We are pleased to present the Comprehensive Annual
Financial Report (“CAFR”) of
This report is divided into four sections: the Introductory, Financial, Statistical, and Compliance Sections. The Introductory Section, which is unaudited, contains this letter of transmittal and information about the County’s organization and principal officials. The Financial Section is composed of the auditors’ report, the general purpose financial statements, and the combining and individual fund and account group financial statements and schedules. The general purpose financial statements are often issued separately for securities offerings or widespread distributions and are frequently referred to as “liftable” general purpose financial statements. The Statistical Section, which is unaudited, contains fiscal and economic data designed to provide a more complete understanding of the County. Many tables in this section present financial data for the past ten years. Finally, the Compliance Section presents reports and schedules required by the federal and state Single Audit Acts.
The County is required to undergo an annual single audit in conformity with the provisions of the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and the State Single Audit Implementation Act. Information related to this single audit, including the Schedule of Expenditures of Federal and State Awards, Schedule of Findings and Questioned Costs, Corrective Action Plan, Summary Schedule of Prior Year Audit Findings and independent auditor’s compliance and internal control reports on the general purpose financial statements and major federal and state programs, are presented in the compliance section of this report.
The County, formed in 1855, is located in the south
central portion of
Generally, the eastern
two-thirds of the County exhibits topographic features common to the Coastal
Plain of North Carolina. It is an area of level to
gently rolling terrain with elevations ranging from 100 to 300 feet above sea
level. Undeveloped lands are covered by
pines and low-growing shrubs. The major
underlying geological formation includes sedimentary rocks consisting mostly of
unconsolidated sands and clays.
Topographic features in the western part of the County resemble the
Piedmont region of
The County contains 384,640 acres or 642 square
The County is governed by a Board of Commissioners
(the "Board"). The Board
consists of five members who are elected from districts, on a partisan basis,
by a district vote and serve staggered four-year terms. Elections for the Board are held in November
of even-numbered years. The
Commissioners take office at the first meeting in December following the
November election. At that time, the
Board elects a Chairman and a Vice Chairman from among its members. Commissioners hold policy-making and
legislative authority. They are also
responsible for adopting the budget and appointing the
The County provides its citizens with a wide range
of services including: public safety, human
services, culture and recreation
development, environmental protection, sanitation, and general government
services. This report includes the
County’s activities in maintaining these services. The County also extends financial support to
certain boards, agencies, and commissions to assist their efforts in serving
citizens. Among these are the Harnett
County Board of Education,
During the past year, travelers
spent $42.5 million in
growth in predominantly the southwest and northeast portions of the County
continued in 2000-2001. The County’s
affordable cost of living index continues to contribute to population
growth. Residential construction permits
were approved during the 1999-2000 year totaling $73,386,903. Commercial and industrial construction
projects totaled $10,584,520. The
County’s population grew over 34% from 1990 to 2000, ranking
Agriculture plays a significant role in the economy
Urban horticulture is another important aspect of
agricultural economy in
Principal taxpayers include a wholesale distributor, four public service companies, a textile manufacturer, shopping strip, a defense contractor, custom truck body manufacturer, a book manufacturer, and a mobile home manufacturer. The County is fortunate to have such diversity among these corporate citizens.
An economic development assessment and action plan prepared by the Leak-Goforth Company, a development consultant, was presented to the County in March, 2001. The plan calls for developing industrial parks at four strategic locations in the County to provide additional options for new and expanding industries.
Significant Economic Facts for the 2000-2001 fiscal year include the following:
¨ Powell and Powell Supply purchased the vacant This End Up Furniture facility and created 75 jobs.
¨ Carolina Pre-Cast concrete added a 10,000 square foot office facility.
¨ South River EMC built a new 35,000 square foot corporate office in Dunn.
¨ Davis Love, Inc. opened
their new golf course at the Village at Anderson Creek, a 2,100 lot subdivision
¨ New Century Bank began construction on its $1.5 million corporate headquarters in Dunn.
This year economic development efforts have taken center stage in
As noted in
previous years, continuing improvements to infrastructure will determine the
County’s ability to respond to the tremendous growth we continue to
experience. The capital needs of public
education continue as the number one priority of the County’s overall capital
program. During the past year, school
construction has continued at a significant pace and will remain a priority in
the years to come. Schools currently
under construction include
Over the past few years, the County has also made a concentrated effort to improve the quality and efficiency of its facilities. This year, efforts in this area continue. Currently, a new courthouse and an adjoining office building are under construction and should be completed by June, 2002. These facilities will house both District and Superior Courtrooms, as well as the Clerk of Court, District Attorney, Tax Office, and Register of Deeds.
Finally, in regards to overall public service, several departments continue changes in how they will service our citizens. These include Central Permitting, GIS, Emergency Communications, and overall web site access to county services. As always, Harnett County Government continues to strive to better serve its citizens and, at the same time, be mindful of the taxpayer. With both of these factors in mind, we believe we are preparing our County for the future.
Harnett County Library received a grant award from the Bill & Melinda Gates
Foundation. This award is dedicated to
partner with libraries to bring access to computers, the Internet, and digital
information for patrons in low-income communities in the
Harnett County Department of Health Director Wayne Raynor, received the “Health
Director of the Year – 2001” award from
the North Carolina Association of Local Health Directors. Various programs were implemented under Mr.
Raynor’s direction. The Maternal Health
Program was designed to address the infant mortality rate in
The Harnett County Emergency Services Department was presented with two awards from the North Carolina Association of County Commissioners. These awards recognized the department’s work for the “Fire Awareness Resistance Education Program” (F.A.R.E.) and the “Safe Kids Coalition”.
The Safe Kid’s Coalition purpose is to reduce the number of preventable and unintentional injuries for kids. These injuries include motor vehicle and bicycle accidents, falls, choking, drowning, fires and burns, and poisoning. The Safe Kids mission is to educate the public through outreach to the community and school. Examples of this outreach include distributing automobile child safety seats to Medicaid eligible and/or needy families and a smoke detector program for the elderly or households with children age 6 and under.
The “Fire Awareness Resistance Education Program” (F.A.R.E.) was implemented in response to the rash of fires, particularly woods fires, started by juveniles in hopes of educating elementary children about the dangers of fire. The Harnett County Fire Marshall’s Office begain visiting the K-3 classes during the Fire Prevention Week. After a review of the program by the Harnett County Board of Education, the “Learn Not to Burn” curriculum was implemented in the standard course of study.
The budget is an integral part of a unit’s accounting system and daily operations. An annual budget or project ordinance, as adopted by the governing body, creates a legal limit on spending authorizations. For Harnett County, annual budgets are adopted for the General, Special Revenue (except the Community Development Revolving Loan Fund, the Child Development Grant Fund, the Hurricane Fran Fund, and the Emergency Response Planning Fund), and Enterprise Funds. Multi-year project budgets are adopted for Capital Projects. Appropriations are made at the line item level.
accounting purposes, budgetary control is maintained on a specific line-item
basis by the use of an encumbrance system.
As purchase orders are issued, corresponding appropriations are reserved
for later payment. If an
over-encumbrance of balances would result, purchase orders are not written
until additional appropriations are made available. Open encumbrances are reported as
reservations of fund balance at
In accordance with State law, the County's budget is prepared on the modified accrual basis, and its accounting records are maintained on that basis. Under modified accrual accounting, revenues are recorded when measurable and available. Expenditures are recorded when a fund liability is incurred, except for unmatured principal and interest on long-term debt and certain compensated absences. Governmental Fund Types, such as the County’s General Fund, Special Revenue Funds, Capital Project Funds, and Trust and Agency Funds are reported on the modified accrual basis in the financial statements. The County’s Enterprise Funds are reported on the full accrual basis in the financial statements, under which revenues are recorded when earned and expenses are recorded when incurred.
County management is responsible for the accounting system and for establishing and maintaining an internal control structure. The internal control structure is designed to provide reasonable, but not absolute, assurance regarding (1) the safeguarding of assets against loss from unauthorized use or disposition, (2) the reliability of financial records for preparing financial statements in conformity with generally accepted accounting principles and maintaining accountability for assets; and (3) compliance with applicable laws and regulations related to federal and state financial assistance programs. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived, and (2) the evaluation of costs and benefits requires estimates and judgments by management.
The County has 24 schools and a community college (
All internal control evaluations occur within the above framework. We believe that the County's internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. As a part of the County’s single audit (discussed in more detail in a later paragraph), the independent auditor performed a review of the County’s internal control structure. This review was not an audit and no opinion was issued on the County’s internal control structure.
General Governmental Fund Types
General governmental revenues totaled $63,420,910 an increase of 2.49% from the prior year. Revenues by source for the Governmental Funds (General, Special Revenue, Capital Projects) are as follows:
2001 Fiscal Percent
Percent Year Ended June 30, Increase/ Increase/
of Total 2001 2000 (Decrease) (Decrease)
Ad valorem taxes 43.66% $ 27,691,049 $ 25,027,816 $ 2,663,233 10.64%
Other taxes and licenses 18.65% 11,827,780 11,342,368 485,412 4.28%
Intergovernmental 22.09% 14,012,400 17,655,266 ( 3,642,866) (20.63)%
Permits & fees 2.65% 1,680,296 1,683,467 ( 3,171) (
Sales and services 7.13% 4,518,842 4,041,423 477,419 11.81%
Investment earnings 3.27% 2,071,810 1,135,207 936,603 82.51%
Miscellaneous 2.55% 1,618,733 995,797 622,936 62.56%
Total 100.00% $63,420,910 $61,881,344 $ 1,539,566 2.49%
Ad valorem taxes provide the County's primary source of revenue. The revenue of $27,691,049 for 2000 - 2001 reflects a 10.64% increase over the previous year. Current year collection rates are 92.32%. Investment earnings for 2000 - 2001 increased 82.51% over the previous year. While the interest rates during the current year continued to decline, the County’s earnings increased due to the COPS 2000 proceeds for the courthouse and school projects. Permits and fees decreased .19% in 2000 – 2001 Although the permit fees charged by the Inspections Department remained the same, the number of permits issued for construction decreased. The sales and services category increased by 11.81%. This increase reflects a continued increase in gross ambulance billings. The Intergovernmental category decreased 20.63%, and was due to a reduction of various program revenues.
General governmental expenditures totaled $73,950,975, an increase of 16.65% from the prior year. Categorized by character and major function, expenditures for the Governmental Funds (General, Special Revenue, Capital Projects) were as follows:
2001 Fiscal Percent
Percent Year Ended June 30, Increase/ Increase/
of Total 2001 2000 (Decrease) (Decrease)
General government 19.94% $ 14,743,012 $ 7,323,620 $ 7,419,392 101.31%
Public safety 19.21% 14,209,303 13,988,669 220,634 1.58%
Transportation .05% 38,665 40,478 (1,813) (4.48)%
Environmental protection .12% 89,927 84,628 5,299 6.26%
and physical dev. 3.76% 2,781,166 1,889,076 892,090 47.22%
Human services 28.19% 20,848,442 18,990,848 1,857,594 9.78%
Cultural and recreational 1.36% 1,006,145 851,386 154,759 18.18%
Education 20.50% 15,162,953 16,201,445 ( 1,038,492) (6.41)%
Debt service 6.87% 5,071,362 4,025,659 1,045,703 25.98%
Total 100.00 % $ 73,950,975 $ 63,395,809 $ 10,555,166 16.65%
The expenditures in the education category decreased
6.41%, which was due to the Public School Building Bonds. These funds will no
longer pass-through the County but will be sent directly to the Harnett County
Board of Education by the State.
The Human Services category continues to be a large
area of expenditures. In 2000 - 2001,
increased 9.78% from the prior year. Medicaid is a State mandated program and may
increase or decrease as required by the State and is based upon the number of eligible
participants and the forecasted rates of inflation of the cost of services. In 1998, the North Carolina General Assembly
increased the income ceiling to 100% of the federal poverty level for the aged,
blind and disabled citizens who became eligible for full Medicaid participation
Fund Balance in the General Fund - The General Fund ended the fiscal year with a total fund balance of $15,888,723. Over $6.8 million of this fund balance is unreserved, which is equal to 11.79% of the annual expenditures. This fund balance is considered adequate to meet unforeseen events and to avoid cash flow shortfalls during periods of low tax collections.
Operating revenues for the Solid Waste Management Fund totaled $2,394,576 down 6.7% from the prior year's revenue of $2,567,796. Total operating expenses for this fund totaled $2,753,669, an increase of 7.75% from the prior year. There was an operating loss of $359,093.
Operating revenues for the
Harnett County Public Utilities Fund totaled $9,704,913, up 7.215% from the prior year’s revenue of
$9,051,869. Based upon our records, this
increase is due to the increased number of daily average consumption and service connections made. The operating income of $1,465,686 is a good
indication of how well revenues are covering total expenses. Unlike many other government units,
The County's idle cash during the year was invested in fully insured or collateralized certificates of deposit, and in demand deposits in the state-authorized mutual fund whose portfolio consists of certificates of deposit, prime quality commercial paper, U. S. Government securities and banker's acceptances.
A comparison of the investment portfolio at the close of the last two fiscal years is as follows:
Class Amount % of Total Amount % of Total
Certificates of deposit $ 3,644,188 28.77% $ 7,300,000 26.91%
Commercial paper 4,098,545 32.37% 4,088,346 15.07%
Management 4,920,669 38.86% 15,734,755 58.02% Total $ 12,663,402 100.00% $ 27,123,101 100.00%
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. The County carries commercial coverage for all risks of loss. The County carries commercial coverage for Worker’s Compensation with limits or $1,000,000 for bodily injury by accident for each accident, $1,000,000 for bodily injury by disease policy limit, and $1,000,000 bodily injury by disease for each employee. The comprehensive general liability general aggregate limit is $4 million. There have been no significant reductions in insurance coverage from the previous year and settled claims have not exceeded coverage in any of the past three fiscal years A schedule of insurance in force is included in the statistical section of this report.
Preparation of this report would not have been possible
without the dedicated efforts of the entire staff of the Finance
Department. Each member of the Finance
Department has my sincere appreciation for their contributions. I would also like to thank the members of the
Board of Commissioners and the
Vanessa W. Young