MANAGEMENT'S DISCUSSION AND ANALYSIS
Our discussion and analysis of Hart County's financial performance provides an overview of the County's financial activities for the fiscal year ended September 30, 2004. Management's discussion and analysis (MD&A) focuses on current year activities and resulting changes, please read it in conjunction with the County's financial statements.
As a result of the enactment of GASB 34, the County is required to present a discussion and analysis of its financial condition and performance for the year ended September 30, 2004.
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to Hart County's basic financial statements. Hart County's basic financial statements are compromised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements: This report also contains other supplementary information in addition to the basic financial statements themselves.
Government-wide Financial Statements. - The government-wide financial statements provide a broad overview of Hart County finances in a manner similar to that of private-sector businesses. The statements include:
Statement of net assets presents the County's assets and liabilities, with the difference between the two reported as net assets. Over time, the change in net assets is an indicator of the improvement (an increase) or deterioration (a decrease) in the County's financial condition.
Statement of activities presents the revenues and expenses of the County. The difference between these is the change in net assets for the year,
Both of the government-wide financial statements identify the various functions of Hart County that are principally supported by taxes and intergovernmental revenues from other functions that are intended to recover all or a significant portion of their costs through user fees and charges. The governmental activities of Hart County, Georgia include general government, judicial, health and welfare, public safety, highways and streets, economic development, and culture and recreation. The business-type activities of Hart County, Georgia are its Solid Waste and Recycling operations.
Government-wide financial statements. The government-wide financial statements include not only Hart County, Georgia itself (known as the primary government), but also legally separate component units (Library, Health Department, The Joint Development Authority of Franklin, Hart and Stephens Counties, and the Water & Sewer Authority) for which Hart County, Georgia is financially accountable. Financial information for these component units is reported separately from financial information presented for the primary government itself.
Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The County, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the' funds of the County can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources, available at the end of the fiscal, year. Such information may be useful in evaluating a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the County's near term financing decision. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The County maintains fourteen individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, and SPLOST #2, both of which are considered to be major funds. Data from the other twelve governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental funds is provided in the form of combining statements elsewhere in this report
The County adopts an annual appropriated budget for its general fund. A budgetary comparison schedule has been provided for the general fund to demonstrate compliance with its budget.
Proprietary funds. The County maintains one proprietary fund. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The County uses an enterprise fund to account for its solid waste operation. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information for the solid waste operation, which is a major fund of the County.
Fiduciary funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the County's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.
Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements.
Other information. In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the County's schedule of budgetary comparisons and combining and individual fund statements.
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Hart County, on an entity-wide basis, had an increase in net assets during FY 2004 of $.9 million, of which governmental activities reported an increase of $1,2 million while business-type activities reported a net decrease of $.3 million. At September 30, 2004 the County had $11.2 million invested in capital assets, net of debt and accumulated depreciation. The table below shows The split of net assets between governmental and business-type activities.
HART COUNTY, GEORGIA'S NET ASSETS
September 30, 2004
is
in thousands)
|
Governmental Activities |
Business-type Activities |
Total Government |
||||
|
2004 |
2003 |
2004 |
2003 |
2004 |
2003 |
|
| Cash and investments |
$ 7,4D6 |
$ 7,934 |
$ 1,384 |
$ 1,302 |
$ 8,790 |
$ 9,236 |
| Other assets |
1,731 |
1,471 |
122 |
19 |
1,853 |
1,490 |
| Capital assets |
12021 |
11,297 |
512 |
401 |
12,533 |
11,698 |
| Total assets |
21,158 |
20,702 |
2,018. |
1,722 |
23,176 |
22,424 |
| Other liabilities |
655 |
731 |
132 |
61 |
787 |
792 |
| Long term debt outstanding |
1,208 |
1,866 |
484 |
1,692 |
1,866 |
|
| Total liabilities |
1,863 |
2,597 |
616 |
61 |
2,479 |
2,658 |
| Net assets: |
10,702 |
9,866. |
512 |
400 |
11,214 |
10,266 |
| Restricted |
4 |
134 |
- |
4 |
134 |
|
| Unrestricted |
8,589 |
8,105. |
890 |
1,261 |
9,479 |
9,366 |
| Total net assets |
$ 19,295 |
$ 18,105 |
$ 1,402 |
$ 1,661 |
$ 20,697 |
$ 19,766i‑ |
HART COUNTY GEORGIA'S CHANGES IN NET
ASSETS
YEAR ENDED SEPTEMBER 30, 2004
|
Governmental Activities |
Business-type Activities |
Total Government |
||||
|
2004 |
2003 |
2004 |
2003 |
2004 |
2003 |
|
|
REVENUES |
$ 1,905 |
$ 1,767 |
$ 778 |
$ 691 |
$ 2,683 |
$ 2,458 |
|
Grants and contributions |
981 |
1,344 |
- |
97 |
981 |
1,441 |
| General
revenues |
9,724 |
9,122 |
- |
9,724 |
9,122 |
|
|
Interest |
98 |
97 |
13 |
14 |
111 |
111 |
|
Other |
8 |
67 |
- |
8 |
67 |
|
|
Total revenues |
12,716 |
12,397 |
791 |
802. |
13,507 |
13,199 |
| EXPENSES |
11,559 |
7,994 |
- |
- |
11,559 |
7,994 |
|
Solid Waste |
- |
- |
928 |
874 |
. 928 |
874 |
|
Total expenses |
11,559 |
7,994 |
928 |
874 |
12.487 |
8,868 |
|
Transfers |
(352) |
(1,060). |
352 |
- 277 |
- |
(7833 |
|
Increase-in net assets |
805 |
3,343 |
215 |
205 |
1,020 |
3,548 |
|
Net assets, Beginning |
18,105 |
15,046 |
1.661' |
1,039 |
19,766 |
16,085 |
|
Prior period adjustment |
385 |
(284) |
(474) |
417 |
(89) |
133 |
|
Net assets, Ending |
$ 19,295 |
$ 18,105. |
$ 1,402 |
$ 1,661 |
$ 20,697 |
$ 19,766 |
Total government-wide revenue for FY 2004 was $13.5 million with $9.7 million in taxes, $1.0 million in grants and contributions, $.1 million in investment earnings and $2.7 million in charges for services.
FINANCIAL ANALYSIS OF THE GOVERNMENT'S FUNDS
As noted earlier, the County uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
Governmental Funds. The focus of the County's governmental funds is to provide information on near-term inflows and outflows of spendable resources. Such information is useful in evaluating a government's near-term financing requirements.
Governmental revenues were up $.6 million from FY 2003. Taxes increased $.7 million and intergovernmental revenue decreased by $.1 million. The increase of tax revenue over FY 2004 was primarily the reason why governmental revenues increased.
Property tax revenues consisted of over $4.4 million, while sales lax revenues also exceeded $4.4 million in the governmental funds.
Expenditures in the governmental funds were $12.6 million of which $1.3 million was for Capital expenditures.
Transfers out of governmental funds to business type funds (Solid Waste) amounted to $352,400 during FY 2004. The County also contributes funds to component units in order to provide resources for capital purchases and improvements, economic development as well as expenses and expenditures for every day operation. The total monies contributed or expended on behalf of component units amounted to $3.5 million during F'' 2004.
Proprietary fund. The County's proprietary fund provides the same type of information found in the government-wide financial statements, but in more detail.
Revenues in business type activities (Solid Waste Fund) was $791,618 which was about a $10,000 decrease over the previous year. Charges for services increased by $87,000, however in FY 2003 Solid Waste had a capital grant of $97,000 and in FY 2004 they had no revenue from grants,
Expenses in business-type activities was $928,000, thus creating the need for supplemental income (transfer). from the General Fund. The General Fund transferred to the Solid Waste Fund approximately $350,000 in FY 2004.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Hart County's Government-wide investment in capital assets at September 30, 2004 was $12.5 million, net of $2.8 million in accumulated depreciation. The investment, which includes land, buildings, roads, bridges, machinery and equipment, park facilities and vehicles, is covered in Note 6.
Major -capita) asset activities in 2004 consisted of additions of $1.4 million. Of this amount, $1.3 million of additions were recorded by the governmental activities. The additions were composed of machinery and equipment of approximately $355,000 and vehicles for the amount of $497,000. Infrastructure amounted to $485,000, additional construction in progress amounted to approximately $70,000 and Building upgrades were $55,000.
Long-term debt decreased by $112,007 during FY 2004. During this time there were no new Long-Term Debts acquired. Additional information on the County's debt is contained in Note 7.
GENERAL FUND BUDGETARY HIGHLIGHTS
Differences between the original budget, the final budget and actual results of the General Fund are shown on the Budgetary Comparison Schedule. During FY 2004 actual revenues were $1.02 million over the overall budget. Additionally, expenditures were $217,000 less than budget.
REQUEST FOR INFORMATION
The financial report is designed to provide a general overview of Hart County's finances for all those interested. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Clerk to the Commission at 800 Chandler Street, Hartwell, GA 30543.