REPORT OF THE AUDIT OF THE CARTER COUNTY FISCAL COURT For The Fiscal Year Ended June 30, 2011

REPORT OF THE AlTDIT OF THE
CARTER COUNTY
FISCAL COURT
For The FisC31 Year Ended
June 30, 2011
CONTENTS PAGE
INDEPE1'<TIENT AlJDITOR' S REPORT 1
CARTERCOUNTYOFfICL-\LS 4
S1.-\TEMENTOF l'oTI ASSETS- \-10DIFIEDCASH BASIS 6
STATEMEl'oi OF ACTIVITIES - MODIfiED CASH BASIS 8
BALANCESHEET- GOVERN:-'lNTAL - \-10DIFlEDCASHBASIS 10
STATEMENTOF REVENUES. EXPENDITURES.
IN Fl.JND - FUNDS - MODIFIEDCASHBA5IS 12
OF THESTATEr-lENT OF REVENUES. EXPENDlTURES. AND CHANGES Fl.JND BAlANCES OF
GOVERNME}'"TAl FUNDSTOTHESTATEMENTOF ACTIVITIES - MODIFIED CASHBASIS 15
STATEMENTOf NETASSETS- PROPRIETARYfUND - :-10DlHEDCASH HASI5 17
STA OF REVENUES, EXPENSES. ANTI CHA.'1GES IN FUND NETASSETS
PROPRIETARY Fl..JND - MODIFIED CASH BASIS 19
STATE\fENT OF CASHFLOWS- PROPRIETARYFUND MODIFIED CASHBASIS 21
STATE:-1ENT OF flDUClARY FUNDNET ASSETS - MODIFIEDCASHBASIS .23
NOTESTOFINANCLI\L STATEI\IENTS 24
BUDGET.<\RY COMPAIIJSON SCIIEDULES 44
NOTESTOREQUIRED SUPPLElI.IENTARY lNFORJ"iAnON 48
COMBINING BALANCE SHEET-
NON-t-.lAJOR GOVER..1\I"'IENTAl FUNDS - \IODIFlED CASH BASIS 50
COrvlBINING STATEMENTOF REVENUES, EXPENDITURES, ANDCHANGES
IN FUNDBALANCES' NON-MAJORGOVER..NMENTAL FUNDS - MODIFIED CASIlBASIS 52
OF EXPENDITliRES OF FEDERAL A\\'ARDS 53
NOTES To THE SCHEDULEOF EXl'E"IDITURES OF FEDERALAWARDS 54
REPORTONINTERNAL CONTROLOVER FINANCL-\L REPORTING ANDON
COMPLlANCEAND OTHERMATIERS BASEDON AN AUDITOFFlNA.NCL\L
STATE\-fENTS PERFORMED IN ACCORDANCEW1THGOVER..N1vlENT AUDITING STANDARDS 56
INTIEPDoiDENT AUDITORS' REPORTONCO/vlPLL-\NCE WITH REQUIREMENTS THATCOULDHAVEA DIRECTAND
MATERIAL EFFECT ON EACHMAJORPROGRA\1 A.'1D01\ INTERNAL COl\'TROLOVERCOMPLlA.'>CE
IN ACCORDANCE \\1TH OMBCIRCUL-\R A-133 59
SCHEDULEOf FINDINGSAND QUESTIO\;ED C05TS 62
APPENDLXA:
CERTIFICATION OF COMPLL\NCE - LOCAL GOVERm.lENT ECONOMIC ASSISTANCE PROGRAM 78
B:
ATTACHMENTSTOCOUNTY'S RESPONSE2011-3 80
Brenda K. Morgan. CPA
Joel y B. Frankl i n. Cr;\

ee'tU6<.ed AU(U,l/'fl4,(1U
749 Broadway Street
P.O. Box 428
West Liberty. KY 4 1472 Phone: (606) 743- 1884
Fax: (606) 743- 1895
www. morganfrankl incpa.corn
To the People of Kcmucky
Honorable Steven L. Beshcar, Governor
Lori H. Flannery. Secretary
Finance and Administration Cabinet
Honorable Charles Wallace, Ca rter County Judge/E xecuti ve
Members of the Curter Count- Fiscal Court
Independent Auditor's
We have audited the accompanying financial statement s of the governme ntal acuviucs, the business-
type activities, each maj or fund, and the aggregate remaining fund informati on or Carter County,
Kentu cky, as of' and 1'01' the >,c,lr ended June 30,2011 , which coll ectively comprise the County's basic
financial statements as listed in ,he table of contents. These financial stateme nts arc the rcsponsibil iry
of the Carter County h su d Court . Our responsibility is to express opinions on these financial
state ments based on our audit.
We conducted our audit in accor dance with auditing standards genera lly acc epted in the United Stares
of Ame rica and the standards applicable to financial audits contained in Governme nt Auditing
St andards. issued by Corn ptrol lcr Ge nera l of the United Stares and the ..\ L1dl , Guide for f iscal C(l Ull
Audit s issued by (he Auditor of Public ACL(l ll!1 IS. Commonwealth of' Kentucky. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether till: financia l
s taten 5 nil' free or m.ncrial misstatement. .'; 11 audit includes examining, on .1 test basis, evidence
supporting (he amounis "nd discl osures in the financi al statements. An audit also includes as sessing the
accounting principles used anc the- estimates made by management. <1 :> \I'd ! as evaluating the
0 \ ' (;, 3 :] fi nancia) statt: ment presentation. We believe that our audit provid es il reasonable basis for our
0pll1i On _
/I. s dcscri bed in Note 1. Carter Couruy. KCl1lUCky, prepares its fi nancial sraterncnts in accordance \\'\111
the modificd cash basis, \\ hicb is a comprehensive basis of account i ng othe r than accounting principles
generally accepted in the Lni:ccl States of America.
In our opinion. the ftnanci .1l statements referred 10 above present fairly, in all mat erial respects, the
rcxpecti ve financia l pos ition of the govemrnental activities. (he business-type activit-it s, each major
fund. and remaining fund information of [he Carter County Fiscal Court :1S orJune 30,
I I. and the respecti ve changes in financial position, and cash flows, where applicable, thereof for the
year (hen ended in conl ornu ty v, ith the basis of accc untuig descri bed in Note 1.
The count y has implemented Governmental ,\ccouming Standards lloClrd Statement :\4 as it relates LO
the: modified cash of ell: descr ibed in Note 1, which has altered tht: forma: and content
of the basic financial statements
To the People of Kentucky
Honorable Steven L. Beshear, Governor
Honorable Charles Wallace. Carter County Judge/Executive
Members of the Carter County Fiscal Court
In accordance with Government Auditing Standards, we have also issued our report dated January 27,
2012, on our consideration of the County's internal control over financial reporting and on our tests of
its compliance with certain provisions of laws. regulations, contracts. and grant agreements and other
maners. 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 and should be considered in assessing
the results of our audit
Accounting principles generally accepted in the United States of America require that the budgetary
comparison information, as listed in the table of contents, be presented to supplement the basic financial
statements. Such information, although not a pal! 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. Vie have applied certain limited procedures to the required supplementary information in
accordance with auditing standards generally accepted in the United States of America, which consisted
of inquiries of management about the methods of preparing the information and comparing the
information for consistency with management's responses to our inquiries. the basic financial
statements, and other knowledge we obtained during our audit of the basic financial statements. We do
not express an opinion or provide any assurance on the information because limited procedures do not
provide us with evidence sufficient to express an opinion or provide any assurance.
The County has omitted the management's discussion and analysis that Governmental Accounting
Standards Board (GASB) requires to 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 reponing for placing
the basic financial statements in an appropriate operational, economic. or historical context. Our
opinion on the basic financial statements is not affected by this missing information.
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the County's financial statements as a whole. The combining and individual
nonmajor fund financial statements are presented for purposes of additional analysis and are not a
required part of the financial statements. The accompanying schedule of expenditures of federal awards
is presented for purposesof additional analysis as required by U.S. Office of Management and Budget
Circular A-133. Audits of States. Local Governments. and Non-Profit Organizations, and is also not a
required part of the financial statements. The combining and individual nonmajor fund financial
statements and the schedule of expenditures of federal awards are the responsibility of management and
were derived from and relate directly to the underlying accounting and other records used to prepare the
financial statements. The information has been subjected to the auditing procedures applied in the audit
of the financial statements and certain additional procedures. including comparing and reconciling such
information directly to the underlying accounting and other records used to prepare the financial
statement or the financial statements themselves. and other additional procedures in accordance with
auditing standards generally accepted in the United States of America. In our opinion. the information
is fairly stated in all material respects in relation to the financial statements as a whole.
2
To the People of Kentucky
Honorable Steven L. Beshear, Governor
Honorable Charles Wallace. Carter County Judge/Executive
Members of the Carter County Fiscal Court
Based on the results of our audit. we present the accompanying schedule of findings and questioned
costs. included herein. which discusses the following report comments:
2011-1
2011-2
2011-3
2011-':+
2011-5
2011-6
2011-7
20I 1-8
2011-9
2011-10
2011-11
2011-12
2011-13
The Fiscal Court Did Not Publish Their Financial Statements In Accordance With KRS
424.220
The Treasurer Should Prepare A Complete And Accurate Schedule Of Expenditures Of
Federal Awards
The Judge/Executive Entered Into A Verbal Agreement With An Individual To Cut And
Remove Hay From County Owned Property Without Fiscal Court Approval
The Fiscal Court Lacks Adequate Internal Controls Over Expenditures
The Fiscal Court Lacks Adequate Segregation Of Duties
The Treasurer Did Not Prepare Bank Reconciliations Timely And Accurately And
Outstanding Checks Are Not Being Followed Up On
The Fiscal Court Lacks Adequate Controls Over Payroll. The Fiscal Court Did Not Comply
With The Administrative Code Or Personnel Policy And Procedures
The Fiscal Court Lacks Adequate Controls Over The Preparation And Submission Of Payroll
Reports
The Fiscal Court Lacks Adequate Controls Over Revenues
The Fiscal Court Does Not Have Adequate Controls Over Fixed Assets
The Carter County Treasurer Did Not Code All Debt Expenditures To A Debt Account Code
Nor Code Alllnsurance Expenditures To An Administration Account Code Nor Code All
Transfers To A Transfer Account
The Fiscal Court Should Require That Proper Records Be Maintained For The Justice Center
Corporation Fund
The Jail Has Not Established Controls Over Balances Remaining In Inmate Accounts Upon
Release
Respectfully submitted,
Morgan-Franklin. LLC
West Liberty, Kentucky
January 27.2012
3
Fiscal Court Members:
Charles \Vallace
Brad Bramrnell
Brandon Burton
Clarence Fankell
Ronnie Greenhill
Clifford Roe
Other Elected 0 fficials:
Patrick Flannery
R. W. Boggs
Mike Johnston
Larry Thompson
Casey Brarnrnell
Charles Kiser
George Sparks
Appointed Personnel:
Beth Justice
CARTERCOUNTY OFFICIALS
For The Year Ended June 30, 20 I I
County Judge/Executive
Magistrate
Magistrate
Magistrate
Magistrate
Magistrate
County Attorney
Jailer
County Clerk
Circuit Court Clerk
Sheriff
Property Valuation Administrator
Coroner
County Treasurer
4
CARTER COUNTY
STAT:'>I:'iT OF SET .-\SSETS - MODIFIED CASH BASIS
.Iu ne 30,2011
5
CARTER COUNTY
STATDIF:\T Of :".'ET ASSETS -l\lODlFIED CASH R-\SIS
JUlleJO,2011
Primary Government
Governmental Business-Type
Activities .xcrivities Totals
ASSETS
Current Assets:
Cash and Cash Equivalents s 1,000,033 $ 63,078 s 1,063,lll
Total Current Assets 1,000,033 63,078 1,063,1 II
Noncurrent Assets:
Capital Assets - Net of Accumulated
Depreciation
Land and Land Improvements 942,900 942.900
Buildings 10,644.380 10,644,380
Equipment 630,706 13,386 644,092
Vehicles 177.566 177,566
Infrastructure 4,159,949 4,159,949
Total Noncurrent Assets 16,555,501 13.386 16,568,887
Total Assets 17.555.534 76,464 17,631,998
LIABILITIES
Current Liabilities:
General Obligation Bonds 140,000 140,000
Financing Obligations 171,960 171,960
Total Current Liabilities 311.960 311.960
Noncurrent Liabilities:
General Obligation Bonds 5,020,000 5,020,000
Revenue Bonds 5,300,000 5.300,000
Financing Obligations 765,070 765.070
Total Noncurrent Liabilities 1l,085,070 11,085,070
Total Liabilities I U97.030 11,397,030
l'\ET ASSETS
Invested in Capital Assets.
Net of Related Debt 5,406.524 13,386 5,419,910
Restricted For:
Debt Service 193,167 193,167
Protection To Persons And Proeprty 76.028 76,028
General Health And Sanitation 11.557 11.557
Unrestricted 471.228 63,078 534,306
Total Net Assets S 6,158,504 s 76,464 $ 6.234,968
The accompanying notes are an integral part of the financial statements.
6
CARTER COuNTY
STATD1E:\T OF ACTIVITIES - i\-IODIFIED CASH BASIS
For The Year Ended .June 30.2011
7
CARTER COUNTY
STATF,I\lENT OF ACTIViTIES - 1\1 01>,1 "I ED CASH BASIS
For Thc Year Ended June 31l, 2011
s 111,750
1,432,356
.lX,O15
(2.169,222)
Totals
(2,154,.112)
S (1,'))1,501)
122,3\,1
(7I,71i
1
)
.17,')')()
('I'l,{)OO)
IH1,220
(4%,4X6)
11,'l')1)
14,7'.10
Nt"! 1{I'V,'III1CS
and Chnuges in Net Assets
(2,169,222)
1'1,790
(2,lCJlJ,222)
Prilllary Covcrumcut
Cuvcrnnuut al Busillcss-Typl'
Activitics Aclivitil's
s (1,9]),501) $
122,]1,\
(7I,7li
I
)
37,')90
CI9,()OO)
Iii 1,220
(456,41i6)
I) I,OX7
131.087
H),IOO
Capital
G.'ants and
COlltributions
$
$ ,17,91i7
1,%2,111
4, tfi4,lJ13
Opcrutillg
(;rllnts and
ConlrilHllillllS
s
s 644,6(,X
l,520,OHI)
62,227
62,227
1,451,106
1,513,333
Chlll'gcs for
Services
s
Expenses
s 2,6'14,9U6
2,830,10 I
154,XX
I
)
55
:\'),000
l,nO,!l91
156,.IH6
7,916,32X
47,'137
'17,137
$ 7,963,765
FUIlt"! ions/l' rllgr:llns
!{epurting EJllity
I'rlnun-y Covcrnmcnu
Governmental Activities:
General Government
Protection 10 Persons and l'ropcny
Gcnerul l lcalth and Snnitatiun
Social Services
Recreation and Culnne
Ruuds
Ikbt Service
Total Govcnuncntul Activities
Ilusincss-lypc Activities:
.Jail Canteen
Totul Llusincss-typc Activities
Total l'rimary Government
General Revenues:
Taxes:
Real Property Taxes
Personal Property Taxes
Motor Veil ide Taxes
Insurance PremiumTaxes
Other Taxes
In Lieu Tax I'nymcnts
l.xccss
Licenses and l'cnnits
Interest
Miscelluneous
Total General Revenues
Change ill Net Assets
Net Assets - Bcginning
Net Assets - Ending
385,0'15 JIl5,045
71,1,\9 71,14
')
83,,187 1i3,11\7
754,.117 75,1,,117
400.5% lOll,5%
79,51\1 7'J,5HI
59.() IU 59/,10
1,877 1,'1',77
480,')47 "1\0,'N7
2.316,709 2,316,709
147,'IS7 1'\,7'.1(J )(,2,277
6,n I I,ll 17 (,1,(,71 (',on/,'J 1
$ 6,15X,5U4 $ 76,.16:1 s (,,23<1,%1\
The nccmnpuuying notes arc an integral part ofthe financial suucmcnts.
CARTER COl.TNTY
BAL-\.J.'iCE SHEET - FUNDS MODIFIED CASH BASIS
June 30,2011
9
CARTER COUNTY
BALANCE SlIEET - GOVER:-'::-IKTAL FLNDS - MODIFIED CASH BASIS
June3U,2Ull
Local
Govern mcnt Justice
Economic Center ~ o n - Total
General Road Jail Assistance Corporation Major Governmental
Fund Fund Fund Grant Fund Funds Funds
ASSETS
Cash and Cash Equivalents S 67,085 S422,477 S 23,402 S 206,317 S 193.l67 $ 87,585 s 1,000,033
Total Assets 67,085 422,477 23,402 s 206,317 193,167 87,585 1,000,033
F l ~ D BALA:-':CES
Restricted For:
Protection to Persons
and Property 76.028 76,028
General Health and Sanitation 11,557 11,557
Debt Service 193,167 193,167
Assigned To:
and Property 23,402 136,169 1-59,571
General Health and Sanitation 35.074 35,074
Recreation and Culture 422,477 20,632 443,109-
Roads 14,442 14,442
Unassigned 67,085 67.085
Total Fund Balances S 67,085 $422,477 S 23,402 $ 206,317 S 193,167 $ 87,585 $ 1,000.033
Reconciliation of the Balance Sheet - Governmental Funds to the Statement of Net Assets:
Total Fund Balances
Amounts Reported For Governmental Activities In The Statement
Of Net Assets Are Different Because:
Capital Assets Used in Governmental Activities Are Not Financial Resources
And Therefore Are Not Reported in the Funds.
Accumulated Depreciation
Debt is Not Due and Payable in the Current Period and, Therefore, is Not
Reported in the Funds.
Financing Obligations
Bonded Debt
Net Assets Of Governmental Activities
10
S 1,000,033
23,979,369
(7,423.868)
(937.030)
(l0,460,000)
$ 6.158,504
CARTER COUl'.TY
STATE:\IE:'iT OF REVE.\'uES, EXPESDITURES, :L'\O CB..-\...'iGES
L'i FUi\D B.\.L:L'iCES - GOVER...'i:\IESTAL FUNDS - i\lODLFIED CASH BASIS
For The Year Ended .JUIlC 30,2011
11
CARTER
ST.-\TD1E:"T OF REYEi\TES. EXPESDITURES. :\.'\D
1;\ FFSD BALASCES - GOVER:--i\IE;\TAL FUNDS -l\IOOlFIED CASH BASIS
For The Year Ended June 30,2011
Local
Government
Economic
General Road Jail Assistance
Fund Fund Fund Grant
REVEKUES
Taxes s 1.489,738
Excess Fees 79.581
Licenses and Permits 59.610
Intergovernmental 551,387 2.700.287 1.432,552 555.609
Charges for Services 1,790 8,045 85,990
Miscellaneous 146,859 16, [40 164,296 4[,360
Interest 407 1,012 ri9 245
Total Revenues 2,329,372 2,717.439 1,605,012 683,204
EXI'E:\DlTCRES
General Government 1,370,448 15,116
Protection to Persons and Property 207,645 1,750,845 257,295
General Health and Sanitation 36,657 109,262
Social Services 55
Recreation and Culture 13,500 35,500
Roads 2,[27,995
Debt Service 10,052 66,930 399,865 44.348
Administration 433,528 IS7,101 440,894 126,337
Total Expenditures 2,071,830 2,382,026 2,591,604
587,913
Excess (Deficiency) of Revenues
Over Expenditures Before Other
Financing Sources (Uses) 257.542 335,413 (986,592) 95,291
Other Financing Sources (Uses)
Debt Issuance-Refunding Bond 222,200
Payment to Defease Bond
Transfers From Other Funds 130,000 834,500 75.000
Transfers To Other Funds (889,500) (l50.000)
Total Other Financing Sources (Uses) (537,300) (150,000) 834,500 75,000
Net Change in Fund Balances (279,753) 185,413 (152,092) 170,291
Fund Balances - Beginning 346,843 237,064 175,494 36,026
Fund Balances - Ending S 67,085 S 422,477 s 23,402 s 206,317
The accompanying notes are an integr-a! part of the financial statements.
12
CARTER COUi"TY
STATDIE:\T OF RE'VE:'-'UES. EXPE:\DlTL'RES,
i\.I'D CIT..... :\GES 1:'-' FU[\'l) B.\LASCES - GO\'ERS:-'rENTAL FUNDS MODIFIED CASII BASIS
For The Year Ended JUIlC 30.2011
(Continued)
Justice
Center Nou TOlal
Corporation Major Governmental
Fund Funds Funds
RE\'EI'iTES
Taxes S 204,955 S 1,694,693
Excess Fees 79,581
Licenses and Permits 59,610
Intergovernmental 382,012 141.655 5,763,502
Charges for Services 1 95,826
Miscellaneous 69 368,724
Interest 96 1,879
Total Revenues 382,082 346.706 8,063,815
EXPEl'i"DlTVRES
General Government 1,385,564
Protection to Persons and Property 268,874 2,484.659
General Health and Sanitation 7.500 153.419
Social Services 55
Recreation and Culture 49,000
Roads 2,127.995
Debt Service 494.260 38.200 1.053,655
Administration 1,110 31,992 1,220,962
Total Expenditures 495,370 346,566 8,475,309
Financing Sources (Uses) (113,288) 140 (411,494)
Other Financing Sources (Uses)
Debt Issuance-Refunding Bond 5,300,000 5,522.200
Payment to Defease Bond (5,190,000) (5,190,000)
Transfers from Other Funds 1.039,500
Transfers To Other Funds (1,039,500)
Total Other Financing Sources (Uses) 110,000 332,200
Net Change in Fund Balances (3,288) 140 (79,294)
fund Balances Beginning 196,455 87,445 1,079,327
Fund Balances > Ending s 193,167 $ 87,585 s 1,000,033
13
CARTER COl.TNTY
OF THE STATEi\LEi"T OF REVE:\l.:ES.
A.. ,,"D CRA.. '\iGES FUND R-\L.-\...'\'CES OF
GOVERi'i'MENTA.L FUNDS TO THE STATEHE.\,"T OF ACTIVITIES .. CASH BASIS
For The Year Ended JUlie 30,2011
14
CARTER COU:--ITY
OF TIlE STATEl\lENT OF REVF.:-.TES.
L\':!'E:'iDITURES. ASD 11\ FUND BALAJ\CES OF
GOVERl\i\IENTAL FLi'iDS TO rur STATDIE.'iT OF ACTIVITIES - i\10DlFIED CASH BASIS
For The Year Ended June 30.2011
Reconciliation to thc Statement of Activiries:
Ner Change in Fund Balances - Total Governmental Funds
Governmental Funds Report Capital Outlays as Expenditures. However. in the
Statement of Activities the Cost of Those Assets are Allocated Over Their
Estimated Useful Lives and Reponed as Depreciation Expense.
Capital Outlay
Depreciation Expense
Net Book Value of Fixed Assets Disposals
The Issuance of Long-Term and Short-Term Debt (e.g. bonds. leases)
Provides Current Financial Resources to Governmental Funds, while
Lease and Bond Principal Payments are Expensed in the Governmental Funds
as a Use of Current Financial Resources. These transactions, however. have
no effect on net assets.
Financing Obligation Payments
Payment To Refunded Bond Escrow Agent
Bond Issuance
Bond Payments
Change in Net Assets of Governmental Activities
The accompanying notes are an integral par.: of the financial statements.
15
$
s
(79,294)
929,304
(963,242)
(4,2.50)
142.169
5.190.000
(5.522,200)
455,000
147.487
CARTER COUNTY
STATEi\lE.'H OF :--;1' ASSETS - PROPRIETARY FUi'[J) - MODIFIED CASU BASIS
.Iune30,2011
16
CARTER COUNTY
STATEI\IENT OF :'-ET ASSETS - PROPRIETARY FUND - i\10DIFIED CASH BASIS
June30.2011
Enterprise
Fund
.Jail
Canteen
Fund
Assets
Current Assets:
Cash and Cash Equivalents
Total Current Assets
Noncurrent Assets:
Capital Assets:
Equipment
Less Accumulated Depreciation
Total Noncurrent Assets
Total Assets
Net Assets
Invested in Capital Assets,
Net of Related Debt
Cnrestricted
Total Net Assets
s
s
63,078
63,078
13,386
13,386
76,464
13,386
63,078
76,464
The accompanying notes arc an integral part of me financial statements.
17
CARTER COU:'-ITY
ST.-\.TEML\T OF REYE:-.l:ES, EXPE:\SES, Ai'iD CllA.'iGES 1:\ FUi"D NET ASSETS-
PROPlUETARY F U ~ D - iVIODIFIJo:D CASU BASIS
For The Year Ended June 30,2011
18
CARTER COCNTY
STATEME:\'T Of REVI:.\VES. EXPENSES, A;\IJ C H A N G I ~ S I:" FL:\,[) NET ASSETS-
PROPRIETARY FLJl\D - .\IODIFIED CASH BASfS
For Tbe Year Ended .IUIlC 30, 2011
Operating Revenues
Canteen Receipts
Total Operating Revenues
Operating Expenses
Educational and Recreational
Depreciation Expense
Salaries - Bookkeeping
Personal Care
Equipment
Phone Cards
Miscellaneous
Total Operating Expenses
Operating Income
Change In Net Assets
Total Net Assets - Beginning
Total Net ASSdS - Ending
Enterprise
Fund
Jail
Canteen
Fund
S 62,227
62,227
5,615
-t,881
5,528
7.337
4,876
13,475
5,7:5
47,437
14,790
14,790
61,674
$ 76.-+64
19
CARTER COUNTY
STATDITl"T OF C.-\.SH FLOWS - PROPRIETARY roxu - :\lODIFIED CASH BASIS
For The Year Ended June 30, 2011
20
CARTER COC:\T\
STATD1El\T OF CASH FLOWS - PROPRIETARY FUi\1) - ;\IOLJIFIED C\SH BASIS
For The Year Ended June 30. :'011
Cash Flows From Operating Activities
Receipts From Customers
Payments to Vendors
Net Cash Provided By
Operating Activities
Capital and Related Financing
Net Decrease in Cash and Cash
Equivalents
Cash and Cash Equivalents - July 1. 20 I0
Cash and Cash Equivalents - June 30, 20 II
Reconciliation of Operating Income to
Net Cash Provided by Operating
Activities
Enterprise
Fund
Jail
Canteen
Fund
S 62,227
(42,556)
19,671
(13,783)
5.888
57,190
$ 63,078
Operating Income
Plus: Depreciation Expense
Total Cash Provided By Operating
Activities
s 14,790
4,88J
19,671
.The accompanying notes are an integra! part of the financial statements.
21
COlT0TY
STATDIE:'iT OF FL':'iD:'iET ASSETS \IODLFlED CASH BASIS
Juue30,2011
22
CARTER COCl"TY
STATE.\If::-n OF FIDUCIARY FCXD :"iET ASSETS - :\H)DIFlf.D CASH llASIS
June 30, 2011
Agency Fund
J ai I
Inmate
Fund
Assets
Current Assets:
Cash and Cash Equivalents
Total Assets
Liabilities
Amounts Held In Custody For Others
Total Liabilities
l' et Assets
Total Net Assets
s
$
51,271
5 1,271
51,271
51.271
o
23
CARTER C O U ~ T Y
:\OTES TO Ff.\.-\:'iCU,L STATEi\lEl"TS
June 30,2011
Note 1. Summary of Significant Accounting Policies
A. Basis of Presentation
The county utilizes a modified cash basis of accounting, which is a comprehensive basis of accounting
other than accounting principles generally accepted in me United States of America. Under this basis of
accounting. assets. liabilities, and related revenues and expenditures are recorded when they result from
cash transactions. with a fe-N exceptions. This modified cash basis recognizes revenues when.received
and expenditures when paid. ):ores receivable are recognized on the Statement of Net Assets. but notes
receivable are not included and recognized on the Balance Sheet - Governmental Funds. Property tax
receivables. accounts payable, compensated absences. and donated assets are not reflected in the
financial statements.
Encumbrances lapse at year-end and are not reflected on the Statement of Net Assets and Statement of
Activities; however encumbrances are reflected on the Balance Sheet - Governmental Funds as pan of
the fund balance (Reserved for Encumbrances).
The State Local Finance Officer does nor require the county to report capital assets and infrastructure;
however. the value of these assets is included in the Statement of Net Assets and the corresponding
depreciation expense is included on the Statement of Activities. .
B. Reporting Entity
The financial statements of Carter County include the funds. agencies. boards, and entities for which the
fiscal court is financially accountable. Financial accountability. as defined by Section 2100 of me
Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and
Financial Reporting Standards, as amended by GASB 14 and GASB 39, was determined on the basis of
the government's ability to significantly influence operations. select the governing authority, participate
in fiscal management and the scope of public service. Consequently. the reporting entity includes
organizations that are legally separate from the primary government. Legally separate organizations are
reported as component units if either the county is financially accountable or the organization's
exclusion would cause the county's financial statements to be misleading or incomplete. Component
units may be blended or discretely presented. Blended component units either provide their services
exclusively or almost entirely to the primary government. or their governing bodies are substantively
the same as the primary government. The County has no discretely presented component units.
Blended Component Unit
The following legally separate organization provides its services exclusively to the primary government,
and the fiscal court is able to impose its will on this organization. This organization's balances and
transactions are reported as though they are part of the county's primary government using the blending
method.
Carter County Justice Center Corporation
The Carter County Justice Center Corporation (the Corporation) is a legally separate entity established
to provide long-term debt service to the Fiscal Court for the construction of a justice center facility. A
majority of the Corporation' s governing body is appointed by the Caner County Judge/Executive,
Further. the Carter County Fiscal Court can significantly influence the Corporation's operations.
Therefore. management must include the Corporation as a component unit, and the Corporation's
financial activity is blended with that of the Fiscal Court.
24
C\RTER COUNTY
-""OTIS TO FI:\:\SCIAL STA1T:\IE;\TS
June 30.2011
(Continued)
Note 1. Summary of Significant Accounting Policies (Continued)
C. Carter County Elected Officials
Kentucky law provides for election of the officials noted below from the geographic area constituting
Cane, County. Pursuant to state statute. these officials perform various services for the Commonwealth
of Kentucky, its judicial courts. the fiscal court. various cities and special districts within the county.
and the board of education. In exercising these responsibilities. however, they are required to comply
with state laws. Audits of their financial statements are issued separately and individually and can be
obtained from their respective administrative offices. These financial statements are not required to be
included in the financial statements of Caner County. Kentucky.
Circuit Court Clerk
County Attorney
Property Valuation Administrator
County Clerk
County Sheriff
D. Government-wide and Fund Financial Statements
In March 2009. the GovernmentalAccounting Standard Board (GASB) issued Statement No. S4 - Fund
Balance Reporting and Government Fund Type Definitions. This Statement established fund balance
classifications based primarily on the extent to which the County is bound to honor constraints on the
use of the resources reponed in each governmental fund as well as establishes additional note
disclosures regarding fund balance classification policies and procedures. The County implemented this
standard effective July I, 20 I O.
The government-wide financial statements (i.e., the statement of net assets and the statement of
activities) report information on all of the non-fiduciary activities of the primary government and its
non-fiduciary component units. For the most pan. the effect of interfund activities has been removed
from these statements. 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 sales, fees. and charges for support. Business-type revenues come mostly from
fees charged to external parties for goods or services. Fiduciary funds are not included in these
financial statements due to the unavailability of fiduciary funds to aid in. the support of government
programs.
The government-wide statements are reponed using the economic resources measurement focus and the
modified cash basis of accounting. as do the proprietary and fiduciary fund financial statements. Under
this basis of accounting, assets. liabilities, and related revenues and expenditures are recorded when
they result from cash transactions. with a few exceptions. Property tax receivables, accounts payable.
compensated absences, and donated assets are not reflected in the financial statements.
The statement of net assets presents the reponing entity's non-fiduciary assets and liabilities. the
difference between the two being reported as net assets. Net assets are reported in three categories:
I) invested in capital assets. net of related debt - consisting of capital assets. net of accumulated
depreciation and reduced by outstanding balances for debt related to the acquisition, construction. or
improvement of those assets; 2) restricted net assets - resulting from constraints placed on net assets by
creditors. grantors. contributors. and other external parties, including those constraints imposed by law
through constitutional provisions or enabling legislation. 3) unrestricted net assets - those assets that do
not meet the definition of restricted net assets or ir.vested in capital assets.
25
CARTER COUNTY
:\"OTES TO FI:'l"ANCIAL STATEi\lE:'iTS
June 30,2011
(Continued)
Note 1. Summary or Significant Accounting Policies (Continued)
D. Government-wide and Fund Financial Statements (Continued)
The statement of activities demonstrates the degree to which the direct expenses of a given function are
offset by program revenues. Direct expenses are those that are clearly identifiable with a specific
function. Program revenues includes: I) charges to customers or applicants who purchase, use. or
directly benefit from goods, services, or privileges provided by a given function: 1) operating grants and
contributions; and 3) capital grants and contributions that are restricted to meeting the operational or
capital requirements of a particular function. Internally dedicated resources such as taxes and
unrestricted state funds are reported as general revenues.
Funds are characterized as either major or non-major. Major funds are those whose assets. liabilities.
revenues, or expenditures/expenses are at least ten percent of the corresponding total (assets. liabilities.
etc.) for all funds or type (goverrunental or proprietary) and whose total assets. liabilities, revenues. or
expenditures/expenses are a least five percent of the corresponding total for all governmental and
enterprise funds combined. The fiscal court may also designate any fund as major.
Separate financial statements are provided for governmental funds. proprietary funds. and fiduciary
funds. Major individual governmental funds and major enterprise funds are reported as separate
columns in the fmancial statements.
Governmental Funds
All goverrunental fund statements are reported using the current financial resources measurement focus
and the modified cash basis of accounting. The modified cash basis recognizes revenues when received
and expenditures when paid. Property tax receivables. accounts payable. compensated absences. and
donated assets are not reflected in the financial statements.
The primary government reports the following major governmental funds:
General Fund - This is the primary operating fund of the fiscal court. It accounts for all financial
resources of the general government, except where the Department for Local Government requires a
separate fund or where management requires that a separate fund be used for some function.
Road Fund - This fund is for road and bridge construction and repair. The primary source of revenue
for this fund is state payments for truck license distribution. municipal road aid, and transportation
grants. The Department for Local Government requires the fiscal court to maintain these receipts and
expenditures separately from the General Fund.
Jail Fund - The primary purpose of this fund is to account for the jail expenses of the county. The
primary sources of revenue for this fund are reimbursements from the state and federal government,
payments from other counties for housing prisoners, and transfers from the General Fund. The
Department for Local Government requires the fiscal court to maintain these receipts and expenditures
separately from the General Fund.
Local Government Economic Assistance (LGEA) Fund - The purpose of this fund is to account for
funds earmarked for economic development. The primary sources of revenue for this fund are from the
state. The Department for Local Government requires the fiscal court to report and budget these receipts
and expenditures separately from the general fund.
26
CARTER C O U ~ T Y
:\OTES TO FINANCIAL STATEME:\TS
June 30,2011
(Continued)
:\ate 1. Summary of Significant Accounting Policies (Continned)
Governmental Funds (Continued)
Justice Center Corporation Fund - This fund accounts for the activities of the Carter County Justice
Center Corporation, a blended component unit of the county. The Justice Center Corporation fund
issued the debt to build the justice center. The Department for Local Government does not require the
fiscal court to report or budget these funds.
The primary government also has the following non-major fund: Enhanced 9 I I Fund. Forestry Fund
and Community Development Block Grant Fund.
Special Revenue Funds:
The Road Fund, Jail Fund. Local Government Economic Assistance Fund. Enhanced 91 I Fund,
Forestry Fund and Community Development Block Grant Fund are presented as special revenue funds.
Special revenue funds are to account for the proceeds of specific revenue sources and expenditures that
are legally restricted for specific purposes.
ProprietarY Funds
All proprietary funds are reponed using the economic resources measurement focus and the modified
cash basis of accounting. Proprietary funds distinguish operating revenues and expenses from non-
operating items. Operating revenues and expenses generally result from providing services and
producing and delivering goods in connection with proprietary funds' principal ongoing operations. All
revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
The principal operating revenues of the county's enterprise funds are charges to customers for sales in
the Jail Canteen Fund. Operating expenses for the enterprise funds include the cost of sales and
services. administrative expenses, and depreciation on capital assets. The government elected not to
adopt Financial Accounting Standards Board (FASS) Statements or Interpretations issued after
November 30, [989. unless the Governmental Accounting Standards Board (GASB) specifically adopts
such FASB statements or interpretations.
The primary government reports the following major proprietary fund:
Jail Canteen Fund - The canteen operations are authorized pursuant to KRS 441.135(l). which allows
the jailer to sell snacks, sodas, and other items to inmates. The profits generated from the sale of those
items are to be used for the benefit or recreation of the inmates. KRS 441.135(2) requires the jailer to
maintain accounting records and report annually to the county treasurer the receipts and disbursements
of the Jail Canteen Fund.
27
CARTER COCNTY
KOTES TO FINA:'''iCL\.L STATEi\-IE0"TS
June 30,2011
(Continued)
Xote 1. Summary of Significant Accounting Policies (Continued)
Fiducian Funds
All fiduciary funds are reponed using the economic resources measurement focus and the modified cash
basis of accounting. Fiduciary funds report only those resources held in a trust or custodial capacity for
individuals, private organizations. or ocher governments. The county's agency fund, the Jail Inmate
Fund. is used to account for inmate monies held by the jailer for custodial purposes only. Unlike other
funds, the agency fund reports assets and liabilities only; therefore, it has no measurement focus.
E. Deposits and Investments
The government's cash and cash equivalents are considered to be cash on hand. demand deposits.
certificates of deposit, and short-term investments with original maturities of three months or less from
the date of acquisition.
KRS 66.480 authorizes the county to invest in the following, including but not limited to, obligations of
the United States and of its agencies and instrumentalities, obligations and contracts for future delivery
or purchase of obligations backed by the full faith and credit of the United States, obligations of any
corporation of the United States government. bonds or certificates of indebtedness of this state. and
certificates of deposit issued by or other interest-bearing accounts of any bank or savings and loan
institution which are insured by the Federal Deposit Insurance Corporation (FDIC) or which are
collateralized. to the extent uninsured, by any obligation permitted by KRS 41.240(4).
F. Capital Assets
Capital assets. which include land. non-depreciable land improvements, depreciable land improvements,
buildings, furniture and office equipment, building improvements, machinery, equipment. and
infrastructure assets (roads and bridges) that have a useful life of more than one reporting period based
on the government's capitalization policy. are reported in the applicable governmental or business-type
activities of the government-wide financial statements. Such assets are recorded at historical cost or
estimated historical cost when purchased or constructed.
Cost of normal maintenance and repairs that do not add to the value of the asset or materially extend the
asset's life are not capitalized. Land. non-depreciable land improvements. and Construction In Progress
are not depreciated. Interest incurred during construction is not capitalized. Capital assets and
infrastructure are depreciated using the straight-line method of depreciation over the estimated useful
life of the asset.
Capitalization
Threshold
Useful Lifc
(Years)
Land Improvements
Buildings
Building Improvements
Machinery and Equipment
Vehicles
Infrastructure
28
$
s
s
S
s
S
12,500
25.000
25,000
2,500
2.500
20.000
25-40
30-40
15-25
5-10
3-5
15-25
CARTER COCi'\TY
:\01'5 TO Fl:\:\:\CL-\L STATE:\I:\TS
June 30,2011
(Continued)
:\ote 1. Summary of Significant Accounting Policies (Continued)
G. Long-term Obligations
In the government-wide financial statements and proprietary funds in the fund financial statements. long
term debt and other long-term obligations are reported as liabilities in the applicable financial
statements. The principal amount of bonds. notes and financing obligations are reported.
In the fund financial statements. governmental funds recognize bond interest, as well as bond issuance
COSts when received or when paid. during the current period. The principal amount of the debt and
interest are reported as expenditures. Issuance costs. whether or nor withheld from the actual debt
proceeds received. are reponed as expenditures. Debt proceeds are reponed as other financing sources.
H. Fund Equity
In the fund financial statements. governmental funds report aggregate amounts for five classifications of
fund balances based on the constraints imposed on the use of these resources. The nonspendable fund
balance classification includes amounts that cannot be spent because they are either (a) not in spendable
form - prepaid items or inventories: or (b) legally or contractually required to be maintained intact.
The spendable portion of the fund balance comprises the remaining four classifications: restricted,
committed. assigned, and unassigned.
Restricted fund balance. This classi tication reflects the constraints imposed on resources either (a)
externally by creditors. grantors. contributors, or laws or regulations of other governments: or (b)
imposed by law through constitutional provisions or enabling legislation.
Committed fund balance. These amounts can only be used for specific purposes pursuant to
constraints imposed by formal resolutions or ordinances of the fiscal court - the governments
highest level of decision making authority. Those committed amounts cannot be used for any other
purpose unless the fiscal court removes the specified use by taking the same type of action imposing
the commitment. This classification also includes contractual obligations to the extent that existing
resources in the fund have been specifically committed for use in satisfying those contractual
requirements.
Assignedfund balance. This classification reflects the amounts constrained by the county's "intent"
to be used for specific purposes. but are neither restricted nor committed. The fiscal court and
Judge/Executive have authority to assign amounts to be used for specific purposes. Assigned fund
balances include all remaining amounts (except negative balances) that are reported in governmental
funds. other than the General Fund. that are not classified as nonspendable and are neither restricted
nor committed.
Unassigned/lind balance. This fund balance is the residual classification for the General Fund. It is
also used to report negative fund balances in other governmental funds.
When both restricted and unrestricted resources are available for use, it is the counrys policy to use
externally restricted resources first, then unrestricted revenues - committed, assigned, and unassigned
in order as needed.
29
CARTER COUNTY
NOTES TO FlNA:\ClAL STA1'Ey1:\1'5
June 30,2011
(Continued)
~ o t e 1. Summary of Significant Accounting Policies (Continued)
1. Property Tax Calendar
Generally, and except as otherwise provided by law. property taxes are assessed as of January 1. levied
(mailed) November 1, due at discount November 30. due at face value December 31, delinquent
January I following the assessment. and subject to sale ninety days following April 15
th
.
J. Budgetary Information
Annual budgets are adopted on a cash basis of accounting and according to the laws of Kentucky 2.S
required by the State Local Finance Officer.
The County Judge/Executive is required to submit estimated receipts and proposed expenditures to the
fiscal court by May I of each year. The budget is prepared by fund. function, and activity and is
required 1:0 be adopted by the fiscal court by July 1.
The fiscal court may change the original budget by transferring appropriations at the activity level:
however, the fiscal court may not increase the total budget without approval by the State Local Finance
Officer. Expenditures may not exceed budgeted appropriations at the activity level.
Formal budgets are not adopted for the Justice Center Corporation Fund because bond indentures and
other relevant contractual provisions require specific payments to and from this fund annually. The
Department for Local Government does not require this fund to be budgeted.
K. Related Organizations and Jointly Governed Organizations
A related organization is an entity for which a primary government is not financially accountable. It
does not impose will or have a financial benefit or burden relationship, even if the primary government
appoints a voting majority of the related organization's .governing board. Based on these criteria, the
Ambulance Service is considered a related organization of the Carter County Fiscal Court.
A jointly governed organization is an entity that results from a multi-governmental arrangement that is
governed by representatives from each participating government. The entity provides services to the
citizens of each participating government. but there is no ongoing financial interest or responsibility by
the participating governments. The jointly governed organization can act independently of each of the
participating governments. The Northeast Kentucky Regional Industrial Park Authority meets the
criteria noted above and is an organization jointly governed by the Kentucky Counties of Boyd, Carter.
Elliott. Greenup, and Lawrence.
Note 2. Deposits
The primary goverrunent maintained deposits of public funds with depository institutions insured by the
Federal Deposit Insurance Corporation (FDlC) as required by KRS 66.480(1)(d). According to KRS
41.240(4). the depository institution should pledge or provide sufficient collateral which, together with
FDIC insurance, equals or exceeds the amount of public funds on deposit at all times. In order to be
valid against the FDIC in the event of failure or insolvency of the depository institution, this pledge or
provision of collateral should be evidenced by an agreement between the county and the depository
institution, signed by both parties. that is (a) in writing, (b) approved by the board of directors of the
depository institution or its loan committee, which approval must be reflected in the minutes of [he
board or committee, and (c) an official record of the depository institution. These requirements were
met.
30
CARTER COUNTy'
:--'-OTE5 TO FL'{AXCL-\L STATE:\IE:"TS
June 30, 2011
(Continued)
Note 2. Deposits (Continued)
Custodial Credit Risk - Deposits
Custodial credit risk is the risk that in the event oi a depository institution failure, the County's deposits
may not be rerurned. The County does not have a deposit policy for custodial credit risk. but rather
follows the requirements of KRS -t1.240(4). As of June 30. 2011, all deposits were covered by FDIC
insurance or a properly executed collateral security agreement.
Bank Balances Insured By FDIC At June 30, 2011
Bank Balances Collateralized at June 30. 2011
Bank Balance At June 30, 20 J 1
s 466,175
999,853
Note 3. Capital Assets
Capital asset activity for the year ended June 3D. 2811 was as follows:
Prima ry Covernrncu t:
Beginning
Balance Increases Decreases
Ending
Balance
Capital Assets Not Being Depreciated:
Land and Land Improvements
Total Capital Assets Not Being
Depreciated
Capital Assets. Being Depreciated:
Buildings
Equipment
Vehicles
Infrastructure
Total Capital Assets Being
Depreciated
Less Accumulated Depreciation For:
Buildings
Equipment
Vehicles
Infrastructure
Total Accumulated Depreciation
Total Capital Assets. Being
Depreciated. Net
Governmental Acti vities Capital
Assets. Net
s 942,900 s S S 942.900
942.900 942.900
14.121.535 14.121.535
2.0H.155 (10.000) 2.034,155
1.034.628 137.410 (186.919) 985.119
5,103,766 791.894 5,895,660
22.304.084 929.304 (196.919) 23.036,469
(3.135,463) (341.692) (3.477,155)
(1,251,476) (161,473) 9.500 ( 1.403,449)
(923,689) (67,033) 183,169 (S07,553)
(1,342,667) (393,044) (l,735,711)
(6.653,295) (963,242) 192.669 (7,423,868)
15,650,789 (33,938) (4.250) 15,612,601
S 16,593,689 $ (33,938) $ (4.250) $ 16,555,501
31
C.-\RTER COCNTY
NOTES TO FDiA2\CTAL ST.-\ TEME1"TS
June 30, 20ll
(Continued)
Note 3. Capital Assets (Continued)
Beginning
Balance Increases Decreases
Ending
Balance
Business-Tvpe Activities:
Capital Assets. Being Depreciated:
Equipment S 60.173 $ 13,783 S S 73.956
Total Capital Assets Being
Depreciated 60.173 13.783 73.956
Less Accumulated Depreciation For:
Equipment (55.689) (4.881) (60,570)
Total Accumulated Depreciation (55.689) (4,88) ) (60,570)
Total Capital Assets. Being
Depreciated. Net 4,484 8,902 13,386
Business-Type Activities Capital
Assets, Net s 4,484 S 8,902 S 0 $ 13,386
Depreciation expense was charged to functions of the primary government as follows:
General Government
Protection to Persons and Property
General Health and Sanitation
Roads, Including Depreciation of General Infrastructure Assets
Total Depreciation Expense - Governmental Activities
Business-Tvpe Activities
Jail Canteen
Total Depreciation Expense - Business Activities
S 38,380
448.182
1.220
475,460
S 963,242
S 4.881
S 4.881
Subsequent Review
Subsequent events have been evaluated through January 27. 2012. which is the date the financial
statements were available to be issued.
32
CARTER COU;\TY
;:\'01'5 TO FINA:\CIAL 51'AT;\1:\1'5
.Iune 30.2011
(Continued)
Note 5. Lung-term Debt
A. Improvement Bonds, Series 2001
On May 1,2001, the Carter County Fiscal COUI1 issued $6,105,000 of General Obligation improvement
bonds for financing the construction of the Caner County Detention Facility. The bonds require
semiannual interest and principal payments to be made on May 1 and November l of each year. The
interest rate is variable and was 4.20% during the fiscal year ended June 30. 2011. The interest
payments commenced on November 1. 200 I, and the principal payments commenced on May I, 2003.
As of June 30. 2011. the principal amount outstanding was S5.160,000. Bond payments for me
remaining years are:
Governmental Activities
Fiscal Year Ended
June 30 Principal Interest
2012 140,000 258,890
2013 145,000 252.660
2014 155,000 246.063
2015 160.000 233,855
2016 170,000 231.255
2017 -2021 990.000 1,023.265
2022-2026 1.300.000 744.919
2027-2031 1,700.000 374.125
2032 400,000 20.500
Totals S 5,160.000 s 3.390,532
B. First Mortgage Revenue Bonds, Series 2009
On August 1. 200 I, the Carter County Justice Center Corporation. Administrative Office of the Courts
(AOC). and the county entered into a lease agreement for the purpose of constructing the Justice Center
and obtaining office rental space for the AOC at the Justice Center. Subsequently, on July 1, 2002, the
Carter County Justice Center Corporation issued First Mortgage Revenue Bonds in order to construct
the Carter County Justice Center. These bonds were defeased with me issuance of First Mortgage
Revenue Bonds dated November I. 2010.
C. First Mortgage Revenue Bonds, Series 2010
On November I. 2010. The Carter County Justice Corporation issued First Mortgage Revenue Bonds in
order to defease the 2009 Series Revenue Bonds.
The Carter County Justice Center Corporation and the Kentucky Area Development Districts Financing
Trust are acting as agents for the AOC in order to manage and maintain the Justice' Center. The Carter
County Justice Center Corporation and the Kentucky Area Development Districts Financing Trust
expect annual rentals from the AOC for use of the Justice Center to be in the full amount of the.annual
principal and interest requirements of the bonds. Under the terms of the lease, the AOC has agreed to
pay directly to the paying agent bank, me use allowance payment as provided in the lease. The lease
agreement is renewable each year. The Carter County Justice Center Corporation and the Kentucky
Area Development District, Financing Trust are in reliance upon the use allowance payment in order to
meet me debt service for the bonds.
33
CARTER COUNTY
NOTES TO FINANCIAL STAT f ~ I E N T S
Junc 30, 2011
(Coutinucd)
Note 5. Lung-term Dcht (Continued)
C. First :\Iortgagc Revenue Bonds, Series 2002 (Continued)
The use allowance payment commenced with occupancy of the Justice Center by the Administrative
Office of the Courts. The AOC with the execution of the lease has expressed its intention to continue to
pay the full use allowance payment in each successive biennial budget period until March I, 2022. but
the lease does not legally obligate the Administrative Office of Courts to do so.
The bonds require semiannual interest and principal payments to be made on March I and September 1
of each year. The interest rate is variable ranging from 1.25% to 3.25%. The interest payments
commenced on March I. 20 II, and the principal payments commence on March 1. 2013. As of June
30. 2011, the principal amount outstanding was 55.300,000. Bond payments for the remaining years
are:
Fiscal Year Ended
2012 66,250
2013 390,000 66.250
201..t 435.000 98.200
2015 445,000 89.500
2016 450.000 92,690
2017-2021 2.475.000 393.000
20222023 1.105.000 53,723
Totals s 5300.000 $ 859.613
D. Kentucky Area Development District Financing Program
On October 9. 2003. the Carter County Justice Center Corporation entered into a 20-year lease
agreement with the Kentucky Area Development Districts Financing Trust in the amount of S380.000.
The proceeds of the lease were used to fund a portion of the construction costs associated with the new
Justice Center. A principal payment of S170.000 was paid on May 28. 2004 with the remaining
principal due annually commencing on December 1. 2006. The agreement requires semiannual interest
payments at an average rate of 3.86 percent. The Administrati ve Office of the Courts is expected to pay
the full amount of the principal and interest payments. The principal outstanding as of June 30. 2011
was $130.000.
34
CARTER COUNTY
NOTES TO FI:\.-\NCIAL STATK\lE.\"TS
June 30, 2011
(Continued)
Note 5. Long-term Debt (Continued)
D. Kentucky Area Development District Financing Program (Continued)
Future principal and interest requirements are:
E. Road Equipment
Fiscal Year Ended
June 30
2012
2013
2014
2015
2016
2017-2021
2022-2023
Totals s
Principal
15,000
10,000
10,000
10.000
10.000
55,000
20.000
130.000 $
Interest
5.198
4,759
4,390
4,008
3,613
10,696
960
33,624
In October 2009, the county entered into a financing obligation agreement for S300,000 with The
Commercial Bank of Grayson for the purchase of road equipment. Terms of the agreement stipulate a
five-year repayment schedule. with annual principal and interest payments at an interest rate of 3.95%.
The principal and interest are due on September 1 of each year to end on September 1. 2014. As of June
30. 20 II. the principal balance remaining was 5238.531.
Fiscal Year Ended
June 30
2012
2013
2014
2015
Totals s
Principal
57.508
59,779
62.141
59,103
238.531
35
s
Interest
9.422
7,150
4,789
2,524
23.885
CARTER COU:\TY
:\OTES TO Fl:\A\"CL\L 51'.-\TE.\1E:\TS
June 30, 2011
(Continued)
F. Grahn Fire Department - Fire Truck
On March 7. 2005, the Carter County Fiscal Court entered into a S93,000 agreement with the Kentucky
Association of Counties Leasing Trust Program for the acquisition of a fire truck, Terms of the
agreement stipulate a ten-year repayment schedule, with variable interest payments and variable annual
principal payments ending on July 20. 2015, The interest rate during the fiscal year ended June 30.
2011 was 4.383%. As of June 30.2011. the principal balance remaining was 552.503. Future principal
and interest requirements are:
Fiscal Year Ended
June 30
2012
2013
2014
2015
2016
Totals s
Principal
S,140
8,484
8,843
9.216
17,820
52,503 s
.Interest
1,860
1.516
1.1.57
784
5,690
The Grahn Fire Depart ment has agreed to make the principal payments for the term of the lease
agreement. However, the Grahn Fire Department is under no binding agreement to make the required
payments.
G. Hitchins Fire Department - Fire Pumper
On June 22 2006, the Carter County Fiscal Court entered into a $140,000 agreement with the Kentucky
Association of Counties Leasing Trust Program for the acquisition of a fire pumper. Terms of the
agreement stipulate a twelve-year repayment schedule, with variable interest payments and variable
annual principal payments ending on July 20. 2017. The interest rate during w'e fiscal year ended June
30, 20 II was 4.591 %. As of June 30. 20 II, the principal balance remaining was $92.550. Future
principal and interest requirements are:
Fiscal Ycar Ended
2012 6.434 2,980
2013 6,707 3,013
2014 6,991 3,009
2015 7.267 2.713
2016 7,593 2.260
2017-2018 57.558 1.964
Totals $ 92,550 s 15,939
36
CARTER COl:NTY
I"OTES TO Fl NAJ'iCIAL STA
June 30.2011
(Continued)
1\ate 5. Long-term Debt (Continued)
G. Hitchins Fire Dcpurtrneut - Fire Pumper (Continued)
The Hitchins Fire Department has agreed to make the principal payments for the term of the lease
agreement. However. the Hitchins Fire Department is under no binding agreement to make the required
payments.
H. Norton Branch Fire Department - Fire Truck
On June 30 2006. the Caner County Fiscal Court entered into a $148,000 agreement with the
Kentucky Association of Counties Leasing Trust Program for the acquisition of a fire truck. Terms
of the agreement stipulate a fourteen-year repayment schedule. with 4.5% interest payments and
variable annual principal payments ending on December 20. 2020. As of June 30. 2011. the
principal balance remaining was $103.000. Future principal and interest requirements are:
Fiscal Year Ended
June 30 Principal . Interest
2012 10.000 5,155
2013 10,000 4,661
2014 10,000 4.159
2015 10.000 3.654
2016 10,000 3,149
2017-2021 53.000 8.033
Totals s 103,000 S 28.811
The Norton Branch Fire Department has agreed to make the principal payments for the term of the
lease agreement. However, the Norton Branch Fire Department is under no binding agreement to
make the required payments.
I. Carter County Tactical Search-Rescue Service Inc. - Rescue Truck
On January 19, 2007, the Caner County Fiscal Court and the Caner County Tactical Search-
Rescue Service signed a S19,291 promissory note with the Commercial Bank of Grayson for the
acquisition of a rescue truck. Terms of the agreement stipulate a five-year repayment schedule,
with a 5% stated rate of interest and annual payments of $4,392 beginning October 1. 2007 and
ending on October 11. 2011. As of June 30, 1011, the principal balance remaining was $0.
37
CARTER COUNTY
!"I'OTES TO FINANCIAL ST.-\TL\'l:\TS
June 30, 2011
(Continued)
J. Erncrgcncy Management Services Equipment
On April 20, 2009. the Carter County Fiscal Court entered into a S100.000 lease agreement with
the Kentucky Association of Counties Leasing Trust Program for the acquisition of emergency
management services equipment. Terms of the agreement stipulate a thirty-six month repayment
schedule, with variable interest payments and variable monthly principal payments ending on April
20. 2012. The interest rate during the fiscal year ended June 30. 20 II was 4.181 %. As of June 30,
2011. the principal balance remaining \.... as S28.632. Future principal and interest requirements are:
K. Fire Truck
Fiscal Year Ended
June ]0
2012
Totals s
Principal
28.632
28.632
Interest
738
738
On June I, 2007, the Carter County Fiscal Court entered into a $95,000 lease agreement with the
Kentucky Association of Counties Leasing Trust Program for the acquisition of a fire truck. Terms
of the agreement stipulate a ten-year repayment schedule. with variable interest payments and
variable monthly principal payments ending on July 20. 2017. The interest rate during the fiscal
year ended June 30, 20 II was 4.593%. As of June 30, 2011. the principal balance remaining was
S69.615. Future principal and interest requirements are:
Fiscal Year Ended
2012 7.211 2.789
2013 7.516 2..+84
2014 7.833 2,165
2015 8,165 1.835
2016 8.508 1,492
2017-2018 30.382 1.225
Totals S 69.615 s 11.990
38
C.-\RTER COU::--iTY
:\"01'5 TO FlNA1'iCI.-\L STATE:\U:':\TS
June 30, 201 I
(Continued)
L. Fire And Police Equipment
On October 8. 2010. the Carter County Fiscal Court entered into a $135.100 loan with First
National Bank for the acquisition of fire and police equipment. Terms of the agreement stipulate a
five-year repayment schedule. with annual interest and principal payments ending on October 15.
2015. The interest rate during the fiscal year ended June 30. 2011 was 3.95%. As of June 30.
2011, the principal balance remaining was 5135,100. Future principal and interest requirements
are:
Fiscal Year Ended
2012
2013
2014
2015
2016
11.176
11,714
12,197
12,685
87,328
5.514
4,977
4,494
4.005
3.497
22,487 135,100 $
======
Totals
M, Sherlff s Cruiser
On October 8. 2010, the Carter County Fiscal Court enlered into a S87, 100 loan with First National
Bank for the acquisition of four sheriff s police cruisers. Terms of the agreement stipulate a three-
year repayment schedule, with annual interest and principal payments ending on October 15. 2013.
The interest rate during the fiscal year ended June 30.2011 was 3.95%. As of June 30,2011, the
principal balance remaining was $87, 100. Future principal and interest requirements are:
Principal fntetest
27,859 3.555
29,036 2,379
30,205 1.210
s 87,100 $ 7.144 Totals
Fiscal Year Ended
June 30
2012
2013
2014
39
CARTER COl":"TY
NOTES TO FI:\A.\Tl:\L
.June30.2011
(Continued)
Changes In Long-term Liabilities
Long-term liability activity for the year ended June 30, 2011. was as follows:
Beginning Ending Due Within
Balance Additions Reductions Balance One Year
Primal"): Government:
Governmental Activities'
General Obligation
Improvement Bonds S 5.295.000 s (135.000) s 5.160.000 $ 140.000
Revenue Bonds 5.510.000 5.300.000 (5.510,000) 5.300.000
Financing Obligations 856.999 222,200 (142.169) 937.030 171.960
Long-term Liabilities S 11.661.999 S 5.522.200 s (5,787,169) S 11,397,030 $ 311.960
O. Debt Service
Debt service on the Statement of Activities includes interest of $345,305 and bond issuance costs of
S115,411.
Note 6. Employee Retirement System
The fiscal court has elected to participate in the County Employees Retirement System (CERS).
pursuant to KRS 78.530 administered by the Board of Trustees of the Kentucky Retirement
Systems. This is a cost sharing. multiple employer defined benefit pension plan. which covers all
eligible full-time employees and provides for retirement. disability and death benefits to plan
members. Benefit contributions and provisions established by statute.
Nonhazardous covered employees are required to contribute 5 percent of their salary to the plan.
Nonhazardous covered employees who begin participation on or after September I. 2008 are
required to contribute 6 percent of their salary to be allocated as follows: 5% will go to the
member's account and 1% will go to the KRS insurance fund. The county's contribution rate for
nonhazardous employees was 16.93 percent.
Hazardous covered employees are required to contribute 8 percent of their salary to the plan.
Hazardous covered employees who begin participation on or after September I. 2008 are required
to contribute 9 percent of their salary to be allocated as follows: 8% will go to the member' 5
account and I% will go to the KRS insurance fund. The county's contribution rate for hazardous
employees was 33.25 percent.
The county's contribution for FY 2009 was S244,562 and FY 20 to was S293.586 and FY 2011
was 5296.736.
40
CAHTER COUNTY
NOTES TO FINANCIAL ST.-\TEi\lEi\TS
June 30, zon
(Continued)
Note 6. Employee Retirerncnt System (Continued)
Benefits fully vest on reaching five years of service for nonhazardous employees. Aspects of
benefits for nonhazardous employees include retirement after 27 years of service or age 65.
Nonhazardous employees who begin participation on or after September 1. :2008 must meet the rule
of 87 (members age plus years of service credit must equal 87. and the member must be a
minimum of 57 years of age) or the member is age 65, with a minimum of 60 months service
credit.
Aspects of benefits for hazardous employees include retirement after 20 years of service or age 55.
For hazardous employees who begin participation on or after September 1, 2008 aspects of benefits
include retirement after 25 years of service or the member is age 60, with a minimum of 60 months
of service credit.
CERS also provides post retirement health care coverage as follows:
For member participating prior to July I, 2003. years of service and respective percentages
ofthc maximum contribution are as follows:
Years of Service
20 or more
15-19
10-14
4-9
Less than 4
% Paid by Insurance Fund
100%
75%
50%
25%
0%
% Paid by Member through
Payroll Deduction
0%
25%
50%
75%
100%
As a result of House Bill 290 (2004 General Assembly). medical insurance benefits are calculated
differently for members who began participation on or after July 1.2003. Once members reach a
minimum vesting period often years. non-hazardous employees whose participation began on or
after July 1,2003. earn ten dollars per month for insurance benefits at retirement for every year of
earned service without regard to a maximum dollar amount.
Hazardous employees whose participation began on or after July I. 2003. earn fifteen dollars per
month for insurance benefits at retirement for every year of earned service without regard to a
maximum dollar amount. Upon the death of a hazardous employee, such employee's spouse
receives ten dollars per month for insurance benefits for each year of the deceased employee's
hazardous service. This dollar amount is subject to adjustment annually based on the retiree cost of
living adjustment. which is updated annually due to changes in the Consumer Price Index.
Historical trend information showing the CERS' progress in accumulating sufficient assets to pay
benefits when due is presented in the Keutuckv Retirement Systems' annual financial report. This
report may be obtained by writing the Kentucky Retirement Systems, 1260 Louisville Road,
Frankfort, KY 40601-6124, or by telephone at (502) 564-4646.
41
CARTER COCNTY
~ O T E S TO Fli\ANClAL STATb\IE:\TS
June 30,2011
(Continued)
Note 7. Insurance
For the fiscal year ended June 30, 201 L Carter County was a member of the Kentucky Association of
Counties' All Lines Fund (KALF). KALF is a self-insurance fund and was organized to obtain lower
cost coverage for general liability property damage. public officials' errors and omissions, public
liability, and other damages. The basic nature of a self-insurance program is that of a collectively
shared risk by its members. If losses incurred for covered claims exceed the resources contributed by
the members. the members are responsible for payment of the excess losses.
42
C.-\.RTER CO UNTY
BUDGETAHY COMPARISON SCLLEDULES
Required Supplementary Information - Muditicd Cash Basis
For The Year Ended .Iu ne 311,2011
43
CARTER C O U ~ T Y
BI;OGET.\RY CO.\'IPARISO.\' SCHEDULLS
Required Supplementary Information - .\'lodified Cash B;ISis
GENERAL fL'XD
Actual Variance with
Amounts, Final Budget
Budgeted Amounts (Budgetary Positive
Original Final Basis) (Negative)
RE\'"Ei\"UES
Taxes S 1,343.000 S 1.343.000 S 1,489.738 S 146,738
In Lieu Tax Payments 8.000 8,000 (8,000)
Excess Fees 35.500 35.500 79,581 44,081
Licenses and Permits 37.100 37.100 59.610 22,510
Intergovernmental 505,950 542,928 551,387 8,459
Charges for Services 3,800 3,800 1.790 (2.010)
MiscclIaneous 50.800 66,304 136.807 70,503
Interest 750 750 407 (343)
Total Revenues 1.994,900 2.037,382 2.319.320 281,938
EXPE1\DITL'RES
General Government 1,190.533 1.311,958 1,370,448 (58,490)
Protection to Persons and Property 16.361 33.696 207.645 (173.949)
General Health and Sanitation 40,400 40.400 36,657 3,743
Recreation and Culture 18,000 18.000 13.500 4,500
Debt Service 6,700 6.700 6,700
Administration 461.156 451.878 433,528 18,350
Total Expenditures 1,733,150 1.862,632 2,061,778 (199,146)
Financing Sources (Uses) 261,750 174,750 257.542 82,792
OTHER FE\Al,CL'\G SOURCES (USES)
Debt Proceeds 87.000 222.200 135,200
Transfers To Other Funds (780,700) (780,700) (889,500) (108.800)
Transfers From Other Funds 214.000 214,000 130,000 (84,000)
Total Other Financing Sources (Uses) (566.700) (479.700) (537,300) (57,600)
Net Changes in Fund Balance (304,950) (304,950) (279.758) 25.192
Fund Balance - Beginning 304,950 304,950 346.843 41,893
Fund Balance - Ending S 0 S 0 S 67,085 S 67,085
44
CARTER COU.'iTY
BlDGETARY SCHEOU.ES
Required Supplementary Information - 1'ludilied Cash Basis
For The Year Ended June 30, :!Ul1
(Continued)
ROAD FUND

Intergovernmental S 1,681,500 s 1,681,500 S 2,700,287 S 1,018,787
Miscellaneous 1,000 1,000 16,140 15,140
Interest 4,000 4,000 1,012 (2,988)
Talai Revenues 1.686,500 1,686,500 2,717,439 1.030,939
EXPE:'\UITURES
Roads 1,456,400 1,473,914 2,127,995 (6.54,081)
Debt Service 75,000 80,082 66,930 13.152
Administration 274,150 251,554 187, I01 64.453
TOlal Expenditures 1.805,550 1,805,550 2,382,026 (576,476)
Financing Sources (Uses) (119,050) (119,050) 335,413 454,463
OTHER Fli\'ANCING SOL:RCES (USES)
Transfers To Other Funds (177,000) (177,000) (150,000) 27,000
Total Other Financing Sources (Uses) (177,000) (177,000) (150,000) 27,000
Net Changes in Fund Balance (296,050) (296,050) 185,413 481,463
Fund Balance - Beginning S 296,050 $ 296,050 S 237,064 (58,986)
Fund Balance - Ending S 0 S 0 S 422,477 S 422,477
45
CARTER COUl\TY
BUDGETARY COL\IPARlSO:\ SCHEDL"LES
Required Supplementary Information - :\lodillcd Cash Basis
For The Year Endcd .Iune 30. 21111
(Continucd)
./.-\ LL n:~ J)
Amounts. Final Budget
'" .
REVEI\CES
lntergovernmenta I S 1,510,200 s 1,510,200 S 1,432,552 s (77,648)
Charges for Services 13,000 13.000 8.045 (4.955)
Miscellaneous 187,000 , 87,000 164.296 (n.704)
Interest 250 ~ 5 0 119 (131 )
Total Revenues 1.710,450 1,710.450 1,605,012 (105,438)
EXPEi\DITURES
Protection to Persons and Property 1,648,100 1,675.517 1,750,845 (75.328)
Debt Service
Principal 140.000 140.000 135,102 4.898
[merest 260.000 267.381 264.763 2.618
Administration 523,050 488,252 440,894 4.7.358
Total Expenditures 2,571,150 2,571,150 2.591.604 (20.454)
Financing Sources (Uses) (860,700) (860,700) (986.592) (125.892)
OTHER FL'lANCL['.'G SOlJHCES (USES)
Transfers From Other Funds 770.700 770,700 834.500 63.800
Transfers To Other Funds
Total Other Financing Sources (Uses) 770.700 770.700 834.500 63,800
Net Changes in FW1d Balance (90,000) (90,000) ( 152.092) (62.092)
Fund Balance - Beginning 90,000 90,000 175.494 85,494
Fund Balance - Ending S 0 s 0 S 23,402 s 23,402
46
C.-\RTER
BUDGETARY SCBEDCLES
Required Supplementary Information - :\lodified Cash Basis
(Continued)
LOCAL ECO:'iOi\UC GR.-\ST
REVE.:'I"""lTS
Intergovernmental s 450,750 S 450.750 S 555,609 $ 104,859
Charges for Services 86,500 86,500 85.990 (510)
Miscellaneous 250 250 41,360 41,110
Interest 100 100 245 145
Total Revenues 537,600 537,600 683.204 145,604

General Government 18,400 1&,400 15,116 3,284
Protection to Persons and Property 249.450 251.048 257,295 (6,247)
General Health and Sanitation 63.950 109.421 109,262 159
Social Services 1.000

55 182 z:: I
Recreation and Culture 37,750 17,750 35.500 (17.750)
Debt Service 44.348 (44.348)
Administration 160,050 133,744 126.337 7,407
Total Expenditures 530,600 530,600 587,913 (57,313)
Financing Sources (Uses) 7,000 7,000 95.291 88.291
OTHER FINA.:"iCING SOURCES (CSES)
Transfers From Other Funds 75,000 75.000
Transfers To Other Funds (37,000) (37,000) 37,000
Total Other Financing Sources (Uses) (37,000) (37,000) 75,000 112,000
Net Changes in Fund Balance (30,000) (30,000) 170,291 200.291
Fund Balance Beginning 30.000 30,000 36,026 6,026
Fund Balance Ending S
s 0 S 206.317 $ 206,317
47
CARTER COUNTY
NOTES TO REQUIRED SL'PPLEl\IENTARY INFOR;\IAnON
.June 30,2011
I\ote 1. Budgetary Information
Annual budgets are adopted on a cash basis of accounting and according to the laws of Kentucky as
required by the State Local Finance Officer. Formal budgets are not adopted for the Justice Center
Corporation Fund.
The County Judge/Executive is required to submit estimated receipts and proposed expenditures to the
fiscal court by May I of each year. The budget is prepared by lund. function. and activity and is
required to be adopted by the fiscal court by July 1.
The fiscal court may change the original budget by transferring appropriations at the activity level:
however, the fiscal court may not increase the total budget without approval by the State Local Finance
Officer. Expenditures may not exceed budgeted appropriations at the activity level.
The fiscal court exceeded its budgeted expenditures in the Road Fund because they did not budget for
capital assets and related debt.
Reconclllatlon of General Fund
Total Revenues - Budgetary Basis
Plus: Miscellaneous Revenues for County Debt Paid by Others
Total Revenues - Modified Cash Basis
Total Expendirures - Budgetary Basis
Plus: Expenditures for debt service paid by others
Total Expenditures - Modified Cash Basis
S 2,319,320
10.052
S 2,329,372
S 2.061.778
10,052
s 2,071.830
48
CARTER COUNn'
CO)IBl:\I:\C B.-\.LA.NCE SHEET-
NO:-;l\L-\JOR COVER.")!E:\TAL FeNDS - .'dODlFIED CASH BASIS
Other Supplementary luformatinu
JlllieJO.2011
49
CA.RTIR COUNTY
COMBI.'il:-1G BAL-\:'ICE SH.EET-
:\Oi'i-.\L\JOR GO\"ER:'i.\IE:'iTAL FCSDS - .\tODIFlED CASH BASIS
Other Supplementary Information
June 30. 2011
Corn rn unity
Development Total
Block Non-l\lajor
For est ry Grant E-911 Covernrn ental
Fund Fund Fund Funds
ASSETS
Cash and Cash Equivalents S 13,215 S 11,557 s 62,813 S 87,585
Total Assets 13,215 11,557 62,813 87,:585
FU':-;D
Restricted For:
General Health and Sanitation I J ,5:57 11,557
and Property 13,215 62,813 76,028
Total Fund Balances S 13,215 S 11,557 S 62,8 3 S 87,585
Tne accompanvinz notes are an intearal part of the financial statements.
- . - 50
CARTER COUl';TY
COMBIl\"ING STATEl\IE:.\T OF REVENUES, .-\.'\D CR.-'\.i"lGES
IS FLSD BALANCES - GOVERNMENTAL FU:,/DS - CASH BASIS
Other Supplementary Information
For The Year Ended June 3U, 2011
51
C:\RTER COUNTY
STATE.\lE:'iT OF IlliVE\CES, EXPENDITURES. A\D CHANGI;:S
I:" Fe:"n BALASCES - \O.'\-:>L-\.JOR GOVER\,\IEl\TAL FUi\DS - MODIFIED CASH BASIS
Other Supplementary lufurrna tiuu
For The Year Ended June 30. 201 I
Total
Community Non-Major
Forestry Development E-911 Governmental
Fund Block Grant Fund Funds

Taxes S 2,750 $ 202,205 S 204,955
Intergovernmental 7,500 I3
J,155 141.655
Interest Income 96 96
Total Revenues 2.750 7,500 336,456 346,706

General Government
Protection to Persons and Property 3,397 265,477 268,874
General Health and Sanitation 7,500 7.500
Debt Service 38,200 38,200
Administration 31.992 31,992
Total Expenditures 3,397 7,500 335,669 346,566
Financing Sources (Uses) (647) 787 140
OTHER SOURCES (USES)
Transfers From Other Funds
Total Other Financing Sources (Uses)
Net Change in Fund Balances (647) 787 140
Fund Balances - Beginning 13,862 11,557 62.026 87.445
Fund Balances - Ending S 13,215 S 11,557 s 62,813 S 87,585
The accompanying notes are an inSrral part of the financial statements.
CARTER COUNTY
SCHEDULE Of EXI'Ei\,DLTDliS OF FEDERAL AWARDS
For the Year Ended June 30, 2011
Program Title
C;.S. Department of Homeland Security
Passed through the Kentucky Department ojHomeland Security
Disaster Grants - Public Assistance DR# 1925
Homeland Security Grant Program
Emergency Management Performance Grant
V.S. Department of Agriculture
Narural Resources Conservation Service
Emergency Watershed Protection Program
Office of Rural Development. Community Facilities
Loans and Grants
U.S. Department of Housing and Urban Development
Passed Through Kentucky Department for Local Government
Community Development Block Grant
TOTAL EXPEi\DITURS OF FEDER-\L.-\WARDS
Pass-
Through
Grantor's
Number
Unknown
Unknown
Unknown
N/A
Unknown
Federal
eFDA No.
97.036
97.067
97.042
10.923
10.766
14.228
s
$
Expenditures
92.697
56.572
12, 105
233,291
36.978
279,140
710.783
The accompanying notes are an integral part of' the financial statements.
53
CARTER COUNTY
NOTES TO THE SCHEDULE OF OF FEDER-\L AWARDS
Fur the Year Ended .Junc 3D, 2011
Note 1 - Basis of Presentation
The accompanying Schedule of Expenditures of Federal Awards includes the federal grant activity of Carter County,
Kentucky and i.s presented on a modified cash basis of accounting. The information is this schedule is presented in
accordance with the requirement Circular A- I 33_ Audits of Slates. Local Governments, and Non-Profit
Organizations.
The accompanying notes are an i
S
4"mlpart of tbe financial statements.
Rr;PORT ON CO:"TROL OVER .-\.i."lJ) ON
COMP[L-\.."lCE AND OTHER:\L-\TTERS B.-\SEDON AN AUDIT OF FI0.-\...'\CL-\.L STATEyIEf';TS
PERFOR.'\lED I:" ACCORDASCE WITH GOVERS\IE0T STA.:.... D.\RDS
55
Brenda K. J\'Iorgan. CPA
Jody B. Franklin. CPA
7-.+9 Broad way Street
P.O. Box 42R
West Liberty. 1<.1' 4 1472
Phone: (606) 743- 1884
Fax: (606) 743- 1895
www.morganfrankIi ncpa.COIll
The Honorable Charles Carter County Judge/Executive
Me", bel'S of the: Carter Count: F;SC2.! CouI,
Report On Internal Co ntrol Over Financial Reporting "\.nd
On Compliance Ot her \f3ncrs Based On An Audit Of Financial
StaLlC.ll l..l,: nts ..!..",;_c() r:hncc \\lith (Jovcrrlment AudiIl l1 !! Standards
\Ve have aud ired the Finaneial statemenIs DCt he glwernll1en ta I act ivi ties, the bus mess-type acti vitics. e:1Ch
major f'Jnd, and the aggrcpte rernaming fund informat ion 0 f Carter COU"[::. J< cntucky, as of and fix the
:' car ended June 3O. 201 L \\ ,':;ch collecti v(; !: comprise the Cou ntv s basic finan cia l statements and have
issued our rep ort t!:C!'COI1 d,ltd January Tl , ::'11 \ 2. Caner Counrv presents its fi" llT1 cial statements ,) [1 the
modifi ed cash basis of acoJDti ng whid, is a comprehensive basis of accounting other than gcnt:.:ra]\:--
accepted ac count! ng. princ i Ples. \V e condLJ et l:d our aud it in accordance with aud iti ng standards ge-no:rally
accepted in the Lini ted States of .'\ mcrica and the standards npp Ii cable to Finaneia] audits contained in
(im'ernmcfi( Auditing Staniiards. issue.l by the Comptroller General of the United States,
Interna l Cont rol Over Fi naliC iai Renc' r.. il1 C'
t
v
1:J ncgemern of Carter Counry is resp onsible for establishinz and ms iruaining e ffect ive: internal control
over financial reponing. In planning and performing our audit) we considered the County's internal
control over financial reporting 9.5 a for designing our illiditing procedures for the purpose 01
expressing our opinions un the financia l statements, but not Ill[ the purpose of cxpressiug an opinion on
the ettecti vcne ss o I' the Counrys in ternal cont ra 1 over Ilna ill.' iill report: ng Accord i ngIy. we do net
express an op.nion Oil [he effccii ven ess or" the Counrv s i 11 tcrna I Conrrol 0\' er II nancia I reponing,
Our consideration of internal control over financial reporting was for the limi ted purpose described in the
preceding paragraph and was not designed to idenrify all ddiciencies in internal control over financial
reporting that might be sign:f!C3Jlt Je llcit:IK\(:s, or material weaknesses and therefore, there C311 be no
assurance thai: all dcticiencics, sign ificant deficiencies. 01' l1l;Jteria! weaknesses have been ickntiiied.
However. as described in the accc rnpanvi ng schedule of 1\I1dings and questioned COS!S, we identi ficd
ce rtain ceficienc ics in interna ! co ntro l ove r tinanc ial reponing that we cons ider to be material weaknesses
and 0[:-,<0 r defic ien cics that we con sider to be si gnifican: defi cicnc ies.
A deficiency In tnternul control exist s wiler, the design or operation or <I control does not allow
management or ernp loyu:s. in the norm a! course of performi II g their ass igned luncti OT1S, to prevent, or
detect <Ina correct rnisstmements on a time ly basis. >\ material weakness is a deficiency, or a combination
of dcfic iericies, in internal centro I sue h that there is it reasonab Ie poss i bi! ity that a rnaterial !11isstaterncnt
o f the entity . s ti nancial st a te.uerus wi I[ no! he prevent ed, or detected and corrected on J. t ime lv bas is. \Vf:;
consider the deficiencies uesc rbed in (\)c ::cc,) mp, mying scbcdule of findi ngs and questioned costs ,is
items :? 0 ll---'i . 20 1i - 5, 20 j 1-6. 2D11-7. ::. 0 I i -8. 20 I 1-9. 20 11-1O. and :2011- j 1 to be v,-eakneS5t: s.
56
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
(Continued)
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. We consider the deficiencies described in the accompanying schedule offindings and
questioned costs as items 2011-12 and 2011-13 to be significant deficiencies.
Compliance ..\.nd Other J\-latters
As part of obtaining reasonable assurance about whether the County's financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of Jaws, 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 instances of noncompliance or other matters that are required to be reported
under Government Auditing Standards and which are described in the accompanying schedule of findings
and questioned costs as items 2011-1, 20112, and 2011-3.
The Carter County Judge/Executive's responses to the findings identified in our audit are described in the
accompanying schedule of findings and questioned costs. \Ve did not audit the Judge's responses and,
accordingly. we express no opinion on them.
This report is intended solely for the information and use of management, others within the entity. the
Department for Local Government, federal awarding agencies and pass-through entities and is not
intended to be and should not be used by anyone other than these specified parties.
Morgan-Franklin, LLC
West Liberty. Kentucky
Januarv 27. 2012
57
l)1)EPE:'-.1)ENT AUDITORS' REPORT ox CO;\,U'LIA1'iCE wrrn RQL1RE.\lE"'-TS TEL-\.T COULD B.A.VI
A DlRECT .-L~ 1 ) C\L-\TERL:\.L EFFECT 0;\ EACH MAJOR PROGRAM ASD 0:\ INTEH.!.'AL CONTROL
OV"ER COi\lPLIA.\CE e,,- ACCORDA..l'KE WITH Ol'rLB CIRCCL.-\R A-133
58
Brenda K. Morgan. CP.-\
Jody B. Fra nklin. CEL\

b'!4ied fJf!tu
749 Broa dway Street
r.o. Box 418
West Libert y. K'r'
Phone: (606 ) 743-1884
Fax: (606) 743- 1895
w\V\V.morganfrankIi ncpa.COI11
Tr,e Horiorabie Charles Judge/Execut ive
k ::':", Cane r Co unt: I C0 \: :.
-[h 2..t Have
A Direct A::d '\ !.,c--:: f:2i Ef:'-:: c: 0 .1 =J.c"c; i\'L:!J ell' Pro gn:. m _"\ nd Ck l;; ':c:ruill Control
V-/ ith Otv(B (ire\!l;'., ,-"-.. -133
.cD mpI i;1 ;1U:
i,1/ t f12\f.: th e C""t: r e l) '.: :',' :' f ; 5 G()1T1 Ph an c e w] rh the 1': 0'))0:;; (\ camp liance requir ern ent s
:icscri b'tc ::'1 Supp le ment co uld 2. dLrec::
on or' CO'..l nt;-::; .or [he yea r June 30. 2
1
) 1. The
c : aud iiors or :ie
:..i[' ccs .s \\. :Ii \) !'
[0 each ,) ( 1S the ot- Countys manag ernen:
Our respousibility is to opi nion on the County's comp liance on ouraudi t.
o f Azr.e rtc a: .o ir; Go vcrrnnen:
Standcrds, issued by the: Ge: era! or lhe UQitt:: d SUHi::S ; and O\-!B Circular ,'\ - 133, A:.Jd:'!s of
Swce.\ , Local Governments, XOII- Pro}:: Orgcn isanons . Thos e s. undards 2__nd OM B Ci rc ular A- 133
requlr' c plan and aud!t .o ob tain about whether noncc rr .phance
\\ tJ.e coraplianc- tc that COl.d J (: :In(:
or. 1 pro '.,)C,: .-\.... aud.: :.IlC ludes cxa rn.ning, 0::" ev....ienee 2:Dlj1_:t thc:
C s iiance \\ ' c. pcrforr n ing sueh oth procedures as \Vt.: cons ider ed
in lh.:: c irc urnsr a uc c., z)e! t2\ 'c .hat our audit provides a re asonab le basis tor our opin io n.
Our audit does not provide Ll k:g2. ofthe County' s compl iance -.,..-ith tho se requirements.
our t he Count>' in :; :! ma iena. r espe ct s , wi th
c() uld ::1. on e2.Ch of r=.ajul rOT
]1.l:lC :ie, :? G\1.
Th:::: of L-U: ...e cor:tro:
over CO". :1L:1C,: t ....'jt n the:: ;] ( CQ:Qi: '(i cts, ::: nd grac: t3 cppl lcable to t'cck r;,:
in planrung our we cnn..sidered the: intern,!!
-..:l :h [he ch at h2. \' c a di, ccl and materi2.1 ef:cc: '.::" 2. m,',j0:- feder,d
r. o .. he auditinq, f'Jr :t e of Ol..!.f l"':,pinlcc I) ':' IO res:
\.) :'": i:-:' \\" lih C) ;\fjj :\ - 133,
;J :..! f?Qse ?o n 0 P- of CC:lr_rol .;'ccCl rC!11g1y',
\v'' ::0 [l,.)l an etTec:!",,'(:HcS3 or CCll.l l1CY s over 2C[np1i ance.
59
Independent Auditors' Report On Compliance With Requirements Tum Could Have
A Direct And Material Effect On Each Major Program And On Internal Control
Over Compliance In Accordance With O"YIB Circular A-133
Internal Control Over Compliance (Continued)
A deficiency En internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assi gned functions. IO prevent. or detect and correct, noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material weakness in internal
control over compliance is a deficiency: or combination of deficiencies. in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requiremen: of a federal program will not be prevented, or detected and corrected, on a
timely basis.
Our consideration of internal control over compliance was for the limited purpose described in the
fiTS1: paragraph of (his section and was not designed to identify all deficiencies in internal control
over compliance that might be deficiencies, significant deficiencies. or material weaknesses. We
did not identify any deficiencies in internal control over compliance that we consider to be material
weaknesses, as defined above.
This report is intended solely for the information and use of management. others within the entity.
the Department for Local Government. federal awarding agencies, and pass-through entities and is
not intended to be and should not be used by anyone other than these specified parties.
Morgan-Franklin, LLC
West Liberty, Kentucky
January 27, 2012
60
CARTER COU:-iTY
Schedule of Findings and Questioned Costs
For The Year Ended JUlie 30. 21111
61
CARTER COUNTY
SCHEDULE OF FE\DISGS AND QUESTIONED COSTS
June 30,2011
A. S"ClvEV1ARY OF AlTOIT RESULTS
1. The auditors' report expresses an unqualified opinion on the financial statements of the Carter County
Fiscal Court,
2. Eight material weaknesses and two significant deficiencies were disclosed during the audit of the fmancial
statements are reported in the Independent Auditors' Report.
3. Three instances of noncompliance material to the financial statements of Carter County. which would be
required to be reported in accordance with Government Auditing Standards, were disclosed during the
audit.
4. No significant deficiencies or material weaknesses in internal control over major federal award programs
are reported in the Independent Auditors' Report.
5. The auditors' report on compliance for the major federal award programs for Carter County expresses an
unqualified opinion on all major federal programs.
6. No audit findings required to be reported in accordance with Section 51O(a) of OMB Circular A-133 are
reported in this schedule.
7. The programs tested as a major programs included: Community Development Block Grant (CFDA
#14.228) and FENL\ (CFDA #97.036)
8. The threshold for distinguishing between Type A and B programs was $300,000.
9. Carter County was not determined to be a low-risk auditee.
B. FL."'DIl\GS - FINA::\CIAL STATEMEl'iT AUDIT
STATE LAWS AND REGULATIONS:
2011-1 The Fiscal Court Did Not Publish Their Financial Statements In Accordance With KRS 42U20
Condition: During our audit, we noted that the County did not publish their financial statements in
accordance with KRS 424.220.
Criteria: KRS 424.220(6) states that the officer shall. except in a county publishing its audit in accordance
with KRS 91A.040(6). within sixty days after the close of the fiscal year cause the financial statement to be
published in full in a newspaper qualified under KRS 424.120.
Effect: The public is not aware of the county's financial position.
Cause: Failure to publish financial statements.
Recommendation: We recommend that the County publish their financial statements in accordance with
KRS 424.220 or KRS 91A.040(6).
Judge Executive's Response: This was also the responsibility ofthe former Treasurer.
62
C-\.JUER COUNTY
SClIDL'LE OF f["'iD[',"GS A.NDQCESTJONED COSTS
June 3D. 2011
B. FISm:"CS - FINANCIAL 5TATL\I0"T AUDIT (Continued)
STATE LAWS AND REGeL..\,. TrONS (Continued):
2011-2 The Treasurer Should Prepare A Complete And Accurate Schedule Of Expenditures Of Federal
Awards.
Condition: During our audit we noted that the treasurer did not prepare a complete and accurate schedule of
expenditure of federal awards.
Crite ria: Or-,,[B Circular .-\-133 Audits of State, Local Governments and Non-Profit Organization. section
310(8) requires the auditee to prepare a schedule 0:' expenditures of federal awards covered by the auditee's
financial statements. At a minimum. the schedule shall include:
A list of individual Federal programs by 'Federal Agency. For Federal Programs included in a cluster
of programs. list individual Federal programs within a cluster of programs. For R&D total Federal
awards expended shall be shown either by individual award or by Federal agency and major
subdivision within the Federal agency.
For Federal awards received as a sub recipient, provide the name of the pass-through entity and
identifying number assigned by the pass-through entity shall be included.
Provide total Federal awards expended for each individual Federal program and the CFDA number or
other identifying number when the CFDA information is not available.
Include notes that describe the significant accounting policies used in preparing the schedule.
To the extent practical, pass-through entities should identify in the schedule the total amount provided
to sub recipients from each Federal Program.
Include. in either the schedule or a note to the schedule, the value of the Federal awards expended in
the form of non-cash assistance, the amount of insurance in effect during the year, and loans or 10a.T1
guarantees outstanding at year-end. While not required. it is preferable to present this information in
the schedule.
Ca use: Unknown
Effect: Federal sources of funds may be missed. therefore affecting compliance with federal grant
requirements.
Recommendation. We recommend that the treasurer prepare a complete and accurate schedule of federal
expenditures. It may be easier to maintain This schedule if it is updated throughout the year.
Judge Executive's Response: This was the responsibility a/the Former County Treasurer.
2011-3 The Judge/Executive Entered Into A Verbal Agreement With An Individual To Cut and Remove
Hay From County Owned Property Without Fiscal Court Approval
Condition: The Judge/Executive verbally agreed with an individual to cut hay on county owned property.
The verbal agreement was not presented to the fiscal court for approval. The agreement was for the individual
to cut the hay in exchange for all the bales produced. Therefore, any money that would have been received
from the sale of hay was not remitted to the county, nor was it determined if the value of the hay given as
compensation was high enough to require the contract be bid out.
63
CA.RTER COUNTY
SCHlll:LE OF FC';IHNGS AND QUESTIONED COSTS
June 30,2011
B. - STATL\lENT AUDIT (Continued)
STATE LAWS AND REGULATIONS (Cominued):
2011-3 The .Iudge/Executive Entered Into A Verbal Agreement With An Individual To Cut and Remove
Hay From County Owned Property Without Fiscal Court Approval (Continued)
Condition (Continued): We determined through incuiry that three of the five magistrates were aware of the
Judge/Executives intention to have the hay removed: however, our audit has disclosed that the matter was not
brought before the fiscal court for approval and no such approval was noted in the official minutes ofthe fiscal
court meetings,
Criteria: KRS 67.080(l)(b)(3) requires that when personal property of the county is "conveyed or sold, the
county shall conveyor sell it in accordance with KRS 67.0802. which does not authorize the disposal of
county personal property by barter or like-kind exchange. KRSs 67.080, .083 and .710 dictate the
responsibilities of the fiscal court and Judge/Executive. Accordingly, the fiscal court has the power to enter
into contracts and the Judge/Executive has the duty to provide for the execution of all contracts entered into by
the fiscal court. The County's administrative code requires bidding for all expenditures exceeding $10,000.
Effect: Magistrates were not given the opportunity to approve or disapprove the disposition of the county's
personal property. In addition, there is the potential for diversion of funds and non-compliance with bid laws
and the county's administrative code.
Cause: The failure of the Judge/Executive to bring the agreement before the fiscal court for approval. The
Judge/Executive disposed of county personal property through a bartering transaction.
Recommendation: \Ve recommend that all contracts and agreements be presented to the fiscal court for
approval, whether verbal or written. We also recommend that no verbal or written contracts involve the
bartering of county personal property for any goods or services.
Judge Executive's Response: We operate County Government by the direction ojLocal Government any issue
in question we contact Department ojLocal Government.
I contacted the State Local Finance Officer on 2-3-2012, the Carter County Treasurer and 2 - Auditors with
Morgan- Franklin was present when I asked the State Local Finance Officer about the cutting ojthe grass and
weeds this is part ojthe day to day operations ojthe County Judge Executive. We had previously talked about
this 2 years ago the State Local Finance Officer said it was.
Under this State ojEmergency as provided in KRS 39."1..100(2) and 45A.380(l) (7) Judge Executive can waive
procedures andformalities otherwise required by lawpertaining to:
A. Performance ofpublic work
B. Entering into contracts
C. Incurring obligations
D. Employment ojpermanent and temporary workers
E. Utilization ofvolunteer workers
F. Rental ofequipment
G, Appropriations and expenditures ojpublic funds
The county has had eleven emergencies in the las! 10 years.
64
CARTER COUNTY
SCHEDULE OF FL"<'DINGS AND QUESTIO:".'ED COSTS
June30,2011
B. FINDL'iGS - FINA:"iCIAL STATEi\lE:'iT AUDIT (Continued)
STATE LAWS AND REGULAT I O ~ S (Continued):
2011-3 The Judge/Executive Entered Into A Verbal Agreement With An Individual To Cut and Remove
Hay From County Owned Property Without Fiscal Court Approval (Continued)
Judge Executive's Response (Continued): The Carter County Administrative Code(423.2) says the judge
executive obtains price quotes as he deems necessaryfrom vendors and selects (he one most advantageous to
the county.
Whereas Local Government has the responsibility to protect [he public's health, safety and welfare. I have a
letter from the health department stronglyfeels potential for mold and other airborne problems exist after such
floods and would recommend standing vegetation in this area to be removed. This vegetation can also
serve as a hiding and breeding area for mosquitoes and other pests but feels with the number of houses in this
area be proximity to the middle school playing area also children has been observed playing in this vegetation
and weed area.
I have attached 2 letters from expert Agricultural personnel that said this vegetation weeds and grass has zero
dollar value for Agriculture use.
(KRS.249.l95)The county judge executive must take action to control and eradicate nodding thistles on all
lands, right ofway and easements occupied or controlled by the county.
See Attachments in Appendix B on page 80.
Auditors' Reply: Based on the documentation given to auditors, the most current emergency declared existed
as ofApril 21 through 25,2011. Based on inquires ofthe individual who cut the hay, the hay was cut around
August of 2011. Furthermore, as parr of [he Judge/Executive's response above he states that he had
discussions regarding this matter two years ago with the State Local Finance Officer of the Department for
Local Government. It appears that there was sufficient time to contract and bid [he hay removal. The statute
setting forth the powers and duties of the county Judge/Executive, K.RS 67.7lO(l), states that the
Judge/Executive's responsibilities include "executjing] all contracts entered into by the fiscal court ... " The
law does not allow a Judge/Executive, solely on his own authority, to enter into contracts to dispose ofcounty
personal property without the approval of the fiscal court, in compliance with K.RS 67.0802. We did not
determine the authenticity of the letters attached by the Judge/Executive or determine the credentials of the
individuals who wrote them. fVe further recommend [hat the Judge/Executive seek advice from the County
Attorney related to the interpretation ofKentucky Revised Statutes.
65
CARTER COUNTY
SCHEDCLE OF FL';DE\GS ...~ ' i D QUESTlOSED COSTS
June 30, 2011
B. FI.:\DISGS - Fl?\.-\i\CIAL STATEMEi'iT AUDIT (Continued)
INTER..!'\AL CONTROL - MATERlAL \VEAKt'fESSES:
2011--t The Fiscal Court Lacks Adequate Internal Cuntrols Over Expenditures
Condition: During our audit, we tested twenty-five disbursements and noted the following:
Six invoices vvere not paid within thirty days
One check was not found on the claims listing for approval in the minutes
One check had no backup documentation
One check number per the approval in the minutes didn't match the actual check number
One check was coded incorrectly
Criteria: It is a good internal control for:
The treasurer to ensure all checks are mailed out timely
All bills received that have a previous balance are investigated by the treasurer :0 determine if- the
previous balance has been paid to prevent duplicate payments
Supporting documentation for all disbursements be maintained
Check numbers to be entered properly into the computer system
Effect: When checks do not clear timely, it could be an indication of the treasurer holding checks. By
preparing checks for a date that is much earlier man when it is actually mailed it appears that invoices are paid
timely when they are actually not.
Duplicate payments may occur and not be detected.
With no supporting documentation there is no way to determine if an expense is reasonable and necessary
Check numbers entered into the computer system do not agree to actual check numbers.
Cause: The Fiscal Court has a material weakness in its internal controls over accounting for expenditures.
Eimer tbe controls in place are not working as planned or management has chosen to ignore or override the
controls in place.
Recant menda tion: We recommend the Fiscal Cour; reevaluate their controls over disbursements to determine
the controls that would best address the findings listed under the condition section above. The fiscal court may
determine the controls listed above under the criteria section are adequate or may decide to implement other
controls to eliminate such internal control weaknesses in the future.
66
C.-\RTER COUNTY
SCHEDCLE OF FL'o'DL"iGS AND QGESTIOi\ED COSTS
June 30, 2011
B. - FIN.-\J.'fCL-\.L STATEi\IENT AUDIT (Continued)
CONTROL - :\-LA..TERLA..L \VEAK"\it:SSES (Continued):
The Fiscal Court Lacks Adequate Internal Controls Over Expenditures (Continued)
Judge Executive's Response: Regarding the 6 invoices that were not paid we have Fiscal Court meeting the
2
nd
Tuesday ofevery month and we must have a cur-off date at the end of eve?"} month in order to prepare our
claims to present to the Carter County Fiscal Court [0 be approved and paid and from time to time we have
vendors who does not get their invoices to us before our cur-of! date and therefore we hold them over to be
paid the fallowing month. H';? hay'! sent our vendors staring this in order to remedy this problem.
Regarding the check that had been coded incorrectly and the problem with the no backup information and the
other bred problems is the responsibility of the former County Treasurer and has nothing to do with the
Carter County Fiscal court. Sometimes the Carter County Fiscal Court does not approve a bill and we hold
them over until the next meeting.
2011-5 The Fiscal Court Lucks Adequate Segreg:ttion Of Duties
Condition; During our audit, we rioted that the Fiscal Court lacks adequate segregation of duties.
Criter-ia: Adequate segregation of duties prevents the same person from having a significant role In each
function of a particular process.
Effect: As a result of our audit, we noted a lack of segregation of duties exists over the following accounting
functions: receipts collection and processing, record-keeping. disbursement processing, report preparation and
reconciliations,
Cause:
The County Treasurer prepares and deposits the receipts. posts to the ledger and prepares reports from
these ledgers for submission to the Department for Local Government (DLG), and performs the bank
reconciliations.
The County treasurer performs all aspects of the payroll process.
All invoices are received and maintained by the office manager or office clerk. The office manager or
the office clerk prepare the disbursement checks and cancels the invoices.
Recommendation: To adequately protect the fiscal court against inaccurate financial reporting, we
recommend the fiscal coun separate the duties in preparing and depositing receipts. recording transactions,
preparing reports. disbursement processing and reconciling bank accounts. If any of these duties cannot be
segregated due to limited number of staff, strong oversight should be provided over the employee responsible.
The employee providing the oversight should document this.
67
CARTER COUNTY
SCHEDULE Of AND QUESTIONED COSTS
June 30, 21111
B. FT;\DD'"CS - FlNAI\CL\L 51'.-\1'[,:\1:--;1' AUDIT (Continued)
fNTERNAL CONTROL . \VEAKi'ffiSSES (Continued):
2Ul1-5 The Fiscal Court Lacks Adequate or Duties (Continued)
Recommendation (Ccutiuued): More specifically. we recommend:
That the treasurer prepare deposits and then have tl.e office manager double check the deposit and initial the
deposit slip. The office manager should then physically take the deposit to the bank.
That someone independent of every aspect of the receipt and disbursement process receive at centra! mailing
address all County mail. This person shall open all mail and prepare a list of all mail received. This list shell
be distributed to the County Judge/Executive and Ccunty Treasurer. If this is not possible. we recommend that
all receipts be received by the Judge/Executive's office and that every County receipt be timely remitted to the
County Treasurer for deposit. We also recommend all invoices be received by the County Treasurer: who
shall prepare a listing of all invoices received. These invoices shall be timely remitted to the County
Judge/Executive's office staff.
That all checks be signed first by the treasurer, given to the Judge/Executive to sign and then to the office
manager so she can review the checks coensure both signatures are present and prepare them to mail.
Judge Executive's Response: We are currently adding another employee to be bonded to be able to take
deposits to the bank.
2011-6 The Treasurer Did Not Prepare Bank Reconciliations Timely And Accurn tely And Outst:1llding
Checks Are Not Being Followed Up 00
Condition: During our audit, we noted that :reasurer did not prepare bank reconciliations timely and the
payroll account was not reconciled as of June 30. 2011.
We also noted a reconciling item of S17.520 posted in the general ledger that was not investigated for the
cause of the discrepancy,
We also noted checks outstanding for more than six months.
Criteria: Bank accounts should be reconciled promptly each month. Reconciling items that are not
inconsequential should be investigated and resolvec. Checks that are outstanding for more than six months
should be investigated to determine if they should be voided or reissued.
Effect: Errors or irregularities in recording revenues and expenses may not be detected in a timely manner.
Ca usc: Lack of internal controls requiring the preparation of reconciliations for all bank accounts and an
independent review of the reconciliations.
68
C-\RTER COU0TY
SCHEDL:LE OF F[";'TJL'1-CS AND QUESTWNED COSTS
June 30, 2011
B. FL--;DL\'CS - 1i'J['.".-\j'iCLAL 51'A1':'Il0'1' AL-DIT (Continued)
lNTERi'IAL CONTROL - MATERIAL WEAKJ"JESSES (Continued):
2011-6 The Treusurcr Did Nor Prepa r-e Ba nk Reconciliations Timely And Accurately And Outstanding
Checks Are 00t Being Followed Up On (Continued)
Recommendation: \Ve recommend that all bade accounts be reconciled promptly each month and that the
payroll account be reconciled immediately if not already done. We recommend that any reconciling item,
unless clearly inconsequential, be investigated. We also recommend that checks outstanding for more than six
months be investigated to determine if they Should je voided or reissued. The bank reconciliations should be
reviewed each month by a person independent of the reconciliation process and the bank statements should be
opened and viewed by an independent person before the statements are given to the treasurer :0 reconcile.
Judge Executive 's Response: This was [he duties ojthe former Treasurer and [ nave asked every year to pur Q
finance officier in place (0 oversee [he duties & ;0 keep everyone in check & Balances.
2011-7 The Fiscal Court Lucks Adequate Controls Over Payroll. The Fiscal Court Did Not Comply
With The Admin istrntivc Code or Personnel Policy And Procedures
Condition: During our payroll testing, we tested twelve employees and noted the following:
One employee did not have a supervisor's or independent third party's signature on their time sheet.
One employee was paid 19 minutes less than documented on the tirnesheet
Time out was not always recorded on tirnesheets, one timesheet did not show tune out for lunch
One employee' s approved withholding amount did not agree with the actual withholding amount
One employee had approval for Aflac withholding but no stated amount to withhold
Two employees did not have the correct portion of life insurance withheld
One employee was working more than 100 hours during the month tested and no retirement was being
withheld and no exception was noted in the employee's personnel tile
Leave balances on check stubs do nor appear to be accurate
There is no documentation in me personnel files when an employee discontinues insurance coverage
City withholding was not calculated and deducted properly for three employees
Timesheets for one pay period could r . ~ t be located
The former treasurer's personnel file was empty so we could nor determine if she worked required
hours for her pay
Health insurance premiums were paid late for October 20 I0
One employee did not have the correct withholding for health insurance
No approval noted for extra Kentucky withholding for one employee
One employee check number on pay stub and general ledger did not agree to check clearing the bank.
69
CARTER COUNTY
senE D U L l ~ OF FINDfr.:CS AND QUEST10i\ED COSTS
June 30, 2011
B. F1NIJL"iCS F1NA:"ICL-\.L STATEi.'VLE::\TAUDlT (Continued)
fNTEfu"iAL CONTROL rvLA. TER1AL WEAK.,"fESSES (Continued):
2011-7 The Fiscal Cuurt Lacks Adequate Controls Oyer Payroll. The Fiscal Court Did Not Comply
With The Administrative Colic or Personnel Policy And Procedures (Con rinucd)
Criteria: The following are established controls of the Fiscal Court or examples of good internal control
policies:
A supervisor or independent Third parry should sign off on employee's tirnesheets.
Pursuant to the Union Contract, eight hours work shall constitute a day's work unless the job is set up
on a four day, ten hour work schedule. Tine and a half shall be paid for at! work in excess of forty
hours per week.
Pursuant to the Personnel Policies and Procedures, non-supervisory full time employees shall work no
less than thirty-six hours per week.
Pursuant to the County's Administrative Code, each employee shall keep a daily record of his/her own
time which is validated by the immediate supervisor on a semi-monthly basis. Pursuant to KRS
337.320, every employer shall keep a record of the hours worked each day and each week by each
employee.
It is the County's policy that all employees use time clocks to provide an accurate record of time
worked.
Someone should recalculate timesheets.
Employees should indicate the hours taken for lunch and/or breaks.
Documentation of employee's approval of withholdings should be maintained in the personnel files.
Withholding amounts should be properly withheld from employee' s checks.
Per the County Employment Retirement System employees who work in a regular full time position
for a participating agency must be enrolled in the retirement system at the beginning of their
employment. A regular full-time posicion is defined by state statute as a position that averages 100
hours of work per month over a fiscal or calendar year. excluding the classifications of temporary.
seasonal, and interim.
Leave balances should be maintained and accurate.
Documentation in personnel files should be updated when employees discontinue coverage
Pursuant to the Policies and Procedures manual the County will pay the single portion of health
insurance. Per the Union Contract new hires will be covered on the first day of the month following
the successful probationary period (60 Days).
Effect: Not clearly defining which regulations employees are governed by may result In incorrec:
compensation being paid.
Inaccuracies in an employee's tirnesheet may exist and not be detected.
An employee may have been underpaid.
Payroll checks may be issued without sufficient substantiation for time worked.
Time sheet discrepancies may occur when the time clock is not utilized.
If time in and time out is not indicated on a timesheet, thetirnesheet is not a complete and accurate
account of time.
If there is no indication that an employee approved a withholding the county may be responsible for
reimbursing the employee for unapproved withholdings,
70
CARTER couxrv
SCHEDL-U: OF FLYOL\GS ANU QuESTIONeD COSTS
June 30,201 I
B. FNOL'>"GS - FJ.:.'\'A:,\'CL\L ST.-\TEi\IEST ArTDIT (Con tinucd)
rNTERJ"fAL CONTROL - Nt\.TERl-\L W'tAKN'ESSES (Continued):
2011-7 The Fiscal Court Lacks Adequate Controls Over Puyrotl, The Fiscal Court Did Not Comply
With The Administrative Cude or Personnel Policy And Procedures (Continued)
Effect (Continued):
inaccurate amounts could be withheld from an employees check.
County may be over or under paying for sick/vacation leave.
County m::.y be paying IOO much for health insurance for employees who discontinue participation in
insurance coverage.
Ca use: The Fiscal Court has a material weakness in its internal controls over payroll. Either the controls in
place are not working as planned or management has chosen to ignore or override the controls in place.
Recommendu tion: We recommend the Fiscal Court reevaluate their controls over payroll to determine the
controls that would best address the findings listed under the condition section above. The fiscal court may
determine the controls listed above under the criteria section are adequate or may decide to implement other
controls to eliminate such internal control weaknesses in the future.
Judge Executive's Response: This was duties of the former Treasurer & 1 have asked every yeClr !O have a
finance officer to be put in place [0 oversee the Treasurers duties were being fulfilled.
2011-8 The Fiscal Court Lacks Adequate Controls Over The Preparation And Submission Of Payroll
Reports
Condition: During our audit, we noted the following:
The July. October and December 20 I0 and the March 2011 Kentucky Retirement Report amounts due
were not paid timely.
Payments for Social Security. Medicare and Federal Withholdings for July, August, September,
October and November 2010 were not made until September 20 II.
The September and October 2010 Kentucky K-l 's were filed and paid late.
Health, Dental. and Vision insurance premiums were not paid timely.
We also noted that the payroll tax withholdings and employer matching were transferred to the payroll and
social security bank accounts with each payroll. In September of 20 10 the general fund did not transferred the
correct amount of funds to the payroll bank account, which contributed to a shortfall of $92,564, In addition,
penalties and interest paid on late filings contributed to the general fund having to pay additional funds to bring
payroll tax liabilities up to date.
Criteria: Pursuant to KRS 141.330. the Department of Revenue may require the employer to remit the tax
withheld under KRS 141.3 10 and 141.315 within a reasonable time after the payroll period or other period.
Based on the County's Kentucky Withholding reports, the County is required to remit withholdings to the
tll :h
Department of Revenue by the 10 and 25 of each month.
Retirement is due the Ia
Ul
of each month.
941 payments are due on or before the following Wednesday after each pay date.
71
CARTER COUNTY
SCHEDlLE OF FL'iDL."IGS A.:-.rD COSTS
June 30, 20U
B. - STATE.:\lE.'\T AUDIT (Continued)
TNTERJ."\iAL CONTROL - TERL'\L WEAKNESSES (Continued):
2011-8 The Fiscal Court LIcks Adequate Controls Over The Preparation And Submission Of Payroll
Reports (Continued)
Effect: The treasurer did not prepare and .ernit payroll reports and withholding payments timely. The County
incurred the following interest, fines and penalties for not paying payroll withholdings timely:
IRS 59,610
Kentucky Revenue 54,888
Insurance coverage could lapse if not paid timely.
Cause: The fiscal court lacks adequate controls over the preparation and submission of payroll reports.
Because bank reconciliations v,ere not performed timely, the current treasurer was not aware that payroll taxes
were not submitted.
Recommendu tion: We recommend that the treasurer remit payroll reports and withhotding payments timely
in the future. \Ve further recommend the fiscal co.irt segregate these duties by having the office manager
er.sure all payroll withholdings and insurance premium payments have been mailed our by the applicable due
dates. This could be documented by the office manager stamping the invoice or payroll report "mailed" and
initialing and daring.
We also recommend that excess funds in the payroll account be transferred back to the general fund to
reimburse it for the S92.564 paid in September 2011 to the LRS.
Judge Executive 's Response: The Carrel' Co. Fiscal Court wasn't aware oflate charges. Once again this falls
under the former Treasurer not fulfilling her responsibilities and once again J have asked every year to have a
finance officer put in place to oversee that the finances was being taken care of Late payments and Finance
charges were being paid without the approval ofthe County Judge or the Fiscal Court.
2011-9 The Fiscal Court Lacks Adequate Controls Over Revenues
Condition: During our audit, we noted that the treasurer was not endorsing checks remitted to the fiscal court.
We also noted revenues that were not properly coded.
Criteria: It is a best practice and a good internal control procedure to endorse checks received and to deposit
revenues weekly or when there is greater than S500 of revenues on hand.
Effect: Misappropriation of assets could occur. The Fiscal Court may not be aware of funds currently
availabie.
Cause: The Fiscal Court lacks adequate internal controls over revenues.
Recommendation: We recommend that the treasure: endorse checks received and make deposits weekly or
when there is greater than $500 of revenues on hand.
Judge Executive's Response: This was the responsibility ofthe former Treasurer.
72
CART2:R COUNTY
SCHEDULE OF FJl'iDl'\-CS A:'iO QUEST10l,ED C O ~ T S
June JU, 20 U
B. Fl-"-OL'."GS - F['.fA.\CL-\L 51'..-\1'1"101' AuDIT (Continucl1)
INTER.NAL CONTROL - MATERrAL WEAKNESSES (Continued):
2011-10 The Fiscal Court Docs :--ot Have Adequate Controls Over Fixed Assets
Condition: During our audit, we noted that the depreciation schedule did not include identifying numbers for
all assets [hat have such numbers (vehicle identification number. Serial "umber, etc.) and it was not updated
for purchases and disposals. We noted assets rnisclassified within the fourth quarter report.
In addition. we noted that the fiscal court did not update their insurance policies for additions and disposals.
\Ve also noted that the Fiscal Court's current capitalization policy does not set a capitalization threshold for
each major category. The Fiscal Court's current capitalization policy is as follows:
Capital assets, which include land, non-depreciab.e land improvements, depreciable land improvements,
buildings, furniture and office equipment, building improvements. machinery, equipment, and infrastructure
assets (roads and bridges) that have a useful life of more than one reporting period based on the government's
capitalization policy, are reported in the applicable governmental or business-type activities of the
government-wide financial statements. Such assets are recorded at historical cost or estimated historical cost
when purchased or constructed.
Cost of normal maintenance and repairs that do not add [Q the value of the asset or materially extend the asset' 5
life are not capitalized. Land. non-depreciable land improvements, and Construction In Progress are not
depreciated. Interest incurred during construction is not capitalized. Capital assets and infrastructure are
depreciated using the straight-line method of depreciation OVer the estimated useful life of the asset,
Criteria: It is a good internal control procedure to document identifying numbers for assets and to update
insurance policies for additions and disposals. It is also a good internal control policy that the Fiscal Court has
a capitalization threshold by category in order to determine what expenditures will go on the depreciation
schedule.
Effect: The fiscal court may be paying more for insurance than necessary or the fiscal court may not have
sufficient coverage for assets.
Without identifying numbers. It IS more likely that the wrong assets could be taken off of the depreciation
schedule when disposals occur.
Maintaining the list of capitalizable assets becomes cumbersome because every expenditure for items that have
a useful life of more than one reponing period is required to be capitalized regardless of the amount of the
expenditure. Under the current policy this would include such minimal items as a staples or tape dispenser.
Ca use: Lack of internal controls over fixed assets.
73
CARTER COUl\TY
SCHEDULE OF F['WI:\"GS AND QUESTJOSED COSTS
June 30, 2011
B. FI:'fDISGS - Fll\A;\ClAL ST.-\.TE}IE.\T AUDIT (Coutin ued)
INTERl"lALCO)lTROL - !'viA.TERJA.L WEAKJ"lESSES (Continued):
2011-10 The Fiscal Court Does 00t Have Adequate Controls Over Fixed Assets (Continued)
Recornmcnda tion: We recommend the Fiscal Court look over the insurance policy periodically and
determine if any assets need to be removed or added and the fiscal court should require the treasurer to include
identifying numbers for all asse.s.
We also recommend that the County consider setting a capitalization threshold by major category. An
example of one is as follows:
Capitalization Useful Life
Threshold (Years)
Land Improvements S 12,500 25-40
Buildings S 25.000 30-40
Building Improvements S 25.000 1525
Machinery and Equipment s 2.500 5-10
Vehicles S 2,500 3-5
Infrastructure S 20,000 15-25
Our recommendations are suggestions for management to consider. Management is responsible for deciding
what procedures should be implemented.
Judge Executive '5 Response: This falls under (he responsibility ofthe former Treasurer.
2011-11 The Carter County Treasurer Did 00t Code All Debt Expenditures To A Debt Account Code
Nor Code All Insurance Expcnditures To An Administration Account Code Nor Code All Transfers To
A Transfer Account
Condition: During our audit, we noted that the treasurer is not coding expenditures to the proper account
code. We noted that equipment purchases were coded to salaries and debt. and transfers were coded to
miscellaneous. We also noted that building insurance for the Enhanced 911 is coded to a 5100 account instead
of a 9000 account.
Criteria: County's are required to record expenditures in accordance with the Budget Manual provided by the
Department of Local Government.
Effect: Failure to utilize the appropriate account codes could mislead financial statement users.
Cause: Failure to record expenditures in accordance with the Budget Manual provided by the Department of
Local Government.
74
CARTER COUNTY
SCHEDl"LE OF FDiDLNGS AND QUESTlOi\ED COSTS
.June 30, 2011
B. FI:\DL'iGS - FL..... AI\CL\L STATEyIEI\T AUDIT (Continued)
2011-11 The Carter County Treasurer Did :'{ut Code All Debt Expenditures To A Debt Account Code
Nor Code All Insurance Expenditures To An Administration Account Code Nor Code All Transfers To
A Transfer Account (Continued)
Recommendation: We recommend the County Treasurer ensure that all payments are posted to the correct
account codes in the future. The County Treasurer should consult the Budget Manual provided by the
Department of Local Government to determine the appropriate account codes for expenditures.
Judge Executive's Response: This was the duties of the former Treasurer and I asked every year to have a
finance officer ro be put in place to oversee that the Treasurers duties were being fulfilled.
lNTERJ'IAL CONTROL- SIGNIFICANTDEFICIENCIES:
2011-12 The Fiscal Court Should Require That Proper Records Be Maintained For The Justice Center
Corporation Fund
Condition: During our audit we found that the treasurer did not maintain bank statements. reconcile bank
statements. or prepare financial statements for the Justice Center Corporation Fund.
Criteria: The Justice Center Corporation is a blended component unit of the Fiscal Court. The fiscal court is
financially accountable and legally obligated for the debt of the Justice Center Corporation. The fiscal court
should require that proper records be maintained for the Carter County Justice Center Corporation.
Effect: The fiscal court is not aware of the transactions that are occurring relating to the receipts and
disbursements of the Justice Center Corporation.
Cause: Lack of internal controls requiring the preparation of financial statements for the Justice Center
Corporation Fund.
Recommendation: We recommend the fiscal court designate someone to receive the bank statements for the
Justice Center Corporation, maintain a receipts and disbursements ledger, and prepare a financial statement.
Judge Executive's Response: This is handled by the State ofKentucky and the Carter Co. Fiscal Court has no
authority over this.
Auditor's Reply: The Carter County Justice Center Corporation (the Corporation) is a legally separate entity
established to provide long-term debt service to the Fiscal Court for the construction of a justice center
facility. A majority of the Corporation's governing body is appointed by the Carter County Judge/Executive.
Further, the Carter County Fiscal Court can significantly influence the Corporation's operations. Therefore,
management must include the Corporation as a component unit, and the Corporation's financial activity is
blended with that ofthe Fiscal Court.
75
CARTER
SCHEDULE OF AND QUESTIONED COSTS
.June 30, 2011
n. FI:\"DII'GS - fT\A;\ClAL STATL\TE::\T AUDIT (Continued)
INTERNAL CONTROL - SIGNIFICANT DEFICIENCIES (Continued):
2011-13 The Jail Has Xot Established Controls Oyer Balances Remaining In Inmate Accounts Lpon
Release
Condition: During our audit. we noted one inmate who had a balance of $37 in her account from the prior
year. Upon inquiry ofjail personnel inmates are told upon release that they can pick lip their money in the
front office. If it is not picked up" the balance remains in the inmates account and is available upon re-
incarceration.
Criteria: It is a good internal control policy to reimburse inmates for balances remaining in their accounts on
a timely basis. KRS 393.090 states that after three years, if the funds have not been claimed, they are
presumed abandoned and abandoned funds are required to be sent to the Kentucky State Treasurer by KRS
393.110.
Effect: The inmate's money is not returned to them. Additional reporting to the state is required.
Cause: Lack of adequate internal controls over inmate money.
Recommendation: "Ve recommend that the jail establish controls over balances remammg in inmate
accounts upon release and make efforts to rerum the money in a timely manner. If monies are not returned, we
recommend the jail prepare the annual report as required by KRS 393.110.
Judge Executive's Response: This is the responsibility ofthe Carter Co. Jailer, this falls under the day to day
operations of the jail. The Fiscal Court & Judge had complaints from inmates & their families that their
money & clothes had not been reimbursed,
Jailer's Response: No response.
C. .-\i'\fD QCESTIO:\ED COSTS - MAJOR FEDERAL AWARDS PROGRAL\I AUDIT
NONE
D. SCIIEDl-LE OF PRIOR AUDIT FINDI:"IGS
NONE
76
CERTIFICUION OF COMPLIANCE-
LOCAL GOVER:-'-.\IE:\T ECO:\O.\lIG ASS1ST\.'\CE PROGRA.\l
CARTER COCNTY FISCAL COCRT
Fur The Fiscal Year Ended
Junc30.2011
Appendix A
77
For Tbc Year Entlcd .June 30,
The Carter County Court hereby that assisrunce from the
Gcvemment Economic Assistance Program was expended for the purpose intended as
di<'::J.td t1H:: appficable Kenrucky R''::':iscd
78
ATTACHMENTS TO COUNTY'S RESPONSE 2011-3
CARTER C O U ~ T Y FISCAL COURT
For the Fiscal Year Ended
.June 30, 2011
Appendix B
79
February 7, 2012
Carter County Fiscal Court:
I am writing in reference to the area of land that the Carter County Fiscal Court owns around the CCDC
and the ambulance barracks and its potential for agricultural use. Upon my observation, that parcel of
land is highly populated with Johnson Grass, Nodding Thistle, and several other noxious perennial
'Needs. Weeds like Johnson Grass are very difficult to control since the reproduce from seeds and from
roots snc would require repeated tre atrnents in multiple years to control them. Weed seeds are veri
mobile in flood waters and this area would be susceptible to annual reseeding due to flooding.
A.ny agricultural use of this property, whether it be for forage crops or row crops would be very difficult
or at best, not very profitable after the added expense of weed control, lower yields due to weed
competition, or lower quality of forage crops due to the presence of these weeds.
If the fiscal court decides to trv to improve this property for agricultural use, I would be glad to offer my
assistance and recommendations to improve this property. Thank you for your time regarding this
matter.
Sincerely:
Myron Evans
CEA/Ag and Natural Resources
Carter County
80
LITTLE S.-\i'iDY DISTRICT HEALTH DEPART0,IENT
P.O. BOX 1)09
COljRTHOL'SE, HJ.\t. un
GRA'YSON, KY 4L143
PHOi\E
F.-\X
February 6, 2012
606-474-6685
606--+74-0256
606--+1-+-4115
To: Charles Waliace. Carter County Judge Executive
In re: Property Owned by Caner County with potential for flooding
Dear Sir:
In response to your question, [ do fed that there is a potential problem with the 30
+/ - acres the county owns that lays behind the Middle School and Meadowview
Subdivision, adjacent to the Jail and the Ambulance Service building.
As you are aware, this property is subject to being flooded when the Little Sandy
River leaves its banks. I strongly feel that the potential for mold and other airborne
problems exists after such floods, and would recommend that the standing vegetation in
this area be removed after it has been covered with standing waters. This vegetation also
can serve as a hiding/breeding area tor mosquitoes and other pests.
I am aware that this would be an extra expenditure for the county. but feel that
with the number of housing units in the area, the proximity to the Middle School playing
fields, and the Jail, this would be a beneficial improvement tor all involved. Also, I have
observed children playing in and otherwise utilizing this area.
If you have any questions, please contact me. but, again, this would be my
recommendation In regards to this property.
81

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