities in the Statement of Activities are different because: Properiy tax revenue is recognized under the modified accrual basis of accounting only to the extent it has been collected within sixty days of year-end. On the accrual basis Statement of Activities, such revenue is recognized regardless of when collected. (86,506) Changes in Net Position of Governmental Activities $ (2,255,273) See Notes to Financial Statements 13 Countywide Law Enforcement District Notes to Financial Statements June 30, 2015 Note 1 - Organization and Summary of Significant Accounting Policies The District Countywide Law Enforcement District(the District), an ORS Chapter 451 municipal corporation of the State of Oregon, was approved and created by election of the Deschutes County (the County)voters on November 7, 2006, for the purpose of providing a permanent source of funding for law enforcement services that are provided to all County residents. The District entered into an intergovernmental agreement, April 16, 2007,with Deschutes County whereby the County, through the Deschutes County Sheriff's Office, is contracted to perform certain law enforceinent functions within its boundaries. The Deschutes County Board of Commissioners is the governing body of the District. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the activities of the District. Govermnental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The District has no business-type activities or fiduciary funds. The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include: 1) charges to customers who purchase,use, or directly benefit from goods, services or privileges provided by a given function or segment; and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Measurement Focus,Basis of Accounting and Financial Statement Presentation The government-wide financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. It is the District's policy to first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within sixty days of the end of the current fiscal period. Revenues received after this period are considered unavailable. Expenditures are recorded when a liability is incurred, as under accrual accounting. Property taxes associated with the current fiscal period are considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the District. As a general rule,the effect of any interfund activity has been eliminated from the government-wide financial statements. 14 Countywide Law Enforcement District Notes to Financial Statements June 30, 2015 The District reports the following governmental funds: General Fund —The General Fund is utilized to account for the transactions of the District.Property taxes and law enforcement contracts are its principal sources of revenue. Expenditures are for the operation and administration of the District. Reserve Sub-Fund—The Reserve Sub-Fund accumulates funds for acquisition of capital assets. Transfers from the Operating Sub-Fund and interest are its principal sources of revenue. Expenditures are for capital outlay of the District. Budget Policy The District meets the requirement of state law by preparing a budget for its fund and sub-fund. The budget is prepared on the modified accrual basis of accounting. The resolution authorizing appropriations for each fund sets tbe level by which expenditures cannot legally exceed appropriations. Materials & Services is the only budgetary level of control established by resolution. The detailed budget document provides specific detailed information far the above mentioned expenditure category. Unexpected additional resources may be added to the budget through the use of a supplemental budget and appropriations resolution. Original and supplemental budgets may be modified by the use of appropriation transfers between the levels of control. Appropriations lapse as of year-end. Reporting Entity The District's financial statements include the accounts of all District operations. The criteria for including organizations as component units within the Districts reporting entity, as set forth in GASB 61, The Financial Reporting Entity: Omnibus,include whether: • The organization is legally separate (can sue and be sued in its own name). • The District holds the corporate powers of the organization. • The District appoints a voting majority of the organizations' board. • The District is able to impose its will on the organization. • The organization has the potential to impose a financial benefit/burden on the District. • There is a fiscal dependency by the organization on the District. There were no specific agencies which required consideration under the criterion in the current fiscal year for inclusion in the Districts reporting entity. Under the above criterion,the District is includable as a component unit in the financial statements of Deschutes County, since the District's governing board is comprised of the Deschutes County Commissioners. 15 Countywide Law Enforcement District Notes to Financial Statements June 30, 2015 Cash and Investments Cash and investments are comprised of funds held by the Deschutes County Treasurer, in the County's cash and investment pooL The District's cash and investments participate in this pool rather than specific, identifiable securities. The District's share of County pooled cash and investments can be drawn upon demand, and therefore, the entire amount on deposit with the County is considered cash and cash equivalents. Interest earned on pooled investments is allocated monthly based on the average daily balance of the District in relation to total investments in the pool. It is not practical to determine the investment risk, collateral, or insurance coverage for the District's share of these pooled investments. This pool generally includes demand deposits, investments in the Oregon State Treasurer's Local Government Investment Pool(LGIP), obligations of the United States Treasury and United States Government agencies and instrumentalities, certain high-grade cominercial paper and corporate bonds. This policy is in accordance with ORS 294.035 which specifies the types of investments authorized for municipal corporations. State statutes authorize the County to invest in obligations of the U.S. Treasury, commercial paper, corparate bonds, municipal bonds,banker's acceptances, repurchase agreements, and the State Treasurer's Local Government Investment Pool(LGIP). Investments for the County, as well as for its component units, are reported at fair value. The LGIP operates in accordance with appropriate state laws and regulations. Information about the pooled cash and investments is included in the County's annual financial report and may be obtained by contacting the Deschutes County Finance Department, 1300 NW Wall Street, Suite 200, Bend, Oregon, 97703. Property Taxes/Unavailable Revenue Property taxes are assessed on a July 1 -June 30 fiscal year basis. The taxes are levied as of July 1 based on assessed values as of January 1. Property tax payments are due in three equal installments, on November 15, February 15 and May 15. A discount of 3%is available if taxes are paid in full by November 15 and a discount of 2% on the unpaid balance is available if taxes are paid in full by February l 5. Properiy taxes attach as an enforceable lien July 1 and are considered delinquent if not paid by the following May 15. The Deschutes County Treasurer is the tax collection agent for the District. The District's 2015 fiscal year tax levy was $18,481,804. Tax revenue is considered available for expenditure upon receipt by the County, which serves as the intermediary collecting agency. Uncollected property taxes are shown on the governmental balance sheet as receivables. Collections within sixty days subsequent to year-end have been accrued and the remaining taxes receivable are recorded as deferred revenue on the modified accrual basis of accounting since they are not deemed available to finance operations of the current period. Accounts Receivable Receivables include amounts due from other governments for grant reimbursement and services provided to other governmental agencies. All receivables are current and therefore due within one year. Allowances are reported when accounts are proven to be uncollectible. Based on historical collections, all balances are deemed collectible, therefore no allowance has been recorded as of June 30, 2015. 16 Countywide Law Enforcement District Notes to Financial Statements June 30, 2015 Fund Balances The Governmental Accounting Standards Board(GASB) Statement No. 54,Fund Balance Reporting and Governmental Fund Type Definitions (GASB 54), defines the different types of fund balances that a governmental entity must use for financial reporting purposes. GASB 54 requires the fund balance amounts to be properly reported within one of the fund balance categories listed below: 1. Nonspendable-such as fund balance associated with inventories,prepaids, long-term loans and notes receivable, and property held for resale (unless the proceeds are restricted, committed or assigned). 2. Restricted-fund balance category includes amounts that can be spent only far specific purposes stipulated by constitution, external resource providers or through enabling legislation. 3. Conunitted-fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the District's governing board(the District's highest level of decision- malcing authority). Such constraint remains legally binding unless removed in the same manner. 4. Assi�ned-fund balances classification are intended to be used by the District for specific purposes but do not meet the criteria to be classified as restricted or committed. Assignments are made by the County Administrator based on the County Commissioner's direction. 5. Unassi�ned-fund balance is the residual classification for the District's general fund and includes all spendable amounts not contained in the other classifications. The District reduces restricted amounts first when expenditures are incurred for purposes for which both restricted and unrestricted(committed, assigned or unassigned)amounts are available. The District reduces committed amounts first, followed by assigned amounts and then unassigned amounts when expenditures are incurred for the purpose for which amounts in any of those unrestricted fund balance classifications could be used. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that effect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates. Note 2 - Cash and Investments As of June 30, 2015,the District had a deposit of$5,204,323 with the Deschutes County Treasurer. All of the District's deposits were adequately insured during the year. Note 3 - Risk Management In the agreement described in Note 1, Deschutes County covenants and agrees to defend, indemnify and hold and save harmless the District and each of the District's officers, agents and employees, if any, from and against any and all claims whatsoever that might arise against the District or any of its officers, agents ar employees, if any, by reason of any alleged act or failure to act or failure of Deschutes County to act. 17 Required Supplementary Information June 30, 2015 Countywide Law Enforcement District www. debaill� .com Countywide Law Enforcement District Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual—General Fund Budgetary Basis Year Ended June 30, 2015 Budgeted Amounts Variance With Original Final Actual Final Budget Revenues Property taxes $ 17,652,944 $ 17,652,944 $ 18,126,157 $ 473,213 Fines, forfeitures and penalties 365,000 365,000 485,243 120,243 Interest and rents 40,000 40,000 62,932 22,932 Charges for services 201,900 201,900 188,848 (13,052) Other 72,100 72,100 46,273 (25,827) Intergovernmental Local 60,632 60,632 98,�466 37,834 State 1,953,266 1,953,266 2,377,079 423,813 Federal 20,000 20,000 10,072 (9,928) Total revenues 20,365,842 20,365,842 21,395,070 1,029,228 Expenditures Materials and services 25,508,019 25,287,970 22,721,368 2,566,602 Total expenditures 25,508,019 25,287,970 22,721,368 2,566,602 Other financing sources (uses) Transfers out (100,000) (100,000) (100,000) - Net Change in Fund Balance (5,242,177) (5,022,128) (1,426,298) 3,595,830 Fund Balance, Beginning of Year 5,242,177 5,242,177 6,219,748 977,571 Fund Balance, End of Year $ - $ 220,049 4,793,450 $ 4,573,401 Adjustments to generally accepted accounting principles (US GAAP)basis: Countywide Law Enforcement Reserve Fund 630,381 Fund Balance -US GAAP Basis $ 5,423,831 See Notes to Required Supplementary Information 18 Countywide Law Enforcement District Notes to Required Supplementary Information June 30, 2015 Note 1 - Adjustments from Budgetary Basis of Accounting to GAAP The District has a reserve fund maintained for budgetary purposes that does not meet the definition of Special Revenue Funds for GAAP reporting purposes. At year-end,the ending fund balance for this fund is combined with the General Fund. 19 Other Supplementary Information June 30, 2015 Countywide Law Enforcement District www. debaill� .com Countywide Law Enforcement District Schedule of Revenues, Expenditures and Changes in Fund Balance—Budget and Actual—Reserve (Sub-Fund of General Fund) Budgetary Basis Year Ended June 30,2015 Budgeted Amounts Variance With Original Final Actual Final Budget Revenues Investment earnings $ 2,000 $ 2,000 $ 4,580 $ 2,580 Total revenues 2,000 2,000 4,580 2,580 Expenditures Materials and services 100 847,049 847,049 - Capital outlay 627,000 100 - 100 Total expenditures 627,100 847,149 847,049 100 Other financing sources (uses) Appropriation transfer - 220,049 - (220,049) Transfers in 100,000 100,000 100,000 - Net Change in Fund Balance (525,100) (525,100) (742,469) (217,569) Fund Balance, Beginning of Year 525,100 525,100 1,372,850 847,750 Fund Balance, End of Year $ - $ - $ 630,381 $ 630,181 20 Countywide Law Enforcement District Combining Balance Sheet—General Fund and Reserve Sub-Fund June 30, 2015 Reserve General Fund Sub-Fund Total Assets Cash and investments $ 4,573,942 $ 630,381 $ 5,204,323 Property taxes receivable 507,285 - 507,285 Accounts receivable 198,975 - 198,975 Total assets $ 5,280,202 $ 630,381 $ 5,910,583 Liabilities Unearned revenue $ 33,452 $ - $ 33,452 Total liabilities 33,452 - 33,452 Deferred Inflow of Resources Unavailable revenue -property taxes 453,300 - 453,300 Total deferred inflow of resources 453,300 - 453,300 Fund Balance Assigned - 630,381 630,381 Unassigned 4,793,450 - 4,793,450 Total fund balances 4,793,450 630,381 5,423,831 Total Liabilities, Deferred Inflow of Resources and Fund Balances $ 5,280,202 $ 630,381 $ 5,910,583 21 Countywide Law Enforcement District Combining Statement of Revenues, Expenditures and Changes in Fund Balances—General Fund and Reserve Sub Fund Year Ended June 30, 2015 Reserve General Fund Sub-Fund Total Revenues Taxes and assessments $ 18,126,157 $ - $ 18,126,157 Fines, forfeitures and penalties 485,243 - 485,243 Interest and rents 62,932 4,580 67,512 Charges for services 188,848 - 188,848 Other 46,273 - 46,273 Intergovernmental revenues Local 98,466 - 98,466 State 2,377,079 - 2,377,079 Federal 10,072 - 10,072 Total revenues 21,395,070 4,580 21,399,650 Expenditures Public Safety 22,721,368 847,049 23,568,417 Total expenditures 22,721,368 847,049 23,568,417 Excess (Deficiency) of Revenues over Expenditures (1,326,298) (842,469) (2,168,767) Other Financing Sources (Uses) Transfers in - 100,000 100,000 Transfers out (100,000) - (100,000) Total other financing sources (uses) (100,000) 100,000 - Net Change in Fund Balances (1,426,298) (742,469) (2,168,767) Fund Balance, Beginning of Year 6,219,748 1,372,850 7,592,598 Fund Balance, End of Year $ 4,793,450 $ 630,381 $ 5,423,831 22 Countywide Law Enforcement District Schedule of Property Tax Transactions Year Ended June 30, 2015 Beginning Taxes Balance and Interest Receivable Tax Year 2014-15 Levy Adjustments (Discounts) Collections June 30, 2015 2014-2015 $ 18,481,804 $ (66,202) $ (457,271) $ 17,663,115 $ 295,216 2013-2014 339,687 (5,495) 19,457 240,560 113,089 2012-2013 147,465 (495) 19,443 106,704 59,709 zoll-zol2 sl,sa4 �si�� zo,ss� go,263 21,921 zolo-zoll z�,9o9 �z6o� 9,ozs 30,262 6,41s Prior 16,465 (604) 3,102 8,028 10,935 Totals $ 19,095,174 $ (73,573) $ (385,384) 18,128,932 $ 507,285 Land Sale Revenue 16,803 Adjustments for Accruals June 30, 2014 (73,565) June 30, 2015 53,986 Modified accrual basis tax revenue $ 18,126,156 23 �� Eic�eBaill : ��-- Y CP�4s�.�Uti1NES5.AnVI5t�R5 Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial StatemenYs Performed in Accordance with Government Aucliting Stanctards To the Deschutes County Commissioners Countywide Law Enfarcement District Bend, Oregon 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 financial statements of the governmental activities and the general fund of Countywide Law Enforcement District(the District) as of and for the year ended June 30, 2015, and the related notes to the financial statements,which collectively comprise the District's basic financial statements, and have issued our report thereon dated November 02, 2015. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the District'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 District's internal control. Accordingly,we do not express an opinion on the effectiveness of the District's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions,to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the District's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, ar a combination of deficiencies, in internal control that is less severe than a material weakness,yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this secrion and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not yet been identified. www.�idebcilly.com 24 877 W.Main St.,Ste.800 � Boise,ID 83702-5858 � T 208.344.7150 I. F 208.344.7435 � EOE Compliance and Other Matters As part of obtaining reasonable assurance about whether the District's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements,noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However,providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly,we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 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 District's internal con�rol or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing StandaYds in considering the District's internal control and compliance. Accordingly,this communication is not suitable for any other purpose. ,� G r� Boise, Idaho November 02, 2015 25 Countywide Law Enforcement District Audit Comi�nents and Disclosures Required by State Regulators June 30, 2015 Audit Comments and Disclosures Required by State Regulations Oregon Administrative Rules 162-010-0000 through 162-010-0320 of the Minimum Standards for Audits of Oregon Municipal Corporations,prescribed by the Secretary of State in cooperation with the Oregon State Board of Accountancy, enumerate the financial statements, schedules, comments, and disclosures required in audit reparts. The required statements and schedules are set forth in the preceding sections of this report. Required comments and disclosures related to the audit of such statements and schedules are set forth in the following pages. 26 �� Eic�eBaill : ��-- Y CP�4s�.�Uti1NES5.AnVI5t�R5 Independent Auditor's Report Required by Oregon State Regulations To Deschutes County Commissioners Countywide Law Enforcement District Bend, Oregon We have audited the basic financial statements of Countywide Law Enforcement District(the District) as of and for the year ended June 30, 2015, and have issued our report thereon dated November 02, 2015. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the provisions of the Minimum Standards of Audits of Oregon Municipal Corporations, prescribed by the Secretary of State. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free from material misstatement. Compliance As part of obtaining reasonable assurance about whether the District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws,regulations, contracts, and grants, including provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules 162-010-0000 through 162-010-0320, as set forth below,noncompliance with which could have a direct and material effect on the determination of financial statements amounts: Instances of Non- OAR Section Compliance Identified 162-010-0000 Preface Not Applicable 162-010-0010 Definitions Not Applicable 162-010-0020 General Requirements Nonc noted 162-010-0030 Contracts None noted 162-010-0050 Financial Statcments None noted 162-010-0115 Required Supplementary Infarmation(RSI) None noted 162-010-0120 Supplementaty Financial Information None noted 162-010-0130 Schedule of Revenues,Expenditures/Expenses, and Changes in Fund None noted Balances/Net Posirion,Budget and Actual (Each Fund) 162-010-0140 Schedule of Accountability far Independently Elected Officials Not Applicable 162-010-0150 Schedule of Property Tax Transactions or Acreage Assessments None noted 162-010-0190 Other Financial or Statistical Information Not Applicable 162-010-0200 Independent Auditor's Review of Fiscal Affairs None noted www.�idebrilly.com 27 877 W.Main St.,Ste.800 � Boise,ID 83702-5858 � T 208.344.7150 I. F 208.344.7435 � EOE Instances of Non- OAR Section Compliance Identified 162-010-0230 Accounting Records and Internal Control None noted 162-010-0240 Public Fund Deposits None noted 162-010-0250 Indebtedness Not Applicable 162-010-0260 Budget None noted 162-010-0270 Insurance and Fidelity Bonds None noted 162-010-0280 Programs Funded from Outside Sources Not Applicable 162-010-0295 Highway Funds Not Applicable 162-010-0300 Investments None noted 162-010-0310 Public Contracts and Purchasing Not Applicable 162-010-0315 State School Fund Not Applicable 162-010-0316 Public Charter Schools Not Applicable 162-010-0320 Other Comments and Disclosures Not Applicable 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 test disclosed no instances of noncompliance that are required to be reported under Minimum Standards for Audits of Oregon Municipal Corporations,prescribed by the Secretary of State. Internal Control Over Financial Reporting In planning and performing our audit, we considered the District's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the District's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course ofperforming their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A�naterial weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness,yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was far the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not yet been identified. 28 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Minimum Standards for Audits of Oregon Municipal Corporations,prescribed by the Secretary of State, in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. f � For Eide Bailly LLP Boise Idaho November 02, 2015 29