HANCOCK COUNTY
Notes to Financial Statements
For the Year Ended September 30, 1995
19
Hancock
Port and Hancock
Harbor Medical
Commission Center Total
Equity - Beginning 0 0 0
Accounting change 1,331,314 3,713,008 5,044,322
Equity - Beginning restated 1,331,314 3,713,008 5,044,322
Equity - Ending $ 1,324,946 6,185,983 7,510,929
C. Basis of Presentation.
The accompanying general purpose financial statements have been prepared in conformity with
generally accepted accounting principles as prescribed by the Governmental Accounting Standards
Board.
D. Account Classifications.
The account classifications used in the financial statements conform to the broad classifications
recommended in Governmental Accounting, Auditing and Financial Reporting as issued in 1988 by the
Government Finance Officers Association and the Mississippi County Financial Accounting Manual as
revised in 1993 by the Office of the State Auditor.
E. Fund Accounting.
The financial activities of the county are recorded in individual funds and account groups used to report
financial position and results of operations. Fund accounting is used to demonstrate legal compliance
and to aid financial management by segregating transactions relating to certain government functions or
activities. A fund is a separate accounting entity with a self-balancing set of accounts, segregated for
the purpose of carrying on specific activities or attaining certain objectives in accordance with specific
regulations, restrictions or limitations. An account group is a financial reporting device designated to
provide accountability for certain assets and liabilities that are not recorded in funds because they do not
directly affect net expendable available financial resources. The following fund categories, which are
further subdivided into separate "fund types", are utilized by the county:

GOVERNMENTAL FUND TYPES
General Fund - This fund is used to account for all activities of the general government for which a
separate fund has not been established.
Special Revenue Funds - These funds are used to account for the proceeds of specific revenue sources
(other than for major capital projects) that are legally restricted to expenditures for specified purposes.
Special Revenue Funds account for, among others, certain federal grant programs, taxes levied with
statutorily defined distributions and other resources restricted as to purpose.
Debt Service Funds - These funds are used to account for the accumulation of resources for, and the
payment of, general long-term debt principal, interest and related costs.
HANCOCK COUNTY
Notes to Financial Statements
For the Year Ended September 30, 1995
20
FIDUCIARY FUND TYPES
Agency Funds - These funds account for various taxes, deposits and other monies collected or held by
the county, acting in the capacity of an agent, for distribution to other governmental units or designated
beneficiaries.
ACCOUNT GROUPS
General Fixed Assets - The General Fixed Assets Account Group is used to account for the fixed assets
of the county.
General Long-term Debt - The General Long-term Debt Account Group is used to account for all
long-term debt of the county.
F. Basis of Accounting/Measurement Focus.
Governmental Fund Types and Agency Funds - All Governmental Funds are accounted for using a
current financial resources measurement focus. With this measurement focus, only current assets and
current liabilities are generally included on the balance sheet. Operating statements of these funds
present increases (i.e., revenues and other financing sources) and decreases (i.e., expenditures and other
financing uses) in net current assets.
The modified accrual basis of accounting is used by all Governmental Fund Types and Agency Funds.
Under this method, revenues are recognized in the accounting period in which they become both

available and measurable to finance operations during the year or to liquidate liabilities existing at the
end of the year. Available means collected in the current year or soon enough after year end to
liquidate liabilities existing at the end of the year. Significant revenue sources which are susceptible to
accrual include intergovernmental revenues, consisting of grants, entitlements and shared revenues and
charges for services. Expenditures are recognized in the accounting period in which the fund liability is
incurred. Modifications to the accrual basis of accounting include:
• Licenses, fees, fines and forfeits and other miscellaneous revenues are recognized when
received since they normally are only measurable at that time.
• Property taxes are recognized as revenue when received because the remaining delinquent
property taxes not collected before the close of the fiscal year are considered immaterial. See
Note 1N for further explanation.
• Principal and interest on general long-term debt are recognized when due.
• Obligations for accumulated unpaid employee benefits are recognized when paid.
HANCOCK COUNTY
Notes to Financial Statements
For the Year Ended September 30, 1995
21
G. Budgetary Process and Accounting.
Process:
Statutory requirements dictate how and when the county's budget is to be prepared. Generally, in the
month of August, prior to the ensuing fiscal year beginning each October 1, the Board of Supervisors of
the county, using historical and anticipated fiscal data and proposed budgets submitted by the Sheriff
and the Tax Assessor-Collector for his or her respective department, prepares an original budget for
each of the Governmental Funds for said fiscal year. The completed budget for the fiscal year includes
for each fund every source of revenue, each general item of expenditure and the unencumbered cash
and investment balances. When during the fiscal year it appears to the Board of Supervisors that
budgetary estimates will not be met, it may make revisions to the budget.
Accounting:
The county's budget is prepared principally on the cash basis of accounting. All appropriations lapse at
year end and there are no encumbrances to budget because state law does not require that funds be

available when goods or services are ordered, only when payment is made.
H. Cash and Investments.
State law authorizes the county to invest in interest bearing time certificates of deposit for periods of
fourteen days to one year with depositories and in obligations of the U.S. Treasury, State of Mississippi,
or any county, municipality or school district of this state. Further, the county may invest in certain
repurchase agreements that have a term of less than fourteen days.
Cash includes amounts in demand deposits, all certificates of deposit and cash equivalents, which are
short-term highly liquid investments that are readily convertible to cash (generally three months or
less). Investments in governmental securities are stated at cost or amortized cost.
I. Assets Whose Use Is Limited.
The board of trustees of the Hancock Medical Center has set aside certain assets whose use is limited to
future capital improvements. The board retains control of these assets and may, at its discretion,
subsequently use them for other purposes.
J. Receivables and Payables.
Receivables are reported net of allowances for uncollectible accounts, where applicable.
Interfund receivables and payables arise principally from loans and advances between county funds and
transactions that have not resulted in the actual transfer of cash at the end of the fiscal year. Interfund
loans due in the subsequent fiscal year are reported as "Due To" and "Due From Other Funds" and
noncurrent portions of interfund receivables and payables are reported as "Advances To" and "Advances
From Other Funds" on the combined balance sheet.
Loans between the primary government and discretely presented component units due in the subsequent
fiscal year are reported as "Due from Primary Government" and "Due to Component Units."
HANCOCK COUNTY
Notes to Financial Statements
For the Year Ended September 30, 1995
22
K. Inventories.
Inventory at the Hancock Medical Center is valued at lower of cost or market, which approximates
market, using the first-in/first-out method.
L. Fixed Assets.

General Fixed Assets
Fixed assets are not capitalized in the funds used to acquire or construct them. Instead, capital
acquisition and construction are reflected as expenditures in Governmental Funds and the related assets
are reported in the General Fixed Assets Account Group. All purchased fixed assets are stated at cost
where historical records are available and at an estimated historical cost where no historical records
exist. Donated assets are valued at market value at the time of donation. The costs of normal
maintenance and repairs that do not add to the value of assets or materially extend their respective lives
are not capitalized; however, improvements are capitalized. Interest expenditures are not capitalized on
general fixed assets. Public domain (infrastructure) fixed assets consisting of certain improvements
other than buildings, such as roads, bridges, sidewalks, drainage systems, lighting systems and similar
assets that are immovable and of value only to the county, are not capitalized. Depreciation is not
provided on general fixed assets.
Proprietary Fixed Assets of Component Units
Fixed assets acquired or constructed for the Hancock Medical Center and the Hancock County Port and
Harbor Commission are capitalized at cost in the respective funds in which they are utilized. Donated
fixed assets are recorded at their fair market value at time of donation. Proprietary fixed assets,
excluding land, are depreciated on the straight-line method over the estimated useful lives of the
respective assets.
M. Fund Equity.
Proprietary Fund Equity.
Proprietary fund equity consists of contributed capital and retained earnings. Contributed capital is
recorded when capital grants or contributions from customers are received or when fixed assets are
transferred from the General Fixed Assets Accounts Group. Unreserved retained earnings represent the
net assets available for future operations or distribution.
Governmental Fund Equity.
The unreserved fund balances represent the amount available for budgeting future operations. The
reserved fund balances represent the amount that has been legally restricted to a specific purpose or that
is not available for appropriation or expenditure. The county had the following reserved fund balances
at year end:
Reserved for Debt Service - An account used to segregate a portion of fund balance for debt

service resources legally restricted to the payment of general long-term debt principal and
interest amounts maturing in future years.
HANCOCK COUNTY
Notes to Financial Statements
For the Year Ended September 30, 1995
23
Reserved for Advances - An account used to indicate the noncurrent portions of interfund
receivables that does not represent available spendable resources.
Reserved for Capital Improvements - An account used to segregate a portion of fund balance
that is not considered available spendable resources and that is legally restricted for future
capital improvements purposes.
Reserved for Cash on Deposit in Risk Pool - An account used to segregate a portion of fund
balance for cash deposited with a fiscal agent legally restricted for employee health claims.
N. Property Tax Revenues.
Numerous statutes exist under which the Board of Supervisors may levy property taxes. The selection
of authorities is made based on the objectives and responsibilities of the county. Restrictions associated
with property tax levies vary with the statutory authority. The amount of increase in certain property
taxes is limited by state law. Generally, this restriction provides that these tax levies shall produce no
more than 110% of the amount which resulted from the assessments of the previous year.
The Board of Supervisors, each year at a meeting in September, levies property taxes for the ensuing
fiscal year which begins on October 1. Real property taxes become a lien on January 1 of the current
year and personal property taxes become a lien on March 1 of the current year. Taxes on both real and
personal property, however, are due on or before February 1 of the next succeeding year. Taxes on
motor vehicles and mobile homes become a lien and are due in the month that coincides with the month
of original purchase.
Generally accepted accounting principles require property taxes to be recognized at the levy date if
measurable and available. All property taxes are recognized as revenue when received. Real property
taxes are recognized as revenue when received because most delinquent real property taxes are collected
by selling real property for taxes, together with all fees, penalties and damages accruing until date of
sale, before the close of the fiscal year. The remaining amount of real property not sold for taxes at the

tax sale is considered immaterial; therefore, no end of year delinquent taxes receivable is recorded.
The amount of delinquent personal property taxes unpaid at year end is also considered immaterial.
Motor vehicle and mobile home taxes do not meet the measurability and collectibility criteria for
property tax recognition because the lien and due date cannot be established until the date of original
purchase occurs.
O. Intergovernmental Revenues in Governmental Funds.
Intergovernmental revenues, consisting of grants, entitlements and shared revenues, are usually
recorded in Governmental Funds when measurable and available. However, the "available" criterion
applies for certain federal grants and shared revenues when the expenditure is made because expenditure
is the prime factor for determining eligibility. Similarly, if cost sharing or matching requirements exist,
revenue recognition depends on compliance with these requirements.
P. Deferred Revenue.
Deferred revenues arise when resources are received by the government before it has a legal claim to
them, as when federal grant monies are received prior to the incurrence of qualifying expenditures. In
subsequent periods, when the revenue recognition criterion is met or when the government has a legal
HANCOCK COUNTY
Notes to Financial Statements
For the Year Ended September 30, 1995
24
claim to the resources, the liability for deferred revenue is removed from the combined balance sheet
and revenue is recognized.
Q. Interfund Transfers.
Interfund transfers are segregated from revenues and expenditures in the county's financial statements.
Reimbursements of expenditures made between funds are not recorded as interfund transfers but are
recorded as expenditures in the reimbursing fund and as a reduction of expenditures in the reimbursed
fund. The county reported the following types of interfund transactions:
Residual Equity Transfers - Nonroutine or nonrecurring transfers between funds are reported as
additions to or deductions from fund equity.
Operating Transfers - Legally authorized and routine transfers between funds of the primary
government and between the primary government and its discretely presented component units

are reported as operating transfers.
R. Compensated Absences Liability.
The county as primary government and the Hancock County Port and Harbor Commission have each
adopted a policy of compensation for accumulated unpaid employee benefits; however, adequate
records are not maintained for determining the amount of the liability. Therefore, no liability is
recorded in the accompanying financial statements as required by generally accepted accounting
principles. We believe the effects of the unrecorded liability on the financial statements are immaterial.
The Hancock Medical Center has adopted a policy of compensation for accumulated unpaid employee
personal leave and accrued major medical leave. At year end, the Hancock Medical Center has a
liability of $464,832 which consists of $194,769 for unused vacation days and $270,063 for unused sick
days.
S. Total Columns on General Purpose Financial Statements.
The total columns on the general purpose financial statements are captioned "Memorandum Only" to
indicate that they are presented only to facilitate financial analysis. Data in these columns do not
present financial position and results of operations in conformity with generally accepted accounting
principles. Neither is such data comparable to a consolidation. Interfund eliminations have not been
made in the aggregation of this data.
(2) Stewardship, Compliance and Accountability.
A. The canteen fund, reported in the Special Revenue Fund Type, had a deficit fund balance in the amount
of $16,859 at September 30, 1995.
B. The General Fund had an excess of actual expenditures over budget at year end in the amount of
$18,797.
HANCOCK COUNTY
Notes to Financial Statements
For the Year Ended September 30, 1995
25
(3) Budgetary Basis vs. GAAP.
The accompanying Combined Statement of Revenues, Expenditures and Changes in Fund Balances - Budget
(Non-GAAP Budgetary Basis) and Actual - All Governmental Fund Types presents comparisons of the legally
adopted budget with actual data on a budgetary basis. Since the budgetary and GAAP presentations of actual

data differ, a reconciliation of the results of operations for the year follows:
Excess of Revenues and Other Sources Over (Under) Expenditures and Other Uses
Governmental Fund Types
Special Debt
General Revenue Service
Budget (Cash Basis) $ (434,103) 196,372 279,185
Increase (Decrease)
Net adjustment for revenue accruals 136,255 (3,673) 918
Net adjustment for expenditure accruals (67,071) 188,158
To record excess of revenues
& other sources over (under)
expenditures & other uses
for nonbudgeted funds 501,056
GAAP Basis $ (364,919) 881,913 280,103
(4) Prior Period Adjustments.
Governmental Funds.
The effects of error corrections on the prior period financial statements are summarized in the tables below:
Fund
General Fund Type Balance
As previously reported $ 4,773,337
To write-off loans receivable from the Hancock County
Wastewater District 1 erroneously recorded in prior years (7,500)
As adjusted $ 4,765,837
Fund
Special Revenue Fund Type Balance
As previously reported $ 3,429,730
To record a "Due to Other Governments" liability for taxes
collected in prior years within the Cities of Bay St. Louis
and Waveland, but not remitted. (13,221)
As adjusted $ 3,416,509

HANCOCK COUNTY
Notes to Financial Statements
For the Year Ended September 30, 1995
26
(5) Accounting Change.
Effective October 1, 1994, the county changed the fund type classification for certain funds because of a change
in the nature or purpose of those funds. The cumulative effect on beginning of year fund balance/retained
earnings is as follows:
Beginning
Fund Balance
Restatement
Special Revenue Fund Type
Jail construction $ 1,325
Library construction (83,499)
Canteen 6,881
McLeod Park 15,309
Nine separate fire districts (900)
Total $ (60,884)
Capital Projects Fund Type
Jail construction $ (1,321)
Library construction 83,499
Total $ 82,174
Beginning
Retained Earnings
Restatement
Enterprise Fund Type
Canteen $ (6,881)
McLeod Park (15,309)
Total $ (22,190)
Effective October 1, 1994, the county adopted the provisions of a newly issued accounting principle which

required the inclusion of the financial statements of component units that have significant operational of financial
relationships with the county. The cumulative effect of the change in accounting principle on beginning of year
fund balances reflected on the statement of revenues, expenditures and changes in fund balances (Exhibit B) was
as follows:
Beginning
Fund Balance
Inclusion of Discretely Presented Component Units Restatement
Hancock County Human Resource Agency $ 2,182
Hancock County Port & Harbor Commission 402,558
Nine separate fire districts 900
Total $ 405,640
HANCOCK COUNTY
Notes to Financial Statements
For the Year Ended September 30, 1995
27
The cumulative effect of the change in accounting principle on the beginning of the year retained earnings
reflected on the statement of revenues, expenses and changes in retained earnings (Exhibit D) was as follows:
Beginning
Retained
Earnings
Inclusion of Discretely Presented Component Units Restatement
Hancock Medical Center $ 3,713,008
Hancock County Port and Harbor Commission 1,331,314
Total $ 5,044,322
(6) Intergovernmental Revenues.
Intergovernmental revenues of the primary government consisted of the following at September 30, 1995:
Governmental Fund Types
Special
General Revenue
Federal Sources:

Victim/witness $ 56,490
Community development block grants 200,727
Bridge inspection grant 320
Total Federal Sources $ 56,490 201,047
State Sources:
State Grants:
Reimbursement for food stamps, welfare $ 52,880
Reimbursement for homestead exemption 432,461
Reimbursement for state aid roads 91,535
Library grant 408,467
Reimbursement for emergency
management funds 34,060
Tidelands 500,000
Total State Grants $ 519,401 1,000,002
State Shared Revenues:
Motor vehicle fuel tax $ 1,323,775
Motor vehicle licenses 42,341 55,799
Severance taxes 33,862
Insurance premium tax distribution 90,917
State gaming 1,544,145 44,122
ABC permits 18,900
HANCOCK COUNTY
Notes to Financial Statements
For the Year Ended September 30, 1995
28
Governmental Fund Types
Special
General Revenue
Law enforcement training 3,419
Land patents 24,645

Motor vehicle rental 13,796
Railcar tax 14,920
Aircraft registration 900
Harvest & overweight fees 63,226
Timber sale 64,866
Other state shared revenues 2,046 1,176
Total State Shared Revenues $ 1,789,891 1,552,964
Local Sources:
Payments in lieu of taxes: $
Cities of Bay St. Louis and Waveland 236,705
Total Local Sources $ 0 236,705
(7) Deposits and Investments.
Deposits:
Cash and other deposits of the primary government with financial institutions as of September 30, 1995, were
entirely covered by federal depository insurance or by collateral held by the county or its agent in the county's
name.
According to the component unit audit reports, all cash and other deposits at September 30, 1995 of the
discretely presented component units were covered by federal depository insurance or by collateral pledged by
the financial institution in the unit's name.
Investments:
According to the component unit audit report of the Hancock Medical Center, the hospital held a substantial
amount of investments in Treasury Bills at year end. However, the carrying amount and market value of the
Treasury Bills are not disclosed and no disclosure is made concerning the level of credit risk assumed by the
hospital.
(8) Deferred Compensation Plan.
Primary Government
The county offers its employees a deferred compensation plan created in accordance with Internal Revenue Code
Section 457. The plan, available to all employees of the county, permits participants to defer a portion of their
salary until future years, thereby deferring taxation on the portion deferred. The deferred compensation is not
available to employees until they are separated from service or face an unforeseeable financial emergency.

HANCOCK COUNTY
Notes to Financial Statements
For the Year Ended September 30, 1995
29
All amounts of compensation deferred under the plan, all property rights purchased with those amounts and all
income attributable to those amounts, property or rights are (until paid or made available to the employee or his
beneficiary) solely the property of the employer (without being restricted to the provisions of benefits under the
plan), subject only to the claims of the employer's general creditors. Participants' rights under the plan are
equal to those of the employer's general creditors in an amount equal to the fair market value of the deferred
account for each participant.
At June 30, 1995, assets held for participants employed by the county and reported in an Agency Fund totaled
$367,490. The county believes that it is unlikely that it will use the assets to satisfy the claims of general
creditors in the future. The county has no liability for losses under the plan, but the Board of Trustees of the
Public Employees' Retirement System, as plan administrator, does have the duty of due care that would be
required of an ordinary prudent investor.
Hancock Medical Center
The Hancock Medical Center offers its employees the same deferred compensation plan offered by the primary
government to its employees. As of September 30, 1995, assets held for participants employed by the Hancock
Medical Center totaled $249,055.
(9) Interfund Receivables and Payables.
Individual fund interfund receivables and payables consisted of the following at September 30, 1995:
Interfund Interfund
Receivables Payables
Due from/to Other Funds
General Fund $ 41,568 152,871
Special Revenue Funds:
Sheriff tax support 8,938
Library 5,959
Reappraisal 5,959
Road 44,425

Road - Bay St. Louis 1,493
Road - Waveland 1,054
Bridge 7,000
Sanitary landfill 11,321
Fire protection 1/4 mill 11
Total 86,160 0
Debt Service Funds:
Hancock Medical Center 4,321
Jail 6,553
County fair 655
Refunding bonds 4,439
Total 15,968 0