Greenlee County single audit reporting package year ended ...

              GREENLEE COUNTY, ARIZONA
Single Audit Reporting Package
June 30, 2003
GREENLEE COUNTY, ARIZONA
Single Audit Reporting Package
June 30, 2003
i
Table of Contents Page
Financial Statement Section
Independent Auditors' Report………………………………………………………... 1
Combined Balance Sheet—All Fund Types and Account Groups….……………. 4
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances
All Governmental Fund Types…………………………………….…………………. 5
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual—General and Special Revenue Fund Types…….. 6
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual—Debt Service Fund Type………………….………. 9
Statement of Net Assets—Investment Trust Fund………………...………………. 10
Statement of Changes in Net Assets—Investment Trust Fund……………..……. 11
Notes to Financial Statements……………………………………………….………. 12
Supplementary Information
Schedule of Expenditures of Federal Awards………………………….………. 29
Notes to Schedule of Expenditures of Federal Awards……………….………. 30
GREENLEE COUNTY, ARIZONA
Single Audit Reporting Package
June 30, 2003
ii
(Continued)
Report on Compliance with Requirements Applicable to Each Major Program and on
Internal Control over Compliance in Accordance with OMB Circular A-
133………………………………………………………………………………………
35
Schedule of Findings and Questioned Costs
Summary of Auditors’ Results………………………………………………….… 37
Financial Statement Findings…………………………………………………..... 38
Federal Award Findings and Questioned Costs...……………………………... 38
Single AuditSection
Report on Compliance and on Internal Control over Financial Reporting Based on and
Audit of General Purpose Financial Statements Performed in Accordance with
Government Auditing Standards...………..…………………….. 33
Independent Auditors’ Report
1
The Auditor General of the State of Arizona
The Board of Supervisors of
Greenlee County, Arizona
We have audited the accompanying general purpose financial statements of Greenlee County,
Arizona, as of and for the year ended June 30, 2003, as listed in the table of contents. These
general purpose financial statements are the responsibility of the County’s management. Our
responsibility is to express an opinion on these general purpose financial statements based on
our audit.
We conducted our audit in accordance with U.S. generally accepted auditing standards 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the general pupose financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as
well as evaluating the overall general purpose financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
In our opinion, the general purpose financial statements referred to above present fairly, in all
material respects, the financial postion of Greenlee County, Arizona, as of June 30, 2003, and
the results of its operations, and the net assets and changes in net assets of its investment trust
fund for the year then ended in conformity with U.S. generally accepted accounting principles.
Our audit was made for the purpose of forming an opinion on the general purpose financial
statements of Greenlee County, Arizona taken as a whole. The accompanying Schedule of
Expenditures of Federal Awards listed in the table of contents is presented for purposes of
additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits
of States, Local Governments, and Non-Profit Organizations, and is not a required part of the
general purpose financial statements. Such information has been subjected to the auditing
procedures applied in the audit of the general purpose financial statements and, in our opinion,
is fairly stated, in all material respects, in relation to the general purpose financial statements
taken as a whole.
Greenlee County, Arizona
March 26, 2004
2
In accordance with Government Auditing Standards, we have also issued our report dated
March 26, 2004, on our consideration of the County’s internal control over financial reporting
and our tests of its compliance with certain provisions of laws, regulations, contracts, and
grants. That report is an integral part of an audit performed in accordance with Government
Auditing Standards and should be read in conjunction with this report in considering the results
of our audit.
CHRISTENSEN, GALE & MCLAREN, LLP
March 26, 2004
3
THIS PAGE LEFT BLANK INTENTIONALLY
GREENLEE COUNTY, ARIZONA
Combined Balance Sheet — All Fund Types and Account Groups
June 30, 2003
4
See accompanying notes to financial statements.
Fiduciary
Governmental Fund Types Fund Types Account Groups
Special Debt Trust and General General Long-
Assets General Revenue Service Agency Fixed Assets Term Debt
Cash and cash equivalents $ - $ 38,054 $ - $ - $ $
Cash and investments held by treasurer 534,173 1,895,391 - 4,668,293
Cash and investments held by trustee 276,339
Receivables (net of allowances):
Property taxes 10,402 11,503 -
Due from other governments 224,808 76,539 -
Fixed assets:
Land and improvements 1,324,908
Buildings and improvements 5,886,216
Machinery and equipment 6,403,912
Amount available in debt service fund 276,339
Amount to be provided for retirement
of general long-term debt 2,387,029
Total assets 7 69,383 2,021,487 2 76,339 4 ,668,293 13,615,036 2,663,368
Liabilities and Fund Equity
Accounts payable 1 03,901 43,989 - - - -
Compensated absences payable 5 4,781 - 144,276
Deposits held for others 2 8,677
Obligations under capital leases 437,908
Landfill closure and postclosure care costs payable 626,184
Certificates of participation payable 1,455,000
Deferred revenues 2 42,430 8,720
Total liabilities 4 01,112 52,709 - 2 8,677 - 2,663,368
Fund equity:
Investment in general fixed assets 13,615,036
Fund balances:
Reserved for investment trust participants 4,639,616
Unreserved 3 68,271 1,968,778
Unreserved - designated for debt service 276,339
Total fund equity 3 68,271 1,968,778 2 76,339 4 ,639,616 13,615,036 -
Total liabilities and fund equity $ 769,383 $ 2,021,487 $ 276,339 $ 4 ,668,293 $ 13,615,036 $ 2,663,368
GREENLEE COUNTY, ARIZONA
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances
All Government Fund Types
Year Ended June 30, 2003
5
See accompanying notes to financial statements.
Governmental Fund Types
Special Debt
General Revenue Service
Revenues:
Taxes $ 1,965,307 $ 1,136,190
Intergovernmental 3,011,059 3,090,401
Charges for services 97,789 435,581
Fines and forfeits 57,405 18,102
Investment income - 19,222 1 ,035
Miscellaneous 84,952 47,953 -
Total revenues 5,216,512 4,747,449 1,035
Expenditures:
Current:
General government 2,983,822 353,030
Public safety 1,697,032 890,366
Highways and streets - 1,074,131
Sanitation 320,959 213,751
Health 208,949 831,048
Welfare 416,310 -
Culture and recreation 25,867 108,894
Education 153,795 161,224
Capital outlay 177,259 178,928
Debt service:
Principal retirement - - 2 55,000
Interest and fiscal charges - - 86,285
Total expenditures 5,983,993 3,811,372 341,285
Excess (deficiency) of revenues over (under) expenditures (767,481) 936,077 (340,250)
Other financing sources (uses):
Operating transfers in 1,337,967 1,074,331 338,196
Operating transfers out (963,884) (1,786,610) -
Capital lease proceeds
Total other financing sources (uses) 374,083 (712,279) 338,196
Excess (deficiency) of revenues and other sources over
(under) expenditures and other uses (393,398) 223,798 (2,054)
Fund balances, July 1, 2002 761,669 1,744,980 278,393
Fund balances, June 30, 2003 $ 368,271 $ 1,968,778 $ 276,339
GREENLEE COUNTY, ARIZONA
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual—General and Special Revenue Fund Types
Year Ended June 30, 2003
6
See accompanying notes to financial statements.
General Fund Special Revenue Funds
Budget Actual Variance Budget Actual Variance
Revenues:
Taxes $ 1,816,074 $ 1,965,307 $ 149,233 1,133,570 1,136,190 2,620
Intergovernmental 2,690,056 3,011,059 3 21,003 3,385,513 3,090,401 (295,112)
Charges for services 106,600 97,789 (8,811) 487,326 435,581 (51,745)
Fines and forfeits 46,000 57,405 1 1,405 1,000 18,102 17,102
Investment income - - - 10,220 19,222 9,002
Miscellaneous 190,000 84,952 (105,048) 21,713 47,953 26,240
Total revenues 4,848,730 5,216,512 3 67,782 5,039,342 4,747,449 (291,893)
Expenditures:
General government:
Board of Supervisors 245,293 241,501 3 ,792 180,490 181,222 (732)
Airport 1,880 2,317 ( 437) 11,873 114 11,759
Assessor 186,402 178,348 8 ,054 3,684 - 3,684
Attorney 204,271 199,407 4 ,864 254,960 123,778 131,182
Contingency 150,780 42,973 1 07,807 - - -
Constable #1 23,564 23,097 4 67 - - -
Constable #2 17,721 17,116 6 05 - - -
County administration 169,321 150,010 1 9,311 - - -
Data processing 177,064 189,927 (12,863) - - -
Elections 60,000 50,327 9 ,673 - - -
General services 745,681 721,429 2 4,252 - - -
GIS program 9,500 (21,422) 3 0,922 - - -
Ground and maintenance 167,674 194,270 (26,596) - - -
Justice of the Peace No. 1 104,636 97,287 7 ,349 1,986 4 5 1,941
Justice of the Peace No. 2 102,046 99,474 2 ,572 3,639 155 3,484
Planning and zoning 2,000 (90) 2 ,090 - - -
Recorder 130,486 126,902 3 ,584 5,329 3,522 1,807
Superior court 413,670 478,487 (64,817) 59,094 44,194 14,900
Treasurer 154,430 145,772 8 ,658 1,187 - 1,187
Voter registration 11,200 6,887 4 ,313 - - -
Public fiduciary 38,633 39,803 (1,170)
Total general government 3,116,252 2,983,822 1 32,430 522,242 353,030 169,212
(continued)
GREENLEE COUNTY, ARIZONA
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual—General and Special Revenue Fund Types
Year Ended June 30, 2003
7
See accompanying notes to financial statements.
(continued)
General Fund Special Revenue Funds
Budget Actual Variance Budget Actual Variance
Public Safety:
Bioterrorism - - - - 76,429 (76,429)
DARE program - - - - 7 8 (78)
Emergency services 23,636 27,732 (4,096) 1,525 - 1,525
Jail enhancement - - - - - -
Probation and juvenile facility - - - 898,716 656,817 241,899
Sheriff 1,620,681 1,669,300 (48,619) 146,083 157,042 (10,959)
Total public safety 1,644,317 1,697,032 (52,715) 1,046,324 890,366 155,958
Highways and streets:
Roads - - - 1,156,648 1,074,131 82,517
Total highways and streets - - - 1,156,648 1,074,131 82,517
Sanitation:
Landfill - 320,959 (320,959) 448,699 213,751 234,948
Total sanitation - 320,959 (320,959) 448,699 213,751 234,948
Health:
Ambulance service 113,100 146,324 (33,224) - - -
Emergency food and shelter - - - 63,007 - 63,007
Health services - - - 954,067 61,232 892,835
Rabies control 58,200 62,625 (4,425) - 769,816 (769,816)
Total health 171,300 208,949 (37,649) 1,017,074 831,048 186,026
Welfare:
ALTCS payments 410,739 416,310 (5,571) - - -
Total welfare 410,739 416,310 (5,571) - - -
Culture and recreation:
Fair and racing association - - - 91,702 108,894 (17,192)
Parks and recreation 23,000 25,867 (2,867) - - -
Total culture and recreation 23,000 25,867 (2,867) 91,702 108,894 (17,192)
Education:
Employment and training - - - 257,586 129,970 127,616
School superintendent 142,875 135,794 7 ,081 45,742 24,327 21,415
(continued)
GREENLEE COUNTY, ARIZONA
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual—General and Special Revenue Fund Types
Year Ended June 30, 2003
8
See accompanying notes to financial statements.
(concluded)
General Fund Special Revenue Funds
Budget Actual Variance Budget Actual Variance
U of A extension services 13,000 18,001 (5,001) 8,621 6,927 1,694
Total education 155,875 153,795 2 ,080 311,949 161,224 150,725
Economic development:
Economic development - - - 10,156 - 10,156
Total economic development - - - 10,156 - 10,156
Capital outlay: 309,083 177,259 1 31,824 1,081,111 178,928 902,183
Total expenditures 5,830,566 5,983,993 (153,427) 5,685,905 3,811,372 1,874,533
Excess (deficiency) of revenues over
(under) expenditures (981,836) (767,481) 2 14,355 (646,563) 936,077 1,582,640
Other financing sources (uses)
Operating transfers in 1,298,885 1,337,967 3 9,082 960,093 1,074,331 114,238
Operating transfers out (1,067,049) (963,884) 1 03,165 (1,533,033) (1,786,610) (253,577)
Capital lease proceeds
Total other financing sources (uses) 231,836 374,083 1 42,247 (572,940) (712,279) (139,339)
Excess (deficiency) of revenues and other sources
over (under) expenditures and other uses (750,000) (393,398) 3 56,602 (1,219,503) 223,798 1,443,301
Fund balances, July 1, 2002 - 761,669 7 61,669 1,744,980 1,744,980
Residual equity transfers, net 750,000 - (750,000) 1,219,503 - (1,219,503)
Fund balances, June 30, 2003 $ - $ 368,271 $ 368,271 $ - $ 1,968,778 $ 1,968,778
GREENLEE COUNTY, ARIZONA
Combined Statement of Revenues, Expenditures, and Changes in Fund Balances
Budget and Actual—Deby Service Fund Type
Year Ended June 30, 2003
9
See accompanying notes to financial statements.
Budget Actual Variance
Revenues:
Investment Income $ - $ 1,035 $ 1,035
Total Revenues - 1,035 1,035
Expenditures:
Principal 341,204 255,000 86,204
Interest and fiscal charges - 86,285 (86,285)
Total Expenditures 341,204 341,285 (81)
Excess (deficiency) of revenues over (under) expenditures ( 341,204) (340,250) 954
Other financing sources (uses):
Operating transfers in 341,204 338,196 (3,008)
Total other financing sources (uses) 341,204 338,196 (3,008)
Excess of (deficiency) revenues and other sources over
(under) expenditures and other uses - (2,054) (2,054)
Fund balances, July 1, 2002 - 278,393 278,393
Fund balances, June 30, 2003 $ - $ 276,339 $ 276,339
GREENLEE COUNTY, ARIZONA
Statement of Fiduciary Net Assets
Fiduciary Funds
June 30, 2003
10
See accompanying notes to financial statements.
Investment
Trust Agency
Assets Fund Fund
Cash and cash equivalents $ 4,639,616 $ 28,677
Total assets 4,639,616 28,677
Liabilities
Deposits held for others - $ 28,677
Net assets held in trust $ 4,639,616
GREENLEE COUNTY, ARIZONA
Statement of Changes in Fiduciary Net Assets
Fiduciary Funds
Year Ended June 30, 2003
11
See accompanying notes to financial statements.
Investment
Trust
Fund
Additions:
Contributions from participants $ 13,774,472
Investment income 66,343
Total additions 13,840,815
Deductions:
Distributions to participants 14,394,819
Total deductions 14,394,819
Net decrease in net assets (554,004)
Net assets held in trust:
July 1, 2002 5,193,620
June 30, 2003 $ 4,639,616
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
12
Note 1 - Summary of Significant Accounting Policies
The accounting policies of Greenlee County, Arizona conform to U.S. generally accepted
accounting principles applicable to governmental units adopted by the Governmental
Accounting Standards Board (GASB). A summary of the County's more significant
accounting policies follows.
The County's major operations include general government, public safety, highway and
street maintenance and construction, sanitation, health, welfare, culture and recreation, and
education.
A. Reporting Entity
The County is a general purpose local government that is governed by a separately elected
board of three county supervisors. These general purpose financial statements present all
the fund types and account groups of the County (a primary government) and its component
units.
Component units are legally separate entities for which the County is considered to be
financially accountable. Blended component units, although legally separate entities, are in
substance part of the County's operations. Therefore, data from these units is combined
with data of the primary government. Discretely presented component units, on the other
hand, are reported in a separate column in the combined financial statements to emphasize
they are legally separate from the County. The blended component unit discussed below
has a June 30 year-end. The County has no discreetly presented component units.
Blended Component Unit – The Greenlee County Municipal Property Corporation was
formed to finance the renovation, restruction, construction and equipping of the County’s old
courthouse building. The corporation issued certificates of participation that evidence
undivided proportionate interests in rent payments to be made under a lease agreement,
with an option to purchase, between Greenlee County and the corporation. Although the
corporation is a legally separate entity from the County, the Board of Supervisors of the
County serves as the Board of Directors of the corporation. Consequently, the financial data
for the corporation are blended with the data of the primary government and reported in the
Debt Service Fund and the General Fixed Assets and General Long-Term Debt Account
Groups. Separate financial statements of the blended compoment unit are not prepared.
B. Fund Accounting
The County's accounts are maintained in accordance with the principles of fund accounting
to ensure that limitations and restrictions on the County's available resources are observed.
The principles of fund accounting require that resources be classified for accounting and
reporting purposes into funds or account groups in accordance with the activities or
objectives specified for those resources. Each fund is considered a separate accounting
entity, and its operations are accounted for in a separate set of self-balancing accounts that
comprise its assets, liabilities, fund equity, revenues, and expenditures.
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
13
Note 1 - Summary of Significant Accounting Policies (continued)
B. Fund Accounting (continued)
Account groups are reporting devices to account for certain assets and liabilities of the
governmental funds not recorded directly in those funds.
Accounts are separately maintained for each fund and account group; however, in the
accompanying financial statements, funds that have similar characteristics have been
combined into generic fund types that are further classified into broad fund categories. A
description of the County’s fund categories, types, and account groups follows.
1. Governmental Funds account for the County's general government activities using the
flow of current financial resources measurement focus and include the following fund types:
The General Fund is the County's primary operating fund. It accounts for all financial
resources of the County, except those required to be accounted for in other funds.
The Special Revenue Funds account for specific revenue sources that are legally restricted
to expenditures for specified purposes.
The Debt Service Fund accounts for resources accumulated and used for the payment of
general long-term debt principal, interest, and related costs.
2. Fiduciary Funds account for assets the County holds on behalf of others, and include
the following fund types.
The Investment Trust Fund accounts for investments made by the County on behalf of other
governmental entities using the economic resources measurement focus.
The Agency Fund is custodial in nature and does not present results of operations or have a
measurement focus. This fund is used to account for assets that the government holds for
others in an agency capacity.
4. Account Groups are used to establish control and accountability for certain County
assets and liabilities that are not recorded in the funds and include the following two groups.
The General Fixed Assets Account Group accounts for all of the County’s fixed assets.
The General Long-Term Debt Account Group accounts for all of the County’s long-term
obligations.
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
14
Note 1 - Summary of Significant Accounting Policies (continued)
C. Basis of Accounting
The financial statements of the Governmental and Agency Funds are presented on the
modified accrual basis of accounting. Revenues are recognized when they become
measurable and available to finance current-period expenditures. Expenditures are
recognized when the related fund liability is incurred, except for principal and interest on
general long-term debt that are recognized when due.
Revenues susceptible to accrual are property taxes; licenses and permits;
intergovernmental aid, grants, and reimbursements; interest revenue; charges for services;
and sales taxes collected and held by the State at year-end on the County’s behalf. Fines
and forfeits, rents, contributions, and miscellaneous revenues are not susceptible to accrual
because generally they are not measurable until received in cash.
The financial statements of the Investment Trust Fund are presented on the accrual basis of
accounting. Revenues are recognized when they are earned, and expenses are recognized
when they are incurred.
D. Budgeting and Budgetary Control
Arizona Revised Statutes (A.R.S.) require the County to prepare and adopt a balanced
budget annually for each separate fund. The Board of Supervisors must approve such
operating budgets on or before the third Monday in July to allow sufficient time for the legal
announcements and hearings required for the adoption of the property tax levy on the third
Monday in August. A.R.S. prohibit expenditures or liabilities in excess of the amounts
budgeted.
Essentially, the County prepares its budget on the same modified accrual basis of
accounting used to record actual revenues and expenditures.
The County has adopted budgets in accordance with the A.R.S. requirements for the
General, Special Revenue and Debt Service Funds.
Expenditures may not legally exceed appropriations at the department level. In certain
instances, transfers of appropriations between departments or from the contingency account
to a department may be made upon approval of the Board of Supervisors. With the
exception of the General Fund, each fund includes only one department.
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
15
Note 1 - Summary of Significant Accounting Policies (continued)
D. Budgeting and Budgetary Control (continued)
Encumbrance accounting, under which purchase orders, contracts, and other commitments
to expend monies are recorded to reserve that portion of the applicable fund balance, is
employed as an extension of formal budgetary control. Encumbrances outstanding at year-end
for goods or services that were not received before fiscal year-end are canceled.
However, the County may draw warrants against encumbered amounts for goods or
services received but unpaid at June 30 for 60 days immediately following the close of the
fiscal year. After 60 days the remaining encumbered balances lapse.
E. Cash and Investments
Nonparticipating interest-earning investment contracts are stated at cost. Money market
investments and participating interest-earning investment contracts with a remaining
maturity of one year or less at time of purchase are stated at amortized cost. All other
investments are stated at fair value.
F. Inventories
Purchases of inventory items are recorded at the time of purchase as expenditures in the
funds from which the purchases were made; and because the amounts on hand at June 30,
2003, were immaterial, they are not included in the balance sheet.
G. Fixed Assets
Purchased fixed assets capitalized in the General Fixed Assets Account Group are recorded
at the time of purchase as expenditures in the funds from which the expenditures were
made. Such assets are capitalized at cost. Donated fixed assets are capitalized at their
estimated fair market value at the time received.
Depreciation on general fixed assets is not recorded, and interest incurred during
construction is not capitalized. Also, public domain (infrastructure) general fixed assets
consisting of certain improvements other than buildings, such as roads, bridges, curbs and
gutters, streets and sidewalks, drainage, and lighting systems, are not capitalized.
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
16
Note 1 - Summary of Significant Accounting Policies (continued)
H. Compensated Absences
Compensated absences consist of vacation leave earned by employees based on services
already rendered. Employees may accumulate up to 160 hours of vacation depending on
years of service, but any vacation hours in excess of the maximum amount that are unused
at year-end are forfeited. Upon termination of employment, all unused and unforfeited
vacation benefits are paid to employees. Accordingly, vacation benefits are accrued as a
liability in the financial statements.
Employees may accumulate an unlimited number of sick leave hours. Generally, sick leave
benefits provide for ordinary sick pay and are cumulative but are forfeited upon termination
of employment. Because sick leave benefits do not vest with employees, a liability for sick
leave benefits is not accrued in the financial statements.
A liability of $54,781 for vested compensated absences of the Government Funds is
recorded in the General Fund since it is expected to be paid from current financial
resources. The long-term balance of $144,276 is shown as a liability in the General Long-
Term Debt Account Group in the balance sheet at June 30, 2003.
I. Investment Income
Investment income is composed of interest, dividends, and net changes in the fair value of
applicable investments.
J. Property Taxes
Property taxes are recognized as revenues in the fiscal year they are levied and collected or
if they are collected within 60 days subsequent to fiscal year-end. Property taxes not
collected within 60 days subsequent to fiscal year-end, or collected in advance of the fiscal
year for which they are levied, are reported as deferred revenues.
K. Intergovernmental Grants and Aid
Grants and assistance awards made on the basis of entitlement periods are recorded as
intergovernmental receivables and revenues when entitlement occurs.
Reimbursement grants are recorded as intergovernmental receivables and revenues when
the related expenditures are incurred. Reimbursements not received within 60 days
subsequent to fiscal year-end are reported as deferred revenues.
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
17
Note 2 - Stewardship, Compliance and Accountability
Nine General Fund departments, three Special Revenue Funds, and the Debt Service Fund
had an excess of actual expenditures over appropriations as reported on the Combined
Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual
– General and Special Revenue Fund Types and the Statement of Revenues, Expenditures,
and Changes in Fund Balance – Budget and Actual – Debt Service Fund Type. Generally,
the excesses were the result of unexpected expenditures in those departments during the
year.
Note 3 - Deposits and Investments
Arizona Revised Statutes authorize the County to invest public monies in the State
Treasurer's investment pool; U.S. Treasury obligations; specified state and local government
bonds; and interest-earning investments such as savings accounts, certificates of deposit,
and repurchase agreements in eligible depositories. The statutes require collateral for
demand deposits, certificates of deposit, and repurchase agreements at 101 percent of all
deposits not covered by federal depository insurance.
County Treasurer’s Investment Pool—Arizona Revised Statutes require community
colleges, school districts, and other local governments to deposit certain public monies with
the County Treasurer (see Note 13). Those monies are pooled with County monies for
investment purposes.
Deposits—At June 30, 2003, the investment pool’s deposits were entirely covered by federal
depository indurance or by collateral held by the County’s custodial bank in the County’s
name.
Other Deposits—The County’s nonpooled deposits at June 30, 2003, were entirely covered
by federal depository insurance or by collateral held by the County’s custodial bank in the
County’s name.
Investments—At June 30, 2003, the County’s nonpooled investments consisted of the
following.
Fair
Value
Money Market Mutual Fund $ 276,339
Total $ 276,339
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
18
Note 3 - Deposits and Investments (continued)
The nonpooled investments at June 30, 2003, are categorized below to give an indication of
the level of risk the County assumed at year-end.
Catergory 1 - - insured or registered in the County’s name, or securities held by the
County or its agent in the County’s name.
Catergory 2 - - uninsured or unregistered with securities held by the counterparty’s
trust department or agent in the County’s name.
Catergory 3 - - uninsured or unregistered with securities held by the counterparty, or
by its trust department or agent but not in the County’s name.
Category Fair
1 2 3 Value
Money Market Mutual Fund - - $ 276,339 $ 276,339
Total - - $ 276,339 $ 276,339
A reconciliation of cash and investments to amounts shown on the Combined Balance Sheet
follows.
Cash and investments:
County
Treasurer’s
Investment Pool Other Total
Cash on hand $ 7,750 $ - $ 7,750
Carrying amount of
deposits 7,090,107 38,054 7,128,161
Reported amount of
investments 0 276,339 276,339
Total $ 7,097,857 $ 314,393 $ 7,412,250
Combined Balance Sheet:
Cash and cash equivalents $ 38,054
Cash and investments held
by County Treasurer 7,097,857
Cash and investments held
by trustee 276,339
Total $ 7,412,250
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
19
Note 4 - Property Taxes Receivable
The County levies real property and personal property taxes on or before the third Monday
in August that become due and payable in two equal installments. The first installment is due
on the first day of October and becomes delinquent after the first business day of November.
The second installment is due on the first day of March of the next year and becomes
delinquent after the first business day of May.
During the year, the County also levies various personal property taxes that are due the
second Monday of the month following receipt of the tax notice and become delinquent 30
days later.
Property taxes receivable consist of uncollected property taxes as determined from the
records of the County Treasurer's Office. At June 30, 2003, the uncollected property taxes
and related allowances for uncollectibles were as follows:
Fiscal Year
General
Fund
Special
Revenue
Funds
2003 $ 10,221 $ 11,110
Prior 2,888 3,618
13,109 14,728
Less allowances
for uncollectibles 2,707 3,225
Net total $ 10,402 $ 11,503
That portion of property taxes receivable not collected within 60 days after June 30, 2003,
has been deferred and, consequently, is not included in current-year revenues.
Note 5 - Due from Other Governments
Amounts due from other governments at June 30, 2003, consisted of the following:
Governmental Fund Types
Due From: General Special Revenue
Arizona State Treasurer:
State Sales Tax $ 147,964 $ -
Auto Lieu Tax 18,584 -
County Excise Tax 58,260 -
Highway User Revenues - 76,539
Total $ 224,808 $ 76,539
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
20
Note 6 - Changes in General Fixed Assets
A summary of the changes in general fixed assets follows:
Balance
July 1, 2002 Additions Deletions
Balance
June 30, 2003
Land and improvements $ 1,324,908 $ - $ - $ 1,324,908
Buildings and improvements 5,816,671 69,545 5,886,216
Machinery and equipment 6,115,415
3
360,951 72,454 6,403,912
Construction in progress 69,545 69,545 0
Total $ 13,326,539 $ 430,496 $ 141,999 $ 13,615,036
Note 7 - Certificates of Participation Payable
The County issued $2,700,000 in certificates of participation with an interest rate of 4.60% -
5.40% to renovate its old courthouse. The certificates of participation are generally callable
with interest payable semiannually.
Principal and interest requirements at June 30, 2003, were as follows:
Description
Interest
Rates Maturities
Outstanding
Principal
July 1, 2002 Retirements
Outstanding
Principal
June 30, 2003
Greenlee County
Property
Corporation
4.85%
5.40% 2003-2007 $ 1,710,000 $ 255,000 $ 1,455,000
Total $ 1,710,000 $ 255,000 $ 1,455,000
Certificates of participation debt service requirements to maturity, are as follows:
Year ending June 30, Principal Interest Total
2004 $ 265,000 $ 73,328 $ 338,328
2005 285,000 59,555 344,555
2006 305,000 44,473 349,473
2007 600,000 28,040 628,040
Total $ 1,455,000 $ 205,396 $ 1,660,396
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
21
Note 8 - Obligations Under Leases
Capital Leases—The County has acquired machinery and equipment under the provisions
of various long-term lease agreements classified as capital leases for accounting purposes
because they provide for a bargain purchase option or a transfer of ownership by the end of
the lease term. Accordingly, the assets have been capitalized and a summary of assets
leased under capital leases as of June 30, 2003, as follows:
General Fixed Assets
Machinery and equipment $ 1,208,229
The future minimum lease payments under the capital leases, together with the present
value of the net minimum lease payments as of June 30, 2003, were as follows:
General
Long-Term Debt
Account Group
Year ending June 30,
2004 $ 189,582
2005
2006
2007
130,864
108,080
45,034
Total minimum lease payments 473,560
Less amount representing
interest
35,652
Present value of net minimum
lease payments $ 437,908
Note 9 - Landfill Closure and Postclosure Care Costs
State and federal laws and regulations require the County to place a final cover on its two
remaining landfill sites when it stops accepting waste and to perform certain maintenance
and monitoring functions at the site for 30 years after closure. Athough, closure and
postclosure care costs will not be paid until near or after the date that the landfill stops
accepting waste, the County reports a portion of these closure and postclosure care costs
as an addition to the General Long-Term Debt Account Group in each period based on
landfill capacity used as of each balance sheet date.
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
22
Note 9 - Landfill Closure and Postclosure Care Costs (continued)
The $626,184 reported as landfill closure and postclosure care liability at June 30, 2003,
represents the cumulative amount reported to date based on the use of approximately 83
percent of the estimated capacity of the landfills. The County will recognize the remaining
estimated cost of closure and postclosure care of $129,404 as the remaining estimated
capacity is filled. These amounts are based on what it would cost to perform all closure and
postclosure care in fiscal year 2003. The County expects to close the Loma Linda Landgill in
the year 2010 and the Blue Landfill in the year 2018, and the actual cost may be higher due
to inflation, changes in technology, or changes in regulations.
According to state and federal laws and regulations, the County must comply with the local
government financial test requirements that assure the County can meet the costs of landfill
closure, postclosure, and corrective action when needed. The County is in compliance with
these requirements.
Note 10 - Risk Management
The County is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; injuries to employees; and natural disasters; but
was unable to obtain insurance at a cost it considered to be economically justifiable.
Therefore, the County joined and is covered by thre public entity risk pools: the Arizona
Counties Property and Casualty Pool, the Arizona Counties Workers’ Compensation Pool,
and the Arizona Local Government Employee Benefit Trust, which are described below.
The Arizona Counties Property and Casualty Pool is a public entity risk pool currently
composed of 11 member counties. The pool provides member counties catastrophic loss
coverage for risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; and natural disasters; and provides risk management services. Such
coverage includes all defense costs as well as the amount of any judgment or settlement.
The County is responsible for paying a premium, based on its exposure in relation to the
exposure of the other participants, and a deductible of $7,500 per occurrence for
property claims and $1,500 per occurrence for liability claims. The County is also
responsible for any payments in excess of the maximum coverage of $100 million per
occurrence for property claims and $15 million per occurrence for liability claims. A County
must participate in the pool at least three years after becoming a member; however, it may
withdraw after the initial three-year period. If the pool were to become insolvent, the County
would be assessed an additional contribution.
The Arizona Counties Workers’ Compensation Pool is a public entity risk pool currently
composed of 11 member counties. The pool provides member counties with workers’
compensation coverage, as required by law, and risk management services. The County is
responsible for paying a premium, based on an experience rating formula, that allocates
pool expenditures and liabilities among the members.
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
23
Note 10 - Risk Management (continued)
The Arizona Counties Property and Casualty Pool and the Arizona Counties Workers’
Compensation Pool receive independent audits annually and an audit by the Arizona
Department of Insurance triennially. Both pools accrue liabilities for losses that have been
incurred but not reported. These liabilities are determined annually based on an independent
actuarial valuation.
The County provides life, health, and disability benefits to its employees and their
dependents through the Arizona Local Government Employee Benefit Trust currently
composed of six counties. The Trust provides the benefits through a self-funding agreement
with its participants and administers the program. The County is responsible for paying the
premium and may require its employees to contribute a portion of that premium. If it
withdraws from the Trust, the County is responsible for any claims run-out costs, including
claims reported but not settled, claims incurred but not reported, and administrative costs. If
the Trust were to terminate, the County would be responsible for its proportional share of
any Trust deficit.
The County purchases commercial insurance for other miscellaneous risks of loss, Settled
claims have not exceeded this commercial coverage in ay of the past three fiscal years.
Note 11 - Changes in Long-Term Liabilities
A summary of changes in the liabilities reported in the General Long-Term Debt Account
Group were as follows:
Balance
July 1, 2002 Additions Reductions
Balance
June 30, 2003
Compensated balances
Obligations under capital
Leases
Landfill closure and postclosure
care costs payable
$ 212,370
680,952
560,833
$ 250,352
65,351
$ 318,446
243,044
$ 144,276
437,908
626,184
Certificates of participation
payable 1,710,000 255,000 1,455,000
Total $ 3,164,155 $ 315,703 $ 816,490 $ 2,663,368
Note 12 - Retirement Plans
Plan Descriptions—The County contributes to the three plans, two of which are described
below. The Elected Officials Retirement Plan and the Attorney Investigators’ participation in
the Public Safety Personnel Retirement System are not described due to their relative
insignificance to the County’s financial statements. Benefits are established by state statute
and generally provide retirement, death, long-term disability, survivor, and health insurance
premium benefits.
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
24
Note 12 - Retirement Plans (continued)
The Arizona State Retirement System (ASRS) administers a cost-sharing multiple-employer
defined benefit pension plan that covers general employees of the County. The ASRS is
governed by the Arizona State Retirement System Board according to the provisions of
A.R.S. Title 38, Chapter 5, Article 2.
The Public Safety Personnel Retirement System (PSPRS) is an agent multiple-employer
defined benefit pension plan that covers public safety personnel who are regularly assigned
hazardous duty as employees of the State of Arizona or one of its political subdivisions. The
PSPRS, acting as a common investment and administrative agent, is governed by a five-member
board, known as The Fund Manager, and 189 local boards according to the
provisions of A.R.S. Title 38, Chapter 5, Article 4.
Each plan issues a publicly available annual financial report that includes its financial
statements and required supplementary information. A report may be obtained by writing or
calling the applicable plan.
ASRS PSPRS
3300 N. Central Ave.
P.O. Box 33910
Phoenix, AZ 85067-3910
1020 E. Missouri Ave.
Phoenix, AZ 85014
(602) 240-2000 or (800) 621-3778 (602) 255-5575
Funding Policy—The Arizona State Legislature establishes and may amend active plan
members’ and the County’s contribution rates.
Cost-sharing plan—For the year ended June 30, 2003, active ASRS members and the
County were each required by statute to contribute at the actuarially determined rate of 2.49
percent (2.00 percent retirement and 0.49 percent long-term disability) of the members’
annual covered payroll. The County’s contributions to ASRS for the years ended June 30,
2003, 2002, and 2001 were $56,642, $50,897 and $68,885, respectively, which were equal
to the required contributions for the year.
Agent plans—For the year ended June 30, 2003, active PSPRS members were required by
statute to contribute 7.65 percent of the members’ annual covered payroll, and the County
was required to contribute at the actuarially determined rate of 4.79 percent.
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
25
Note 12 - Retirement Plans (continued)
Annual Pension Cost—The County’s pension cost for the agent plan for the year ended
June 30, 2003, and related information follows.
PSPRS
Contribution rates:
County 4.79%
Plan members 7.65%
Annual pension cost $ 41,061
Contributions made $ 41,061
The current-year annual required contributions for the PSPRS were determined as part of its
June 30, 2001, actuarial valuation using the entry-age actuarial cost method. The actuarial
assumptions included (a) 9 percent investment rate of return and (b) projected salary
increases ranging from 6.5 percent to 9.5 percent per year. Both (a) and (b) included an
inflation component of 5.5 percent. The assumptions did not include cost-of-living
adjustments. The actuarial value of assets was determined using techniques that smooth
the effects of short-term volatility in the market value of investments over a 4-year period.
The unfunded actuarial accrued liability is being amortized as a level percentage of
projected payroll on an open basis. The remaining amortization period at June 30, 2001,
was 20 years.
Trend Information—Annual pension cost information for the current and two preceding
years follows for the agent plan.
Plan
Year Ended
June 30
Annual
Pension
Cost
Percentage of
APC
Contributed
Net Pension
Obligation
PSPRS 2003
2002
2001
$ 41,061
28,339
34,073
100%
100
100
$ 0
0
0
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
26
Note 12 - Retirement Plans (continued)
Analysis of Funding Progress—The following information was obtained from the three
most recent actuarial valuations of the agent plans.
PSPRS
Actuarial
Valuation
Date
Actuarial
Value of Plan
Assets
(a)
Actuarial
Accrued
Liability
(b)
Funding
Excess
(a-b)
Funded
Ratio
(a/b)
Annual
Covered
Payroll
(c)
Unfunded
Liability as
Percentag
e of
Covered
Payroll
([a-b]/c)
6/30/03
6/30/02
6/30/01
$ 2,124,391
2,051,947
2,063,588
$ 1,675,274
1,584,623
1,346,809
$ 449,117
467,324
716,779
126.8%
129.5
153.2
$ 432,413
412,645
419,931
-
-
-
Note 13 - County Treasurer’s Investment Pool
Arizona Revised Statutes require community colleges, school districts, and other local
governments to deposit certain public monies with the County Treasurer. The Treasurer has
a fiduciary responsibility to administer those and the County monies under her stewardship.
The Treasurer invests, on a pool basis, all idle monies not specifically invested for a fund or
program. In addition, the Treasurer determines the fair value of those pooled investments
annually at June 30.
The County Treasurer’s investment pool is not registered with the Securities and Exchange
Commission as an investment company and there is no regulatory oversight of its
operations. The pool’s structure does not provide for shares and the County has not
provided or obtained any legally binding guarantees to support the value of the participants’
investments.
Throughout the fiscal year the County Treasurer invests idle monies in mortgage backed
government agency securities in thirty day intervals with interest rates approximately 1.66%.
At June 30, 2003 there were no investments outstanding.
GREENLEE COUNTY, ARIZONA
Notes to Financial Statements
June 30, 2003
27
Note 13 - County Treasurer’s Investment Pool (continued)
A condensed statement of the investment pool’s net assets and changes in net assets
follows.
Statement of Net Assets
Assets $ 7,097,857
Net assets $ 7,097,857
Net assets held in trust for:
Internal participants $ 2,458,241
External participants 4,639,616
Total net assets held in trust $ 7,097,857
Statement of Changes in Net Assets
Total additions $ 23,587,183
Total deductions 23,791,135
Net increase (203,952)
Net assets held in trust:
July 1, 2002 7,301,809
June 30, 2003 $ 7,097,857
Note 14 – Contingent Liabilities
Litigation Claims – At June 30, 2003,there were several claims and lawsuits pending
against the County, the ultimate outcome of which is unpredictable. Consequently, no
provision for any liability has been made.
Note 15– Implementation of GASB Statement No. 34
Beginning with fiscal year 2004, the County will prepare its external financial reports
following the requirements of GASB Statement No. 34, Basic Financial Statements—and
Management’s Discussion and Analysis—for State and Local Governments. Implementing
this standard will significantly change the accounting principles and reporting format the
County uses in future financial reports.
28
Supplementary Information
GREENLEE COUNTY, ARIZONA
Schedule of Expenditures of Federal Awards
Year Ended June 30, 2003
29
Pass-
Through
Federal Grantor/Pass-Through CFDA Grantor's
Grantor/Program Title Number Number Expenditures
U.S. DEPARTMENT OF AGRICULTURE
Direct program:
Forest Service Drug Eradication 10.UNKNOWN N/A 9,264
Passed through the Arizona Department of Health Services
Special Supplemental Food Program for
Women, Infants and Children 10.557 76-1093 4 1,561
Passed through Arizona State Governor's Office
Schools and Roads - Grants to States 10.666 NONE 531,178
Total U.S. Department of Agriculture 582,003
U.S. DEPARTMENT OF THE INTERIOR
Direct program:
Payments in Lieu of Taxes 15.226 N/A 5 30,056
Passed through the Arizona State Treasurer
Taylor Grazing Act 15.UNKNOWN N/A 2 5,000
Total U.S. Department of Interior 5 55,056
U.S. DEPARTMENT OF JUSTICE
Passed through the Arizona Criminal Justice Commission
Byrne Formula Grant Program 16.579 AC-040-01 3,000
Passed through the State of Arizona Department of Emergency and Military Affairs
Equipment Grant Program 16.007 NONE 7,000
Total U.S. Department of Justice 10,000
U.S. DEPARTMENT OF LABOR
Passed through the Arizona Department of Economic Security
Workforce Investment Act - Adult 17.255 E5701009 131,928
U.S. DEPARTMENT OF TRANSPORTATION
Direct program:
Airport Improvement Program 20.106 N/A 3,691
FEDERAL EMERGENCY MANAGEMENT AGENCY
Passed through the United Way of Arizona
Emergency Management-State and Local Assistance 83.534 NONE 7,088
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
Passed through the Arizona Department of Health Services
Preparedness & Response for Bio-Terroism 93.283 N/A 1 23,679
Wellwoman Healthcheck Program 93.919 23-3013 6 9,580
Preventive Health and Health Services
Block Grant 93.991 30-4062 9,999
Total U.S. Department of Health and Human Services 203,258
TOTAL EXPENDITURES OF FEDERAL AWARDS $ 1,493,024
GREENLEE COUNTY, ARIZONA
Notes to Schedule of Expenditures of Federal Awards
Year Ended June 30, 2003
30
Note 1 - Basis of Accounting
The accompanying schedule of expenditures of federal awards includes the federal grant
activity of Greenlee County and is presented on the modified accrual basis of accounting.
The information in this schedule is presented in accordance with the requirements of OMB
Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations.
Therefore, some amounts presented in this schedule may differ from amounts presented in,
or used in the preparation of, the financial statements.
Note 2 - Catalog of Federal Domestic Assistance (CFDA) Numbers
The program titles and CFDA numbers were obtained from the federal or pass-through
grantor or the 2003 Catalog of Federal Domestic Assistance. When no CFDA number had
been assigned to a program, and when there was no federal contract number, the two-digit
federal agency identifier, a period, and the word “unknown” was used.
Note 3 - Subrecipients
In fiscal year 2003, the County did not pass-through any federal domestic assistance
received to any subrecipients.
31
SINGLE AUDIT SECTION
32
THIS PAGE LEFT BLANK INTENTIONALLY
33
Independent Auditors’ Report on Compliance and on Internal Control over
Financial Reporting Based on an Audit of General Purpose Financial Statements
Performed in Accordance with Government Auditing Standards
The Auditor General of the State of Arizona
The Board of Supervisors of
Greenlee County, Arizona
We have audited the general purpose financial statements of Greenlee County, Arizona as of
and for the year ended June 30, 2003, and have issued our report thereon dated March 26,
2004. We conducted our audit in accordance with U.S. generally accepted auditing standards
and the standards applicable to financial audits contained in Government Auditing Standards,
issued by the Comptroller General of the United States.
Compliance
As part of obtaining reasonable assurance about whether the County’s general purpose
financial statements are free of material misstatement, we performed tests of its compliance
with certain provisions of laws, regulations, contracts, and grants, noncompliance with which
could have a direct and material effect on the determination of general purpose financial
statement amounts. However, providing an opinion on compliance with those provisions was
not an objective of our audit and, accordingly, we do not express such an opinion. The results
of our tests disclosed no instances of noncompliance that are required to be reported under
Government Auditing Standards.
Internal Control over Financial Reporting
In planning and performing our audit, we considered the County’s internal control over financial
reporting in order to determine our auditing procedures for the purpose of expressing our
opinion on the general purpose financial statements and not to provide assurance on internal
control over financial reporting. Our consideration of internal control over financial reporting
would not necessarily disclose all such internal control matters that might be material
weaknesses.
Greenlee County, Arizona
Page Two
March 26, 2004
34
A material weakness is a condition in which the design or operation of one or more of the
internal control components does not reduce to a relatively low level the risk that misstatements
in amounts that would be material in relation to the general purpose financial statements being
audited may occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. We noted no matters involving internal control
over financial reporting and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of the members of the Arizona State
Legislature, the Auditor General of the State of Arizona, the County’s Board of Supervisors,
federal awarding agencies, and pass-through entities. It is not intended to be and should not be
used by anyone other than these specified parties. However, this report is a matter of public
record and its distribution is not limited.
CHRISTENSEN, GALE & MCLAREN, LLP
March 26, 2004
35
Independent Auditors’ Report on Compliance with Requirements
Applicable to Each Major Program and on Internal Control over Compliance in
Accordance with OMB Circular A-133
The Auditor General of the State of Arizona
The Board of Supervisors of
Greenlee County, Arizona
Compliance
We have audited the compliance of Greenlee County, Arizona with the types of compliance
requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133
Compliance Supplement that are applicable to each of its major federal programs for the year
ended June 30, 2003. The County’s major federal programs are identified in the Summary of
Auditors’ Results section of the accompanying Schedule of Findings and Questioned Costs.
Compliance with the requirements of laws, regulations, contracts, and grants applicable to each
of its major federal programs is the responsibility of the County’s management. Our
responsibility is to express an opinion on the County’s compliance based on our audit.
We conducted our audit of compliance in accordance with U.S. generally accepted auditing
standards; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB
Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about
whether noncompliance with the types of compliance requirements referred to above that could
have a direct and material effect on a major federal program occurred. An audit includes
examining, on a test basis, evidence about the County’s compliance with those requirements
and performing such other procedures, as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a
legal determination on the County’s compliance with those requirements.
In our opinion, Greenlee County, Arizona complied, in all material respects, with the
requirements referred to above that are applicable to each of its major federal programs for the
year ended June 30, 2003.
Greenlee County, Arizona
Page Two
March 26, 2004
36
Internal Control Over Compliance
The County’s management is responsible for establishing and maintaining effective internal
control over compliance with the requirements of laws, regulations, contracts, and grants
applicable to federal programs. In planning and performing our audit, we considered the
County’s internal control over compliance with requirements that could have a direct and
material effect on a major federal program in order to determine our auditing procedures for the
purpose of expressing our opinion on compliance and to test and report on internal control over
compliance in accordance with OMB Circular A-133.
Our consideration of internal control over compliance would not necessarily disclose all such
internal control matters that might be material weaknesses. A material weakness is a condition
in which the design or operation of one or more of the internal control components does not
reduce to a relatively low level the risk that noncompliance with applicable requirements of laws,
regulations, contracts, and grants that would be material in relation to a major federal program
being audited may occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. We noted no matters involving internal control
over compliance and its operations that we consider to be material weaknesses.
This report is intended solely for the information and use of the members of the Arizona State
Legislature, Auditor General of the State of Arizona, the County’s Board of Supervisors, federal
awarding agencies, and pass-through entities. It is not intended to be and should not be used
by anyone other than these specified parties. However, this report is a matter of public record
and its distribution is not limited.
CHRISTENSEN, GALE & MCLAREN, LLP
March 26, 2004
GREENLEE COUNTY, ARIZONA
Schedule of Findings and Questioned Costs
Year Ended June 30, 2003
37
Summary of Auditors’ Results
Financial Statements
Type of auditors’ report issued: Unqualified
Yes No
Material weakness identified in internal control over financial reporting? X
Reportable conditions identified not considered to be material weaknesses? X
(None reported)
Noncompliance material to the financial statements noted? X
Federal Awards
Material weakness identified in internal control over major programs? X
Reportable conditions identified not considered to be material weaknesses? X
(None reported)
Type of auditor’s report issued on compliance for major programs: Unqualified
Any audit findings disclosed that are required to be reported in accordance with
Circular A-133 (section .510[a])? X
Identification of major programs:
CFDA Number Name of Federal Program or Cluster
15.226 Payments in Lieu of Taxes
Dollar threshold used to distinguish between Type A and Type B programs: $ 300,000
Auditee qualified as low-risk auditee? X
Other Matters
Auditee's summary schedule of prior audit findings required to be reported in
accordance with Circular A-133 (section .315[b])? X
GREENLEE COUNTY, ARIZONA
Schedule of Findings and Questioned Costs
Year Ended June 30, 2003
38
Financial Statement Findings
We noted no reportable conditions, material weaknesses, or instances of noncompliance related
to the general purpose financial statements that are required to be reported in accordance with
Government Auditing Standards.
Federal Award Findings and Questioned Costs
We noted no reportable conditions, material weaknesses, or instances of noncompliance related
to the audit of major programs that are required to be reported by OMB Circular A-133.