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AUDIT REPORTOFSEWARD COUNTYJULY 1, 2020, THROUGH JUNE 30, 2021This document is an official public record of the State of Nebraska, issued bythe Auditor of Public Accounts.Modification of this document may change the accuracy of the originaldocument and may be prohibited by law.Issued on February 16, 2022
SEWARD COUNTYTABLE OF CONTENTSList of County OfficialsFinancial SectionIndependent Auditor’s ReportBasic Financial Statements:Government-Wide Financial Statements:Statement of Net Position - Cash BasisStatement of Activities - Cash BasisFund Financial Statements:Statement of Cash Basis Assets and Fund Balances Governmental FundsStatement of Cash Receipts, Disbursements, and Changes in CashBasis Fund Balances - Governmental FundsStatement of Cash Receipts, Disbursements, and Changes in CashBasis Fund Balances - Fiduciary FundsNotes to Financial StatementsCombining Statements and Schedules:Budgetary Comparison Schedule - Budget and Actual - General FundBudgetary Comparison Schedule - Budget and Actual - Major FundsBudgetary Comparison Schedule - Budget and Actual - Nonmajor FundsCombining Statement of Receipts, Disbursements, and Changesin Cash Basis Fund Balances - Nonmajor FundsSchedule of Office ActivitiesSchedule of Taxes Certified and Collected for All Political Subdivisionsin the CountySchedule of Expenditures of Federal AwardsNotes to the Schedule of Expenditures of Federal AwardsGovernment Auditing Standards SectionIndependent Auditor’s Report on Internal Control Over Financial Reportingand on Compliance and Other Matters Based on an Audit of FinancialStatements Performed in Accordance with Government Auditing StandardsReport on Compliance for each Major Federal Program and Report on InternalControl Over Compliance Required by Uniform GuidanceSchedule of Findings and Questioned CostsAuditee SectionSchedule of Prior Audit FindingsCorrective Action PlanPage12-3456789 - 1819 - 2021 - 2223 - 2728 - 3233 - 343536 - 373839 - 4041 - 4243 - 444546
SEWARD COUNTY529 Seward StreetSeward, NE 68434LIST OF COUNTY OFFICIALSAt June 30, 2021TitleBoard of CommissionersNameMisty AhmicDarrell ZabrockiBob VrbkaJohn CulverKen SchmiedingTermExpiresJan. 2023Jan. 2025Jan. 2023Jan. 2025Jan. 2023AssessorMarilyn HladkyJan. 2023AttorneyWendy ElstonJan. 2023ClerkElection CommissionerRegister of DeedsSherry SchweitzerJan. 2023Clerk of the District CourtTera KoetterJan. 2023SheriffMichael VanceJan. 2023TreasurerBob DahmsJan. 2023Public DefenderVacantVeterans’ Service OfficerRural Transit DirectorMatthew StarkeyAppointedWeed SuperintendentPlanning & ZoningBecky PaulsenAppointedHighway SuperintendentTerry WichtAppointedEmergency ManagerGary PetersenAppointed-1-
NEBRASKA AUDITOR OF PUBLIC ACCOUNTSCharlie [email protected] AuditorPO Box 98917State Capitol, Suite 2303Lincoln, Nebraska 68509402-471-2111, FAX 402-471-3301auditors.nebraska.govSEWARD COUNTYINDEPENDENT AUDITOR’S REPORTBoard of CommissionersSeward County, NebraskaReport on the Financial StatementsWe have audited the accompanying cash-basis financial statements of the governmental activities, each major fund,and the aggregate remaining fund information of Seward County, as of and for the year ended June 30, 2021, andthe related notes to the financial statements, which collectively comprise the County’s basic financial statements,as listed in the table of contents.Management’s Responsibility for the Financial StatementsManagement is responsible for the preparation and fair presentation of these financial statements in accordance withthe cash basis of accounting described in Note 1. This includes determining that the cash basis of accounting is anacceptable basis for the preparation of the financial statements in the circumstances. Management is alsoresponsible for the design, implementation, and maintenance of internal control relevant to the preparation and fairpresentation of financial statements that are free from material misstatement, whether due to fraud or error.Auditor’s ResponsibilityOur responsibility is to express opinions on these financial statements based on our audit. We conducted our auditin accordance with auditing standards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks ofmaterial misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,the auditor considers internal control relevant to the County’s preparation and fair presentation of the financialstatements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing an opinion on the effectiveness of the County’s internal control. Accordingly, we express no suchopinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonablenessof significant accounting estimates made by management, as well as evaluating the overall presentation of thefinancial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinions.-2-
OpinionsIn our opinion, the financial statements referred to above present fairly, in all material respects, the respective cashbasis financial position of the governmental activities, each major fund, and aggregate remaining fund informationof Seward County as of June 30, 2021, and the respective changes in cash-basis financial position for the year thenended in conformity with the basis of accounting described in Note 1.Emphasis of Matters – Basis of AccountingWe draw attention to Note 1 of the financial statements, which describes the basis of accounting. The financialstatements are prepared on the cash basis of accounting, which is a basis of accounting other than accountingprinciples generally accepted in the United States of America. Our opinions are not modified with respect to thismatter.Report on Supplementary InformationOur audit was conducted for the purpose of forming opinions on the financial statements as a whole, whichcollectively comprise the County’s basic financial statements. The combining nonmajor fund financial statement,budgetary comparison information, schedule of office activity, schedule of expenditures of Federal awards asrequired by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, CostPrinciples, and Audit Requirements for Federal Awards, and schedule of taxes certified and collected, are presentedfor purposes of additional analysis and are not a required part of the basic financial statements.The combining nonmajor fund financial statement, budgetary comparison information, schedule of office activity,schedule of expenditures of Federal awards as required by Title 2 U.S. Code of Federal Regulations (CFR) Part200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, andschedule of taxes certified and collected, pages 19-37, are the responsibility of management and were derived from,and relate directly to, the underlying accounting and other records used to prepare the basic financial statements.Such information has been subjected to the auditing procedures applied in the audit of the basic financial statementsand certain additional procedures, including comparing and reconciling such information directly to the underlyingaccounting and other records used to prepare the basic financial statements or to the basic financial statementsthemselves, and other additional procedures in accordance with auditing standards generally accepted in the UnitedStates of America. In our opinion, the information is fairly stated in all material respects in relation to the basicfinancial statements as a whole on the basis of accounting described in Note 1.Other Reporting Required by Government Auditing StandardsIn accordance with Government Auditing Standards, we have also issued our report dated February 1, 2022, on ourconsideration of Seward County’s internal control over financial reporting and on our tests of its compliance withcertain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of thatreport is to describe the scope of our testing of internal control over financial reporting and compliance and theresults of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance.That report is an integral part of an audit performed in accordance with Government Auditing Standards inconsidering Seward County’s internal control over financial reporting and compliance.February 1, 2022Zachary Wells, CPA, CISAAssistant Deputy AuditorLincoln, Nebraska-3-
SEWARD COUNTYSTATEMENT OF NET POSITION - CASH BASISJune 30, 2021GovernmentalActivitiesASSETSCash and Cash Equivalents (Note 1.D)Investments (Note 1.D)TOTAL ASSETSNET POSITIONRestricted for:Visitor Promotion911 Emergency ServicesDrug EducationLaw EnforcementPreservation of RecordsDebt ServiceRoad/Bridge ProjectsAid and AssistanceCoronavirus Relief and AssistanceUnrestrictedTOTAL NET POSITION 18,261,211The notes to the financial statements are an integral part of this statement.-4-
SEWARD COUNTYSTATEMENT OF ACTIVITIES - CASH BASISFor the Year Ended June 30, 2021Functions:Governmental Activities:General GovernmentPublic SafetyPublic WorksPublic AssistanceCulture and RecreationDebt PaymentsTotal Governmental ActivitiesCashDisbursements (1,302,542) (19,179,750)Program Cash ReceiptsFees, Fines,Operatingand ChargesGrants andfor ServicesContributionsNet (Disbursement)Receipts andChanges inNet Position 764,122252,49913,537 1,030,158 1,834,3572,266,0852,969,776316,521 7,386,739General Receipts:TaxesGrants and Contributions Not Restricted toSpecific ProgramsInvestment IncomeLicenses and PermitsHealth Insurance SettlementsMiscellaneousTotal General ReceiptsIncrease in Net PositionNet Position - Beginning of yearNet Position - End of yearThe notes to the financial statements are an integral part of this ,936242,212107,4822,088,257573,99614,817,470 4,054,61714,206,59418,261,211
SEWARD COUNTYSTATEMENT OF CASH BASIS ASSETS AND FUND BALANCESGOVERNMENTAL FUNDSJune 30, 2021ASSETSCash and Cash Equivalents (Note 1.D)Investments (Note 1.D)TOTAL ASSETSFUND BALANCESRestricted for:Visitor Promotion911 Emergency ServicesDrug EducationLaw EnforcementPreservation of RecordsDebt ServiceRoad/Bridge ProjectsAid and AssistanceCoronavirus Relief and AssistanceCommitted to:Law EnforcementRoad MaintenanceAid and AssistanceCounty Buildings and EquipmentReappraisal ServicesHealth InsuranceAssigned to:Other PurposesUnassignedTOTAL CASH BASIS FUND BALANCESGeneral FundRoad FundInheritanceFundHealthInsuranceFund 3,347,0397,238 3,354,277 1,004,587 1,004,587 4,085,180 4,085,180 1,572,604 1,572,604----1,004,587-3,354,277 3,354,277 1,004,587The notes to the financial statements are an integral part of this statement.-6-NonmajorFunds TotalGovernmentalFunds8,244,5638,244,563 18,253,9737,238 5,052511,73219,9891,572,6044,085,180 4,085,180 1,572,6048,244,5634,085,1803,354,277 18,261,211
SEWARD COUNTYSTATEMENT OF CASH RECEIPTS, DISBURSEMENTS,AND CHANGES IN CASH BASIS FUND BALANCESGOVERNMENTAL FUNDSFor the Year Ended June 30, 2021GeneralFundRECEIPTSTaxesLicenses and PermitsInvestment IncomeIntergovernmentalCharges for ServicesMiscellaneousTOTAL RECEIPTSDISBURSEMENTSGeneral GovernmentPublic SafetyPublic WorksPublic AssistanceCulture and RecreationDebt Service:Principal PaymentsInterest and Fiscal ChargesTOTAL DISBURSEMENTSEXCESS (DEFICIENCY) OF RECEIPTSOVER DISBURSEMENTSOTHER FINANCINGSOURCES (USES)Transfers inTransfers outTOTAL OTHER FINANCINGSOURCES (USES)Net Change in Fund BalancesCASH BASIS FUNDBALANCES - BEGINNINGCASH BASIS FUNDBALANCES - ENDING 99,224Road Fund 2,535,90713,5378,0342,557,478InheritanceFund 749,169224,2065,056978,431HealthInsuranceFund 13,9552,088,2572,102,212NonmajorFunds 58313,1276,397,022 8,4464,995,56214,206,594 3,354,277 1,004,587 4,085,180 1,572,6048,244,563 18,261,211The notes to the financial statements are an integral part of this statement.-7-(35,842)
SEWARD COUNTYSTATEMENT OF CASH RECEIPTS, DISBURSEMENTS,AND CHANGES IN CASH BASIS FUND BALANCESFIDUCIARY FUNDSFor the Year Ended June 30, 2021CustodialFund BalancesJuly 1, 2020(as restated)ReceiptsDisbursementsCustodialFund BalancesJune 30, 2021ASSETSCash and Cash Equivalents 3,082,453 964,13945,353,481 45,558,385 2,877,549LIABILITIESDue to other governmentsState - Collected by County TreasurerState - Collected by Other OfficesSchoolsEducational Service UnitsTechnical CollegeNatural Resource DistrictsFire DistrictsMunicipalitiesAgricultural SocietyCemetery DistrictsAirport AuthorityHospitalOthers - Collected by County TreasurerOthers - Collected by Other OfficesTOTAL LIABILITIESTOTAL NET POSITION - The notes to the financial statements are an integral part of this ,690360,901867,25045,558,385 ,0421663,7741071,610,477210,2732,877,549 -
SEWARD COUNTYNOTES TO FINANCIAL STATEMENTSFor the Fiscal Year Ended June 30, 20211.Summary of Significant Accounting PoliciesThe following is a summary of the significant accounting policies utilized in the accounting system ofSeward County.A.Reporting EntitySeward County, Nebraska, (County) is a governmental entity established under and governed by the lawsof the State of Nebraska (State). The County is managed by county officials who are elected on a politicalballot for four-year terms. As a political subdivision of the State, the County is exempt from State andFederal income taxes. The financial statements include all funds of the County that are not legally separate.The County has also considered all potential component units for which it is financially accountable, aswell as other organizations that are either fiscally dependent on the County or maintain a significantrelationship with the County, such that exclusion would be misleading or incomplete. The GovernmentalAccounting Standards Board (GASB) has set forth criteria to be considered in determining financialaccountability. These criteria include appointing a voting majority of an organization’s governing body,and (1) the ability of the County to impose its will on that organization, or (2) the potential for theorganization to provide specific financial benefits to, or impose specific financial burdens on, the County.The County is also considered financially accountable if an organization is fiscally dependent on and thereis potential for the organization to provide specific financial benefits to, or impose specific financial burdenson, the County regardless of whether the organization has (1) a separately elected governing board, (2) agoverning board appointed by a higher level of government, or (3) a jointly appointed board.As required by Generally Accepted Accounting Principles (GAAP), these financial statements present theCounty (the primary government). No component units were identified.Joint Organization.Behavioral Health Region V – The County has entered into an agreement with surrounding counties andthe Nebraska Department of Health and Human Services to provide services to carry out the provisions ofthe Nebraska Behavioral Health Services Act (Act). Agreements were established under the authority ofthe Interlocal Cooperation Act for services to be provided under the Act. Region V (Region) consists ofthe following counties: Polk, Butler, Saunders, Seward, Lancaster, Otoe, Fillmore, Saline, Thayer,Jefferson, Gage, Johnson, Nemaha, Pawnee, York, and Richardson.The governing board for the Region includes representatives from the participating county boards. Eachcounty contributes to the financial support of the Region activities based on formulas developed by theRegion governing board and as required by the Act. Funding is provided by a combination of Federal,State, local, and private funding. The County contributed 55,295 toward the operation of the Regionduring fiscal year 2021. In the event of the termination of the agreement, assets would be disposed of inaccordance with the terms of the agreement. The Nebraska Department of Health and Human Servicesrequires the Region to be audited annually in accordance with State statute. Financial information for theRegion is available in those audit reports.Health Department – The County has entered into an agreement with the Four Corners Health Department(Department) to provide public health services. The agreement was established under authority of theInterlocal Cooperation Act for services to be provided per Neb. Rev. Stat. §§ 71-1626 to 71-1636 (Reissue2018).-9-
SEWARD COUNTYNOTES TO FINANCIAL STATEMENTS(Continued)1.Summary of Significant Accounting Policies (Continued)The Department’s governing board is established by statute and includes representatives from theparticipating county boards and the health profession. Funding is provided by a combination of Federal,State, local, and private funding. The County did not contribute toward the operation of the Departmentduring fiscal year 2021. In the event of the termination of the agreement, assets would be disposed of inaccordance with the terms of the agreement. The Department is audited in accordance with Neb. Rev. Stat.§ 84-304(4) (Supp. 2021). Financial information for the Department is available in that report.Southeast Region 911 Communication Services (911 Region) – The County has entered into an agreementwith the governing boards of the Public Safety Answering Points (PSAPs) of the City of Lincoln, City ofBeatrice, City of Crete, City of Falls City, Cass County, Clay County, Fillmore County, Jefferson County,Johnson County, Pawnee County, Nemaha County, Nuckolls County, Otoe County, Thayer County, andYork County to fund the planning, creation, and implementation of a 911 emergency call system for thesoutheast region of the State of Nebraska.The governing board is established by interlocal agreement and includes representatives from theparticipating political subdivisions. Each political subdivision contributes to the financial support of the911 Region based on formulas developed by the governing board. Funding is provided by a combinationof Federal, State, local, and private funding. The County did not contribute toward the operation of the 911Region during fiscal year 2021. In the event of the termination of the agreement, assets would be disposedof in accordance with the terms of the agreement. Nemaha County was named the fiscal agent for the 911Region in 2016, and all financial activity of the 911 Region would be available in the Nemaha County auditreport.Seward County Communications Agency (Communications Region) – The County has entered into anagreement with the governing boards of the City of Seward and the City of Milford to fund, staff, andoversee the running of an Enhanced Emergency 911 Communications Center.The governing board is established by interlocal agreement and includes representatives from theparticipating political subdivisions. Each political subdivision contributes to the financial support of theCommunications Region based on formulas developed by the governing board. Funding is provided by acombination of Federal, State, local, and private funding. The County is the fiscal agent for theCommunications Region, and all activity is included with the E911 Fund of the County. The activity ofthis fund is included in the financial statements of the County and is included in this report. In event of thetermination of the agreement, assets would be disposed of in accordance with the terms of the agreement.During fiscal year 2017, the County purchased a new Emergency 911 Radio System for 351,149. Thiswas funded entirely by the County; however, the City of Seward and the City of Milford will be refundingthe County for their portions of the cost, in accordance with the agreement for the Communications Region.In July 2017, the County sent letters to the governing boards of the municipalities, requesting repaymentbefore December 31, 2017. The City of Milford responded that its balance of 12,641 would be repaid infive annual interest-free payments. Both the City of Milford and the City of Seward have repaid thebalances, with the last payment made in December 2020 and September 2019, respectively.B.Basis of PresentationGovernment-Wide Financial Statements. The Statement of Net Position - Cash Basis and Statement ofActivities - Cash Basis display information about the activities of the County and are in the format ofgovernment-wide statements, as required by GASB Statement Number 34. These statements include all- 10 -
SEWARD COUNTYNOTES TO FINANCIAL STATEMENTS(Continued)1.Summary of Significant Accounting Policies (Continued)the financial activities of the County, except for fiduciary activities. Internal activities in these statementswere considered immaterial and have not been eliminated. Governmental Generally Accepted AccountingPrinciples (GAAP) requires internal activity to be eliminated to minimize double counting. The Countyreports governmental activities only. Governmental activities are generally financed through taxes,intergovernmental receipts, and other nonexchange transactions. The Statement of Net Position presentsthe County’s non-fiduciary assets in two categories:Restricted. This category results when constraints are externally imposed on net asset use bycreditors, grantors, or contributors, or imposed by law through constitutional provisions or enablinglegislation. When both restricted and unrestricted resources are available for use, it is the County’spolicy to use restricted resources first, then the unrestricted resources as they are needed.Unrestricted. This category represents resources that do not meet the definition of the precedingcategory. Unrestricted resources often have constraints on resources that are imposed bymanagement, but those constraints can be removed or modified.The statement of activities demonstrates the degree to which the direct disbursement of a given function orsegment is offset by program receipts. Direct disbursements are those that are clearly identifiable with aspecific function or segment. Program receipts include the following: 1) charges to customers or applicantswho purchase, use, or directly benefit from goods, services, or privileges provided by a given function orsegment; and 2) grants and contributions that are restricted to meeting the operational or capitalrequirements of a particular function or segment. Taxes and other items not properly included amongprogram receipts are reported instead as general receipts.Fund Financial Statements. The fund financial statements provide information about the County’s funds,including its fiduciary funds. GAAP requires separate statements by fund category – governmental,proprietary, and fiduciary. The County uses only the governmental and fiduciary fund categories. TheCounty Board is the highest level of decision-making authority and has the authority, by resolution, toestablish, modify, or rescind the commitment or assignment of a fund balance to a specific purpose. Whenresources for a specific purpose are available in more than one fund balance classification, the County’spolicy is to use resources in the following order: restricted, committed, assigned, and unassigned. Theemphasis of fund financial statements is on major governmental funds. All remaining governmental fundsare aggregated and reported as nonmajor funds.The County reports the following major governmental funds:General Fund. This is the County’s primary operating fund. It accounts for financial resourcesof the general government, except those required to be accounted for in another fund.Road Fund. This fund is used to account for costs associated with the repair and maintenance ofroads and bridges and is primarily funded by State tax receipts.Inheritance Fund. This fund is used to account for the receipts generated from inheritance taxesand is used for various projects.Health Insurance Fund. This fund is used to account for the costs of insurance premiums andclaims and is primarily funded by County and employee payroll deductions, and reinsurancereimbursements.- 11 -
SEWARD COUNTYNOTES TO FINANCIAL STATEMENTS(Continued)1.Summary of Significant Accounting Policies (Continued)The County reports the following additional non-major governmental fund types:Special Revenue Funds. These funds account for the proceeds from a specific receipt source thatis restricted to disbursements for a specified purpose.Custodial Funds. These funds account for assets held by the County as an agent for various localgovernments.Debt Service Fund. The Justice Center Debt Service Fund accounts for the resources for, and thepayment of, general long-term debt principal, interest, and related costs.The County designates fund balances as follows:Restricted. The fund balance is restricted by external impositions, such as creditors, grantors, orlaws or regulations of other governments.Committed. The fund balance has been designated by the County Board for a specific purpose.Assigned. The fund balance has not been designated by the County Board for a specific purpose,but it has been separated based on the type of revenue.Unassigned. This portion of the General Fund is not restricted, committed, or assigned for aspecific purpose.C.Measurement Focus, Basis of AccountingThe accounting and financial reporting treatment applied to a fund is determined by its measurement focusand basis of accounting. The accounting records of the County are maintained and the government-widefinancial statements were reported on the basis of cash receipts and disbursements. As such, themeasurement focus includes only those assets and fund balances arising from cash transactions on theStatement of Net Position - Cash Basis and the Statement of Activities - Cash Basis. Receipts arerecognized when received, and disbursements are recognized when warrants are paid. This differs fromgovernmental GAAP, which requires the government-wide and fiduciary fund financial statements to bereported using the economic resources measurement focus and the accrual basis of accounting. Under thismeasurement focus and basis of accounting, receipts are recorded when earned, and disbursements arerecorded when a liability is incurred, regardless of the timing of related cash flows.The governmental fund financial statements were also reported on the cash receipt and disbursement basisof accounting. As such, the same measurement focus and basis of accounting were used, as describedabove. This differs from governmental GAAP, which requires governmental fund financial statements tobe reported using the current financial resources measurement focus and the modified accrual basis ofaccounting. Under this measurement focus and basis of accounting, receipts are recognized as soon as theyare both measurable and available. Receipts are considered to be available when they are collectible withinthe current period or soon enough thereafter to pay liabilities of the current period. Disbursements aregenerally recorded when a liability is incurred, as under accrual accounting. However, disbursementsrelated to compensated absences, and claims and judgments are recorded only when payment is due.- 12 -
SEWARD COUNTYNOTES TO FINANCIAL STATEMENTS(Continued)1.Summary of Significant Accounting Policies (Continued)D.Assets and Net PositionCash and Cash Equivalents. The County’s cash and cash equivalents are considered to be cash on hand,certificates of deposits, and demand deposits.Investments. The types of investments in which the County is authorized to invest funds are enumeratedin Neb. Rev. Stat. § 77-2315, § 77-2340, and § 77-2341 (Reissue 2018) and generally include U.S.Government obligations and securities, which are authorized by the Nebraska Investment Council.Capital Assets. Under the cash receipts and disbursements basis of accounting, capital assets are notcapitalized in the funds used to acquire or c
SEWARD COUNTY 529 Seward Street Seward, NE 68434 - 1 - LIST OF COUNTY OFFICIALS At June 30, 2021 Term Title Name Expires Board of Commissioners Misty Ahmic Jan. 2023 Darrell Zabrocki Jan. 2025 Bob Vrbka Jan. 2023 John Culver Jan. 2025 Ken Schmieding Jan. 2023 Assessor Marilyn Hladky Jan. 2023 Attorney Wendy Elston Jan. 2023
