HomeMy WebLinkAboutDeschutes County Extension and 4-H 2019 Financial StatementsFinancial Statements
As of and For the Year Ended June 30, 2019
Deschutes County Extension
and 4-H County Service District
A Component Unit of Deschutes County, Oregon
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Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Table of Contents
June 30, 2019
IndependentAuditor's Report .................................................................................................................................... 1
Management's Discussion and Analysis.................................................................................................................... 4
Financial Statements
Statementof Net Position...................................................................................................................................... 9
Statementof Activities......................................................................................................................................... 10
Balance Sheet — General Fund............................................................................................................................. 11
Reconciliation of the Governmental Fund Balance Sheet for the General Fund to the Statement of Net
Position........................................................................................................................................................... 12
Statement of Revenues, Expenditures and Changes in Fund Balances — General Fund ...................................... 13
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of General
Fund to the Statement of Activities................................................................................................................ 14
Notes to Financial Statements.............................................................................................................................. 15
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual — General
Fund............................................................................................................................................................... 20
Other Supplementary Information
Combining Balance Sheet — General Fund and Construction Sub-Fund............................................................. 21
Combining Statement of Revenues, Expenditures and Changes in Fund Balance - General Fund and
ConstructionSub-Fund.................................................................................................................................. 22
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual — Construction
Sub-Fund........................................................................................................................................................ 23
Schedule of Property Tax Transactions............................................................................................................... 24
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
AuditingStandards.............................................................................................................................................. 25
Audit Comments and Disclosures Required by State Regulations.......................................................................... 27
Independent Auditor's Report Required by Oregon State Regulations................................................................... 28
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Independent Auditor's Report
The Deschutes County Commissioners
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Bend, Oregon
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and the general
fund of Deschutes County Extension and 4-H County Service District (the District), a component unit of
Deschutes County, Oregon, as of and for the year ended June 30, 2019, 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 material misstatement, whether due to fraud or
error.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We 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 material misstatement of the financial statements, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity's preparation
and fair presentation of the financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's
internal control. Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
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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, 2019, 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.
Emphasis of a Matter
As discussed in Note 1, the financial statements of the District are intended to present the financial
position and changes in financial position attributable to the District. They do not purport to, and do not
present fairly the financial position of Deschutes County, Oregon as of June 30, 2019, and the changes in
its financial position for the year then ended in conformity with accounting principles generally accepted
in the United States of America. Our opinions have not been modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis and the schedule of revenues, expenditures and changes in fund balance — budget
and actual — general fund, 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
schedules 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 schedules 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 schedules 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 schedules have 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 schedules are 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 combining balance sheet — general fund and construction
sub -fund, and combining schedule of revenues, expenditures and changes in fund balances - general fund
and construction sub -fund, and the schedule of property tax transactions (supplementary information) are
presented for purposes of additional analysis and are not a required part of the financial statements. The
supplementary information is the responsibility of management and was derived from and relates directly
to the underlying accounting and other records used to prepare the basic financial statements. Such
information has been subjected to the auditing procedures applied in the audit of the basic financial
statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic financial statements or to
the basic financial statements themselves, and other additional procedures in accordance with auditing
standards generally accepted in the United States of America. In our opinion, the supplementary
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 November 18,
2019 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 solely to describe the scope of our testing of internal control over
financial reporting and compliance and the results of that testing, and not to provide an opinion on the
effectiveness of the District's internal control over financial reporting or on compliance. That report is an
integral part of an audit performed in accordance with Government Auditing Standards in considering the
District's internal control over financial reporting and compliance.
Report on Other Legal and Regulatory Requirements
In accordance with the Minimum Standards of Audits of Oregon Municipal Corporations, we have issued
our report dated November 18, 2019, 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 compliance.
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3
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Management's Discussion and Analysis
June 30, 2019
As management of Deschutes County Extension and 4-H County Service District (the District), a component unit
of Deschutes County, Oregon, 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, 2019.
Financial Highlights
• The assets of Deschutes County Extension and 4-H County Service District exceeded its liabilities at June
30, 2019, by $1,308,368. Of this amount, $15,024 is unrestricted.
• Total net position increased by $172,342.
• As of June 30, 2019, Deschutes County Extension and 4-H County Service District's governmental fund
reported an ending fund balance of $3,755 or 1% of total General Fund Fiscal Year 2019 revenues.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the 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 Deschutes
County Extension and 4-H County Service District's finances in a manner similar to a private -sector business.
The Statement of Net Position presents information on all of Deschutes County Extension and 4-H County
Service 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
Deschutes County Extension and 4-H County Service District is improving or deteriorating.
The Statement of Activities presents information showing how Deschutes County Extension and 4-H County
Service District's net position changed during the fiscal year ended June 30, 2019. Changes in net position are
reported when the underlying event giving rise to the change occurs, regardless of the timing of the related cash
flows. Thus, revenues and expenses are reported in this statement for some items, for example, property taxes and
accrued vacation 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 the District that are supported primarily by taxes and inter -governmental revenues (governmental
activities). The governmental activity of Deschutes County Extension and 4-H County Service District is
providing agricultural education extension services to the citizens of Deschutes County, Oregon.
The government -wide financial statements can be found on pages 9-10 of this report.
0
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Management's Discussion and Analysis
June 30, 2019
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated
for specific activities or objectives. The District, like other state and local government entities, uses fund
accounting to ensure and demonstrate compliance with finance -related legal requirements. The fund utilized by
Deschutes County Extension and 4-H County Service District is classified as a governmental fund.
Governmental funds are used to account for 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
Fund Balance Sheet for the General Fund to the Government -wide Statement of Net Position and a reconciliation
from the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances for the
General Fund to the Government -wide Statement of Activities have been included in this report.
The District reported activity in one governmental fund during the fiscal year ended June 30, 2019. Information is
presented in the Governmental Fund Balance Sheet for the General Fund and in the Governmental Fund Schedule
of Revenues, Expenditures and Changes in Fund Balance for the General Fund.
The District adopts an annual budget for its funds. A budgetary comparison statement has been provided for this
fund to demonstrate compliance with the annual budget.
The General Fund Financial Statements can be found on pages 11-14 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 15-
19 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
Deschutes County Extension and 4-H County Service District, assets exceed liabilities by $1,308,368 at June 30,
2019.
Approximately 99% of the District's net position represents its investment in capital assets (building and
equipment). Deschutes County Extension and 4-H County Service District uses these capital assets to provide
services to citizens and this net position is not available for future spending.
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Management's Discussion and Analysis
June 30, 2019
The remaining 1%, $15,024, of Deschutes County Extension and 4-H County Service District's net position may
be used to meet the District's on-going obligations to citizens and creditors.
As of June 30, 2019, Deschutes County Extension and 4-H County Service District reports positive balances in
net position (net investment in capital assets and unrestricted) for the government as a whole and for the
governmental activities. Deschutes County Extension and 4-H County Service District's net position increased by
$172,342 during the year ended June 30, 2019.
A comparison of the summarized government -wide statements to the prior year is as follows:
Assets
Current assets
Capital assets
Total assets
Liabilities
Current liabilities
Total liabilities
Net Position
Net investment in capital assets
Unrestricted
Total net position
Statements of Net Position
June 30, 2019 June 30, 2018 Change
$ 619,133 $ 829,546 $ (210,413)
1,293,344 430,272 863,072
1,912,478 1,259,818 652,660
604,109 123,792 480,317
604,109 123,792 480,317
1,293,344 430,272 863,072
15,024 705,754 (690,730)
$ 1,308,368 $ 1,136,026 $ 172,342
6
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Management's Discussion and Analysis
June 30, 2019
State me nts of Activitie s
Year Ended Year Ended
June 30, 2019 June 30, 2018
Change
Program Revenues
Charges for services
$ 60,000
$ 50,348
$ 9,652
General Revenues
Property taxes
532,513
501,031
31,482
Interest
23,065
9,479
13,586
Total revenues
615,578
560,858
54,720
Expenses
General expenses
443,236
506,129
(62,893)
Total expenses
443,236
506,129
(62,893)
Change in Net Position
172,342
54,729
117,613
Net Position, Beginning of Year
1,136,026
1,081297
54,729
Net Position, End of Year
$ 1,308,368
$ 1,136,026
$ 172,342
Governmental Activities
Governmental activities increased the District's net position by $172,342 during the fiscal year ended June 30,
2019.
Financial Analysis of the District's Funds
Deschutes County Extension and 4-H County Service District uses fund accounting to ensure and demonstrate
compliance with finance -related legal requirements.
Governmental Funds - The focus of the District's governmental funds is to provide information on near-term
inflows, outflows and balances of spendable resources. Such information is useful in assessing the District's
financing requirements. In particular, unassigned 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, 2019, $3,755 is the reported ending fund balance for the District's governmental fund, a decrease
of $691,565 from June 30, 2018.
7
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Management's Discussion and Analysis
June 30, 2019
As of June 30, 2019 the unassigned fund balance for the District's General Fund is $3,755, a decrease of
$691,565. One measure of liquidity is the relationship of the unassigned fund balance to the fund's total revenues.
The unassigned fund balance as of June 30, 2019, for the General Fund is .61 % of its Fiscal Year 2019 revenues.
The District established a sub -fund in fiscal year 2010 with a transfer from the General Fund. This Fund received
a $60,000 transfer from the General Fund and earned $13,870 of interest in the current year and ended with a
negative balance of $231,168, a decrease of $745,264.
General Fund Budgetary Highlights
There were no differences between the District's General Fund budget as originally adopted and the final budget.
Actual revenues exceeded estimated revenues by $10,713.
Capital Asset and Debt Administration
Capital Assets
The District's investment in capital assets for its governmental activities as of June 30, 2019, is $1,293,344, net of
$213,697 accumulated depreciation. This investment in capital assets includes, construction in progress, building
and equipment.
Additional information on Deschutes County Extension and 4-H County Service District's capital assets is
included in Note 3.
Long-term Debt
The 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 District's Assessed Valuation of Taxable Property increased from Fiscal Year 2019 to Fiscal Year
2020 by 5.37% to approximately $25.9 billion.
• Planning for the construction of a building adjacent to its primary location at the Deschutes County
fairgrounds began in late FY 2017 and through FY 2018, with the majority of construction taking place
during FY 2019. As of now, the building is on track and scheduled to be ready for occupancy by Fall
2019. Resources for the project are available from two sources: amounts accumulated in the District's
sub -fund and a long-term loan from Deschutes County.
Requests for Information
This financial report is designed to provide a general overview to those parties interested in Deschutes County
Extension and 4-H County Service 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,
1300 NW Wall Street, Suite 200, Bend, Oregon, 97703.
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Statement of Net Position
June 30, 2019
Total assets 1,912,478
Liabilities
Accounts payable 604,109
Total liabilities 604,109
Net Position
Net investment in capital assets 1,293,344
Unrestricted 15,024
Total net position $ 1,308,368
See Notes to Financial Statements 9
Primary
Government -
Governmental
Activities
Assets
Cash and investments
$ 606,542
Property taxes receivable
12,592
Construction in progress
938,776
Equipment and building
568,266
Accumulated depreciation
(213,697)
Total assets 1,912,478
Liabilities
Accounts payable 604,109
Total liabilities 604,109
Net Position
Net investment in capital assets 1,293,344
Unrestricted 15,024
Total net position $ 1,308,368
See Notes to Financial Statements 9
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Statement of Activities
Year Ended June 30, 2019
Primary
Government -
Governmental
Activities
Expenses
General services $ 443,236
Program Revenues
Capital grants 60,000
Net program expenses 383,236
General Revenues
Property taxes 532,513
Interest on investments 23,065
Total general revenues 555,578
Change in Net Position 172,342
Net Position, Beginning of Year 1,136,026
Net Position, End of Year $ 1,308,368
See Notes to Financial Statements 10
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Balance Sheet — General Fund
June 30, 2019
Assets
Cash and investments $ 606,542
Property taxes receivable 12,592
Total assets $ 619,133
Liabilities
Accounts payable $ 604,109
Total liabilities 604,109
Deferred Inflows of Resources
Unavailable revenue - property taxes 11,269
Total deferred inflows of resources 11,269
Fund Balance
Unassigned 3,755
Total fund balance 3,755
Total liabilities, deferred inflows of resources and fund balance $ 619,133
See Notes to Financial Statements 11
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Reconciliation of the Governmental Fund Balance Sheet for the General Fund to the Statement of Net Position
June 30, 2019
Fund Balance
$ 3,755
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and,
therefore, are not reported on the Balance Sheet. 1,293,344
Some of the District's taxes will be collected after year-end, but are not currently
available resources and, therefore, are deferred in the General Fund. 11,269
Net Position of Governmental Activities $ 1,308,368
See Notes to Financial Statements 12
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Statement of Revenues, Expenditures and Changes in Fund Balances — General Fund
Year Ended June 30, 2019
Revenues
Property taxes $ 531,677
Investment earnings 23,065
Intergovernmental 60,000
Total revenues 614,743
Expenditures
Current
General services 427.173
Capital outlay 879,135
Total expenditures 1,306,307
Net Change in Fund Balance (691,565)
Fund Balance, Beginning of Year 695,320
Fund Balance, End of Year $ 3,755
See Notes to Financial Statements 13
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of General Fund to the
Statement of Activities
Year Ended June 30, 2019
Net Change in Fund Balance - General Fund
$ (691,565)
Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlay as expenditures. However, in the Statement of
Activities, the cost of those assets are allocated over their estimated useful lives and
reported as depreciation expense.
Capital Outlay
Depreciation
Property 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.
Increase / (Decrease) in unavailable property taxes.
Change in Net Position of Governmental Activities
879.135
(16,063)
835
$ 172,342
See Notes to Financial Statements 14
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Notes to Financial Statements
June 30, 2019
Note 1 - Principal Business Activity and Significant Accounting Policies
The District
The Deschutes County Extension and 4-H County Service District (the District), a component unit of Deschutes
County, Oregon, was established under ORS 451.410 to 451.600 on February 2, 1982, for the purpose of
providing agricultural education extension services to the citizens of Deschutes County (the County). 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 government. Governmental 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 or applicants who purchase, use, or directly benefit
from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that
are restricted to meeting the operational or capital requirements of a particular function or section. Taxes and
other items not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for governmental funds.
Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government -wide financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting. 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 assets are 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 generally are recorded when a liability is incurred, as under
accrual accounting.
Property taxes and intergovernmental revenue 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.
15
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Notes to Financial Statements
June 30, 2019
The District reports the following governmental funds:
General Fund - The General Fund is utilized to account for the transactions of the District. Property taxes
are the principal source of revenue. Expenditures are for the operation and administration of the District.
Construction Sub -Fund - The Construction Sub -Fund is a sub -fund of the general fund that is utilized to
accumulate resources for the District's future facilities. Transfers from the General Fund are its principal
source of resources.
Budget Policy
The District prepares a budget for all funds which meet the requirements of state law. The budget is prepared on
the modified accrual basis of accounting. The resolution authorizing appropriations for each fund sets the level for
which it is unlawful to over expend. Program, transfers out and contingency are the levels of control established
by resolution. The detailed budget document provides for specific detailed information for the above-mentioned
categories. 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 District's 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 organization's 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 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 District's reporting entity.
Under the above criterion, the District is includable as a component unit in the financial statements of Deschutes
County, Oregon since the District's governing board is comprised of the Deschutes County Commissioners; the
District also has an eight -member advisory board that oversees operations.
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
16
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Notes to Financial Statements
June 30, 2019
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 commercial 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, corporate
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.
Capital Assets
Capital assets, which include construction in progress, equipment and a building, are reported in the government -
wide financial statements. In the governmental fund statements, capital assets are charged to expenditures as
purchased. Capital assets are recorded at historical cost. Donated assets are recorded at acquisition value as of the
date of the donation.
Capital assets are defined by the District as assets with an initial cost of $5,000 or more and an estimated actual
life of two years or more. Additions or improvements and other capital outlays that significantly extend the useful
life of an asset, or that significantly increase the capacity of an asset, are capitalized. Other costs incurred for
repairs and maintenance are expensed as incurred. Major outlays for capital assets and improvements are
capitalized as projects are constructed.
Depreciation on exhaustible assets is recorded as an allocated expense in the Statement of Activities with
accumulated depreciation reflected in the Statement of Net Position and is calculated on the straight-line basis
over the following estimated useful lives:
Assets Years
Building and Improvements 10-50 years
Equipment 10 years
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
17
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Notes to Financial Statements
June 30, 2019
2% on the unpaid balance is available if taxes are paid in full by February 15. Property 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 2019 fiscal year tax levy was $546,138.
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 General Fund balance sheet as receivables.
Collections within 60 days subsequent to year-end have been accrued and the remaining taxes receivable are
recorded as deferred inflow of resources on the modified accrual basis of accounting since they are not deemed
available to finance operations of the current period.
Fund Balance Reporting
The Governmental Accounting Standards Board 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 for specific purposes stipulated
by constitution, external resource providers or through enabling legislation.
3. Committed 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 Districts' highest level of decision-
making authority). Once adopted, the limitation imposed by the ordinance remains in place until a similar
action is taken (the adoption of another ordinance) to remove or revise the limitation.
4. Assigned fund balance classification is intended to be used by the government 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 eded 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.
Tax Abatements
The District participates in a number of property tax abatement programs. All such abatement programs are
18
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Notes to Financial Statements
June 30, 2019
authorized by Oregon revised statutes or by local resolution or ordinance. Some programs are initiated by the
District and others by other local governments and state agencies. As the amount of taxes abated during fiscal
year 2019 is immaterial, no additional disclosure has been made.
Note 2 - Cash and Investments
As of June 30, 2019, the District had a deposit of $606,542 with the Deschutes County Treasurer. All of the
District's deposits were adequately insured or collateralized by securities held by the pledging financial institution
in the financial institution's name during the year.
Note 3 - Capital Assets
Capital asset activity for the fiscal year ended June 30, 2019, is as follows:
Capital assets not being depreciated
Construction in progress
Capital assets being depreciated
Building
Equipment
Total
Less accumulated depreciation
Building
Equipment
Total
Balance
July 1, 2018
Additions
$ 59,640 $ 879,136
558,430
9,836
568,266
(187,798)
(9,836)
(16,063)
(197,634) (16,063)
$ 430,272 $ 863,072
Depreciation expense of $16,063 was charged to the general services expense.
Note 4 - Risk Management
Deletions
Balance
June 30, 2019
$ 938,776
558,430
9,836
568,266
(203,861)
(9,836)
(213,697)
$ 1,293,344
The District 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 others; and natural disasters for which the District participates in
Deschutes County's self-insurance program. There have been no settlements in excess of insurance coverage and
reserves in the past three fiscal years.
19
Required Supplementary Information
As of and For the Year Ended June 30, 2019
Deschutes County Extension
and 4-H County Service District
A Component Unit of Deschutes County, Oregon
eidebailly.com
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual - General Fund
Year Ended June 30, 2019
REVENUES
Local
Taxes -property
Investment earnings
Total revenues
Budgeted Amounts Variance with
Ori�i -ial Final Actual Final Budget
$ 523,077 $ 523,077 $ 531,677 $ 8,600
5,100 5,100 7,213 2,113
528,177 528,177 538,890 10,713
EXPENDITURES
Current - departmental:
General Services 491,372
Not allocated to organizational units:
491,372 427,173 64,199
Transfer out 60,000 60,000 60,000 -
Contingency 171,805 171,805 - 171,805
Total expenditures 723,177 723,177 487,173 236,004
Net Change in Fund Balance (195,000) (195,000) 51,717 246,717
Fund Balance - Beginning of Year 195,000 195,000 182,654 (12,346)
Fund Balance - End of Year $ - $ - 234,371 $ 234,371
Unrealized gain (loss) on investments 552
Deschutes County Extension and 4-H County Service District
Construction Fund (231,168)
Total fund balance, GAAP basis - End of Year $ 3,755
20
Other Supplementary Information
As of and For the Year Ended June 30, 2019
Deschutes County Extension
and 4-H County Service District
A Component Unit of Deschutes County, Oregon
eidebailly.com
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Combining Balance Sheet — General Fund and Construction Sub -Fund
June 30, 2019
Assets
Cash and investments
Property taxes receivable
Total assets
Liabilities
Accounts payable
Total liabilities
Deferred Inflows of Resources
Unavailable revenue - property taxes
Total deferred inflows of resources
Fund Balances
Unassigned
Total fund balances
Total liabilities, deferred inflows of resources
and fund balances
Construction
21
General
Sub -Fund
Total
$
295,874
$ 310,668
$
606,542
12,592
-
12,592
$
308,466
$ 310,668
$
619,133
$
62,273
$ 541,836
$
604,109
62,273
541,836
604,109
11,269
-
11,269
11,269
-
11,269
234,923
(231,168)
3,755
234,923
(231,168)
3,755
$
308,466
$ 310,668
$
619,133
21
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Combining Statement of Revenues, Expenditures and Changes in Fund Balance - General Fund and Construction
Sub -Fund
Year Ended June 30, 2019
Revenues
Property taxes
Interest
Charges for services
Total revenues
Expenditures
Current
General Services
Capital outlay
Total expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses)
Transfers in
Transfers out
Total other financing sources (uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances, End of Year
Construction
General Sub -Fund Total
$ 531,677
9,195
$ - $ 531,677
13,870 23,065
60,000 60,000
540,872 73,870 614,743
427,173
- 427,173
879,135 879,135
427,173 879,135 1,306,307
113,699 (805,265) (691,565)
60,000
(60,000)
(60,000) 60,000
60,000
(60,000)
53,699 (745,265) (691,565)
181,224 514,096 695,320
$ 234,923 $ (231,168) $ 3,755
22
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual — Construction Sub -Fund
Year Ended June 30, 2019
EXPENDITURES
Current - departmental:
General services 1,638,400 1,638,400 879,135 759,265
Total expenditures 1,638,400 1,638,400 879,135 759,265
Net Change in Fund Balance (521,000) (521,000) (748,375) (227,375)
Fund Balance, Beginning of Year 521,000 521,000 516,628 (4,372)
Fund Balance, End of Year $ - $ - (231,747) $ (231,747)
Unrealized gain (loss) on investments 579
Total fund balance, GAAP basis - End of Year S (231,168)
23
Budgeted Amounts
Variance with
Original
Final
Actual
Final Budget
REVENUES
Investment Earnings
$ 7,400
$ 7,400
$ 10,759
$ 3,359
Intergovernmental
50,000
50,000
60,000
10,000
Debt proceeds
1,000,000
1,000,000
-
(1,000,000)
Transfer in
60,000
60,000
60,000
Total revenues
1,117,400
1,117,400
130,759
(986,641)
EXPENDITURES
Current - departmental:
General services 1,638,400 1,638,400 879,135 759,265
Total expenditures 1,638,400 1,638,400 879,135 759,265
Net Change in Fund Balance (521,000) (521,000) (748,375) (227,375)
Fund Balance, Beginning of Year 521,000 521,000 516,628 (4,372)
Fund Balance, End of Year $ - $ - (231,747) $ (231,747)
Unrealized gain (loss) on investments 579
Total fund balance, GAAP basis - End of Year S (231,168)
23
Tax Year
2018-2019
2017-2018
2016-2017
2015-2016
2014-2015
2013-2014
2012-2013
2011-2012
2010-2011
Prior
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Schedule of Property Tax Transactions
Year Ended June 30, 2019
Beginning
Taxes
Receivable
June 30, 2019
$ 524,700
Balance and
3,824
Interest
2018-19 Levy
Adjustments
(Discounts)
678
531
144
$ 546,138
$ (503)
$ (13,911)
6,568
(18)
192
2,796
(24)
155
1,400
(17)
153
571
(7)
110
69
(2)
11
44
(1)
6
29
-
5
27
(4)
3
116
(5)
9
Totals $ 557,756 $ (581) $ (13,267)
Adjustments for Accruals
June 30, 2018
June 30, 2019
Other tax distribution
Modified accrual basis tax revenue
Collections
Taxes
Receivable
June 30, 2019
$ 524,700
$ 7,024
3,824
2,918
1,303
1,623
858
678
531
144
40
38
19
30
15
18
7
18
20
100
531,316 $ 12,592
(1,185)
1,322
223
$ 531,677
24
EideBailly
CPAs & BUSINESS ADVISORS
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
To the Deschutes County Commissioners
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
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 Deschutes County Extension and 4-H County Service District (the
District), a component unit of Deschutes County, Oregon, as of and for the year ended June 30, 2019, 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 18, 2019.
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, 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 for 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.
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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
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the District's internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
Boise, Idaho
November 18, 2019
26
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Audit Comments and Disclosures Required by State Regulations
June 30, 2019
Audit Comments and Disclosures Required by State Regulations
Oregon Administrative Rules 162-010-0000 through 162-010-0330 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
reports. 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.
27
EideBailly
CPAs & BUSINESS ADVISORS
Independent Auditor's Report Required by Oregon State Regulations
To Deschutes County Commissioners
Deschutes County Extension and 4-H County Service District
A Component Unit of Deschutes County, Oregon
Bend, Oregon
We have audited the basic financial statements of Deschutes County Extension and 4-H County Service
District (the District), a component unit of Deschutes County, Oregon, as of and for the year ended June
30, 2019, and have issued our report thereon dated November 18, 2019. We conducted our audit in
accordance with auditing standards generally accepted in the United States of America and the standards
applicable to the financial audits contained in Government Auditing Standards, issued by the Comptroller
General of the United States and the standards applicable to the financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States and the provisions of the
Minimum Standards for 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 162-010-0330 of the Minimum Standards for Audits of
Oregon Municipal Corporations, noncompliance with which could have a direct and material effect on the
determination of financial statements amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion.
We performed procedures to the extent we considered necessary to address the required comments and
disclosures which included, but were not limited to the following:
OAR
162-010-0000
162-010-0010
162-010-0020
162-010-0030
162-010-0050
162-010-0115
Section
Preface
Definitions
General Requirements
Contracts
Financial Statements
Required Supplementary Information (RSI)
162-010-0120
Supplementary Financial Information
162-010-0130
Schedule of Revenues, Expenditures / Expenses, and Changes in Fund
Balances / Net Position, Budget and Actual (Each Fund)
162-010-0140
Schedule of Accountability for Independently Elected Officials
162-010-0190
Other Financial or Statistical Information
162-010-0200
Independent Auditor's Review of Fiscal Affairs
162-010-0230
Accounting Records and Internal Control
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Instances of Non -
Compliance Identified
Not Applicable
Not Applicable
None Noted
None Noted
None Noted
None Noted
None Noted
None Noted
Not Applicable
Not Applicable
None Noted
None Noted
28
In connection with our testing nothing came to our attention that caused us to believe the District was not
in substantial 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 162-010-0330 of the Minimum Standards for Audits of Oregon Municipal Corporations.
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 of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
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.
This report is intended solely for the information and use of the Deschutes County Commissioners and
management of Deschutes County Extension and 4-H County Service District and the Oregon Secretary
of State and is not intended to be and should not be used by anyone other than these parties.
For Eide Bailly LLP
Boise Idaho
November 18, 2019
29
Instances of Non -
OAR
Section
Compliance Identified
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
162-010-0330
Extensions of Time to Deliver Audit Reports
Not Applicable
In connection with our testing nothing came to our attention that caused us to believe the District was not
in substantial 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 162-010-0330 of the Minimum Standards for Audits of Oregon Municipal Corporations.
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 of performing their assigned functions, to prevent, or
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement
of the entity's financial statements will not be prevented, or detected and corrected on a timely basis. A
significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance.
Our consideration of internal control over financial reporting was for the limited purpose described in the
first paragraph of this section and was not designed to identify all deficiencies in internal control over
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.
This report is intended solely for the information and use of the Deschutes County Commissioners and
management of Deschutes County Extension and 4-H County Service District and the Oregon Secretary
of State and is not intended to be and should not be used by anyone other than these parties.
For Eide Bailly LLP
Boise Idaho
November 18, 2019
29