Annual Report Year Ended December 31, 2016
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2012.06.0087 6/19/12 9:36 AM Page 1 County of Delaware, Pennsylvania Comprehensive Annual Financial Report Year Ended December 31, 2016 Prepared by Edward E. O'Lone, CPA Controller County of Delaware, Pennsylvania Table of Contents December 31, 2016 Page Introductory Section Transmittal Letter 5 GFOA Certificate of Achievement 11 Organizational Chart 12 Principal County Officials 13 Financial Section Independent Auditors' Report 15 Management's Discussion and Analysis 18 Basic Financial Statements Government-Wide Financial Statements: Statement of Net Position 32 Statement of Activities 33 Fund Financial Statements: Balance Sheet - Governmental Funds 35 Reconciliation of the Balance Sheet Governmental Funds to the Statement of Net Position 36 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 37 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 38 Statement of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual Comparison - General Fund 39 Statement of Net Position - Proprietary Funds 40 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds 41 Statement of Cash Flows - Proprietary Funds 42 Statement of Fiduciary Net Position - Fiduciary Funds 43 Statement of Changes in Fiduciary Net Position - Fiduciary Funds 44 1 County of Delaware, Pennsylvania Table of Contents December 31, 2016 Page Notes to Financial Statements 45 Required Supplementary Information Schedule of Funding Progress for the Retirement Health Plan (OPEB) and OPEB Plan Schedule of Employer Cost 90 Schedule of Changes in the County's Net Pension Liability and Related Ratios 91 Schedule of Employer Contributions 92 Schedule of Investment Returns 93 Combining Statements and Schedules Governmental Fund Types: General Fund: Description of Fund 94 Schedule of Expenditures Compared to Budget 95 Health and Human Service Funds: Description of Sub-Funds 98 Combining Balance Sheet Schedule 99 Combining Schedule of Revenues, Expenditures, and Changes in Fund Balance 101 Nonmajor Governmental Funds: Description of Funds 104 Combining Balance Sheet 105 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance 107 Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Liquid Fuels Fund 109 Capital Projects Funds: Description of Sub-Funds 110 Combining Balance Sheet Schedule 111 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances 112 2 County of Delaware, Pennsylvania Table of Contents December 31, 2016 Page Proprietary Fund Types: Internal Service Funds: Description of Funds 113 Combining Statement of Net Position 114 Combining Statement of Revenues, Expenses and Changes in Net Position 115 Combining Statement of Cash Flows 116 Component Units: Description of Component Units 117 Combining Statement of Net Position 118 Combining Statement of Activities 119 Capital Assets, Schedule of Changes in Capital Assets by Function 121 3 County of Delaware, Pennsylvania Table of Contents December 31, 2016 Statistical Section Table Page Financial Trends: Net Position by Component - Government Wide 1 124 Changes In Net Position - Government Wide 2 125 Fund Balances, Governmental Funds 3 127 Changes in Fund Balances, Governmental Funds 4 128 Revenue Capacity: Assessed Value and Estimated Actual Value of Taxable Property 5 129 Direct and Overlapping Real Estate Tax Rates 6 130 Principal Property Taxpayers 7 131 Property Tax Levies and Collections 8 132 Debt Capacity: Ratio of Outstanding Debt by Type 9 133 Direct and Overlapping Governmental Activities Debt 10 134 Computation of Legal Debt Margin 11 136 Demographic and Economic Information: Demographic and Economic Statistics 12 137 Principal Employers 13 138 Operating Information: Full-Time Equivalent County Government Employees by 14 139 Function/Program Operating Indicators by Function/Program 15 140 Capital Asset Statistics by Function/Program 16 141 4 THIS PAGE INTENTIONALLY LEFT BLANK Introductory Section June 27, 2017 To the Citizens of the County of Delaware, Pennsylvania: It is my honor and pleasure to present the Comprehensive Annual Financial Report of the County of Delaware, Pennsylvania (the "County") for the year ended December 31, 2016. This Comprehensive Annual Financial Report ("CAFR") was prepared by the Controller's Department in conjunction with the independent certified public accounting firm of Baker Tilly Virchow Krause, LLP, whose opinion accompanies the basic financial statements contained in the Financial Section of this report. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the County. We believe the data, as presented, is accurate in all material respects; that it is presented in a manner designed to fairly set forth the financial position and results of operations of the County as measured by the financial activity of its funds; and that all disclosures necessary to enable the reader to gain an understanding of the County's financial affairs have been included. The Management's discussion and analysis ("MD&A") immediately follows the independent auditors' report and provides a narrative introduction, overview, and analysis of the basic financial statements. MD&A complements this letter and should be read in conjunction with it. Our County, the oldest settled area of Pennsylvania, is a Home Rule Charter county that is governed by a council of five members who are elected to staggered four-year terms. County Council is responsible for all legislative and administrative functions of County government. Although County Council has overall responsibility for all actions of County departments, the Executive Director, a County Council appointee, is directly responsible for the operations of certain departments as outlined in the Home Rule Charter and County Administrative Code. The primary administrative level staff assistance is provided to County Council by the Executive Director and the County Clerk. Legal guidance and representation is provided by the County Solicitor. The powers and duties of County Council are many. The Home Rule Charter provides County Council with the authority to pass ordinances, resolutions and proclamations and to provide budgets and personnel to meet the needs of the people of Delaware County. County Council is responsible for adopting a budget each year. The budget includes setting taxes and fees sufficient to raise funds needed for budgeted expenditures. To raise funds for major capital projects, County Council also authorizes the sale of bonds. Many of the County's administered social programs are funded by federal and state grants. 5 This report includes all funds of the County. County Council decides the best means of providing services contemplated by the Home Rule Charter. The County provides a variety of services to the citizens of the County, including social service programs, economic development, administration of justice, maintenance of the County's correctional institution, operation of a County long-term nursing home, the administration of elections, recreational opportunities and general governmental services. In addition to general County activities, County Council has fiscal accountability for the Delaware County Solid Waste Authority, the Economic Development Oversight Board, the Delaware County Redevelopment Authority and the Delaware County Chester Waterfront Industrial Development Authority. Consequently, these component units are included in the reporting entity. County Council also has responsibility to appoint members to boards of a number of authorities and advisory boards, but the County's accountability for these entities does not extend beyond the appointments. Controller's Department and Internal Controls The Controller is the elected financial officer of the County and as such is independent of the executive and legislative branches of County government. The current Controller is a licensed Certified Public Accountant in the Commonwealth of Pennsylvania and works cooperatively with the independent auditors when they perform their annual audit. In addition, the County Controller's Office serves in the capacity of internal auditor for the County. During the year, the Controller's Office staff ensures the integrity of the County system of internal accounting controls and conducts financial and compliance audits as well as internal control reviews on various departments and offices. Management of the County is responsible for establishing and maintaining an internal control structure. The objective of an internal control structure, consisting of the control environment, control procedures and accounting system, is to reasonably safeguard the County's assets, check the accuracy and reliability of its accounting data, promote operational efficiency and encourage adherence to prescribed managerial policies. Management believes that the County's internal control structure adequately meets these objectives. The County utilizes a comprehensive integrated financial management and human resource system to enhance access to real time management information and to better implement efficient business practices. This system enables the County to maintain the appropriate flow of information, giving staff the necessary financial tools consistent with the needs of good government management. Further, in response to the Right to Know