Examine the CAFR.

General Fund. Answer the following questions. (1) What statements and schedules pertaining to the General Fund are presented? (2) What purpose is each statement and schedule intended to serve? (3) Are any noncurrent or nonliquid assets included in the General Fund balance sheet? If so, are they offset by equal amounts classified as ?nonspendable? fund balances? (4) Are any noncurrent liabilities included in the General Fund balance sheet? If so, describe them. (5) Are revenue classifications sufficiently detailed to be meaningful? (6) Has the government refrained from reporting expenses rather than expenditures?

COUNTY OF CHARLESTON, SOUTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2014 WITH REPORT OF INDEPENDENT AUDITOR PREPARED BY: FINANCE DEPARTMENT CORINE ALTENHEIN, FINANCE DIRECTOR CARLA D. RITTER, ASSISTANT FINANCE DIRECTOR CHRISANNE PORTER, ACCOUNTANT COUNTY OF CHARLESTON, SOUTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2014 TABLE OF CONTENTS Page(s) INTRODUCTORY SECTION Letter of Transmittal ................................................................................................................. 2-13 GFOA Certificate of Achievement for Excellence in Financial Reporting ..............................14 Organizational Chart .................................................................................................................... 15 Principal Officials ......................................................................................................................... 16 FINANCIAL SECTION Independent Auditor's Report ............................................................................................... 19-21 Management's Discussion and Analysis ............................................................................. 22-35 Basic Financial Statements: Government-wide Financial Statements Statement of Net Position ..................................................................................................... 38 Statement of Activities .................................................................................................... 39-40 Fund Financial Statements Balance Sheet-Governmental Funds.................................................................................... 42 Reconciliation of Total Governmental Fund Balances to Net Position of Governmental Activities ..................................................................................................... 43 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds .......................................................................................................... 44 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities......................................................................................................................... 45 Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual - General Fund ............................................................................. 46-48 Statement of Net Position - Proprietary Funds .............................................................. 49-50 Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Funds .............................................................................................................. 52 Statement of Cash Flows - Proprietary Funds ............................................................... 53-54 Statement of Fiduciary Net Position - Agency Funds ..........................................................56 Combining Statement of Net Position - Discretely Presented Component Units .......... 57-58 Combining Statement of Activities - Discretely Presented Component Units................ 59-60 Notes to Financial Statements ............................................................................................ 61-121 Required Supplementary Financial Information: Schedules of Funding Progress and Employer Contributions - Other Post-Employment Benefits ...................................................................................... 124-125 Supplementary Financial Information: Combining Financial Statements and Schedules Combining Balance Sheet - Nonmajor Governmental Funds .................................... 131-135 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Nonmajor Governmental Funds ........................................................... 137-141 Schedules of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Accommodations Special Revenue Fund ................................................................. 143 Child Support Enforcement Special Revenue Fund .................................................144 Economic Development Special Revenue Fund ......................................................145 Education Special Revenue Fund............................................................................. 146 Fire Districts Special Revenue Fund......................................................................... 147 Hazardous Materials Enforcement Special Revenue Fund ......................................148 Public Defender Special Revenue Fund ................................................................... 149 ii COUNTY OF CHARLESTON, SOUTH CAROLINA COMPREHENSIVE ANNUAL FINANCIAL REPORT For the Year Ended June 30, 2014 Sheriff Special Revenue Fund .................................................................................. 150 Solicitor Special Revenue Fund ................................................................................ 151 Stormwater Drainage Special Revenue Fund ..........................................................152 Victim Notification Special Revenue Fund ................................................................ 153 Victim Notification Special Revenue Fund: Schedule of Fines, Assessments, and Surcharges Collected ..........................................154 Combining Statements of Nonmajor Enterprise Funds: Combining Statement of Net Position - Nonmajor Enterprise Funds ........................ 157-158 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position - Nonmajor Enterprise Fund ....................................................................... 160 Combining Statement of Cash Flows - Nonmajor Enterprise Funds ......................... 161-162 Combining Statements of Internal Service Funds: Combining Statement of Net Position - Internal Service Funds ........................................164 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position - Internal Service Funds ............................................................................. 166 Combining Statement Cash Flows - Internal Service Funds ..................................... 167-168 Combining Statement of Changes in Assets and Liabilities - Agency Funds ......... 170-172 Capital Assets Used in the Operation of Governmental Funds: Schedule by Function ......................................................................................................... 174 Schedule of Changes by Function ...................................................................................... 175 STATISTICAL TABLES-UNAUDITED TABLE Net Position by Component .......................................................................................................... 178 Changes in Net Position ....................................................................................................... 179-181 Fund Balances of Governmental Funds ....................................................................................... 182 Changes in Fund Balances of Governmental Funds............................................................ 183-184 Assessed Value and Estimated Actual Value of Taxable Property ..............................................185 Property Tax Rates - Direct and Overlapping Governments .......................................................186 Computation of Direct and Overlapping Governmental Activities Debt........................................187 Principal Property Taxpayers ....................................................................................................... 188 Property Tax Levies and Collections ............................................................................................ 189 Ratio of Outstanding Debt by Type .............................................................................................. 190 Ratio of General Obligation Bonded Debt to Assessed Value and General Obligation Bonded Debt Per Capita ........................................................................................................... 191 Ratio of Total Tax Supported Debt to Assessed Value and Total Supported Debt Per Capita.................................................................................................................................. 192 Legal Debt Margin Information ..................................................................................................... 193 Pledged Revenue Bond Coverage ............................................................................................... 194 Demographic and Economic Statistics ......................................................................................... 195 Principal Employers ...................................................................................................................... 196 Full-Time Equivalent County Government Employees by Function ..................................... 197-199 Operating Indicators by Function/Program ................................................................................... 200 Capital Asset Statistics by Function ............................................................................................. 201 User Fee Rate History .................................................................................................................. 202 User Fee Billing History ................................................................................................................ 203 Disposal Fee History .................................................................................................................... 204 Financial Assurance Coverage - Municipal Solid Waste Landfill Facilities .................................206 iii THIS PAGE INTENTIONALLY LEFT BLANK INTRODUCTORY SECTION 1 843.958-4000 Fax: 843.958-4004 ktaylor@charlestoncounty.org Lonnie Hamilton III Public Services Building 4045 Bridge View Drive, Suite B238 North Charleston, SC 29405 W. Kurt Taylor County Administrator December 19, 2014 To the members of County Council and the citizens of Charleston County, South Carolina: State law requires that all general-purpose local governments publish at the close of each fiscal year a complete set of financial statements, presented in conformity with generally accepted accounting principles (GAAP), and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. Pursuant to this requirement, we hereby issue the Comprehensive Annual Financial Report (CAFR) for Charleston County, South Carolina, for the fiscal year ending June 30, 2014. This report consists of management's representations concerning the finances of the County. Consequently, management assumes full responsibility for the completeness and fairness of presentation of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the County has established a comprehensive internal control framework that is designed to ensure compliance with applicable laws, regulations and County policies, and safeguards the County's assets. It is designed to compile sufficient reliable information for the preparation of the County financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the County's comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and accurate in all material respects, and presents fairly the financial position and results of operations of the various funds and component units of the County. Charleston County's financial statements have been audited by Scott and Company LLC, a firm of licensed certified public accountants. The goal of the independent audit was to provide reasonable assurance that the financial statements of the County for the fiscal year ended June 30, 2014, are free of material misstatement. The independent audit involved performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depended on auditor's judgment, including the assessment of risk of material misstatement to the financial statements, whether due to fraud or error. An audit also includes evaluating the appropriateness of accounting policies used and significant estimates made by management, and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was sufficient and appropriate evidence for rendering an unmodified opinion that Charleston County's financial statements for the fiscal year ended June 30, 2014, are fairly presented in conformity with GAAP. The independent auditor's report is presented as the first component of the financial section of this report. The independent audit of the financial statements of Charleston County was part of a broader, federally mandated "Single Audit" that is designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on the audited government's internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards. These reports are available in Charleston County's separately issued Supplemental Federal Financial Assistance Reports. GAAP requires that management provide a narrative introduction, overview and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This Letter of Transmittal is designed to complement, and should be read in conjunction with MD&A. Charleston County's MD&A can be found immediately following the report of the independent auditors. 2 PROFILE OF THE GOVERNMENT The County of Charleston was established by the state of South Carolina on April 9, 1948, under the provisions of Act 681 of 1942. The County operates under a Council-Administrator form of government under the S.C Home Rule Act of 1975. Policy-making and legislative authority is vested in a governing council consisting of nine Council members. The Council is elected to single member districts on a partisan basis. Charleston County Council is responsible for, among other duties, passing ordinances and policies, approving the budget, appointing committee members, and hiring the County's Clerk of Council, County Administrator, and appointing the Internal Auditor, and Attorney. The Administrator is responsible for implementing the policies and ordinances of the governing council, overseeing the day-to-day operations of government (except those services provided by countywide elected officials), and for appointing the heads of the various non-elected or appointed County departments. The County has approximately 2,400 employees. Charleston County provides or supports a broad range of services that include, but are not limited to: Public safety - countywide law enforcement (Sheriff's Office), detention facilities, emergency preparedness plans to include activation of the County's Emergency Operations Center in an event of a disaster, as well as fire protection in the Awendaw Consolidated Fire District, the East Cooper Fire District, the West St. Andrew's Fire District, and the Northern Charleston County Fire District Veterans' assistance Health-related assistance - Emergency Medical Services (EMS), alcohol and other drug abuse services, indigent health care, and social services Voter registration Rural street and drainage maintenance and urban maintenance upon request of the municipalities Waste disposal and recycling Planning and zoning administration Criminal, civil, probate, and family court administration in county Magistrates' court and in State courts with the support of the elected Clerk of Court Public defender assistance funding to the Public Defender office, run by an appointed official Property assessments, tax billing (Auditor's office), collection and disbursal to appropriate entities/municipalities (Treasurer's office) Mosquito control Blended component units, although legally separate entities, are, in substance, part of the primary government's operations and are included as part of the primary government. Accordingly, the Charleston Public Facilities Corporation has been shown in the government-wide statements in both the governmental and business-type activities, as appropriate. It is also shown in the fund financial statements, in the debt service and capital project governmental funds, and in the parking garages and other enterprise funds. The Charleston Development Corporation has been shown in the government-wide statements in the governmental activities, and in the fund financial statements in other governmental funds. Discretely presented component units are reported in a separate column in the Statement of Net Position and in the Statement of Activities in order to emphasize that they are legally separate from the primary government, and to differentiate their financial position and results of operations from those of the primary government. 3 The following entities are being reported as discretely presented component units: Charleston County Library (CCL) Charleston County Park and Recreation Commission (CCPRC) Cooper River Park and Playground Commission (CRPPC) James Island Public Service District (JIPSD) North Charleston District (NCD) St. Andrew's Parish Parks and Playground Commission (SAPPPC) St. John's Fire District (SJFD) St. Paul's Fire District (SPFD) Charleston County Volunteer Rescue Squad (CCVRS) Additional information on these nine legally separate entities can be found in Note I.B. in the Notes to Financial Statements starting on page 64. The annual budget serves as the foundation for Charleston County's financial planning and control. All agencies of the County are required to submit requests for appropriation to the County's Budget Office by February 1 each year. The County Administrator presents the proposed budget to County Council for review during May. Council is required to hold public hearings on the proposed budget, and to adopt a final budget each year no later than June 30, which is the close of Charleston County's fiscal year. The appropriated budget is prepared by fund, function (e.g., public safety), and department (e.g., Sheriff's Office). The legal level of budgetary control is determined by County Council at the individual fund level. Expenditures by department, sub-organizational level, and major category (personnel, non-personnel, and capital outlay) are further defined in the budget document. The County Administrator has the authority to make transfers between major expenditure categories within departments and between departments within the same fund. The Administrator has further delegated to five Deputy County Administrators the authority to transfer between departments under their authority. County Council may effect changes in fund totals through amendment to the budget ordinance or the County Administrator has the authority to change fund totals, with the exception of the general fund, if available sources (revenues, transfer in, and fund balance) differ from the budget. Budget-to-actual comparisons are provided in this report for each individual governmental fund for which an appropriated annual budget has been adopted. For the general fund, this comparison is presented on pages 46-48 as part of the Basic Financial Statements for the governmental funds. For governmental funds, other than the general fund, with appropriated annual budgets, this comparison is presented in the nonmajor governmental fund subsection of this report, which begins on page 143. LOCAL ECONOMIC CONDITIONS AND OUTLOOK Charleston's Economy at a Glance. Charleston County's economic base is diversified and growing. The CharlestonNorth Charleston Metropolitan Statistical Area ranked 11th in the Milken Institute's \"Best-Performing Cities 2013\