Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2012 a N C I a L R Eport F Or the Fis
Total Page:16
File Type:pdf, Size:1020Kb
COMPREHENSIVE ANNU COMPREHENSIVE STATE of A L FIN TENNESSEE COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2012 A N C I A L R EPORT EPORT F OR THE FIS OR Mockingbird Tulip Poplar Honeybee CA L YE L A R E NDED JUNE 30, 2012 NDED JUNE 30, Raccoon Iris Passion Flower Tennessee Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012 BILL HASLAM, Governor DEPARTMENT OF AUDIT DEPARTMENT OF FINANCE AND ADMINISTRATION JUSTIN P. WILSON, Comptroller of the Treasury MARK EMKES, Commissioner Division of State Audit Division of Accounts ARTHUR A. HAYES, JR., Director JAN I. SYLVIS, CHIEF OF ACCOUNTS Front Cover: Tennessee State Symbols Tennessee Department of Finance and Administration, Photographs obtained from Tennessee Department of General Services, Authorization No. 317332, Jan 2013. 100 copies. This public Photographic Services (Lady Bug, Mockingbird, Passion Flower, and document was promulgated at a cost of $15.46 per copy. Tulip Poplar), Bill Buchanan/USFWS (Raccoon), and Michelle Earhart (Honeybee). STATE OF TENNESSEE COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED JUNE 30, 2012 TABLE OF CONTENTS INTRODUCTORY SECTION Page Letter of Transmittal 3 Organization Chart 9 Certificate of Achievement for Excellence in Financial Reporting 10 FINANCIAL SECTION Auditor’s Report 12 Management’s Discussion and Analysis 15 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets 27 Statement of Activities 28 Fund Financial Statements: Balance Sheet - Governmental Funds 32 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 33 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 34 Statement of Net Assets - Proprietary Funds 36 Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Funds 37 Statement of Cash Flows - Proprietary Funds 38 Statement of Fiduciary Net Assets - Fiduciary Funds 42 Statement of Changes in Fiduciary Net Assets - Fiduciary Funds 43 Index for the Notes 45 Required Supplementary Information: Infrastructure Assets Reported Using the Modified Approach 119 Other Post Employment Benefits Schedule of Funding Progress—Primary Government 120 Other Post Employment Benefits Schedule of Funding Progress—Component Units 120 Ten-Year Claims Development Table—AccessTN Insurance Fund 121 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual–Major Governmental Funds 122 Reconciliation of Budget to GAAP - Note to RSI 124 Supplementary Information Nonmajor Governmental Funds: Combining Balance Sheet - Nonmajor Governmental Funds - by Fund Type 128 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds - by Fund Type 129 Nonmajor Special Revenue Funds: Combining Balance Sheet - Nonmajor Special Revenue Funds 132 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Special Revenue Funds 136 i Page Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (Budgetary Basis) – All Nonmajor Budgeted Special Revenue Funds 140 Debt Service Fund: Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual (Budgetary Basis) – Debt Service Fund 153 Permanent Funds: Combining Balance Sheet - Permanent Funds 156 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Permanent Funds 157 Nonmajor Enterprise Funds: Combining Statement of Net Assets - Nonmajor Enterprise Funds 160 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Nonmajor Enterprise Funds 162 Combining Statement of Cash Flows - Nonmajor Enterprise Funds 164 Internal Service Funds: Combining Statement of Net Assets - Internal Service Funds 168 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Internal Service Funds 170 Combining Statement of Cash Flows - Internal Service Funds 172 Fiduciary Funds: Combining Statement of Fiduciary Net Assets - Pension and Other Employee Benefit Trust Funds 176 Combining Statement of Changes in Fiduciary Net Assets - Pension and Other Employee Benefit Trust Funds 177 Combining Statement of Fiduciary Net Assets - Private-Purpose Trust Funds 178 Combining Statement of Changes in Fiduciary Net Assets - Private-Purpose Trust Funds 179 Combining Statement of Fiduciary Net Assets - Agency Funds 180 Combining Statement of Changes in Assets and Liabilities - All Agency Funds 181 Component Units: Combining Statement of Net Assets - Component Units 184 Combining Statement of Activities - Component Units 186 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Fund Type Component Units 189 Combining Statement of Revenues, Expenses, and Changes in Fund Net Assets - Proprietary Fund Type Component Units 190 Schedule Page Supplementary Schedules Debt Service Requirements to Maturity - General Obligation Bonds 1 193 Schedule of Outstanding Debt - All Fund Types 2 194 Schedule of General Obligation Commercial Paper Outstanding-By Purpose - All Fund Types 3 194 Schedule of Outstanding Debt - Component Units 4 195 General Fund Supplementary Schedules: Comparative Schedules of Revenues by Source - General Fund 5 196 Comparative Schedules of Expenditures by Function and Department - General Fund 6 197 ii Schedule Page STATISTICAL SECTION Index to Statistical Section 199 Financial Trends-Changes in Net Assets 1 200 Financial Trends-Net Assets By Component 2 204 Financial Trends-Fund Balances of Governmental Funds 3 206 Financial Trends-Changes in Fund Balances of Governmental Funds 4 207 Revenue Capacity-Taxable Sales By Classification 5 208 Revenue Capacity-Sales and Use Tax Rates 6 208 Revenue Capacity-Sales and Use Tax Collections By Taxpayer Classification 7 209 Debt Capacity-Ratios of Outstanding Debt By Type 8 210 Debt Capacity-Legal Debt Service Margin Information 9 211 Demographic and Economic Information 10 212 Demographic and Employment Information-Employment By Industry 11 212 Operating Information-Full Time Employees By Function 12 213 Operating Information-Capital Asset Statistics By Function 13 213 Operating Information-Operating Indicators 14 214 Schedule of Fees/Charges, Legislative Appropriations and Debt Service 15 215 Student Fees and Charges For Institutions With Tennessee State School Bond Authority Debt 16 219 Principal Amount of Debt Outstanding By Institution 17 219 Index to Securities and Exchange Commission (SEC) Disclosures 220 Acknowledgments 221 iii INTRODUCTORY SECTION 1 This Page Intentionally Left Blank 2 STATE OF TENNESSEE DEPARTMENT OF FINANCE AND ADMINISTRATION STATE CAPITOL NASHVILLE, TENNESSEE 37243-0285 MARK A. EMKES COMMISSIONER December 21, 2012 To the Citizens, Governor, and Legislators of the State of Tennessee: It is our privilege to present the Comprehensive Annual Financial Report (CAFR) on the operations of the State of Tennessee for the fiscal year ended June 30, 2012. This report is prepared and submitted by the Department of Finance and Administration as part of its responsibility under Tennessee Code Annotated 4-3-1007 to maintain a system of general accounts embracing all the financial transactions of state government. The CAFR is presented in three sections: Introductory, Financial and Statistical. The Introductory Section is designed to provide the background and context that readers need to benefit fully from the information contained in the Financial Section, and includes this transmittal letter and an organization chart. The Financial Section includes the auditor’s report, management’s discussion and analysis (MD&A), audited government-wide and fund financial statements and related notes thereto, required supplementary information, and the underlying combining and individual fund financial statements and supporting schedules. The Statistical Section contains selected unaudited financial, economic and demographic data on a multi-year basis that is useful in evaluating the economic condition of the government. This report consists of management’s representations concerning the financial information of the State of Tennessee. Consequently, management assumes full responsibility for the completeness and reliability of the information contained in the CAFR. To provide a reasonable basis for making these representations, management of the state 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 the state’s financial statements in conformity with U.S. generally accepted accounting principles (GAAP). Because the cost of internal controls should not outweigh their benefits, the state’s comprehensive framework of internal controls has been designed to provide reasonable, rather than absolute, assurance that the financial statements are free from material misstatements. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. State statutes require an annual audit of all financial statements of the state. As part of the meeting of this requirement, the Office of the Comptroller of the Treasury, Department of Audit, Division of State Audit has examined the accompanying financial statements, and has issued an unqualified opinion on the state’s basic financial statements.