Johnston County Annual Comprehensive Financial Report for fiscal year ending June 30, 2017

10 County of Johnston , North Carolina Comprehensive Annual Financial Report For the Fiscal Year Ended June 30 , 2017PageCounty of Johnston , North Carolina Comprehensive Annual Financial Report For the Fiscal Year Ended June 30 , 2017 Prepared by the Johnston County Finance DepartmentPagePage pageNumber5COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2017 Exhibit s Page s INTRODUCTORY SECTION Letter of Transmittal 3 - 9 Certificate of Achievement for Excellence in Financial Reporting 10 List of Principal Officials 11 Organization Chart 12 Map of Johnston County , North Carolina 13 FINANCIAL SECTION INDEPENDENT AUDITORS REPORT 17 - 19 MANAGEMENT’S DISCUSSION AND ANALYSIS 20 - 31 BASIC FINANCIAL STATEMENTS Government - wide Financial Statements Statement of Net Position 1 34 Statement of Activities 2 35 Fund Financial Statements Balance Sheet – Governmental Funds 3 36 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position 3a 37 Statement of Revenues , Expenditures , and Changes in Fund Balances – Governmental Funds 4 38 Reconciliation of the Statement of Revenues , Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities 4a 39 Statement of Revenues , Expenditures and Changes in Fund Balances – Budget And Actual – General Fund 5 40 Statement of Net Position – Proprietary Funds 6 42 Statement of Revenues , Expenses , and Changes in Fund Net Position – Proprietary Funds 7 43 Statement of Cash Flows – Proprietary Funds 8 - 9 44 - 45 Statement of Fiduciary Net Position – Fiduciary Funds 10 46 iPagePage pageNumber6COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2017 Exhibit s Page s FINANCIAL SECTION CONTINUED NOTES TO THE FINANCIAL STATEMENTS 47 - 93 REQUIRED SUPPLEMENTAL FINANCIAL DATA Other Post Employment Benefits - Schedule of Funding Progress A - 1 96 Schedule of Countys Proportionate Share of Net Pension Asset LGERS A - 2 97 Schedule of County Contributions LGERS A - 3 98 Schedule of Countys Proportionate Share of Net Pension Asset ROD A - 4 99 Schedule of County Contributions ROD A - 5 100 Schedule of Changes in Total Pension Liability A - 6 101 Schedule of Total Pension Liability as a Percentage of Covered - Employee Payroll A - 7 102 COMBINING AND INDIVIDUAL FUND FINANCIAL STATEMENTS AND SCHEDULES General Fund - Schedule of Revenues , Expenditures and Changes in Fund B - 1 104 - 114 Balance - Budget and Actual Schedules of Revenues , Expenditures and Changes in Fund Balances – Budget B - 1a 115 and Actual - Revaluation Fund Schedule of Revenues , Expenditures and Changes in Fund Balance – Budget and Actual - School B - 2 116 Bond Fund Combining Balance Sheet – Non - Major Governmental Funds C - 1 118 Combining Statement of Revenues , Expenditures , and Changes in C - 2 119 Fund Balances - Non - Major Governmental Funds Combining Balance Sheets – Non - Major Special Revenue Funds C - 3 120 Combining Statement of Revenues , Expenditures , and Changes in Fund Balances – Non - Major Special Revenue Funds C - 4 121 Combining Balance Sheet – Non - Major Capital Projects Funds C - 5 122 Combining Statement of Revenues , Expenditures , and Changes in Fund Balances – Non - Major Capital Projects Funds C - 6 123 iiPagePage pageNumber7COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2017 Exhibit s Page s FINANCIAL SECTION CONTINUED 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 - 7 124 Special Tax District Fund - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual C - 8 125 Heritage Commission Fund – Schedule of Revenues , Expenditures and Changes in Fund Balance – Budget and Actual C - 9 126 Communication Fund – Schedule of Revenues , Expenditures and Changes in Fund Balance – Budget and Actual C - 10 127 Research Training Zone – Schedule of Revenues , Expenditures and Changes in Fund Balance – Budget and Actual C - 11 128 Voluntary Ag District - Schedule of Revenues , Expenditures and Changes in Fund Balance - Budget and Actual C - 12 129 Industrial Development Infrastructure – Schedule of Revenues , Expenditures and Changes in Fund Balance – Budget and Actual C - 13 132 Public Safety Center Project Fund – Schedule of Revenues , Expenditures and Changes in Fund Balance – Budget and Actual C - 14 133 Courthouse Facilities Project Fund – Schedule of Revenues , Expenditures and Changes in Fund Balance – Budget and Actual C - 15 134 Enterprise Funds Combining Statement of Net Position - Non - major Enterprise Funds D - 1 136 Combining Statement of Revenues , Expenses , and Changes in Net Position - Non - major Enterprise Funds D - 2 137 Combining Statement of Cash Flows - Non - major Enterprise Funds D - 3 138 - 139 Administrative Fund – Schedule of Revenues , Expenditures and Changes in Fund Balance – Budget and Actual Non - GAAP D - 4 141 Solid Waste Fund – Schedule of Revenues , Expenditures and Changes in Fund Balance – Budget and Actual Non - GAAP D - 5 142 - 143 C & D Landfill - Area 2 Cell 2 – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 6a 144 iiiPagePage pageNumber8COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2017 Exhibit s Page s FINANCIAL SECTION CONTINUED Water Fund – Schedule of Revenues , Expenditures and Changes in Fund Balance – Budget and Actual Non - GAAP D - 6 146 - 147 WTP Filter Add & Chem Feed Imp – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 6a 148 WTP 25 MGD Exp Future Planning – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 6b 149 Looping Lines FY 15 - 16 - Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 6c 150 NCDOT Waterline Projects – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 6d 151 Wastewater Treatment Fund – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 7 152 - 153 2014 Sewer Rehabilitation – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 7a 154 2015 Sewer Rehabilitation – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 7b 155 2016 WWTP Expansion Study – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 7c 156 Cleveland Area Consolidated WW – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 7d 157 Biosolids Facilities Improvement – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 7e 158 Buffalo WWPS Upgrade and Force Main Replacement – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 7f 159 Pine Level Wastewater Pump Station Improvements – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 7g 160 Swift Creek Interceptor – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 7h 161 Water District Funds – Combining Statement of Net Position D - 8 162 Section 8 Housing Assistance Payments Fund – Project No NC 19 - V164 - 006 – Schedule of Revenues and Expenditures – Budget and Actual Non - GAAP D - 9 163 ivPagePage pageNumber9COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2017 Exhibit s Page s FINANCIAL SECTION CONTINUED Water Districts - Consolidating Information Statement of Net Position - Combined Water District Operating Fund E - 1 166 - 167 Schedule of Revenues and Expenditures - Combined Water District Operating Fund E - 2 168 - 169 Combining Statement of Fiduciary Assets and Liabilities – Agency Funds F - 1 172 Combining Statement of Changes in Fiduciary Assets and Liabilities – Agency Funds F - 2 173 OTHER SCHEDULES Schedule of Ad Valorem Taxes Receivable G - 1 176 Analysis of Current Tax G - 2 , G - 2a 177 - 178 Ten Largest Taxpayers G - 2b 179 STATISTICAL SECTION Net Position by Component 1 184 - 185 Changes in Net Position 2 186 - 189 Fund Balances of Governmental Funds 3 190 - 191 Changes in Fund Balances of Governmental Funds 4 192 - 193 Governmental Activities Tax Revenues by Source 5 194 Assessed Value and Estimated Actual Value of Taxable Property 6 195 Property Tax Rates - Direct and Overlapping Governments Per 100 of Assessed Value 7 196 Construction Information 8 197 Principal Property Taxpayers 9 198 Property Tax Levies and Collections 10 199 Schedules of Outstanding Debt Payable Governmental Activities 11 , 12 200 Schedules of Outstanding Debt Payable Business - type Activities 13 , 14 , 15 201 - 202 Ratios of Outstanding Debt by Type 16 203 Ratios of Net General Bonded Debt Outstanding 17 204 vPage0COUNTY OF JOHNSTON , NORTH CAROLINA TABLE OF CONTENTS Year Ended June 30 , 2017 Exhibit s Page s STATISTICAL SECTION CONTINUED Direct and Overlapping Governmental Activities Debt 18 205 Legal Debt Margin Information 19 206 - 207 Pledged Revenue Coverage Information Water System Revenue Bonds 20 208 Demographic and Economics Statistics 21 209 Principal Employers 22 210 Full - time Equivalent County Government Employees by Function 23 211 Operating Indicators by Function Program 24 212 - 213 Capital Assets Statistics by Function 25 214 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 217 - 218 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 219 - 220 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 221 - 222 Schedule of Findings and Questioned Costs 223 - 228 Summary Schedule of Prior Audit Findings 229 Schedule of Expenditures of Federal and State Awards 231 - 237 viPage1Introductory SectionPage3Johnston County J Chad McLamb , CPA Director of Finance POST OFFICE BOX 1049 919 989 - 5112 FAX 919 989 - 5179 SMITHFIELD , NC 27577 December 20 , 2017 The Board of County Commissioners Rick J Hester , County Manager Citizens of Johnston County , North Carolina It is our pleasure to submit this Comprehensive Annual Financial Report “ CAFR ” for the fiscal year ended June 30 , 2017 North Carolina law requires that local governments publish a complete set of financial statements annually within six months of the close of the fiscal year 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 , 2017 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 , 2017 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 unqualified opinion that the County of Johnston’s financial statements for the fiscal year ended June 30 , 2017 are fairly presented in conformity with GAAP This opinion can be found at the beginning of the Financial Section of this document 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 3Page4controls and legal requirements involving the administration of federal and state awards Information regarding this audit is submitted as a separate report , which includes the schedules of financial assistance and findings and questioned costs and the independent auditor’s report on internal control and compliance 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 The County’s 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 the 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 2016 population of the County was 189,460 according to the North Carolina Office of State Budget and Management Smithfield , the County seat , had an estimated 2016 population of 11,238 ; Clayton 19,427 ; Selma 6,227 ; Benson 3,481 ; Four Oaks 2,039 ; Kenly 1,375 ; Princeton 1,242 ; Pine Level 1,822 ; Wilson’s Mills 2,568 ; Micro 463 and Archer Lodge 4,829 The County is one of the fastest growing counties in the State and nation according to the United States Department of Commerce , Bureau of the Census In particular , the townships along the Johnston County Wake County line have experienced significant growth over the past 20 years 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 4Page5options which , when coupled with the job growth of the region , favorably positions the County to capitalize upon new and expanding commercial and industrial opportunities As the population expands and transportation networks improve , the County is experiencing growth further east into central areas of the County The completion of the US Highway 70 bypass around the Town of Clayton in 2008 continues to further open the central towns of Wilson’s Mills , Smithfield , Selma , Pine Level and Four Oaks to increased growth opportunities US Highway 70 from the City of Raleigh to the Town of Morehead City has recently been designated a “ future interstate ” and high priority corridor by the US Department of Transportation Planned improvements to bring the highway to a fully controlled access highway interstate quality in the future should enhance economic growth prospects for the County and the entire Highway 70 Corridor In addition , more people are moving further southeast along Interstate Highway 40 into the McGee’s Crossroads area 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 , funds for education , cultural and recreational activities and general administration functions In addition , the County owns and operates water , sewer and solid waste systems and a stormwater 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 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 Local Economy The County’s overall economy 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 capital expenditures over the years The County is currently experiencing a resurgence of economic growth in the wake of the national slowdown 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 has also been heavily influenced in recent years by residential development , particularly in the 5Page6western and northern portions of the County in and around the Town of Clayton and the Cleveland community As mentioned above , contributing to the County’s growth in recent years 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 During and since the national economic slowdown in recent years , the County’s industrial and commercial sectors have continued to grow and it is anticipated that population growth will continue to significantly impact the County and its infrastructure 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 In October 2007 , the Board adopted formal Financial Policy Guidelines to guide the overall financial and debt management practices of the County In November 2013 , a bond referendum was held in the County and voters approved 57,000,000 in general obligation school bonds and 7,000,000 in general obligation community college bonds The final 27 million was issued in the Spring of 2016 In addition , 2675 million limited obligation bonds were issued in the Summer of 2017 for school capital needs The County maintains a 20 - year public utilities CIP which includes over 300 million in 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 , longer term federal loans and limited State and federal grants Solid waste financing needs are anticipated to be met primarily through the use of accumulated reserves Financial Policies Information Single Audit - As a recipient of federal and State assistance , the County is also 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 and the Finance 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 , 2017 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 6Page7NCGS 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 286,557 for fiscal year 2016 - 17 County policy also stipulates that Legally Available Fund Balance calculated as cash and investments minus the sum of liabilities , encumbrances , and deferred revenues arising from cash receipts at the close of each fiscal year should be at least 15 of the Total Annual Operating Budget of the County The policy further states that if Legally Available Fund Balance at the close of a fiscal year falls below 15 , the Board will adopt a plan as part of the following year’s budget process to restore the Legally Available Fund Balance to the policy level within 36 months from the date of the budget adoption As of June 30 , 2017 , the County’s Legally Available Fund Balance was 2271 Debt Administration - The County’s general obligation bond ratings of Aa1 by Moody’s Investor Services and AA + by Standard & Poors were affirmed during fiscal year 2016 - 17 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 17 Net Debt as a Percentage of Estimated Market Value of Not - to - exceed Taxable Property 40 17 Debt Service Expenditures as a Percentage of Total General Less than Fund Revenues 20 173 Payout of Aggregate Outstanding Approximately Tax - Supported Debt Principal 50 in 10 Years 820 Adherence to the County’s debt management policy is increasingly critical in light of the County’s projected growth and infrastructure requirements Risk Management - The County is exposed to various risks of loss related to assets , liabilities claimed by third parties and employee injury The County is fully 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 self - insures workers ’ compensation claims through a self - funded risk financing pool administered by the North Carolina Association of County Commissioners with claims exceeding 500,000 covered by stop - loss insurance 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 7Page8Pension 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 , 2017 confirmed the ongoing commitment by the County to meet the needs of citizens for services and infrastructure As one of the fastest growing counties in the State and nation , 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 affirmed during fiscal year 2016 - 17 • The Financial Policy Guidelines adopted by the Board continue to determine how the County budgets and plans for the future financially • The Board of Commissioners approved several incentive grants for expanding businesses in the County • The Economic Development office of the County continues to encourage and facilitate development opportunities in the County The Board remains aggressive with economic development efforts The most significant and historic economic announcement was made in August 2015 , when Novo Nordisk Pharmaceutical Industries announced it would invest approximately 18 billion to build a second plant adjacent to its present location just outside the Town of Clayton , and expects to employ approximately 700 at the new facility at an annual wage of 68,000 Construction is well under way and the benefits of this project will be felt in the County for years to come • Several water and wastewater capital projects were completed In addition , the County received notices from the North Carolina Department of Environmental Quality of its intent to fund several more water and wastewater capital projects through State Revolving Fund loans • The County Board of Commissioners approved an updated 20 - year capital improvements plan for the County’s Public Utilities Department with in excess of 330 million in capital project needs • The County issued limited obligation school bonds to finance a total of 30 million in repairs and renovations to existing public school facilities in the County • 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 • County officials continue to work with a consultant to study the long - term jail and court facility needs of the County Other Information Independent Audit – The County is required by State statute to have an annual independent financial audit The accounting firm of Thompson , Price , Scott , Adams & Co , PA was selected 8Page9by the County to perform this audit In addition to meeting the requirements set forth in State statutes , the audit was also designed to comply with the requirements of the Single Audit Act of 1996 and related OMB circular A - 133 and the State Single Audit Implementation Act Thompson , Price , Scott , Adams & Co , PA audited the Financial Section and reported on the County’s compliance with federal and State award programs in the Compliance Section Management’s Discussion and Analysis – Management’s Discussion and Analysis report contains more detailed information regarding the County’s financial statements and can be found immediately following the report of the independent auditors Awards – Certificate of Achievement for Excellence in Financial Reporting The 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 comprehensive annual financial report for the fiscal year ended June 30 , 2016 This is the seventh consecutive year since the fiscal year ending June 30 , 1994 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 comprehensive annual financial report , the contents of which conform to program 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 comprehensive annual 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 Comprehensive Annual 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 Assistant County Manager Director of Finance 9Page010Page1COUNTY OF JOHNSTON , NORTH CAROLINA LIST OF PRINCIPAL OFFICIALS June 30 , 2017 BOARD OF COUNTY COMMISSIONERS Jeffrey P Carver , Chairman Ted G Godwin , Vice - Chairman Allen L Mims , Jr Lillian “ Cookie ” Pope Chad M Stewart Larry Wood Lee Jackson OFFICERS County Manager Rick J Hester Assistant County Manager Director of Finance J Chad McLamb , CPA Register of Deeds Craig Olive Tax Administrator Sheila Garner Sheriff Steve Bizzell 11Page2Johnston County Citizens Johnston County Board of Commissioners County Manager General Government Public Safety Economic & Physical Human Services Public Solid Waste Development Utilities Administration Legal Sheriff E - 911 Planning Economic Social Health & Finance Developmen Services Human Tax Emergency Soil & Inspections Cooperative Veterans Resources Management Water Extension Airport Housing Services Assistance Elections Register of Child Animal Deeds Support Control Court Buildings Facilities & Grounds Geographic Technology Information Services Systems Elected Appointed Board 12Page3Johnston County , North Carolina 13Page5Financial SectionPage7Thompson , 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 We have audited the accompanying financial statements of the governmental activities , the business - type 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 , 2017 , 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 Managements Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America ; this includes the design , implementation , and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement , whether due to fraud or error Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit We did not audit the financial statements of the Johnston County ABC Board Those statements were audited by other auditors whose report has been furnished to us , and our opinion , insofar as it relates to the amounts included for the Johnston County ABC Board , is based solely on the report of the other auditors We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards , issued by the Comptroller General of the United States Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement The financial statements of Johnston County ABC Board were not audited in accordance with Government Auditing Standards An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements The procedures selected depend on the auditors judgment , including the assessment of the risks of material misstatement of the financial statements , whether due to fraud or error In making those risk assessments , the auditor considers internal control relevant to the entitys preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances , but not for the purpose of expressing an opinion on the effectiveness of the entitys internal control Accordingly we express no such opinion An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management , as well as evaluating the overall presentation of the financial statements Members 17 American Institute of CPAs - NC Association of CPAs - AICPA Division of FirmsPage8We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions Opinions In our opinion , based upon our audit and the report of the other auditors , the financial statements referred to above present fairly , in all material respects , the respective financial position of the governmental activities , business - type activities , the aggergate discretely presented component units , each major fund , and the aggregate remaining fund information of the County of Johnston , North Carolina as of June 30 , 2017 , 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 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Managements Discussion and Analysis , the Other Postemployment Benefits Schedules of Funding Progress and Employer Contributions , the Local Government Employees Retirement System Schedules of the Countys Proportionate Share of the Net Pension Liability and County Contributions , the Register of Deeds Supplemental Pension Fund Schedule of the Countys Proportionate Share of the Net Pension Asset and Schedule of County Contributions , 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 , on pages 4 through 15 and 75 through 81 , respectively , be presented to supplement the basic financial statements Such information , although not a part of the basic financial statements , is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational , economic , or historical context We and other auditors 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 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 County of Johnstons basic financial statements 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 18Page9The combining and individual fund financial statements , budgetary schedules , other schedules and the Schedule of Expenditures of Federal and State Awards are the responsibility of management and were derived from and related directly to the underlying accounting and other records used to prepare the basic financial statements Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures , including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves , and other additional procedures in accordance with auditing standards generally accepted in the United States of America by us and other auditors In our opinion , based on our audit , the procedures performed as described above , and the report of the other auditors , 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 December 13 , 2017 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 December 13 , 2017 19Page0JOHNSTON COUNTY , NORTH CAROLINA MANAGEMENT’S DISCUSSION AND ANALYSIS As 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 , 2017 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 liabilities and deferred inflows of resources of Johnston County’s primary government exceeded its assets and deferred outflows of resources at the close of the fiscal year by 100,182,501 net position ? The primary government’s total net position increased by 6,548,493 , primarily due to increase in property tax and increase in charges for services ? As of the close of the current fiscal year , Johnston County’s governmental funds reported combined ending fund balances of 80,645,248 , a decrease of 16,718,369 in comparison with the prior year Approximately 3108 percent of this total amount , or 25,060,516 , is restricted or non - spendable ? At the end of the current fiscal year , legally available fund balance for the General Fund was 48,987,945 , or 2271 percent of total general fund expenditures for the fiscal year ? Johnston County’s total debt decreased by 29,183,042 during the current fiscal year includes premium on issuance as well The key factors in this increase was primarily due to the issuance of clean water revolving loans to finance the construction of water distribution systems and the issuance of refunding LOBs , offset by debt service payments made for the year The County issued 20,741,000 in refunding bonds ? Johnston County maintained its Aa1 from Moodys Investors and maintained their AA + rating from Standard and Poor’s 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 20Page1JOHNSTON COUNTY , NORTH CAROLINA MANAGEMENT’S DISCUSSION AND ANALYSIS Required Components of Annual Financial Report Figure 1 Management’s Basic Discussion and Financial Analysis Statements Government - wide Notes to the Fund Financial Statements Financial 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 21Page2JOHNSTON COUNTY , NORTH CAROLINA MANAGEMENT’S DISCUSSION AND ANALYSIS 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 The 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 , parks and recreation , 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 reader a detailed short - term view that helps him or her determine if there are more or less financial resources available to finance the County’s programs The relationship between governmental activities reported in the Statement of Net Position and the Statement of Activities and governmental funds is described in a reconciliation that is a part of the fund financial statements Johnston County adopts an annual budget for its General Fund , as required by the General Statutes The budget is a legally adopted document that incorporates input from the citizens of the County , the management of the County , and the decisions of the Board about which services to provide and how to pay for them It also authorizes the County to obtain funds from identified sources to finance these current period activities The budgetary statement provided for the General Fund demonstrates how well the County complied with the budget ordinance and whether or not the County succeeded in providing the services as planned when the budget was adopted The budgetary comparison statement uses the budgetary basis of accounting and is presented using the same format , language , and classifications as the legal budget document The statement shows four columns 1 the original budget as adopted by the board ; 2 the final budget as amended by the board ; 3 the actual resources , charges to appropriations , and ending balances in the General Fund ; and 4 the difference or variance between the final budget and the actual resources and charges 22Page3JOHNSTON COUNTY , NORTH CAROLINA MANAGEMENT’S DISCUSSION AND ANALYSIS Proprietary Funds – Johnston County has one kind of proprietary fund Enterprise Funds are used to report the same functions presented as business - type activities in the government - wide financial statements Johnston County uses enterprise funds to account for its water and sewer activity and for its landfill operations These funds are the same as those separate activities shown in the business - type activities in the Statement of Net Position and the Statement of Activities Fiduciary Funds – Fiduciary funds are used to account for resources held for the benefit of parties outside the government Johnston County has five fiduciary funds , all of which are agency funds Notes to the Financial Statements – The notes provide additional information that is essential to a full understanding of the data provided in the government - wide and fund financial statements The notes to the financial statements start on page 28 of this report Other Information – In addition to the basic financial statements and accompanying notes , this report includes certain required supplementary information concerning Johnston County’s progress in funding its obligation to provide pension benefits to its employees Required supplementary information can be found beginning on page 75 of this report Government - Wide Financial Analysis As noted earlier , net position may serve over time as one useful indicator of a government’s financial condition The liabilities and deferred inflows of resources of Johnston County’s primary government exceeded its assets and deferred outflows of resources by 100,182,501 as of June 30 , 2017 The County’s net position increased by 6,548,493 for the fiscal year ended June 30 , 2017 In addition , the County implemented GASB 73 , Accounting and Financial Reporting for Pensions and Related Assets that are not within the scope of GASB Statement 68 , and Amendments to Certain Provisions of GASB Statemetns 67 and 68 , which resulted in a decrease in net position of 5,505,300 Net position is reported in three categories Net investment in capital assets of 159,669,508 , restricted net position of 25,060,516 , and unrestricted net position of 284,912,525 Johnston County’s Net Position Figure 2 Governmental Business - type Activities Activities Total 2017 2016 2017 2016 2017 2016 Current and Other assists 85,929,052 104,335,231 5 1,355,827 4 4,584,937 137,284,879 1 48,920,168 Capital Assets 61,745,714 63,853,663 2 09,981,740 2 14,079,726 271,727,454 277,933,389 Total Assets 147,674,766 168,188,894 2 61,337,567 2 58,664,663 409,012,333 426,853,557 Total deferred outflows of resources 25,973,948 17,852,182 1 , 524,856 3 34,151 27,498,804 18,186,333 Long - term liabilities 324,523,514 352,479,227 1 27,131,161 1 27,540,974 451,654,674 480,020,201 Other liabilities 58,596,374 40,941,288 1 0,415,704 8 , 660,759 69,012,079 49,602,047 Total Liabilities 383,119,888 393,420,515 1 37,546,865 1 36,201,733 520,666,753 529,622,248 Total deferred inflows of resources 8 66,935 1 , 795,611 1 5,159,950 1 5,935,487 16,026,885 17,731,098 Net Position Net investment in capital assets 59,795,584 60,868,102 9 9,873,924 1 03,738,655 159,669,508 164,606,757 Restricted 25,060,516 47,237,843 - - 25,060,516 47,237,843 Unrestricted 295,194,209 317,280,995 1 0,281,684 3 , 122,939 284,912,525 314,158,056 Total Net Position 210,338,109 209,175,050 110,155,608 106,861,594 100,182,501 102,313,456 The net investment in capital assets category is defined as the County’s investment in County owned capital assets eg land , buildings , machinery , and equipment , less any related debt still outstanding that was issued to acquire those items Johnston County uses these capital assets to provide services to citizens ; consequently , these assets are not available for future spending Although the Johnston County’s net investment in capital assets is reported net of the outstanding related debt , the resources needed to repay that debt must be provided by other sources , since the capital assets cannot be used to liquidate these liabilities Another category of net position is restricted net position This represents resources that are subject to external restrictions on how they may be used The final category of net position is unrestricted net position This balance may be used to meet the government’s ongoing obligations to citizens and creditors Unrestricted net position deficit totaled 284,912,525 at June 30 , 2017 This deficit is a result of the situation described in the following paragraph 23Page4JOHNSTON COUNTY , NORTH CAROLINA MANAGEMENT’S DISCUSSION AND ANALYSIS As with many counties in the State of North Carolina , the County’s deficit in unrestricted net position is due primarily to the portion of the County’s outstanding debt incurred for use by the Johnston County Board of Education to construct , renovate and equip schools Under North Carolina law , the County is responsible for providing capital funding for the schools The County has chosen to meet its obligation to provide the schools capital funding by using a mixture of County funds and general obligation debt The assets funded by the County , however , are owned and utilized by the schools Since the County , as the issuing government , acquires no capital assets , the County has incurred a liability without a corresponding increase in assets At the end of the fiscal year , approximately 292,237,521 of the outstanding debt on the County’s financial statements was related to assets included in the public schools financial statements However , since the majority of this school related debt is general obligation debt , it is collateralized by the full faith , credit , and taxing power of the County Accordingly , the County is authorized and required by State law to levy ad valorem taxes , without limit as to rate and amount , as may be necessary to pay the debt service on its general obligation bonds The impact on unrestricted governmental net position of the inclusion of the school system debt without the corresponding assets was offset by the following positive factors Continued diligence in the collection of property taxes by maintaining a collection percentage of 9989 , resulted in a slight increase over last ? year’s collection rate of 9986 Increased charges for services revenue due to growth in the use of County facilities ? Continued low cost of debt due to the County’s high bond rating ? 24Page5JOHNSTON COUNTY , NORTH CAROLINA MANAGEMENT’S DISCUSSION AND ANALYSIS Johnston Countys Changes in Net Position Figure 3 Governmental Business - type Activities Activities Total 2017 2016 2017 2016 2017 2016 Revenues Program revenues Charges for services 18,162,420 16,396,540 4 1,902,626 3 9,658,253 60,065,046 56,054,793 Operating grants and contributions 33,606,297 34,864,364 4 , 725,198 4 , 618,466 38,331,495 39,482,830 Capital grants and contributions 1 , 804,689 4 , 938,536 1 50,000 3 86,760 1,954,689 5,325,296 General revenues - - Property taxes 131,819,406 118,463,256 - - 131,819,406 118,463,256 Other taxes 38,941,931 42,484,003 - - 38,941,931 42,484,003 Grants and contributions not - - restricted to specific programs 2 , 125,786 1 , 515,375 - - 2,125,786 1,515,375 Other 1 , 159,906 8 93,420 3 , 429,498 2 , 836,038 4,589,404 3,729,458 Total revenues 227,620,435 219,555,494 5 0,207,322 4 7,499,517 277,827,757 267,055,011 Expenses Administrative - - 9 10,078 1 , 197,753 910,078 1,197,753 General government 21,494,955 19,158,892 - - 21,494,955 19,158,892 Public safety 47,454,197 44,419,277 - - 47,454,197 44,419,277 Economic and physical 8 , 807,122 9 , 280,065 - - 8,807,122 9,280,065 development - Human services 48,267,939 46,440,530 - - 48,267,939 46,440,530 Cultural and recreation 5 06,500 4 71,000 - - 506,500 471,000 Education 87,023,332 70,558,268 - - 87,023,332 70,558,268 Interest on long - term debt 10,557,699 10,581,329 - - 10,557,699 10,581,329 Solid Waste - - 5 , 411,708 7 , 209,218 5,411,708 7,209,218 Water Districts - - 1 1,662,211 1 2,071,205 11,662,211 12,071,205 Water - - 1 5,559,492 1 5,196,963 15,559,492 15,196,963 Wastewater - - 9 , 830,578 9 , 027,688 9,830,578 9,027,688 Housing Assistance - - 3 , 793,453 3 , 762,379 3,793,453 3,762,379 Total expenses 224,111,744 200,909,361 4 7,167,520 4 8,465,206 271,279,264 249,374,567 Increase decrease in net position before transfers and special items 3 , 508,691 18,646,133 3 , 039,802 965,689 6,548,493 17,680,444 Transfers - 4 67,096 - 467,096 - - Increase Decrease in net position after transfers and special items 3 , 508,691 19,113,229 3 , 039,802 1,432,785 6,548,493 17,680,444 Net position , beginning 209,175,050 229,926,033 1 06,861,594 1 08,294,379 102,313,456 121,631,654 Net position , beginning restated 213,846,800 228,288,279 1 07,115,806 1 08,294,379 106,730,994 119,993,900 Net position , ending 210,338,109 209,175,050 1 10,155,608 1 06,861,594 100,182,501 102,313,456 Governmental activities Governmental activities increased the County’s net position by 3,508,691 Key elements of this increase are as follows Total revenues increased 8,064,941 Expenses also increased by 23,202,383 , mainly due to increased expenses for public safety , human services , and school capital projects funding was received in previous years The County has been able to maintain a high tax collection rate of 9989 25Page6JOHNSTON COUNTY , NORTH CAROLINA MANAGEMENT’S DISCUSSION AND ANALYSIS Business - type activities Business - type activities increased Johnston County’s net position by 3,039,802 Key elements of this increase are as follows Net position decreased in the Water Fund 837,540 This was offset by an increase in net position of the Water District Operating Fund of 635,476 , the Solid Waste Fund of 1,648,773 , the Wastewater Fund of 1,248,450 , and the non - major proprietary funds of 1,993,416 Financial Analysis of the County’s Funds As noted earlier , Johnston County uses fund accounting to ensure and demonstrate compliance with finance - related legal requirements Governmental Funds The focus of Johnston County’s governmental funds is to provide information on near - term inflows , outflows , and balances of usable resources Such information is useful in assessing Johnston County’s financing requirements Specifically , fund balance available for appropriation can be a useful measure of a government’s net resources available for spending at the end of the fiscal year The general fund is the chief operating fund of Johnston County At the end of the current fiscal year , Johnston Countys fund balance available in the General Fund was 48,987,945 while total fund balance reached 66,178,077 The governing body of Johnston County has determined that the county should maintain an available fund balance of 15 of general fund expenditures in case of unforeseen needs or opportunities , in addition to meeting the cash flow needs of the County The County currently has an available fund balance of 2271 of general fund expenditures , while total fund balance represents 3068 of that same amount The School Bond fund is used to account for bond proceeds and expenditures for school capital needs Fund balance decreased by 24,015,752 as a result of expenditures for school projects At June 30 , 2017 , the governmental funds of Johnston County reported a combined fund balance of 80,645,248 , a 1717 percent decrease from last year The General Fund balance increased by 4,492,001 , primarily because the County was able to realize increases in local option sales tax as a result of economic improvements in the area and increase ad valorem tax revenues General Fund Budgetary H