Annual Comprehensive Financial Report - 2022

10 County of Johnston , North Carolina Annual Comprehensive Financial Report For the Fiscal Year Ended June 30 , 2022PageCounty of Johnston North Carolina Annual Comprehensive Financial Report For the Fiscal Year Ended June 30 , 2022 Prepared by the Johnston County Finance DepartmentPagePage pageNumber5COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2022 Exhibit s Page s INTRODUCTORY SECTION Letter of Transmittal 3 - 10 Certificate of Achievement for Excellence in Financial Reporting 11 List of Principal Officials 12 Organization Chart 13 Map of Johnston County , North Carolina 14 FINANCIAL SECTION INDEPENDENT AUDITORS REPORT 17 - 19 MANAGEMENT'S DISCUSSION AND ANALYSIS 21 - 35 BASIC FINANCIAL STATEMENTS Government - wide Financial Statements Statement of Net Position 1 38 Statement of Activities 2 39 Fund Financial Statements Balance Sheet - Governmental Funds 3 40 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 3a 41 Statement of Revenues , Expenditures , and Changes in Fund Balances - Governmental Funds 4 42 Reconciliation of the Statement of Revenues , Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 4a 43 Statement of Revenues , Expenditures and Changes in Fund Balances - Budget And Actual - General Fund 5 45 Statement of Net Position - Proprietary Funds 6 46 Statement of Revenues , Expenses , and Changes in Fund Net Position - Proprietary Funds 7 47 Statement of Cash Flows - Proprietary Funds 8 - 9 48 - 49 iPagePage pageNumber6COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2022 Exhibit s Page s FINANCIAL SECTION CONTINUED Statement of Fiduciary Net Position - Fiduciary Funds 10 50 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 11 51 NOTES TO THE FINANCIAL STATEMENTS 52 - 113 REQUIRED SUPPLEMENTAL FINANCIAL DATA Schedule of Countys Proportionate Share of Net Pension Asset LGERS A - 1 116 Schedule of the ABC Boards Proportionate Share of Net Pension Liability LGERS A - 2 117 Schedule of the TDAs Proportionate Share of Net Pension Liability LGERS A - 3 118 Schedule of the Airport Authoritys Proportionate Share of Net Pension Liability LGERS A - 4 119 Schedule of County Contributions LGERS A - 5 120 Schedule of ABC Board Contributions LGERS A - 6 121 Schedule of TDA Contributions LGERS A - 7 122 Schedule of Airport Authority Contributions LGERS A - 8 123 Schedule of the Countys Proportionate Share of the Net Pension Liability ROD A - 9 124 Schedule of County Contributions ROD A - 10 125 Schedule of Changes in Total Pension Liability - Law Enforcement Officers Special Separation Allowance A - 11 126 Schedule of Total Pension Liability as a Percentage of Covered Payroll - Law Enforcement Officers Special Separation Allowance A - 12 127 Schedule of Changes in the Total OPEB Liability and Related Ratios A - 13 128 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES General Fund - Schedule of Revenues , Expenditures and Changes in Fund B - 1 130 - 140 Balance - Budget and Actual iiPagePage pageNumber7COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2022 Exhibit s Page s FINANCIAL SECTION CONTINUED Schedules of Revenues , Expenditures and Changes in Fund Balances - Budget B - 1a 141 and Actual - Revaluation Fund Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP - ARPA Coronavirus SLFRF B - 2 142 Combining Balance Sheet - Non - Major Governmental Funds C - 1 144 Combining Statement of Revenues , Expenditures , and Changes in C - 2 145 Fund Balances - Non - Major Governmental Funds Combining Balance Sheets - Non - Major Special Revenue Funds C - 3 146 Combining Statement of Revenues , Expenditures , and Changes in Fund Balances - Non - Major Special Revenue Funds C - 4 147 Schedules of Revenues , Expenditures and Changes in Fund Balances - Budget and Actual Moccasin Creek Drainage District - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual C - 5 148 Heritage Commission Fund - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual C - 6 149 Communication Fund - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual C - 7 150 Research Training Zone - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual C - 8 151 Voluntary Ag District - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual C - 9 152 Fines and Forfeitures - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual C - 10 153 Representative Payee Fund - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual C - 11 154 Deed of Trust Fund - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual C - 12 155 iiiPagePage pageNumber8COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2022 Exhibit s Page s FINANCIAL SECTION CONTINUED Opioid Settlement Fund - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual C - 13 156 Combining Balance Sheet - Non - Major Capital Projects Funds C - 14 158 Combining Statement of Revenues , Expenditures , and Changes in Fund Balances - - Non - Major Capital Projects Funds C - 15 159 Schedule of Revenues and Expenditures - Budget and Actual School Bond Fund - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP C - 16 160 Industrial Development Infrastructure - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP C - 17 161 Public Safety Center Project - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP C - 18 162 Enterprise Funds Combining Statement of Net Position - Non - major Enterprise Funds D - 1 164 - 165 Combining Statement of Revenues , Expenses , and Changes in Net Position - Non - major Enterprise Funds D - 2 167 Combining Statement of Cash Flows - Non - major Enterprise Funds D - 3 168 - 169 Administrative Fund - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual Non - GAAP D - 4 171 Solid Waste Fund - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual Non - GAAP D - 5 172 - 173 Landfill Entrance & Attendant Facilities - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 5a 174 Phase 6 - A MSW Landfill Site Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 5b 175 Borrow Areas F1 and G1 - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 5c 176 Ph 4A MSWLF - Area 2 C & DLF Closure - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 5d 177 Water Fund - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual Non - GAAP D - 6 178 - 179 WTP 25 MGD Exp Future Planning - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6a 180 ivPagePage pageNumber9COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2022 Exhibit s Page s FINANCIAL SECTION CONTINUED NCDOT Waterline Projects - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6b 181 WTP 20 MGD Upgrade - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6c 182 WTP Efficiency Project - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6d 183 Post Clearwell Chemical Feed Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6e 184 NC 96 Economic Development Water Main Extension - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6f 185 Buffalo Road BPS & Transmission Main - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6g 186 385 West Transmission Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6h 187 White Memorial Church Road Water Main - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6i 188 Asbestos Cement Water Main Replacement - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6j 189 WTP Expansion Design Build - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6k 190 Smithfield North Booster Pump Station - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 6l 191 Wastewater Treatment Fund - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7 192 - 193 Wastewater SDF Capital Reserve Fund - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7a 194 Buffalo WWPS Upgrade and Force Main Replacement - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7b 195 Pine Level Wastewater Pump Station Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7c 196 McGees Crossroads Sewer Upgrade - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7d 197 Swift Creek Interceptor - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7e 198 vPage0COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2022 Exhibit s Page s FINANCIAL SECTION CONTINUED WWTP 4MGD Expansion - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7f 199 East Clayton WWPS Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7g 200 Landfill Equalization & WWPS Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7h 201 Reedy Branch WWPS & FM - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7i 202 WWTP Flood Mitigation FEMA - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7j 203 NC 42 Sewer Line School Bond Project - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7k 204 Sewer Rehabilitation Sewer - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7l 205 Olive Branch WWPS & FM Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7m 206 ECIA Transmission Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7n 207 Wilsons Mills WWPS Upgrades - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7o 208 Wastewater Hydraulic Modeling - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7p 209 Selma Flow Equalization & WWPS Facilities - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7q 210 Utility Capital Reimbursement - Eastfield - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7r 211 16 Force Main to Buffalo WWPS - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7s 212 Nitrogen Nutrient Credit Acquisition - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7t 213 Four Oaks WWPS & Force Main - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7u 214 WWTP NPDES Permit Expansion - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7v 215 viPage1COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2022 Exhibit s Page s FINANCIAL SECTION CONTINUED Neuse River WWPS - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7w 216 Duchess Downs Gravity Sewer Outfall - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 7x 217 Water District Funds - Combining Statement of Net Position D - 8 218 Water District SDF Capital Reserve Fund - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 8a 219 Buffalo Water District FY 18 Hydraulic Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 8b 220 Wilsons Mills Water District FY 18 Hydraulic Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 8c 221 Wilsons Mills Water District WTP Service Line - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 8d 221 Archer Lodge WD 500,000 Gallon Elevated Storage Tank - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 8e 223 Ingrams WD 2018 Hydraulic Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 8f 224 McGees WD Ph 1 & 2 - NC 210 WM Improvements - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 8g 225 Section 8 Housing Assistance Payments Fund - Project No NC 19 - V164 - 006 - Schedule of Revenues and Expenditures - Budget and Actual Non - GAAP D - 9 226 Water Districts - Consolidating Information Statement of Net Position - Combined Water District Operating Fund E - 1 228 - 229 Schedule of Revenues and Expenditures - Combined Water District Operating Fund E - 2 230 - 231 Combining Statement of Fiduciary Assets and Liabilities - Custodial Funds F - 1 234 Combining Statement of Changes in Fiduciary Assets and Liabilities - Custodial Funds F - 2 235 viiPage2COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2022 Exhibit s Page s FINANCIAL SECTION CONTINUED OTHER SCHEDULES Schedule of Ad Valorem Taxes Receivable G - 1 238 Analysis of Current Tax G - 2 , G - 2a 239 - 240 Ten Largest Taxpayers G - 2b 241 STATISTICAL SECTION Net Position by Component 1 246 - 247 Changes in Net Position 2 248 - 251 Fund Balances of Governmental Funds 3 252 - 253 Changes in Fund Balances of Governmental Funds 4 254 - 255 Governmental Activities Tax Revenues by Source 5 256 Assessed Value and Estimated Actual Value of Taxable Property 6 257 Property Tax Rates - Direct and Overlapping Governments Per 100 of Assessed Value 7 258 Construction Information 8 259 Principal Property Taxpayers 9 260 Property Tax Levies and Collections 10 261 Schedules of Outstanding Debt Payable Governmental Activities 11 , 12 262 Schedules of Outstanding Debt Payable Business - type Activities 13 , 14 , 15 263 - 265 Ratios of Outstanding Debt by Type 16 266 Ratios of Net General Bonded Debt Outstanding 17 267 Direct and Overlapping Governmental Activities Debt 18 269 Legal Debt Margin Information 19 270 - 271 Pledged Revenue Coverage Information Water System Revenue Bonds Previously Held by USDA 20 273 Pledged Revenue Coverage Information Water and Sewer System Revenue Bonds Issued Under Master Trust Indenture Dated August 1 , 2021 21 274 - 275 Demographic and Economics Statistics 22 276 Principal Employers 23 277 viiiPage3COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2022 Exhibit s Page s STATISTICAL SECTION CONTINUED Full - time Equivalent County Government Employees by Function 24 278 Operating Indicators by Function Program 25 280 - 281 Capital Assets Statistics by Function 26 282 COMPLIANCE SECTION 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 285 - 286 Independent Auditors ' Report on Compliance with Requirements Applicable to each Major Federal Program and Internal Control over Compliance in Accordance with Uniform Guidance and the State Single Audit Implementation Act 287 - 289 Independent Auditors ' Report on Compliance with Requirements Applicable to each Major State Program and Internal Control over Compliance in Accordance with OMB Uniform Guidance and the State Single Audit Implementation Act 291 - 293 Schedule of Findings and Questioned Costs 294 - 298 Corrective Action Plan 299 - 300 Summary Schedule of Prior Audit Findings 301 Schedule of Expenditures of Federal and State Awards 302 - 306 ixPage5Introductory SectionPage7Johnston County J Chad McLamb , CPA Deputy County Manager Director POST OFFICE BOX 1049 of Finance 919 989 - 5112 SMITHFIELD , NC 27577 January 24 , 2023 The Board of County Commissioners Rick J Hester , County Manager Citizens of Johnston County , North Carolina It is our pleasure to submit this Annual Comprehensive Financial Report for the fiscal year ended June 30 , 2022 North Carolina law requires that local governments in the State publish a complete set of financial statements annually The financial statements must be presented in conformity with generally accepted accounting principles " GAAP " and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants Pursuant to those requirements , we hereby issue the annual financial report of Johnston County for the fiscal year ended June 30 , 2022 This report consists of management's representation concerning the finances of Johnston County Consequently , management assumes full responsibility for the completeness and reliability of all of the information presented in this report To provide a reasonable basis for making these representations , management of the County has established a comprehensive internal control framework that is designed to protect the government's assets from loss , theft , or misuse and to compile sufficient reliable information for the preparation of Johnston County's financial statements in conformity with GAAP Since the cost of internal controls should not outweigh the benefits , the County's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement As management , we assert that , to the best of our knowledge and belief , this financial report is complete and reliable in all material respects Johnston County's financial statements contained herein have been audited by Thompson , Price , Scott , Adams & Co , PA , a firm of licensed certified public accountants The goal of the independent audit was to provide reasonable assurance that the financial statements of Johnston County for the fiscal year ended June 30 , 2022 are free of material misstatement The independent audit involved examining , on a test basis , evidence supporting the amounts and disclosures in the financial statements ; assessing the accounting principles used and significant estimates made by management ; and evaluating the overall financial statement presentation The independent auditor concluded , based upon the audit , that there was a reasonable basis for rendering an unmodified opinion that Johnston County's financial statements for the fiscal year ended June 30 , 2022 are fairly presented in conformity with GAAP This opinion can be found at the beginning of the Financial Section of this report The independent audit of the financial statements of the County was part of a broader , federally mandated " Single Audit " designed to meet the special needs of federal grantor agencies The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements , but also on the audited government's internal 3Page8controls and legal requirements , with special emphasis on internal controls and legal requirements involving the administration of federal and state awards These reports are contained in the Compliance Section of this report GAAP require that management provide a narrative introduction , overview , and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis " MD & A " This letter of transmittal is designed to complement MD & A and should be read in conjunction with it MD & A can be found immediately following the report of the independent auditors Financial Reporting Entity The financial statements include all funds of the County , including all activities considered to be part of controlled by or dependent on the County Control by , or dependence on , the County was determined in accordance with the criteria established by the Governmental Accounting Standards Board " GASB " and included in the GASB's guidance in defining the governmental reporting entity The financial reporting entity includes all funds of the County , as well as its component units Component units are legally separate entities for which the County is financially accountable Discretely presented component units are reported in a separate column in the general purpose financial statements to emphasize their legal separation from the County and to distinguish their financial positions , results of operations , and cash flows from those of the County The Johnston County Airport Authority , the Johnston County Board of Alcoholic Control , and the Johnston County Tourism Development Authority are included as discretely presented component units in the reporting entity Profile of Johnston County The County was incorporated in 1746 and was formed largely from Craven County Located in the mid - central section of the State and the western segment of the coastal plains region , the County contains approximately 795 square miles The County is uniquely positioned within the geographic center of the State The Town of Smithfield , the County seat , and the Town of Benson are located midway along the Eastern Seaboard of the United States and benefit from the intersection of transcontinental Interstate 40 and Interstate 95 The estimated 2021 population of the County was 226,661 according to the North Carolina Office of State Budget and Management Smithfield , the County seat , had an estimated 2021 population of 11,710 ; Clayton 28,188 ; Selma 6,445 ; Benson 4,080 ; Four Oaks 2,266 ; Kenly 1,350 ; Princeton 1,370 ; Pine Level 2,142 ; Wilson's Mills 2,674 ; Micro 477 and Archer Lodge 5,023 According to the 2020 data from the United States Census Bureau , the County is the fastest growing county in the State The townships along the Johnston County Wake County line have experienced significant growth over the past 25 to 30 years , with more people moving to the area around the Town of Clayton and further southeast along Interstate Highway 40 into the McGee's Crossroads and Cleveland areas With recent economic development and as the population expands and transportation networks improve , the County is experiencing growth further east into central areas of the County , including the towns of Wilson's Mills , Smithfield , Selma , Four 4Page9Oaks and Pine Level A significant factor to such growth is the County's proximity to the Research Triangle Park and to the City of Raleigh , the State's capitol and the major urban center of the State's Coastal Plains region where urban development is heavily concentrated The County offers diversified housing options which , when coupled with the job growth of the region , favorably positions the County to capitalize upon new and expanding commercial and industrial opportunities Major transportation network improvement projects under construction are anticipated to further open the County to growth opportunities Construction continues on a portion of the Southeast Extension of the Interstate NC Highway 540 project in southeastern Wake County The project will extend the Triangle Expressway from the Town of Apex to the Town of Knightdale , completing the 540 Outer Loop around the greater Raleigh area and passing through northern Johnston County In addition , US Highway 70 from the City of Raleigh to the Town of Morehead City was designated " Future Interstate 42 " and a high priority corridor by the US Department of Transportation in 2016 and work began to bring all of Highway 70 to a fully controlled access highway interstate In March 2022 , the NC Department of Transportation received federal approval to designate two bypass segments of US Highway 70 , including 10 miles in the County , as Interstate 42 Work is also continuing to improve traffic on a 12 - mile stretch of Interstate 40 from Raleigh to the Interstate 40 NC Highway 42 interchange in the Clayton Cleveland area of the County The recent federal Bipartisan Infrastructure Bill also labeled an approximately 100 - mile stretch of US Highway 421 between Interstates 85 and Interstate 95 just south of the County as a " high - priority corridor " , setting the stage for the NC Department of Transportation to request a future interstate designation Advancement and completion of these projects will continue to enhance growth prospects for the County The County has a Commissioner - Manager form of government with seven Commissioners comprising the governing body The Commissioners are elected at large on a staggered basis The Board of County Commissioners the " Board " holds policy - making and legislative authority The Board annually adopts a balanced budget and establishes a tax rate for the support of County programs The County Manager has the responsibility for administering these programs in accordance with policies and the annual budget adopted by the Board The County Manager is appointed by and serves at the pleasure of the Board The County provides a wide range of services including public safety , human services , and general administration funds and provides funds for education and cultural and recreational activities In addition , the County owns and operates water , sewer and solid waste systems and a storm water program This annual financial report includes all funds of the County including all activities considered to be part of controlled by or dependent on the County The annual budget serves as the foundation for the County's financial planning and control As required by the North Carolina Budget and Fiscal Control Act , the County adopts an annual budget for all governmental and proprietary operating funds except those authorized by project ordinance that are multi - year in nature The adopted budget is prepared by fund , function and department The County Manager has the authority to approve transfers between the same functions but the Board must approve transfers outside of function appropriations and those that alter the total appropriation of any fund Budget to actual comparisons are provided in this report for each individual governmental fund that has an annual budget adopted A project ordinance is used to establish a budget for a project that extends over more than one fiscal year Project - length budget to actual comparisons for each capital project fund are also included in this report 5Page0Factors Affecting Financial Condition Local Economy - The County is experiencing continued economic growth , with an overall economy that is diversified with a balance of industrial , expanding commercial , and agriculture enterprises The production of pharmaceutical products , heavy equipment , electronic components and other products , along with durable goods assembly operations and distribution centers have provided relatively stable employment to County residents and have been the object of significant expansions and capital expenditures over the years The County is also becoming a center for the medical services industry and related employment and in recent years , the County has experienced growth in the retail sector The County's economy continues to be heavily influenced by residential development , particularly in the western and northern portions of the County in and around the Town of Clayton , the Cleveland and McGee's Crossroads communities , but recently in more central areas of the County , also As mentioned above , contributing to the County's growth is its proximity to the Research Triangle Park and employers in and around the City of Raleigh The County also benefits from its proximity to numerous institutions of higher education including North Carolina State University in the City of Raleigh , The University of North Carolina in the Town of Chapel Hill , Duke University and North Carolina Central University in the City of Durham and East Carolina University in the City of Greenville The County's industrial and commercial sectors have continued to grow with continued economic development bringing more employers to the County and with existing company expansions It is anticipated that economic development and population growth will continue to significantly impact the County and its infrastructure needs in the future Long - Term Financial Planning - The County maintains capital funding strategies to identify current and future capital needs and determine appropriate funding sources for those capital needs , including debt and pay - as - you - go funding The capital funding strategies are updated at least annually and are also used to determine future debt capacity affordability as well as the timing and amount of future debt issuances The County has Board - adopted formal Financial Policy Guidelines to guide its overall financial and debt management practices In November 2018 , a bond referendum was held in the County and voters approved 61,000,000 in general obligation school bonds and 15,000,000 in general obligation community college bonds The final 225 million school bonds and 135 million community college bonds from this referendum were issued in May 2021 Another bond referendum was held in the County on November 8 , 2022 at which voters approved 177,000,000 in general obligation school bonds , with plans to issue the bonds over the next four fiscal years The Board and County staff are planning for future capital improvements needed to address space needs for County , judicial , public school and community college facilities The County maintains a 20 - year public utilities capital improvement plan which includes over 300 million in planned capital improvements The County anticipates that the majority of its water and wastewater financing needs will be met with low interest revolving loans from the State and through a recently established revenue bond program Solid waste capital needs are anticipated to be met primarily through the use of accumulated reserves 6Page1Financial Policies Information Single Audit - As a recipient of federal and State assistance , the County is responsible for ensuring that an adequate internal control structure is in place to ensure compliance with applicable laws and regulations related to those programs This internal control structure is subject to periodic evaluation by management , the Finance Department staff , as well as the Internal Audit Department staff of the County As a part of the County's single audit described earlier , tests are made to determine the adequacy of the internal control structure , including that portion related to federal and State financial assistance programs , as well as to determine that the County has complied with applicable laws and regulations The results of the County's single audit for the fiscal year ended June 30 , 2022 provided no instances of material weaknesses in the internal control structure or significant violations of applicable laws and regulations Cash and Investment Management Policies and Practices - The investment policy of the County is guided in a large part by State statute Investments are made in accordance with North Carolina General Statute " NCGS " 159 - 30 and all depositories are collateralized according to NCGS 159 - 31 County policy stipulates that funds shall be invested with emphasis on safety and liquidity , with no less than 20 of funds available for investment to be maintained in liquid investments at any point in time Cash temporarily idle during the year was invested in interest - bearing accounts , principally with the North Carolina Capital Management Trust , KS Bank and First - Citizens Bank and Trust Company All County deposits are maintained with financial institutions which collateralize deposits in excess of amounts insured by the FDIC by the Pooling Method The governmental fund types recorded investment income of 400,716 for fiscal year 2021 - 22 The County's fund balance policy was amended during fiscal year 2020 - 21 and now stipulates that available fund balance in the general fund at the close of each fiscal year should be at least 20 of the total annual general fund operating budget of the County increased from 15 The policy further states that if available fund balance in the general fund at the close of a fiscal year falls below 20 , the Board will adopt a plan as part of the following year's budget process to restore the available fund balance to the policy level within 36 months from the date of the budget adoption As of June 30 , 2022 , the County's legally available fund balance in the general fund was 182,297,742 or 5952 Debt Administration - The County's general obligation bond ratings are Aa1 by Moody's Investor Services and AA + by Standard & Poor's The County's key financial ratios relating to debt and associated formal financial policy guidelines adopted by the Board are as follows County Policy Actual at 6 30 22 Net Debt as a Percentage of Estimated Market Value of Not - to - exceed Taxable Property 40 11 Debt Service Expenditures as a Percentage of Total General Less than Fund Revenues 20 128 Payout of Aggregate Outstanding Approximately Tax - Supported Debt Principal 50 in 10 Years 721 7Page2Adherence to the County's debt management policies is crucial in light of the County's projected continued growth and infrastructure requirements Risk Management - The County is exposed to various risks of loss related to assets , liabilities claimed by third parties , employee injury and natural disasters The County is insured for property replacement covering buildings and contents , motor vehicles and equipment Bodily injury limits related to vehicles are 1 million per person and 2 million per accident The County claims governmental immunity from all liability except to the limited coverage above The County self - insures workers ' compensation claims up to statutory limits through a self - funded risk financing pool administered by the North Carolina Association of County Commissioners The County has flood insurance on certain public utilities property , with coverage varying with the value of the property The County also has a CyberRisk Policy with a 2,000,000 aggregate limit that includes cyber liability , breach response , cyber - crime and business loss There has been no significant reduction in insurance coverage from the previous year and settled claims have not exceeded insurance policy limits in the last three years Pension Plans - County employees are required to participate in one of several multiple - employer , defined benefit pension plans administered by the State of North Carolina In addition to the pension plans administered by the State , the County administers a single - employer defined benefit plan , a supplemental retirement income plan and a single - employer defined benefit retiree healthcare benefits plan for certain qualified employees All of these plans are discussed in the notes to the financial statements Major Initiatives - Activities undertaken by the County during the fiscal year ended June 30 , 2022 confirmed the ongoing commitment by the County to meet the needs of citizens for services and infrastructure As the fastest growing county in the State , the increasing population places additional demands on the County to meet the needs of its citizens The year's activities as highlighted below demonstrate the County's response to the demands and needs • Johnston County's general obligation bond ratings of Aa1 by Moody's Investors Service and AA + by Standard and Poor's Rating Services were maintained during fiscal year 2021 - 22 In addition , the County received first time Water & Sewer System Revenue Bond ratings of Aa2 by Moody's Investors Service and AA + by Standard and Poor's Rating Services • The Financial Policy Guidelines adopted by the Board continue to determine how the County budgets and plans for the future financially • The County continually updates its seven - year General Fund capital improvements plan , as it plans for future space needs for the County , as well as the needs of the court system and education partners A space needs assessment was completed for the County during fiscal year 2021 - 22 and the County is evaluating potential future building options • County officials continue to collaborate with the Johnston County Board of Education and the Johnston Community College Board of Trustees regarding future capital facility needs Voters in the County approved 61,000,000 general obligation school bonds and 15,000,000 general obligation community college bonds at a referendum on November 6 , 2018 The final 36 million school and community college bonds were issued in May 2021 In addition , a bond referendum was held in the County on November 8 , 2022 at which voters approved 177,000,000 in general obligation school bonds , with plans to issue the bonds over the next four fiscal years • Construction is nearing completion on the County's new detention center on NC Highway 70 East in Smithfield In addition , construction is approximately 50 completed on a new Public Safety Center on the same site These projects address 8Page3overcrowding at the County's current detention center , as well as the need for more space for public safety facilities , including the Sheriff's office , Emergency Services and Emergency 9 - 1 - 1 operations These facilities will allow the transition of the courthouse for primarily judicial uses to be expedited • The Board of Commissioners approved several incentive grants for new and or expanding businesses in the County and the Economic Development office of the County continues to encourage and facilitate development opportunities The Board remains aggressive with economic development efforts - recruiting new industry and encouraging existing industries to grow Recent economic development announcements along the Interstate - 95 corridor are especially exciting Recently , the Board has partnered with the private sector to expand the local inventory of high - end Class A industrial real estate The County's building - lease program includes performance - based incentives that enable the County to be pro - active in recruiting companies that pay above - average salaries and also helps private developers manage the financial risks associated with building speculative space • Work continues on an update to the County's Comprehensive Land Use Plan • The County is undergoing many changes with regards to transportation as major transportation network projects are underway or scheduled in the next few years The County has also agreed to participate in the Triangle Region Commuter Rail Study • The County's recently formed Parks , Greenways and Open Space Program continues to coordinate with municipal and rural athletic recreation associations in the County and to coordinate the Mountains to the Sea Trail project • In fiscal year 2021 - 22 , Emergency Rental Assistance funds from the US Treasury allowed the County to provide almost 97 million rental and utility assistance to eligible households financially impacted by the COVID - 19 pandemic • The County has received a 40,661,647 allocation from the American Recovery Plan Act " ARPA " The County has formed a task force to analyze and prioritize the County's needs for expenditure of the funds To date , 22 million of the County's ARPA funds have been allocated for water infrastructure projects • The County continues to plan for future water and wastewater infrastructure needs through an updated 20 - year Public Utilities Capital Improvements Plan Several water and wastewater capital projects were completed during fiscal year 2021 - 22 In addition , the County continued and or began several more water and wastewater capital projects funded by State Revolving Fund loans administered by the North Carolina Department of Environmental Quality County staff worked during fiscal year 2020 - 21 to establish a water and sewer revenue bond program The first water and sewer revenue bonds were issued in August 2021 in the public bond market with excellent first - time water and sewer revenue bond credit ratings of Aa2 by Moody's Investors Service and AA + by Standard and Poor's Rating Services At present , a second revenue bond issue is being planned for the Spring Summer of 2023 Awards and Acknowledgments Awards - Certificate of Achievement for Excellence in Financial Reporting Government Finance Officers Association of the United States and Canada " GFOA " awarded a Certificate of Achievement for Excellence in Financial Reporting to Johnston County for its annual comprehensive financial report for the fiscal year ended June 30 , 2021 This is the twelfth consecutive year in which the government has achieved this prestigious reward In order to be awarded a Certificate of Achievement , a governmental unit must publish an easily readable and efficiently organized annual comprehensive financial report , the contents of which conform to 9Page4program standards This report must satisfy both generally accepted accounting principles and applicable legal requirements A Certificate of Achievement award is valid for a period of one year only We believe that our current annual comprehensive financial report continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate Acknowledgements - Preparation of the Annual Comprehensive Financial Report would not have been possible without the dedicated efforts of the entire Johnston County Finance Department , other County departments and the auditing staff of Thompson , Price , Scott , Adams & Co , PA The information in this report illustrates the progressive leadership and support provided by the Johnston County Board of Commissioners Without the Board's guidance and initiative in planning and conducting the operations of the County , the County would not be able to operate in a fiscally stable and responsible manner Respectfully submitted , J Chad McLamb , CPA Deputy County Manager Director of Finance 10Page5Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to County of Johnston North Carolina For its Annual Comprehensive Financial Report For the Fiscal Year Ended June 30 , 2021 Executive Director CEO 11Page6COUNTY OF JOHNSTON , NORTH CAROLINA LIST OF PRINCIPAL OFFICIALS June 30 , 2022 BOARD OF COUNTY COMMISSIONERS R S Butch Lawter , Jr , Chairman Patrick E Harris , Vice - Chairman Tony Braswell Ted G Godwin Fred J Smith , Jr Richard D Braswell April Stephens OFFICERS County Manager Rick J Hester Deputy County Manager Director of Finance J Chad McLamb , CPA Register of Deeds Craig Olive Tax Administrator Jocelyn Andrews Sheriff Steve Bizzell 12Page7Johnston County Citizens Johnston County Board of Commissioners County Manager General Government Public Safety Public Solid Economic & Physical Human Services Utilities Waste Development Administration , Legal Sheriff E - 911 Planning Economic Finance Social Health Development & Internal Audit Services Human Tax Emergency Cooperative Inspections Soil & Veterans Resources Management Extension Water Airport Housing Services Assistance Elections Register of Child Animal Parks , Deeds Support Control Greenways & Open Space Court Buildings Facilities & Grounds Geographic Technology Information Services Systems Elected Appointed Board 13Page8Johnston County , North Carolina 14Page9Financial SectionPage1Thompson , Price , Scott , Adams & Co , PA PO Box 398 1626 S Madison Street Whiteville , NC 28472 Telephone 910 642 - 2109 Fax 910 642 - 5958 Alan W Thompson , CPA R Bryon Scott , CPA Gregory S Adams , CPA INDEPENDENT AUDITORS ' REPORT To the Board of County Commissioners County of Johnston Smithfield , North Carolina Report on the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities , the business­type activities , the aggregate discretely presented component units , each major fund , and the aggregate remaining fund information of the County of Johnston , North Carolina , as of and for the year ended June 30 , 2022 , and the related notes to the financial statements which collectively comprise the County of Johnstons basic financial statements as listed in the table of contents In our opinion , the financial statements referred to above present fairly , in all material respects , the respective financial position of the governmental activities , business - type activities , the discretely presented component unit , each major fund , and the aggregate remaining fund information of the County of Johnston , North Carolina as of June 30 , 2022 , and the respective changes in financial position and cash flows , where applicable , thereof and the respective budgetary comparison for the General Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America We did not audit the financial statements of Johnston County ABC Board , which represent 22 percent , 11 percent , and 85 percent of the assets , net position , and revenues , respectively , of the aggregate discretely presented component units as of June 30 , 2022 , and the respective changes in financial position , and where applicable , cash flows thereof for the year then ended Those statements were audited by other auditors whose report thereon has been furnished to us , and our opinion , insofar as it relates to the amounts included for the Johnston County ABC Board , is based solely on the report of the other auditors Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America GAAS and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States Our responsibilities under these standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report We are required to be independent of the County of Johnston and to meet our other ethical responsibilities , in accordance with the relevant ethical requirements relating to our audit We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions The financial statements of Johnston County ABC Board were not audited in accordance with Governmental Auditing Standards 17Page2Responsibilities of Management for the Audit of the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America ; this includes the design , implementation , and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement , whether due to fraud or error In preparing the financial statements , management is required to evaluate whether there are conditions or events , considered in the aggregate , that raises substantial doubt about the County's ability to continue as a going concern for the twelve months beyond the financial statement date , including any currently known information that may raise substantial doubt shortly thereafter Auditors Responsibility for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement , whether due to fraud or error , and to issue an auditor's report that includes our opinions Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Governmental Auditing Standards will always detect material statement when it exists The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error , as fraud may involve collusion , forgery , intentional omissions , misrepresentations , or the override of internal control Misstatements are considered material if there is a substantial likelihood that , individually or in the aggregate , they would influence the judgment made by a reasonable user based on the financial statements In performing an audit in accordance with GAAS and Governmental Auditing Standards , we • exercised professional judgement and maintained professional skepticism throughout the audit • identify and assess the risks of material misstatement of the financial statements , whether due to fraud or error , and design and perform audit procedures responsible to those risks Such procedures include examining , on a test basis , evidence regarding the amounts and disclosures in the financial statements • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances , but not for the purpose of expressing an opinion on the effectiveness of the County of Johnston's internal control Accordingly , no such opinion is expressed • evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management , as well as evaluate the overall presentation of the financial statements • conclude whether , in our judgment , there are conditions or events , considered in the aggregate , that raise substantial doubt about the Countys ability to continue as a going concern for a reasonable period of time We are required to communicate with those charged with governance regarding among other matters , the planned scope and timing of the audit , significant audit findings , and certain internal control - related matters that we identified during the audit 18Page3Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis , the Local Government Employees Retirement System Schedules of the Countys Proportionate Share of Net Pension Liability and County Contributions , pages 116 and 120 , the Local Government Employees ' Retirement System Schedules of the Johnston County County Tourism Development Authority's Proportionate Share of Net Pension Liability and County Contributions , pages 118 and 122 , and the Register of Deeds Supplemental Pension Fund schedules of the Countys Proportionate Share of the Net Pension Asset and County Contributions on pages 124 and 125 , and the Law Enforcement Officers Special Separation Allowance schedules of the Changes in Total Pension Liability and Total Pension Liability as a Percentage of Covered Payroll , pages 126 and 127 , and the Schedule of Changes in the Total OPEB Liability and Related Ratios , page 128 , be presented to supplement the basic financial statements Such information is the responsibility of management , although not a part of the basic financial statements , is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational , economic , or historical context We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America , which consists of inquiries of management about the methods of preparing the information and comparing the information for consistency with managements responses to our inquiries , the basic financial statements , and other knowledge we obtained during our audit of the basic financial statements We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements of the County of Johnston , North Carolina The combining and individual fund statements , budgetary schedules , other schedules , as well as the accompanying Schedule of Expenditures of Federal and State Awards , as required by Title 2 US Code of Federal Regulations CFR Part 200 , Uniform Administrative Requirements , Cost Principles , and Audit Requirements for Federal Awards are presented for purpose of additional analysis and are not a required part of the basic financial statements Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures , including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves , and other additional procedures in accordance with auditing standards generally accepted in the United States of America by us In our opinion , based on our audit , the procedures performed as described above , the combining and individual fund financial statements , budgetary schedules , other schedules , and the Schedule of Expenditures of Federal and State Awards are fairly stated , in all material respects , in relation to the basic financial statements as a whole Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated January 24 , 2023 , on our consideration of the County of Johnstons internal control over financial reporting and on our tests of its compliance with certain provisions of laws , regulations , contracts , and grant agreements and other matters The purpose of the report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing , and not to provide an opinion on internal control over financial reporting or on compliance That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the County of Johnstons internal control over financial reporting and compliance ______________________________________ Thompson , Price , Scott , Adams & Co , PA Whiteville , NC 19 January 24 , 2023Page420Page5MANAGEMENTS DISCUSSION AND ANALYSISPage6As management of Johnston County , we offer readers of Johnston County's financial statements this narrative overview and analysis of the financial activities of Johnston County for the fiscal year ended June 30 , 2022 We encourage readers to read the information presented here in conjunction with additional information that we have furnished in the County's financial statements , which follow this narrative Financial Highlights The assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources of Johnston County's primary ? government at the close of the fiscal year by 62,583,363 net position The primary government's total net position increased by 63,124,418 , primarily due to increase in property tax , sales tax , and charges ? for services As of the close of the current fiscal year , Johnston County's governmental funds reported combined ending fund balances of ? 252,067,527 , an increase of 12,701,287 in comparison with the prior year Approximately 2163 percent of this total amount , or 54,511,918 , is restricted or non - spendable At the end of the current fiscal year , legally available fund balance for the General Fund was 182,297,742 , or 5952 percent of total ? general fund expenditures for the fiscal year Johnston County's total debt increased by 45,332,301 during the current fiscal year includes premium on issuance as well The key ? factors in this increase was primarily due to the issuance of water and sewer system revenue bonds and clean water revolving loans to finance the construction of water and wastewater facility improvements , and the issuance of bonds to finance the construction of a new public safety center , offset by debt service payments made for the year The County issued 165 million in limited obligation bonds for the Public Safety Center , 5007 million Water & Sewer System Revenue Bonds and received 203 million in draw loan revolving loans associated with Water , Waste Water , and Water district projects Johnston County maintained its Aa1 from Moodys Investors and maintained its AA + rating from Standard and Poor's rating services ? In addition , the County issued its inaugural series of water and sewer system revenue bonds and received first time water and sewer revenue bond ratings of Aa2 from Moodys Investors Service and AA + from Standard and Poors Rating Services Overview of the Financial Statements This discussion and analysis are intended to serve as an introduction to Johnston County's basic financial statements The County's basic financial statements consist of three components ; 1 government - wide financial statements , 2 fund financial statements , and 3 notes to the financial statements see Figure 1 The basic financial statements present two different views of the County through the use of government - wide statements and fund financial statements In addition to the basic financial statements , this report contains other supplemental information that will enhance the reader's understanding of the financial condition of Johnston County 22Page7Required Components of Annual Financial Report Figure 1 Management's Basic Discussion and Financial Analysis Statements Government - wide Notes to the Fund Financial Financial Statements Financial Statements Statements Summary Detail Basic Financial Statements The first two statements Exhibits 1 and 2 in the basic financial statements are the Government - wide Financial Statements They provide both short and long - term information about the County's financial status The next statements Exhibits 3 through 11 are Fund Financial Statements These statements focus on the activities of the individual parts of the County's government These statements provide more detail than the government - wide statements There are four parts to the Fund Financial Statements 1 the governmental funds statements ; 2 the budgetary comparison statements ; 3 the proprietary fund statements ; and 4 the fiduciary fund statements The next section of the basic financial statements is the notes The notes to the financial statements explain in detail some of the data contained in those statements After the notes , supplemental information is provided to show details about the County's non - major governmental funds and internal service funds , all of which are added together in one column on the basic financial statements Budgetary information required by the General Statutes also can be found in this part of the statements Following the notes is the required supplemental information This section contains funding information about the County's pension plans Government - wide Financial Statements The government - wide financial statements are designed to provide the reader with a broad overview of the County's finances , similar in format to a financial statement of a private - sector business The government - wide statements provide short and long - term information about the County's financial status as a whole The two government - wide statements report the County's net position and how it has changed Net position is the difference between the County's total assets and deferred outflows of resources and the total liabilities and deferred inflows of resources Measuring net position is one way to gauge the County's financial condition 23Page8The government - wide statements are divided into three categories 1 governmental activities ; 2 business - type activities ; and 3 component units The governmental activities include most of the County's basic services such as public safety , and general administration Property taxes and state and federal grant funds finance most of these activities The business - type activities are those that the County charges customers to provide These include the water and sewer and landfill services offered by Johnston County The final category is the component units Although legally separate from the County , the ABC Board is important to the County because the County is financially accountable for the Board by appointing its members and because the Board is required to distribute its profits to the County The County then distributes the profits among the County and municipalities in the County The County also reports the Tourism Development Authority and the Airport Authority as component units The government - wide financial statements are on Exhibits 1 and 2 of this report Fund Financial Statements The fund financial statements provide a more detailed look at the County's most significant activities A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives Johnston County , like all other governmental entities , uses fund accounting to ensure and reflect compliance or non - compliance with finance - related legal requirements , such as the General Statutes or the County's budget ordinance All of the funds of Johnston County can be divided into three categories governmental funds , proprietary funds , and fiduciary funds Governmental Funds - Governmental funds are used to account for those functions reported as governmental activities in the government - wide financial statements Most of the County's basic services are accounted for in governmental funds These funds focus on how assets can readily be converted into cash flow in and out , and what monies are left at year - end that will be available for spending in the next year Governmental funds are reported using an accounting method called modified accrual accounting This method also has a current financial resources focus As a result , the governmental fund financial statements give the read