State of Missouri Comprehensive Annual Financial Report for Fiscal Year Ended June 30, 2015

3.7 MB·English

by  Missouri Office of Administration, Division of Accounting

Missouri
C
o
Fm
o
p
r
r
the
eh
e
F
in
s
cs
aiv
l e
Y

eA
a
n
r
n
E
nu
da
el

dF
Jin
u
na
en
c
3
i
0a
,l
2 R
0
e
1
5p
o
r
t
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2015
On the Cover:

Alley Spring, Eminence, Missouri, 1985, Series B, Image 045-08950; Department of Economic
Development, Division of Tourism, Record Group 104; Missouri State Archives.

This report can be viewed on the Internet at http://oa.mo.gov/accounting/reports
STATE OF MISSOURI
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
Fiscal Year Ended June 30, 2015
JEREMIAH W. (JAY) NIXON
Governor
DOUGLAS E. NELSON
Commissioner
Office of Administration
STACY NEAL
Director
Division of Accounting
Prepared by
Office of Administration, Division of Accounting
STATE OF MISSOURI

COMPREHENSIVE ANNUAL FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2015

TABLE OF CONTENTS

INTRODUCTORY SECTION Page

Letter of Transmittal ...................................................................................................................................... I
Organizational Chart .................................................................................................................................... VI
Principal State Officials ................................................................................................................................ VII

FINANCIAL SECTION

Auditor's Opinion ........................................................................................................................................... i

Management’s Discussion and Analysis ......................................................................................................... 1

Basic Financial Statements

Government-Wide Financial Statements

Statement of Net Position ................................................................................................................. 14

Statement of Activities ..................................................................................................................... 15

Fund Financial Statements

Governmental Funds

Balance Sheet ............................................................................................................................. 17

Reconciliation of the Balance Sheet of Governmental Funds to the
Statement of Net Position ........................................................................................................... 18

Statement of Revenues, Expenditures, and Changes in Fund Balances ......................................... 19

Reconciliation of the Statement of Revenues, Expenditures, and
Changes in Fund Balances in Governmental Funds to the Statement of Activities ......................... 20

Proprietary Funds

Statement of Net Position ........................................................................................................... 21

Statement of Revenues, Expenses, and Changes in Fund Net Position ......................................... 22

Statement of Cash Flows ............................................................................................................ 23

Fiduciary Funds

Statement of Fiduciary Net Position ............................................................................................ 24

Statement of Changes in Fiduciary Net Position .......................................................................... 25

Component Units

Statement of Net Position ........................................................................................................... 26

Statement of Revenues, Expenses, and Changes in Net Position/
Statement of Activities ............................................................................................................... 27
Notes to the Financial Statements ................................................................................................................ 28

Required Supplementary Information

Budgetary Comparison Schedule General Fund, Major Special Revenue Funds ........................................ 110

Notes to Required Supplementary Information Budgetary Reporting ...................................................... 112

Schedule of Changes in Net Pension Liability and Related Ratios............................................................ 113

Schedule of Proportionate Share of the Net Pension Liability .................................................................. 114

Schedule of State Contributions ............................................................................................................ 115

Supplementary Information

Budgetary Comparison Schedule Major Capital Projects Fund ................................................................ 116

Combining Fund Statement - General Fund

Balance Sheet ........................................................................................................................... 117

Statement of Revenues, Expenditures, and Changes in Fund Balance ........................................ 118

Combining and Individual Fund Statements and Schedules - Non-Major Funds

Governmental Funds

Combining Balance Sheet Non-Major Governmental Funds – by Fund Type...................................... 119

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances
Non-Major Governmental Funds – by Fund Type ............................................................................. 120

Special Revenue Funds

Combining Balance Sheet ......................................................................................................... 121

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ..................... 122

Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget (Non-GAAP Budgetary Basis) and Actual........................................................................ 123

Debt Service Funds

Combining Balance Sheet ......................................................................................................... 127

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ..................... 128

Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget (Non-GAAP Budgetary Basis) and Actual........................................................................ 129

Capital Projects Funds

Combining Balance Sheet ......................................................................................................... 132

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ..................... 133
Permanent Funds

Combining Balance Sheet ......................................................................................................... 134

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ..................... 135

Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances -
Budget (Non-GAAP Budgetary Basis) and Actual........................................................................ 136

Proprietary Funds

Enterprise Funds

Combining Statement of Net Position ....................................................................................... 139

Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ...................... 141

Combining Statement of Cash Flows ........................................................................................ 143

Internal Service Funds

Combining Statement of Net Position ....................................................................................... 145

Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ...................... 147

Combining Statement of Cash Flows ........................................................................................ 149

Fiduciary Funds

Pension (and Other Employee Benefit) Trust Funds

Combining Statement of Fiduciary Net Position ........................................................................ 151

Combining Statement of Changes in Fiduciary Net Position ....................................................... 152

Private-Purpose Trust Funds

Combining Statement of Fiduciary Net Position ........................................................................ 153

Combining Statement of Changes in Fiduciary Net Position ....................................................... 154

Agency Funds

Combining Balance Sheet ......................................................................................................... 155

Combining Statement of Changes in Assets and Liabilities ........................................................ 156

Component Units

Combining Statement of Net Position ....................................................................................... 157

Combining Statement of Revenues, Expenses, and Changes in Net Position .............................. 158

Combining Statement of Cash Flows ........................................................................................ 159
STATISTICAL SECTION

Financial Trends

Net Position by Component .................................................................................................................. 160

Changes in Net Position ........................................................................................................................ 161

Fund Balances – Governmental Funds ................................................................................................... 163

Changes in Fund Balances – Governmental Funds .................................................................................. 165

Revenue Capacity

Revenue Base – Taxable Sales by Industry ............................................................................................. 167

Revenue Base – Personal Income by Industry ......................................................................................... 168

Personal Income Tax Revenue ............................................................................................................... 169

Personal Income Tax Rates ................................................................................................................... 170

Revenue Payers by Industry .................................................................................................................. 171

Personal Income Tax Filers/Liability ...................................................................................................... 172

Debt Capacity

Ratios of Outstanding Debt................................................................................................................... 173

Pledged Revenue Coverage ................................................................................................................... 175

Demographic and Economic Information

Demographic Indicators........................................................................................................................ 176

Economic Indicators ............................................................................................................................. 177

Principal Employers .............................................................................................................................. 178

Operating Information

State Employees by Function................................................................................................................. 179

Operating Indicators by Function .......................................................................................................... 180

Capital Asset Statistics by Function ....................................................................................................... 182

Acknowledgements ......................................................................................................................................... 184
The Introductory Section includes material to
familiarize the reader with the organizational
structure of the State, the nature and scope of
services the State provides, and a summary of
the financial activities of the State and the
factors that influence these activities.
Jeremiah W. (Jay) Nixon
Governor

State of Missouri
Doug Nelson OFFICE OF ADMINISTRATION Stacy Neal
Commissioner Division of Accounting Director
570 Truman Building, 301 West High Street
Post Office Box 809
Jefferson City, Missouri 65102
[phone]
INTERNET: http://www.oa.mo.gov/acct
E-MAIL: [email protected]

January 14, 2016

The Honorable Jeremiah W. (Jay) Nixon
The Honorable Members of the Legislature
Citizens of the State of Missouri

In accordance with generally accepted accounting principles, I submit to you the Comprehensive Annual
Financial Report (CAFR) of the State of Missouri for the fiscal year ended June 30, 2015. This report was prepared
by the Office of Administration, Division of Accounting, whose management is responsible for its contents.

The report is prepared to show the financial position and operating results of the State. The State’s internal
accounting controls provide reasonable assurance regarding the safeguarding of assets against loss from
unauthorized use or disposal and the reliability of financial records for preparing financial statements. The
concept of reasonable assurance recognizes that the cost of a control should not exceed the resulting benefit. We
believe the data presented is accurate in all material respects and that all disclosures necessary to enable the
reader to gain a reasonable understanding of the State’s financial activities have been included.

An annual audit of the basic financial statements is completed each year by the State Auditor’s Office. The
State Auditor conducts the audit in accordance with generally accepted government auditing standards, and her
opinion has been included in this report. The State Auditor conducts a "Single Audit" of all federal funds in
accordance with the Federal Single Audit Act of 1996 and the U.S. Office of Management and Budget Circular
A-133, “Audits of States, Local Governments, and Non-Profit Organizations.”

A narrative introduction, overview, and analysis of the basic financial statements is presented in the
Management’s Discussion and Analysis (MD&A) section of this report. This letter of transmittal is intended to
complement MD&A and should be read in conjunction with it. The MD&A can be found immediately following the
Independent Auditor’s Report.

PROFILE OF THE GOVERNMENT

Missouri was organized as a territory in 1812 and was the second state (after Louisiana) of the Louisiana
Purchase to be admitted to the Union. Statehood was granted on August 10, 1821, making Missouri the 24th
state. The State encompasses 68,945 square miles.

The State operates under three branches of government: executive, legislative, and judicial. The executive
branch consists of the Governor, Lieutenant Governor, Secretary of State, State Auditor, State Treasurer, and
Attorney General. The legislative branch consists of 34 members of the Senate and 163 members of the House of
Representatives. The judicial branch is a three-tier court system: the Supreme Court, the State’s highest court,
has statewide jurisdiction; a court of appeals that consists of districts established by the General Assembly; and a
system of circuit courts that has original jurisdiction over all cases and matters, civil and criminal.

I
The State provides a range of services in the areas of agriculture, education, health and social services,
transportation systems, public safety, judicial systems, economic development, conservation and natural
resources, labor relations, and general administration.

The State operates on a legally adopted budget in order to ensure compliance with legal provisions embodied
in the annual appropriated budget passed by the General Assembly and approved by the Governor prior to the
beginning of the fiscal year. If appropriations are not sufficient for a fiscal year, supplemental amounts are
requested during the next legislative session by the same process that original appropriations are requested.
Budgets are established at the program level. Expenditures cannot exceed the individual appropriation amount.
The Governor has the authority to reduce the allotments of appropriations in any fund if it appears that the
revenue estimate will not be met. Article IV, Section 27 of the Missouri Constitution, amended in 2014, requires
the Governor to notify the General Assembly if the Governor reduces allotments when it appears revenues will be
less than estimated. This Section then gives the General Assembly the authority to overturn any of the Governor’s
restrictions with a two-thirds vote, similar to the procedure to overturn a veto. Unexpended appropriations lapse
at the end of each appropriation year, unless reappropriated to the following appropriation year.

The financial reporting entity of the State includes all of the funds of the primary government as well as
component units for which the State is financially accountable. The transmittal letter, MD&A, and the financial
statements focus on the primary government and its activities. Although information pertaining to the component
units is provided, their separately issued financial statements should be read to obtain a complete overview of
their financial position.

ECONOMIC CONDITION AND OUTLOOK

State Economy

Missouri’s economy continues to show some growth over the past year. However, there are signs of
uncertainty in the U.S. and Missouri’s economy. Missouri’s unemployment rate and total employment both moved
in a positive direction. The State’s unemployment rate was at 5.8% in May 2015 which is down from May 2014 at
6.1%. The lowest point over the same 12 month period was reached in December 2014 at 5.4% corresponding to
the lowest rate in close to seven years. The lowest point for Missouri was just slightly lower than the U.S.
unemployment rate at the end of the same measurement period, which was 5.5% in May 2015 representing a
nearly seven year low. Even though January to May 2015 reflected an uptick in the State’s unemployment rate, the
trend has continued to be downward since 2010 as see in the following graph.

Source: MERIC 2015 Missouri Economic Report.

II