Town of Oakboro Oakboro, North Carolina For the year ended June 30, 2023  Independent Auditor's Reports Basic Financial Statements Information Accompanying the Basic Financial Statements  And    Town of Oakboro Table of Contents June 30,2023  Independent Auditor's Report Management's Discussion and Analysis Basic Financial Statements:  1-2 3-11  Government-wide Financial Statements:  Exhibit1 Exhibit2 2  Statement of Net Position Statement of Activities  12 13  Fund Financial Statements Exhibit3 3 Exhibit4 Exhibit5 5 Exhibite 6 Exhibit7 Exhibit8 Exhibit 9  Balance Sheet-G Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances- - Governmental Funds Reconciliation of the Statement of Revenues, Expenditures And Changes in Fund Balances - Budget and Actual Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Statement of Fund Net Position - Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position - Proprietary Fund Statement of Cash Flows - Proprietary Funds  14 15 16 17 18 19 20 21-43  Notes to the Financial Statements Required Supplemental Financial Data:  Law Enforcement Officer's Special Separation Allowance - Changes in Pension Liability and Pension Liability as al Percentage of Covered Payroll Contributions and Proportionate Share of Net Pension Liability (Asset)  44 45  Local Government Employees' Retirement System    Combining and Individual Funds Statements and Schedules:  Statement of Revenues, Expenditures, and Changes in Fund Balances- Statement of Revenues, Expenditures, and Changes in Fund Balances- Budget and Actual - Special Revenue - ARPAI Funds Schedule of Revenues and Expenditures Budget and Actual - (Non-GAAP) Schedule of Revenues and Expenditures - Budget and Actual -( (Non-GAAP) Schedule of Revenues and Expenditures Budget and Actual- -( (Non-GAAP)  Budget and Actual - General Fund  46-49 50 51-52 53-54 55  Water Fund Sewer Fund  Water and Sewer Capital Project Fund  Other Schedules:  Schedule of Ad' Valorem Taxes Receivable Analysis of Current Tax Levy  56 57  Compliance Section:  Report on Internal Control over Financial Reporting and on Compliance and Other Matters based on an Audit of Financial Statements Performed in Accordance  with Government Auditing Standards  58-59    EDDIE CARRICK, CPA, PC Certified Public Accountant Independent Auditor's Report  Tot thel Honorablel Mayor and Board of Aldermen Town of Oakboro, North Carolina Report on the Audit of Financial Statements Opinions  Ihave audited the financial statements oft the governmental activities, business-type activities, each major fund, andt the aggregate remaining fund information of Town of Oakboro, North Carolina as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise Town of Oakboro's basicf financial statements asl listedi int thet table of contents. Inm my opinion, the accompanying financial statements referred to above present fairly, in all material respects, the respective financial position oft the governmental activities, business-type activities, each major fund, andt the aggregate remaining fundi information of Town of Oakboro, North Carolina as of. June 30, 2023, andt the respective changes inf financial position and the respective budgetary comparison for the General Fund, for the) yeart thene ended in accordance with accounting principles generally acceptedi int the United States ofA America. Iconducted my audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. My responsibilities under those standards aref further described in the Auditor's Responsibilities fort the Audit oft the Financial Statements section of my report. l'am required to be independent of the Town of Oakboro, andt to meet my other ethical responsibilities, in accordance with the relevant ethical requirements relating to my audit. believe that the audit evidence Ihave obtained is sufficient and appropriate to provide a Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted int the United States of America; and for the design, implementation, and maintenance ofi internal control relevant tot the preparation andf fairp presentation off financial statements that aret free from material misstatement, whether duet tof fraudo or error. Inp preparing thei financial statements, management is required to evaluate whether there are conditions ore events, consideredi in the aggregate, that raises substantial doubt aboutt the Town of Oakboro's ability to continue as a going concern for the twelve months beyond the financial statement date, including any currently knowni information that mayr raise substantial doubts shortlyt thereafter. My objectives are to obtain reasonable assurance about whether the financial statements as a whole are free of material misstatement, whether due toi fraud or error, and toi issue an auditor's report thati includes my opinions. Reasonable assurance is al high level of assurance buti is not absolute assurance andt therefore is not a guarantee that an audit conducted in accordance with GAAS and Governmental Auditing Ther risk of not detecting a material misstatement resulting fromf fraudi is higher thanf for oner resulting from error, ast fraudr mayi involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually ori ini the aggregate, they wouldi influence thej judgment madel by a reasonable user based ont the financial  Basis for Opinions  basist for my audit opinions.  Responsibility of Management's for the Audito oft the Financial Statements  Auditor's Responsibility for the Audito of the Financial Statements Standards will always detect materials statement when ite exists.  statements.  Inp performing an auditi in accordance with GAAS, and Governmental, Auditing Standards,  Exercised professional judgement andr maintained professional skepticism throughout the audit.  identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsible to those risks. Such procedures include examining, on at test basis, evidence regarding the obtain an understanding of internal control relevant to the auditi in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Town of Oakboro's internal control. evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by conclude whether, in my judgment, there are conditions ore events, considered int the aggregate, thatr raise substantial doubt about lam required to communicate with those charged with governance regarding among otherr matters, the planned scope andt timing of the audit,  amounts and disclosures int thef financial statements. Accordingly, nos such opinion is expressed.  management, as well as evaluate the overall presentation oft thef financial statements. the Town of Oakboro's ability too continue as agoing concernf for a reasonable periodo of time. significant auditf findings, and certain internal control-relatedi matters that! identified during the audit.  Member of the American. Institute of Certified Public Accountants  151 Young Drive, Lexington, NC: 27292 336-249-2545, Fax 336-249-4745  1    Required Supplementary Information  Accounting principles generally accepted in the United States of America require that Managements Discussion and Analysis on pages 3 through 11, thel Law Enforcement Officers' Special Separation. Allowance Schedules ofF Funding Progress and Employer Contributions onp page 44, the Local Government Employees' Retirement System's Schedules oft the Proportionate Share of the Net Pension Asset (Liability) and Contributions, on page 45, respectively, be presented tos supplement the basic financial statements. Such information is the responsibility of management and, although not a part oft the basic financial statements, is required by the Governmental Accounting Standards Board who considers ittob be ane essential part oft thet financial reporting for placing thet basic financial statements in an appropriate operational, economic, orh historical context. Ihave applied certainl limited procedures tot the required supplementary informationi in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to my inquiries, the basic financial statements, and Idor not express an opinion or provide any assurance on the information because the limited procedures do not provide me with sufficient My audit was conducted1 for the purpose off forming opinions ont thef financial statements that collectively comprise the Town of Oakboro's basic financial statements. The individual fund financial statements, budgetary schedules, and other schedules are presented for purposes of additional analysis and are not ar required part of the basic financial statements. Such informationi ist ther responsibility of management andy was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. This information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling suchi information directly to the underlying accounting and other records usedt to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally acceptedi int thel United States ofA America. Inr my opinion, thei individual fundf financial statements, budgetary schedules, and Ina accordance with Government, Auditing Standards, Thave alsoi issued my report dated! November 6, 2023 on my consideration oft the Town of Oakboro's internal control over financial reporting and on my tests ofi its compliance with certain provisions ofl laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of my testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of Town of Oakboro's internal control over financial reporting or on compliance. Thatr reporti is ani integral part ofa an audit performed in accordance with Government. Auditing  other knowledgel lobtained duringr my audit oft thel basic financial statements. evidence toe express an opinion or provide any assurance.  Supplementary Information  other schedules aref fairlys stated,i ina allr material respects, inr relation tot thet basici financial statements as awhole  Other Reporting Required by Government, Auditing Standards  Standards inc considering Town of Oakboro's internal control over financial reporting and compliance.  Eddie Carrick CPA,PC DCL,C Lexington, North Carolina November 6, 2023  2    Joengf Gakbore  PO Box 610 109A N. Main Street Oakboro, NC 28129  704-485-3351 (phone)  704-485-2439 (fax)  Management's Discussion and Analysis  Asr management of the Town of Oakboro, we offer the readers oft the Town of Oakboro's financial statements this narrative overview and analysis oft the financial activities of the Town of Oakboro for the fiscal year ended June 30, 2023. We encourage readers to read the information presented here in conjunction with additional information that we have furnishedi in the Town's financial statements, which follow this narrative.  Financial highlights  The assets and deferred outflows of resources of the Town of Oakboro exceeded its liabilities and deferred inflows ofr resources at the close oft thei fiscal year by$ $16,731,325 (net position). The government's total net position increased by $934,854 primarily due to increased grant As of the close oft the current fiscal year, the Town of Oakboro's governmental funds reported combined ending fund balances of $1,443,282, with a net increase of $252,767 in fund balance. Approximately Att the end oft the current fiscal year, unassigned fund balance for the general fund was $1,188,544, or The Town of Oakboro's total debt increased by $77,841 due to principal payments of $418,233 applied to the bonds and installment purchase, a net increase of $13,252 in compensated absences, a net increase int the pension obligation of $493,3721 for LGERS, and ar net decrease of $10,550 forl LEO.  contributions int the proprietary fund.  18% of this total amount, or $254,738, is restricted. 54% oft total general fund expenditures fort thet fiscal year.  Overview oft the Financial Statements  This discussion and analysis is intended to serve as introduction to the Town of Oakboro's basic financial statements. The Town's basic financial statements consist of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements (see Figure 1). The basic financial statements present two different views oft the Town through the use of government-wide statements and fund financial statements. In addition to the basic financial statements, this report contains other supplemental information that will enhance the reader's understanding of the financial condition of the Town of Oakboro.  3    Management Discussion and Analysis Town of Oakboro Figure 1  Required Components of Annual Financial Report  Management's Discussion and Analysis  Basic Financial Statements  Government-wide Financial Statements  Fund Financial Statements  Notes to the Financial Statements  Summary  Detail  Basic Financial Statements  Thei first two statements (Exhibits 1 and 2)i in the basic financial statements are the Government-wide Financial Statements. They provide both short and long-term information about the Town's financial status. The next statements (Exhibit 3 through 9) are Fund Financial Statements. These statements focus on the activities of the individual parts of the Town's government. These statements provide more detail than the government-wide statements. There are three parts to the Fund Financial Statements: 1) the governmental fund statements 2) thel budgetary comparison statements and 3) thep proprietary fund statements. The next section of the basic financial statements is the notes. The notes to the financial statements explain in detail some of the data contained in those statements. After the notes, supplemental information is provided to show details about the Town's individual funds. Budgetary information required by the General Statutes also  can bei found int this part of the statements.  4    Management Discussion and Analysis Town of Oakboro Government-Wide Financial Statements  The govemment-wide financial statements are designed to provide the reader with a broad overview of the Town's finances, similar in format to a financial statement of a private-sector business. The government-wide statements provide short and long-term information about the Town's financial status as a whole. The two government-wide statements report the Town's net position and how itl has changed. Net position is the difference between the Town's total assets and deferred outflows of resources and total liabilities and deferred inflows ofr resources. Measuring net position is one way to gauge the Town's financial condition. The government-wide statements are divided into two categories: 1) governmental activities and 2) business- type activities. The governmental activities include most of the Town's basic services such as safety and security, transportation, cultural and recreation, and administration. Property tax and state shared revenues finance these activities. The business-type activities are those that the Town charges customers to provide.  These include water and sewer services offered byt the Town.  The govemment-wide financial statements are on Exhibits 1 and 2 of this report.  Fund Financial Statements  The fund financial statements (see Figure 1) provide a more detailed look at the Town's most significant activities. A fund is a group of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Town of Oakboro, like all other governmental entities in North Carolina, uses fund accounting to ensure and reflect compliance (or non-compliance) with finance-related legal requirements, such as General Statutes or the Town's budget ordinance. All oft the funds of the Town of Governmental Funds - Governmental funds are used to account for those functions reported as governmental activities in the government-wide financial statements. Most of the Town's basic services are accounted for in governmental funds. These funds focus on how assets can readily be converted into cash flow in and out, and what monies are left at year-end that will be available for spending in the next year. Governmental funds are reported using an accounting method called modified accrual accounting which provides a short term spending focus. As a result, the govemmental fund financial statements give the reader a detailed short-term view that helps him determine ift there are more orl less financial resources available to finance the Town's programs. The relationship between government activities (reported in the Statement of Net position and the Statement of Activities) and governmental funds is describedi inar reconciliation thati is part of the fund financial statements.  Oakboro can be divided into two categories: govemmental funds and proprietary funds.  5    Management Discussion and Analysis Town of Oakboro  The Town of Oakboro adopts an annual budget for the General Fund, as required by the General Statutes. The budget is al legally adopted document thati incorporates input from the citizens oft the Town, the management of the Town, and the decisions of the board about which services to provide and how to pay for them. It also authorizes the Town to obtain funds from identified sources to finance the current period activities. The budgetary statement provided for the General Fund demonstrates how well the Town complied with the budget ordinance and whether or not the Town succeeded in providing the services as planned when the budget was adopted. The budgetary comparison statement uses the budgetary basis of accounting and is presented in the same format, language and classifications as thel legal budget document. The statement shows four columns: 1) the original budget as adopted by the board 2) the final budget as amended by the board 3) the actual resources, charges to appropriations, and ending balances in the General Fund, and 4) the differences or variance between the final budget and actual resources and charges. To account for the difference between the budgetary basis of accounting and the modified accrual basis, a reconciliation showing the differences in the Proprietary funds - The Town of Oakboro has one type of proprietary fund. Enterprise Funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The Town uses an enterprise fund to account for its water and sewer activity. This fund is the same as the functions shown int the business-type activities int the Statement of Net position and Statement of Activities. Notes to the Financial Statements - The notes provide additional information that is essential to the full understanding of data provided int the government-wide andi fund financial statements. The notes to the financial Other Information - In addition to the basic financial statements and accompanying notes, this report includes certain supplemental information detailing the information provided in the basic financial statements and is presented to allow the reader to gain an in-depth understanding oft thet financial information presented. Interdependence with Other Entities- The Town depends on financial resources flowing from, or associated with, both the Federal Government and the State of North Carolina. Because of this dependency, the Town is subject to changes in specific flows ofi intergovemmenta revenues based on modifications to Federal and State laws and Federal and State appropriations. Iti is also subject to changes ini investment eamings and asset values associated with U.S. Treasury Securities because of actions by foreign govemnment and other holders of publicly  reported activities is shown at the end of the budgetary statement.  statements begin on page 21 oft this report.  held U.S. Treasury Securities.  6    Management Discussion and Analysis Town of Oakboro  Town of Oakboro's Net Position (Figure 2)  Governmental. Activities 2023  Business-Type. Activities 2023  Total 2023 2022 2,801,981 $ 4,429,008 17,863,269 496,331  2022  2022  Current ando other assets $ 1,582,664 $ 1,294,597 $ 1,219,317 $ 3,134,411  Noncurrent othera assets Deferred outflows Totala assets and deferred outflows Long-term liabilities Otherl Liabilities Current! liabilities Total liabilities Deferred inflows Netp position: Neti investmenti in capital assets Restricted Unrestricted Total net position  3,451,065 3,533,986 378,482 285,213 5,412,211 5,113,796 651,008 292,361 33,000 68,056 752,064 360,095 68,302 249,344 3,451,065 3,533,986 254,738 279,549 886,042 690,822 $4,591,845 $ 4,504,357  14,412,204 12,018,858 117,849  66,178  351,391  15,749,370 15,219,447 21,161,581 20,333,243  3,471,048 3,751,854 32,791 99,667 3,603,506 3,862,353 6,385  4,122,056 4,044,215 65,791 167,723 4,355,570 4,222,448 74,687  33,000 34,734  27,357 83,141 64,980  60,357 117,875 174,638  11,125,302 8,157,472 1,014,176 3,134,641  14,576,367 11,691,458 254,738 1,900,218 3,825,463  279,549  12,139,479 $ 11,292,114 $1 16,731,325 $ 15,796,471  Asr noted earlier, net position may serve over time as one useful indicator of a government's financial condition. The assets and deferred outflows of the Town exceeded liabilities and deferred inflows by $16,731,325 as of June 30, 2023. The Town's net position increased by $934,854 for the fiscal year ended June 30, 2023. However, the largest portion, $14,576,367 or 87% reflects the Town's net investment in capital assets (road improvements, equipment, machinery, utility plant). The Town uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although the Town's neti investment in capital assets is reported net of the outstanding debt, the resources needed to repay that debt must be provided by other sources, since capital assets cannot be used to liquidate these liabilities. An additional portion of the Town's net position, $254,738, represents resources that are subject to external restrictions on Several particular aspects of the Town's financial operations positively influenced the total unrestricted  how theyr may be used. The remaining balance of $1,900,218 is unrestricted.  government net position:  Conservative spending approach by management Capital grants received for water/sewer expansion  Several particular aspects of the Town's financial operations negatively influenced the total unrestricted  government net position:  Increased expenses int the proprietary fund and General Fund  7    Management! Discussion and Analysis Town of Oakboro  Town of Oakboro's Changesi inl Net Position (Figure3 3)  Govemmental Activities 2023 2022  Business-type Activities 2023 2022  Total 2023 2022  Revenues Program revenues: Charges fors services Operating grants and contributions Capitalg grants and contributions General revenues: Property taxes Othert taxes Other Totalr revenues Expenses: Generalg government Publics safety Transportation Environmental protection Cultural andr recreational Interest onl long-t termo debt Watera ands sewer Total expenses Increase inr neta assets beforet transfers Transfers Increase inr net position Net position, July1 Netp position, June 30  $ 105,744 $ 93,755 $ 1,718,832 $ 1,375,743 $ 1,824,576 $ 1,469,498  82,261 298,675 1,023,065 922,833 1,056,226 896,083 204,128 145,578 2,770,099 2,150,533 706,153 446,269 1,033,414 876,367 269,820 267,503 266,070 262,053 410,154 297,889 2,685,611 2,150,081 84,488 84,488 4,504,357 4,506,905  92,284  82,261 973,448 4,593,728 1,023,065 1,056,226 206,401 5,165,977 8,126,398 706,153 1,033,414 269,820 266,070 410,154 47,125 1,501,388 1,319,557 931,853 4,644,136 931,854 4,644,136  92,284 922,833 896,083 151,972  674,773  4,593,728  2,273 2,395,878  6,394 5,975,865  446,269 876,367 267,503 262,053 297,889 12,624  47,125 1,501,388 1,548,513 847,365 847,365 11,292,114  12,624 1,319,557 4,643,684 4,643,684  1,332,181 4,234,124 3,482,262  452 452  6,648,430 15,796,471 11,155,335  4,588,845 $ 4,507,357 $ 12,139,479 $ 11,292,114 $ 16,728,325 $ 15,799,471  Governmental activities. Governmental activities increased the Town's net position by $84,488 thereby accounting for 9% of thet total increase in net position of the Town. The increase in net position was the result of a concerted effort to control costs and manage expenditures. Management believes healthy investment in the Town will result in additional revenues, and in that vein added to the Town's net position by investing in capital assets. Increased efforts to maximize tax collections also contributed to the favorable net position. Tax revenue did not appreciably decline in the current year. Town management acknowledges that 2023 was a successful year and plans on improving upon these approaches as al long-term strategy to realize continued fiscal health.  8    Management Discussion and Analysis Town of Oakboro Keye elements of thisi increase are as follows: Taxr revenues remained steady.  Town council has adopted a conservative approach to general fund spending.  Business-type activities: Business-type activities increased the Town's net position by $847,365, accounting for 91% of thet total increase in the government's net position. Key elements oft thisi increase are as follows:  Increased revenue collections  Capital grants received for water /sewer expansion  Financial Analysis of the Town's Funds  As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-related Governmental Funds. The focus of the Town's governmental funds is to provide information on near-term inflows, outflows, and balances of usable resources. Such information is useful in assessing the Town's financing requirements. Specifically, unreserved fund balance can be a useful measure of a governments net The general fund is the chief operating fund of the Town. At the end of the current fiscal year, the Town of Oakboro's fund balance available in the General Fund was $1,188,544, while total fund balance reached $1,443,282. The Town currently has an available fund balance of 54% of general fund expenditures, while total General Fund Budgetary Highlights: During the fiscal year, the Town made several revisions to the budget.  legal requirements.  resources available for spending at the end oft the fiscal year.  fund balance represents 65% of the same amount.  Generally, budget amendments falli into one of three categories:  1) Amendments made to adjust the estimates that are used to prepare the original budget ordinance 2) Amendments made to recognize new funding amounts from external sources, such as Federal and  once exacti information is available, State grants and,  3) Increases in appropriations that become necessary to maintain services.  Proprietary Funds: The Town's proprietary funds provide the same type of information found in the government-wide statements but in more detail. Unrestricted net position in the Water and Sewer Fund at the end of the fiscal year amounted to $1,014,176. The total increase in net position was $847,365. Other factors concering the finances of this fund have already been addressed in the discussion oft the Town's business-type  activities.  9    Management Discussion and Analysis Town of Oakboro Capital Asset and Debt Administration  Capital Assets. The Town's investment in capital assets fori its governmental and business-type activities as of June 30, 2023, totals $17,863,269 (net of accumulated depreciation). These assets include buildings, roads, Major acquisitions included vehicles and equipment of $102,847 int the General Fund and System improvements  machinery and equipment.  of $2,804,336 in the Proprietary Fund.  Town of Oakboro's Capital Assets (net of depreciation) (Figure 4)  Govemnmental Activities 2023 2022 948,894 957,384 1,559,127 1,666,271 233,646 187,974 112,821 125,780  Business-type Activities 2023 2022  Total 2023 2022 948,894 1,559,127 233,646 819,334  Land andi improvements $ 596,577 $ 596,577 $ 76,640 $ 76,640 $ 673,217 $ 673,217  Buildings Improvements Vehicles Equipment Construction' inp progress Plant and distribution  957,384 1,666,271 187,974 827,957  706,513  702,177  9,582,212 6,893,610 9,582,212 6,893,610 4,046,839 4,190,181 4,046,839 4,190,181  3 3,451,065 $ 3,533,986 $ 14,412,204 $ 11,862,608 $ 17,863,269 $ 15,396,594  Additional information on the Town's capital assets can be found in Note IIL.A.5 of the Basic Financial Long-term Debt. As of June 30, 2023, the Town had General Fund obligations of $651,008 and Water and  Statements.  Sewer obligations of $3,471,048.  Town of Oakboro's Outstanding Debt (Figure 5)  Govermental Activities 2023 2022 $ $ 628,038 281,798 22,970 10,563  Business-type Activities 2023 2022 181,120 44,538 3,026 2,181  Total 2023 2022 809,158 326,336 25,996 12,744  Other notes Net pension obligation Compensated absences  $3,286,902 $ 3,705,136 $ 3,286,902 $ 3,705,136  $651,008 $ 292,361 $ 3,471,048 $ 3,751,855 $ 4,122,056 $ 4,044,216  10    Management Discussion and Analysis Town of Oakboro Town of Oakboro's Outstanding Debt  The Town of Oakboro's total debt increased by $77,841 due to principal payments of $418,233 applied to the bonds and installment purchase, a net increase of $13,252 in compensated absences, a net increase in the North Carolina general statutes limit the amount of general obligation debt that a unit of government cani issue to 8p percent of the total assessed value of property located within that government's boundaries. The legal debt  pension obligation of $493,372 forl LGERS, and a net decrease of $10,550 forl LEO.  margin for the Towni is $19,823,122.  Additional information on the Town's debt can bet found in Note III.B.5 of this report.  Economic Factors and Next Year's Budgets and Rates:  The following key economic indicators reflect the growth and prosperity oft the Town: Overall economy is weak att this time. The Town's population grew by 66%1 from the 2000 census.  Budget Highlights for the Fiscal Year Ending June 30, 2024  Governmental Activities:  The 2023-24 budget has been prepared using very conservative estimates for both revenues and expenditures due to the overall weakness of the economy. The growth in population provides a modest increase in sales tax and Powell bill revenues. Iti is estimated there will bes sustained growth in construction and new! business. The Town has chosen nott to appropriate fund balance int thei fiscal year 2024 budget. Management believes that increased revenues and continued restrictions on spending will maintain the Town's financial position. As the Town considers future revenue sources, it has determined that a $0.01 increase in the property tax rate will result in additional revenues of approximately $24,474 at current values and collection rate. Though management believes current growth will generate enough revenue to support Town operations, a careful  analysis of property tax revenue willl be considered ini future years' budgets.  Business-type Activities: Requests for Information  The Town has maintained its current water and sewer rates fort the 2023-24 fiscal year.  This report is designed to provide an overview of the Town's finances for those with an interest in this area. Questions concerning any of thei information found in this report or requests for additional information should be  directed to the Finance Officer at 109 N. Main Street, Oakboro, NC: 28129.  11    Exhibit1  Town of Oakboro, North Carolina Statement of Net Position June 30, 2023  Governmental Activities $ 1,223,600 38,326 69,327 137,046 114,365 1,582,664 836,666 2,614,399 3,451,065 5,033,729 51,073 327,409 378,482 68,056 33,000 503,185 124,853 22,970 752,064 17,739 50,563 68,302 3,451,065 173,373 81,365 886,042 4,591,845  Business-type Activities $  Total $ 1,998,574 38,326 268,393 148,949 44,333 156,250 147,157 2,801,981 10,495,518 7,367,751 17,863,269 20,665,250 51,073 445,258 496,331 167,723 352,995 65,792 684,305 124,853 25,996 2,933,907 4,355,571 24,124 50,563 74,687 14,576,367 173,373 81,365 1,900,219 16,731,325  ASSETS Current assets: Cash and cash equivalents unrestricted Taxes receivable (net) Accounts receivable (net) Due from other governments Inventories Current portion ofl long-term receivable Cash and cash equivalents restricted Total current assets Non-current assets: Capital Assets: Land and construction inp process Other capital assets, net of depreciation Total non-current assets Total assets DEFERRED OUTFLOWS OF RESOURCES Deferred outflows - LEOSSA Deferred outflows LGERS Total deferred outflows ofr resources LIABILITIES Current liabilities: Accounts payable Long term debt- current Payable from restricted assets Long-term liabilities: Pension liability LGERS Pension liability- LEOSSA Accrued vacation Long term debt- NCDEQ Total liabilities DEFERRED INFLOWS OF RESOURCES Deferred pension inflows- -L LGERS Deferred pension inflows LEOSSA Total deferred inflows ofr resources NET POSITION Neti investmenti in capital assets Restricted for: Stabilization by State Statute Streets Unrestricted Total net position  774,974 199,066 11,903 44,333 156,250 32,792 1,219,317 9,658,852 4,753,352 14,412,204 15,631,521 117,849 117,849 99,667 352,995 32,792 181,120 3,026 2,933,907 3,603,506 6,385 6,385 11,125,302  1,014,176 12,139,479  The notes tot thet financial statements are an integral part of this statement  12        Exhibit3  Town of Oakboro, North Carolina Balance Sheet Governmental Funds June 30, 2023  Major Special Revenue Funds  Total Governmental $ 1,223,600 114,365 69,327 38,326 137,046 1,582,664 $ 68,056 33,000 101,056 38,326 38,326 173,373 81,365 1,188,544 1,443,282  General 1,223,600 $ 114,365 69,327 38,326 137,046 e 1,582,664 $ 68,056 $ 33,000 101,056 38,326 38,326 173,373 81,365 1,188,544 1,443,282 1,582,664  ASSETS  Casha and cashe equivalents- -U unrestricted Casha and cashe equivalents restricted Accounts receivable (net) Taxes receivable (net) Interfund receivable (payable) Duet from other governments  LIABILITIES, DEFERRED INFLOWS ANDF FUNDE BALANCES Liabilities: Accounts payable and accrued liabilities Deposits Deferred inflows ofr resources: Property taxr receivable Total deferredi inflows ofresources Fund! balances: Restricted: Stabilizationl by State Statute Streets Unassigned Totall Liabilities and fund balances Amounts reportedf for governmental activities int thes statement ofn net position (Exhibit 1) arec differentb because: Capital assets usedi ing governmental activities arer not financial resources andt therefore arer notr reportedi int thef funds. Gross capital assets ath historical cost Accumulated depreciation Deferred outflows- LEOSSA Deferred outflows LGERS Liabilities for eamed revenues considered deferred inflows ofresources inf funds statements. Somel liabilities, including bondsp payable, accruedi interest, and compensated absences are not due andp payablei int the current perioda and aret thereforer notr reportedi int thef funds Accrued vacation Pension liability- LEOSSA Pension liability- LEGRS Deferredi inflows- -LEOSSA Deferredi inflows -LGERS Net position oft theg governmental: activities  6,585,444 (3,134,379)  3,451,065 51,073 327,409 38,326  Deferred outflows arer noti included as expenses in Statement ofA Activities  (22,970) (124,853) (503,185) (50,563) (17,739) 4,591,845  Ther notes tot thet financial statements are ani integral part oft this statement  14    Exhibit 4  Town of Oakboro, North Carolina Governmental Funds For the Year Ended June 30, 2023  Statement of Revenues, Expenditures and Changes in Fund Balance  Major  Special Revenue  Total Governmental $ 1,021,087 675 1,058,551 380,936 62,942 105,744 12,188 128,997 2,771,120  General $ 1,021,087 $ 675 1,058,551 82,261 62,942 105,744 12,188 128,997 2,472,445  Revenues: Ad Valorem taxes Other taxes andl licenses Unrestricted intergovernmental revenues Restricted intergovernmental revenues Permits andf fees Sales and services Investment earnings Miscellaneous Total revenues Expenditures: Current: General govemnment Public safety Transportation Environmental protection Cultural andi recreational Total Expenditures Excess (deficiency) of revenues over expenditures Other Financing Sources (Uses): Transfer from (to) otherf funds Total other financing sources (uses) Net changei inf fund balance Fund Balances Beginning of year, July1 End of year, June 30  298,675  298,675  386,213 1,008,365 235,289 260,626 329,185 2,219,679 252,767  298,675  684,888 1,008,365 235,289 260,626 329,185 2,518,354 252,767  298,675  252,767 1,190,515 $ 1,443,282 $  252,767 1,190,515 $ 1,443,282  Ther notes tot thet financial statements are ani integral part oft this statement  15    Exhibit5  Town of Oakboro, North Carolina Governmental Funds For the Year Ended June 30, 2023  Statement of Revenues, Expenditures, and Changes in Fund Balance (continued)  Amounts reported for governmental activities in statement of activities are Neto changes int fund balances total governmental funds  different because:  252,767  Governmental funds report capital outlays as expenditures. However, in the Statement ofA Activities the cost oft those assets isa allocated over their estimated useful lives andr reported as depreciation expense. This ist the amount by which capital outiays exceeded depreciation int the current period (net of disposals). Capital outlay expenditures which were capitalized Capital outlay from capital projects Depreciation expense for governmental assets Revenues in the Statement of Activities that do not provide current financial resources are notr reported as revenues in thef funds. Changei in unavailable revenue for tax revenues  102,847 (185,768)  (82,921)  1,978  Changes in LGERS pension expense: Deferred outflows Pension liability Deferred inflows Changes in LEOSSA pension expense: Deferred outflows Pension liability Deferred inflows  109,888 (356,790) 195,845 (16,619) 10,550 (14,803)  (51,057)  (20,872)  Thei issuance ofl long-term debt provides current financial resources tog governmental funds, while the repayment oft the principal ofl long-term debt consumes the current financial resources ofg governmental funds. Neither transaction has anye effect on net position. This amounti ist the nete effect oft these differences int the treatment of long-term debt  andr relatedi items.  Proceeds from long-term debt Principle payments on debt  Some expenses reported int the Statement of Activities do not require the use of current financial resources and, therefore, are notr reported as expenditures in governmental funds. Compensated absences  (12,407) 87,488  Total changes in netp position of governmental activities  Ther notes tot thei financial statements are an integral part oft this statement  16    Exhibit6  Town of Oakboro, North Carolina General Fund For the Year Ended June 30, 2023  Statement of Revenues, Expenditures, and Changes in Fund Balance- Budget and Actual  Variance with Final Budget- Positive (Negative)  Original  Final  Actual Amounts  Revenues: Adv valorem taxes Other taxes andl licenses Unrestricted intergovernmental Restrictedi intergovernmental Permits andf fees Sales and services Investment earnings Miscellaneous Total revenues Expenditures Current: General government Public safety Transportation Environmental protection Cultural andi recreation Debt service: Principal retirement Interest and other charges Total expenditures Revenues over (under) expenditures Other financing sources (uses): Transfers to capital projects Fund! balance appropriated Total other financing sources (uses) Neto change in Fund Balance Fund balance, beginning ofy year Fund balance, ending of year  $ 870,984 $ 1,017,550 $ 1,021,087 $  3,537 75 95,640 261 52,942 21,744 11,188 91,397 276,784  600 803,000 82,000 10,000 84,000 1,000 37,600 1,889,184  600 962,911 82,000 10,000 84,000 1,000 37,600 2,195,661  675 1,058,551 82,261 62,942 105,744 12,188 128,997 2,472,445  323,825 918,188 143,920 218,600 284,651  390,000 1,010,000 239,920 262,000 330,000  386,213 1,008,365 235,289 260,626 329,185  3,787 1,635 4,631 1,374 815  1,889,184  2,231,920 (36,259) 36,259 36,259  2,219,679 252,767  12,241 289,026 (36,259) (36,259)  252,767 $ 252,767 1,190,515 1,443,282  The notes to the financial statements are ani integral part of this statement  17    Exhibit7  Town of Oakboro, North Carolina Statement of Fund Net Position Proprietary Funds June 30, 2023  Major Enterprise Funds Sewer Fund  Water Fund  Total $ 774,974 32,792 199,066 11,903 156,250 44,333 1,219,317 9,658,852 4,753,352 14,412,204 117,849 117,849 99,667 352,995 32,792 485,454 3,026 181,120 2,933,907 3,118,053 3,603,506 6,385 6,385 11,125,302 1,014,176 12,139,479  Assets: Current assets: Cash andi investments unrestricted Cash andi investments restricted Accounts receivable, (net)- billed Internal balances Duef from other governments Current portion ofl long-term receivable Inventories Total currenta assets Capital assets: Land and other non-depreciable assets Other capital assets, net of depreciation Capital assets (net) Deferred outflows of resources Deferredp pension outflows Liabilities: Current Liabilities: Accounts payable anda accrued liabilities Current portion ofl longt term debt- NCDEQ Liabilities payable from restricted assets: Customer deposits Total current liabilities Noncurrent Liabilities: Compensated: absences Pension liability Longt term debt-N NCDEQ Totalr noncurrent liabilities Total liabilities Deferred inflows of resources Deferred pensioni inflows Net Position: Net investment inc capital assets Unrestricted Total net position  $ 774,974 $ 32,792 100,893 332,235 6,283 17,505 1,264,681 26,500 2,052,808 2,079,308 55,487 55,487 56,874 32,792 89,666 2,072 85,276 87,348 177,014 3,006 3,006 2,079,308 1,140,148 3,219,455  98,173 (332,235) 5,620 156,250 26,828 (45,364) 9,632,352 2,700,544 12,332,896 62,363 62,363 42,793 352,995 395,788 954 95,844 2,933,907 3,030,705 3,426,493 3,379 3,379 9,045,995 (125,971) 8,920,024  Ther notest tot thei financial statements are ani integral part oft this statement  18    Exhibit 8  Town of Oakboro, North Carolina Proprietary Funds For the Year Ended June 30, 2023  Statement of Revenues, Expenses, and Changes in Fund Net Position  Major Enterprise Funds Sewer Fund 92,623 90,694 898,190 7,828 622,582 103,552 733,962 164,228 23 (47,125) (47,101) 117,126 674,773 674,773 791,899 8,128,125 8,920,024  Water Fund 18,112 12,805 820,642 41,438 322,641 252,157 151,189 767,426 53,216 2,250 2,250 55,466  Total 110,735 90,694 12,805 1,718,832 49,266 322,641 252,157 622,582 254,741 1,501,388 217,444 2,273 (47,125) (44,852) 172,592 674,773 674,773 847,365 11,292,114 12,139,479  Operating Revenues: Charges for services Miscellaneous income Sale of capacity Other operating revenues Total operating revenues Operating Expenses: Administration Water operations Water purchases Waste collection and treatment Depreciation Total operating expenses Operating income (loss) Non-Operating Revenues (Expenses): Interest oni investments Interest and other charges Total non-operating revenues (expenses) Income (loss) before other sources (uses) Other sources (uses) Grants Transfers (to) from Changei in netp position Total net position beginning Total net position- -6 ending  $ 789,725 $ 714,872 $ 1,504,598  55,466 3,163,989 3,219,455  Ther notes tot thef financial statements are an integral part oft thiss statement  19    Exhibit9  Town of Oakboro, North Carolina Statement of Cash Flows Proprietary Funds Fort the' Year Ended June 30, 2023  Major Enterprise Funds Water Fund Sewer Fund 795,453 (430,514) (163,198) 201,741  Total 1,662,823 (839,375) (359,310) 464,138 156,250  Cash Flows From Operating Activities: Cash receivedf fromo customers Cashp paidf forg goods and services Casht to or on behalf ofe employees Other operatingr revenues Net cash provided by operating activities Cash Flows From Non-Capital Financing Activities: Casht froml long term receivables Casht fromi interfund payables Net cash provided! byr non-capital financing activities Cash Flows From Capital and Related Financing Activities: Acquisition and construction ofo capital assets Proceeds from capital grants Principle paid on bondr maturities Interest paid on bond maturities Net cash (used)! by capital and relatedf financing activities Cash Flows From Investing Activities: Interest income Neti increase (decrease) inc casha and cashe equivalents Balances beginning ofy year Balances end ofy year Reconciliation of operatingi incomet tor net cash provided by operating activities Operatingi income (loss) Adjustments tor reconcile operatingi income tor net cash provided! by operating activities: Depreciation expense Changes in assets andl liabilities: (Increase) decreasei ina accounts receivable (Increase) decreasei inr net pension outflows (Increase) decreasei ini inventories Increase (decrease) ina accounts payable and accruedl liabilities Increase (decrease)i inc customer deposits Increase (decrease) ina accrued vacation pay Total adjustment Net cash provided by operating activities  867,370 (408,861) (196,112) 262,397 156,250 332,235 488,485 (2,737,594) 674,773 (418,233) (47,125)  (332,235) (332,235) (66,743)  (2,804,337) 674,773 (418,233) (47,125)  (66,743) (2,528,179) (2,594,922)  2,250  23  2,273 (1,972,261) 2,780,027 807,766 217,444 254,741 (57,167) 26,314 16,526 5,435 845 246,694 464,138 47,125  (194,987) (1,777,274) 1,002,753 807,766 53,216 151,189 (27,405) 9,101 8,133 5,435 2,072 148,525 $ 201,741  1,777,274  164,228 103,552 (29,762) 17,213 8,393 (1,227) 98,169 262,397 47,125  Interest paid  The notest tot thet financial statements are ani integral part oft this statement  20    Town of Oakboro, North Carolina NOTES TO FINANCIAL STATEMENTS As oforf for the Year Ended. June 30, 2023  Description of the Unit  The Town of Oakboro is located in Stanly County, which is in the Piedmont area of North Carolina. The Town has ap population of approximately 2,129. The Town provides water ands sewer services toi its residents.  IS Summary of Significant Accounting Policies  The accounting policies of the Town of Oakboro conform to generally accepted accounting principles as applicable to governments. The following is as summary oft the more: significant accounting policies.  A. Reporting Entity  The Town of Oakboro is a municipal corporation governed by an elected mayor and a five- member Board of Commissioners. As required by generally accepted accounting principles, these financial statements present the Town, as single entity with no other legally separate entities for which the Towni is financially accountable.  B. Basis of Presentation  Govemment-wide Statements: The statement of net position and the statement of activities display the information about the govemment. These statements include the activities of the overall government. Eliminations have been made to minimize the double counting of internal activities. The statements distinguish between the govemmental and business-type activities of the Town. Governmental activities generally are financed through taxes, intergovemmental revenues, and other non-exchange transactions. Business-type The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the Town and for each function of the Town's governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include (a) fees and charges paid by the recipients of goods and services offered by the programs and (b) grants and contributions that are restricted to meeting the operational and capital requirements of a particular program. Revenues that are not classified as program Fund Financial Statements: Thei fund financial statements provide information about the Town's funds. Separate statements for each fund category - govemmental and proprietary - are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as non-major funds.  activities are financed in whole or part by fees charged to external parties.  revenues, including allt taxes, are presented as general revenues.  21    Notes to the Financial Statements (continued)  B. Basis ofP Presentation (continued)  Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity oft the fund. Exchange transactions are those in which each party receives and gives up essentially the same values. Non-operating revenues, such as subsidies and investment earings, result  from non-exchange transactions or ancillary activities. The Townr reports the following major govemmental funds:  General Fund: The General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in other funds. The primary revenue sources are ad valorem taxes, State grants, and various other taxes and licenses. The primary expenditures are for public  safety, street maintenance and construction, and sanitation services.  Special Revenue Funds  The Special Revenue Fund account for specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditures for specific purposes. The Town maintains one Special  Revenuel Fund, the American Rescue Plan Act (ARPA). The Town reports the following major enterprise funds:  Sewer Fund: This fundi is used to account fort the Town's sewer fund operations. Water Fund: This fund is used to account for the Town's water operations.  - Measurement Focus and Basis of Accounting the modified basis of accounting.  Ina accordance with North Carolina General Statutes, all funds of the Town are maintained during the year using Govemment-wide and Proprietary Fund Financial Statements: The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus. The government-wide and proprietary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned ande expenses recorded at thet time liabilities are incurred regardless of when the related casht flows take place. Non-exchange transactions, in which the Town gives (or receives) value without directly receiving (or giving) equal value in exchange, includes property taxes, grants, and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. Revenue from grants and donations is recognized in thet fiscal year in which alle eligibility requirements have been satisfied. Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and the producing and delivering of goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues oft the Town enterprise funds are charges to customers for sales and services. The Town also recognizes as operating revenue the portion of tapi fees intended to recover the cost of connecting new customers to the water and sewer system.  revenues. Likewise, general revenues include all taxes.  22    Notes to the Financial Statements (continued)  C. Measurement Focus and Basis of Accounting (continued)  Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non- Govemmenta Fund Financial Statements: Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and The Town considers all revenue available if they are collected within 90 days after year end, except for property taxes. Ad valorem taxes receivable are not accrued as revenue because the amount is not susceptible to accrual. At June 30, taxes receivable for property other than motor vehicles are materially past due and are not considered to be an available resource to finance the operations of the current year. Also, as of September 1, 2013, State law altered the procedures for the assessment and collection ofp property taxes on registered motor vehicles in North Carolina. Effective with this change in the law, the State of North Carolina is responsible for billing and collecting the property taxes on registered motor vehicles on behalf of all municipalities and special tax districts. Property taxes are due when vehicles are registered. The billed taxes are applicable to the fiscal year in which they are received. Uncollected taxes that were billed in periods prior to September 1, 2013 and for limited registration plates are shown as a receivable in these financial statements and are offset by deferred Sales taxes and certain intergovernmenta revenues, such as the beer and wine tax, collected and held by the State at year-end on behalf of the Town are recognized as revenue. Sales taxes are considered a shared revenue for the Town because the tax is levied by Stanly County and then remitted to and distributed by the State. Most intergovernmental revenues and sales and services are not susceptible to accrual because generally they are not measurable until received in cash. All taxes, including those dedicated for specific purposes are reported as general revenues rather than program revenues. Under the terms of grant agreements, the Town funds certain programs by a combination of specific cost-reimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there is both restricted and unrestricted net position available to finance the program. Itis the Town's policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants, and then general  operating revenues and expenses.  acquisitions under capital leases are reported as other financial sources.  inflows of resources.  revenues. D. Budgetary Data  The Town's budgets are adopted as required by the North Carolina General Statutes. An annual budget is adopted for the General Fund and the Enterprise Funds. All annual appropriations lapse at the fiscal-year end. Project ordinances are adopted for Grant Projects, Special Revenue, Capital Projects, and the Enterprise Capital Projects Funds. The enterprise fund projects are consolidated with their respective fund for reporting purposes. AIl budgets are prepared using the modified accrual basis of accounting. Expenditures may not legally exceed appropriations at the functional level for all annually budgeted funds and at the object level for the multi-year funds. Amendments are required for any revisions that alter total expenditures of any fund or that change functional appropriations by more than $2,500. All amendments must be approved by the governing board. During the year, several immaterial amendments to the original budget were necessary. The budget ordinance must be adopted by July 1 of the fiscal year or the governing board must adopt an interim budget that covers  that time until the annual ordinance can be adopted.  23    Notes to the Financial Statements (continued)  E. Assets, Liabilities, Deferred Outflows/Inflows of Resources, and Fund Equity:  1. Deposits andl Investments  All deposits oft the Town are made in board-designated official depositories and are secured as required by State law (G.S. 159-31). The Town may designate, as an official depository, any bank or savings association whose principal office is located in North Carolina. Also, the Town may establish time deposit accounts such as NOW State law (G.S. 159-30(c)) authorizes the Town to invest in obligations of the United States or obligations fully guaranteed both as to principal and interest by the United States; obligations of the State of North Carolina; bonds and notes of any North Carolina local government or public authority; obligations of certain non- guaranteed federal agencies; certain high quality issues ofc commercial paper and bankers' acceptances; and the North Carolina Capital Management Trust (NCCMT). The Town's investments are reported at fair value. Non- participating interest eaming contracts are accounted for ato cost. The NCCMT- Government Portfolio, a SEC- registered (2a-7) a money market mutual fund is measured at fair value. The NCCMT- Term Portfolio is bond fund, has no rating and is measured at fair value. As of June 30, 2023, The Term portfolio has a duration of. .15 years. Because the NCCMT Government and Term Portfolios have a weighted average maturity ofl less than 90  and SuperNOW accounts, money market accounts, and certificates of deposit.  days, they are presented as an investment with ar maturity of less than 6 months.  2. Cash and Cash Equivalents cash and cash equivalents. 3. Restricted. Assets  The Town pools money from several funds to facilitate disbursements and investment and to maximize investment income. Therefore, all cash and investments are essentially demand deposits and are considered  Customer deposits held byt the Town before any services are supplied are restricted to the service for which the deposit was collected. Powell Bill funds are also classified as restricted cash because it can be expended only fort the purposes ofr maintaining, repairing, constructing, reconstructing or widening of local streets per G.S. 136-  41.1 through 136-41.4 Town of Oakboro Restricted Cash Governmental Activities General Fund Total governmental activities Business-type Activities Water and Sewer Fund Total Business-type Activities Total Restricted Cash  Streets  $81,365 114,365  Customer deposits 33,000  Customer deposits 32,792  32,792 $147,157  24    Notes to the Financial Statements (continued)  4.Ad Valorem Taxes Receivable  Ina accordance with State law (G.S. 105-347 and G.S. 159-13(a)), the Town levies ad valorem taxes on property other than motor vehicles on July 1, the beginning of the fiscal year. The taxes are due on September 1; however, interest does not accrue until the following January 6. These taxes are based on the assessed values as of January 1, 2021. As allowed by State law, the Town has established a schedule of discounts that apply to taxes, which are paid prior to the due date. Int the Town's General Fund, ad valorem tax revenues are reported  net of such discounts.  5. Allowances for Doubtful Accounts  All receivables that historically experience uncollectible accounts are shown net of an allowance for doubtful accounts. This account is estimated by analyzing the percentage of receivables that were written off in prior  years.  6. Inventory and Prepaid Items rather than when purchased.  The inventories of the Town are valued at cost (first-in, first-out), which approximates market. The Town's General Fund has no inventory but consists of expendable supplies that are recorded as expenditures as used The inventories of the Town's enterprise funds consist of materials and supplies held for subsequent use. The  cost oft these inventories are expensed when held for resale rather than when purchased.  7. Capital Assets  Capital assets are defined by the government as assets with an initial, individual cost of more than a certain cost and an estimated useful life ofr more than two years. Minimum capitalization costs are as follows: land, $10,000; Buildings, improvements, substations, lines, and other plant and distribution systems, $15,000; infrastructure, $20,000; furniture and equipment, $3,000; and vehicles, $5,000. Purchased or constructed capital assets are reported at cost or estimated historical cost. Donated capital assets are recorded at their estimated fair value at the date of donation. General infrastructure assets acquired prior to July 1, 2003, consist of water and sewer system assets that were acquired or that received substantial improvements subsequent to. July 1, 1980, and are reported at estimated historical cost using deflated replacement costs. The cost of normal maintenance and repairs that dor not add to the value of the asset or materially extend assets' lives are not capitalized. Capital assets are depreciated using thes straight-line method over thei following estimated useful lives:  Asset Class Infrastructure Buildings Improvements Vehicles Furniture and equipment Computer equipment  Life 10-30 years 25-50 10-50 6 5-10 3  25    Notes to the Financial Statements (continued)  8. Deferred Outflows /Inflows of Resources  Ina addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, Deferred Outflows of Resources, represents a consumption of net position that applies to a future period and SO will not be recognized as an expense or expenditure until then. The Towni has one item thati meet this criterion, contributions made to and other deferred outflows to the pension plani int the 2023 fiscal year. In addition to liabilities, the statement off financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, Deferred Inflows of Resources, represents an acquisition of net position that applies to ai future period and sO will not be recognized as revenue until then. The Town has two items that meet the criterion for this category property taxes receivable and deferrals of pension expense that result from the implementation of  GASB Statement 68. 9. ARPA Funds  InFY 2020/21, the American Rescue Plan Act (ARPA) established the Coronavirus State and Local Fiscal Recovery Funds to support urgent COVID-19 response efforts and replace lost revenue for eligible state, local, territorial, and tribal governments. The Town was allocated $597,350 off fiscal recovery funds to be paid in two equal installments. The first installment of $298,675 was received in July 2021. The second installment was received in mid-2022. The Town management and council have elected to use $597, 350 oft the ARPA funds as of. June 30, 2023. The ARPA funds have been transferred to the' Water/Sewer Capital Project.  10. Long-Term Obligations  Int the government-wide financial statements, and proprietary fund types in the fund financial statements, long- term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statements of net position. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life oft the bonds using the straight-line method that approximates the effective interest method. Bonds payable are reported net oft the applicable bond premium or discount. Bond issuance costs, except for prepaid insurance costs, are expensed in the reporting period in Ini fund financial statements, the governmental fund type recognizes bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt is reported as other financing sources. Premiums received on debti issuances are reported as other financing sources while discounts on debti issuance are reported as other financing uses. Issuance costs, whether or not withheld from the actual net proceeds  which they are incurred. Prepaid insurance costs are expensed over the life oft the debt.  received, are reported as debt service expenditures. 11. Compensated. Absences  The vacation policy of the Town provides for the accumulation of up to thirty (30) days earned vacation leave. For the Town's government-wide and proprietary funds, an expense and al liability for compensated absences and the salary-related payments is recorded. Sick leave does not vest but any unused sick leave accumulated: at the time of retirement may be used in the determination of length of service for retirement benefit purposes. Since the Town has no obligation for the accumulated sick leave until it is actually taken, no accrual for sick  leave has been made.  26    Notes to the Financial Statements (continued)  11. Net position/Fund Balances  Net position  Net position in government-wide and proprietary fund financial statements are classified as net investment in capital assets; restricted; and unrestricted. Restricted net position represents constraints on resources that are either externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or  imposed by lawt through state statute.  Fund Balances  In the governmental fund financial statements, fund balance is composed of five classifications designed to  disclose the hierarchy of constraints placed on how fund balance can! be spent. The governmental fund types classify fund balances as follows:  Nonspendable Fund Balance This classification includes amounts that cannot be spent because they are either (a) noti in spendable form or (b)I legally or contractually required tol ber maintained intact. Restricted Fund Balance - This classification includes amounts that are restricted to specific purposes externally Restricted for Stabilization by State Statute North Carolina G.S. 159-8 prohibits units of government from budgeting or spending a portion of their fund balance. This is one of several statutes enacted by the North Carolina State Legislature in the 1930's that were designed to improve and maintain the fiscal health of local government units. Restricted by State statute (RSS), is calculated at the end of each fiscal year for all annually budgeted funds. The calculation in G.S. 159-8(a) provides a formulai for determining what portion of fund balance is available for appropriation. The amount of fund balance not available for appropriation is what is known as "restricted by State statute". Appropriated fund balance in any fund shall not exceed the sum of cash and investments minus the sum of liabilities, encumbrances, and deferred revenues arising from cash receipts, as those figures stand at the close of the fiscal year next preceding the budget. Per GASB guidance, RSS is considered a resource upon which a restriction is "imposed by law through constitutional provisions or enabling legislation." RSS is reduced by inventories and prepaids as they are classified as nonspendable. Outstanding Encumbrances are included within RSS. RSS is included as a component of Restricted Net position and Restricted for Streets - Powell Bill portion of fund balance that is restricted by revenue source for street construction and maintenance expenditures. This amount represents the balance of the total unexpended Committed Fund Balance -portion of fund balance that can only be used for specific purposes imposed by majority vote by quorum of the Town of Oakboro's governing body (highest level of decision-making authority). Any changes or removal of specific purpose requires majority action byt the governing body. The governing body can, by adoption of an ordinance prior to the end of the fiscal year, commit fund balance. Once adopted, the limitation imposed by the ordinance remains in place until a similar action is taken (the adoption of another Assigned fund balance - portion oft fund balance that the Town of Oakboro intends to use for specific purposes. Unassigned fund balance - the portion of fund balance that has not been restricted, committed, or assigned to  imposed by creditors ori imposed byl law.  Restricted fund balance on thei face oft the balance sheet  Powell Bill funds.  ordinance) to remove or revise thel limitation.  specific purposes or other funds.  27    Notes to the Financial Statements (continued)  11. Net position/Fund Balances (continued)  The Town of Oakboro has a revenue spending policy that provides guidance for programs with multiple revenue sources. The Finance Officer will use resources in the following hierarchy: bond proceeds, federal funds, State funds, local non-town funds, town funds. For purposes of fund balance classification expenditures are to be spent from restricted fund balance first, followed in-order by committed fund balance, assigned fund balance and lastly unassigned fund balance. The Finance Officer has the authority to deviate from this policy ifi it is in the  besti interest of the Town. 12. Pensions  For purposes of measuring the net pension asset, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Local Governmental Employees' Retirement System (LGERS) and additions to/deductions from LGERS' fiduciary net position have been determined on the same basis as they are reported by LGERS. For this purpose, plan member contributions are recognized in the period in which the contributions are due. The Town's employer contributions are recognized when due and the Town has a legal requirement to provide the contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of LGERS.  Investments are reported at fair value. II.S Stewardship, Compliance, and/ Accountability: 1. Noncompliance withl North Carolina General Statutes: 2. Contractual Violations: There were none noted. 3. Excess of Expenditures over Appropriations: II. Detail Notes on AlI Funds and Account Groups  A. Material Violations of Finance-Related Legal and Contractual Provisions:  The Town overspent budgeti int the Water Sewer capital Project Fund  The Town overspent budgeti in the Water Sewer capital Project Fund  A. Assets: 1. Deposits  All the deposits of the Town are either insured or collateralized by using one of two methods. Under the Dedicated Method, all deposits that exceed the federal depository insurance coverage level are collateralized with securities held by the Town's agents in these units' names. Undert the Pooling Method, whichi is a collateral pool, all uninsured deposits are collateralized with securities held by the State Treasurer's agenti in the name of the State Treasurer. Since the State Treasurer is actingi in ai fiduciary capacity for the Town, these deposits are considered to be held by the Town's agents int the Town's name. The amount oft the pledged collateral is based on an approval averaging method for non-interest bearing deposits and the actual current balance for interest- bearing deposits. Depositories using the Pooling Method report to the State Treasurer the adequacy of their pooled collateral covering uninsured deposits. The State Treasurer does not confirm this information with the Town or the escrow agent. Because of thei inability to measure the exact amounts of collateral pledged for the Town under the Pooling Method, the potential exists to undercolaterization, and this risk may increase in periods ofh high cash flows. However, the State Treasurer of North Carolina enforces strict standards of financial stability for each depository that collateralizes public deposits under the Pooling Method. The Town has no policy regarding custodial credit risk for deposits, but relies on the State Treasurer to enforce standards of minimum capitalization for all pooling method financial institutions and to monitor them for compliance. The Town complies with the provisions of G.S. 159-31 when designation official depositories and verifying that deposits are properly  secured.  28    Notes to the Financial Statements (continued)  1. Deposits  At. June 30, 2023, the Town's deposits had a carrying amount of $2,122,283 and al bank balance of $2,107,849. The bank balances of the Town were covered by $250,000 of federal depository insurance. The remaining balance of deposits is collateralized under the Pooling Method as enumerated above. The Town had cash on  hand of $300 at year end. 2. Investments regarding credit risk.  At June 30, 2023, the Town had $23,148 invested with the North Carolina Capital Management Trust's Government Portfolio which carried a credit rating of AAAm by Standard and Poor's. The Town has no policy  3. Receivables - Allowances for Doubtful Accounts  There were no allowances for bad debts for the outstanding receivables at. June 30, 2023.  4. Recelvables-Long' Term  In selling a portion of the sewer system to Stanly County, the Town agreed to receive $1,562,500 in ten equal payments of $156,250 beginning July 1, 2014 at 0% interest. The non-current portion is SO reflected on the  proprietary funds balance sheet. The balance at. June 30, 2023 was $156,250.  5. Capital Assets Construction commitments Primary Government  The Water and Sewer Capital Project has $623,000 remaining in construction commitments at. June 30, 2023.  Capital asset activity for the Primary Government for the year ended June 30, 2023:  Beginning Balances 596,577 $ 596,577 1,067,941 3,455,600 388,112 974,367 5,886,020 110,557 1,789,329 262,332 786,393 2,948,611 2,937,409 3,533,986 29  Ending Balances 596,577 596,577 1,067,941 3,455,600 392,347 1,072,979 5,988,867 119,047 1,896,473 279,526 839,333 3,134,379 2,854,488 3,451,065  Governmental activities: Capital assets notl being depreciated: Land Construction inp progress Capital assets not being depreciated: Capital assets being depreciated: Buildings Infrastructure Equipment Vehicles and motorized equipment Total capital assets being depreciated: Less, accumulated depreciation for: Buildings Infrastructure Equipment Vehicles and motorized equipment Total accumulated depreciation Total capital assets being depreciated, net Governmental activity capital assets, net  Increases  Decreases $  4,235 98,612 102,847 8,490 107,144 17,194 52,940 185,768    Notes to the Financial Statements (continued)  5. Capital Assets (continued)  Depreciation expense was charged to functions oft the primary govemment as follows:  General government Public safety Transportation Cultural and recreational  $11,810 70,386 31,405 72,167 $185.768  Business-type Activities Business-type activities: Water Fund Capital assets not being depreciated Land Construction! inp progress Capital assets being depreciated: Plant distributions systems Furniture & maintenance equipment Motor vehicles Total capital assets being depreciated Less, accumulated depreciation for: Plant distribution systems Furniture &r maintenance equipment Motor vehicles Total accumulated depreciation Total capital assets being depreciated, net Waterf fund capital assets, net Sewer Fund Capital assets not being depreciated Construction worki inp progress Land Total not being depreciated Capital assets being depreciated: Plant ando distribution center Furniture & maintenance equipment Motor vehicles Total capital assets being depreciated Less, accumulated depreciation for: Plant ando distribution center Furniture & maintenance equipment Motor vehicles Total accumulated depreciation Total capital assets being depreciated, net Sewer fund capital assets, net Business-type activites capital assets, net  Beginning Balances $  Ending Balances  Increases  Decreases $  26,500 $ 4,195,255 568,158 58,604 4,822,017 2,262,233 350,927 71,602 2,684,762 2,137,254 2,163,754 6,893,610 50,140 6,943,750 6,224,955 882,407 73,638 7,181,000 3,967,796 389,892 68,208 4,425,896 2,755,104 9,698,854 11,862,608  $  26,500 4,195,255 605,150 88,354 4,888,759 2,378,102 371,467 86,382 2,835,951 2,052,808 2,079,308 9,582,212 50,140 9,632,352 6,224,955 921,057 83,980 7,229,992 3,995,266 463,906 70,276 4,529,448 2,700,544 12,332,896 14,412,204  36,992 29,750 66,742 115,869 20,540 14,780 151,189  2,688,602 2,688,602 38,650 10,342 48,992 27,470 74,014 2,068 103,552  30    Notes to the Financial Statements (continued)  B. Liabilities:  1. Pension Plan Obligations:  a. Local Governmental Employees' Retirement System  Plan Description. The Town is a participating employer in the statewide Local Governmental Employees' Retirement System (LGERS), a cost-sharing muliple-employer defined benefit pension plan administered by the State of North Carolina. LGERS membership is comprised of general employees and local law enforcement officers (LEOs) of participating local govemnmental entities. Article 30 ofG.S. Chapter 128 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. Management of the plan is vested in the LGERS Board of Trustees, which consists of 13 members - nine appointed by the Governor, one appointed by the State Senate, one appointed by the State House of Representatives, and the State Treasurer and State Superintendent, who serve as ex-officio members. The Local Govemmental Employees' Retirement System is included int the Comprehensive Annual Financial Report (CAFR) for the State of! North Carolina. The State's CAFR includes financial statements and required supplementary information for LGERS. That report may be obtained by writing to the Office of the State Controller, 1410 Mail Service Center, Raleigh, North Benefits Provided. LGERS provides retirement and survivor benefits. Retirement benefits are determined as 1.85% of the member's average final compensation times the member's years of creditable service. Amember's average final compensation is calculated as the average of a member's four highest consecutive years of compensation. Plan members are eligible to retire with full retirement benefits at age 65 with five years of creditable service, at age 60 with 25y years of creditable service, or at any age with 30 years of creditable service. Plan members are eligible tor retire with partial retirement benefits at age 50 with 20 years of creditable service or at age 60 with five years of creditable service (age 55 fort firefighters). Survivor benefits are available to eligible beneficiaries of members who die while in active service or within 180 days of their last day of service and who have either completed 20 years of creditable service regardless of age (15 years of creditable service for firefighters and rescue squad members who are killed in the line of duty) or have completed five years of service and have reached age 60. Eligible beneficiaries may elect to receive a monthly Survivor's Alternate Benefit for life or a return of the member's contributions. The plan does not provide for automatic post-retirement benefit LGERS plan members who are LEOs are eligible to retire with full retirement benefits at age 55 with five years of creditable service as an officer, or at any age with 30 years of creditable service. LEO plan members are eligible to retire with partial retirement benefits at age 50 with 15 years of creditable service as an officer. Survivor benefits are available to eligible beneficiaries ofl LEO members who die while in active service or within 180 days of their last day of service and who also have either completed 20 years of creditable service regardless of age, or have completed 15 years of service as a LEO and have reached age 50, or have completed five years of creditable service as a LEO and have reached age 55, or have completed 15 years of creditable service as a LEO if killed int the line of duty. Eligible beneficiaries may elect to receive a monthly Survivor's Alternate Benefit Contributions. Contribution provisions are established by General Statute 128-30 and may be amended only by the North Carolina General Assembly. Town employees are required to contribute 6% of their compensation. Employer contributions are actuarially determined and set annually by the LGERS Board of Trustees. The Town's contractually required contribution rate for the year ended June 30, 2023, was 13.10% of compensation for law enforcement officers and 12.10% for general employees and firefighters, actuarially determined as an  Carolina 27699-1410, by calling (919) 981-5454, or at www.osc.nc.gov.  increases. Increases are contingent upon actuarial gains of the plan.  forl life or a return oft ther member's contributions.  amount  31    Notes to the Financial Statements (continued)  a. Local Governmental Employees' Retirement System (continued)  that, when combined with employee contributions, is expected to finance the costs of benefits eamed by employees during the year. Contributions to the pension plan from the Town were $116,175 for the year ended Refunds of Contributions - Town employees who have terminated service as a contributing member ofl LGERS, may file an application for a refund of their contributions. By state law, refunds to members with at least five years of service include 4% interest. State law requires a 60 day waiting period after service termination before the refund may be paid. The acceptance of a refund payment cancels the individual's right to employer Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of At. June 30, 2023, the Town reported al liability of $684,3051 fori its proportionate share oft the net pension liability. The net pension liability was measured as of. June 30, 2022. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2021. The total pension liability was then rolled forward tot the measurement date of June 30, 2022 utilizing update procedures incorporating the actuarial assumptions. The Town's proportion of the net pension liability was based on a projection of the Town's long-term share of future payroll covered by the pension plan, relative to the projected future payroll covered by the pension plan ofa all participating LGERS employers, actuarially determined. At. June 30, 2023 (as measured at June 30, 2022), the Town's proportion was 0.01213%, which was a decrease of 0.0032% from its For the year ended June 30, 2023, the Town recognized pension expense of $103,864. At June 30, 2023, the Town reported deferred outflows of resources and deferred inflows of resources related to pensions from the  June 30, 2023.  contributions or any other benefit provided by LGERS.  Resources Related to Pensions  proportion measured as of. June 30, 2022 (as measured as of June 30, 2021).  following sources:  Deferred Outflows of Deferred Inflows of  Resources $  Resources 2,891  Differences between expected and actual experience  29,486 $ 68,278 226,170 5,149 116,175 445,258 $  Changes ofa assumptions investments  Net difference between projected and actual earnings on pension plan Changes in proportion and differences between Town contributions and proportionate share of contributions Town contributions subsequent tot ther measurement date  21,233 24,124  Total  $  32    Notes to the Financial Statements (continued)  a. Local Governmental Employees' Retirement System (continued)  $116,175 reported as deferred outflows of resources related to pensions resulting from Town contributions subsequent to the measurement date will be recognized as a decrease in the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred inflows of resources related to pensions will be  recognized in pension expense as follows: Year ended June 30: 2024 2025 2026 2027 2028 thereafter  $  97,561 80,249 19,398 107,751 304,959  $  Actuarial Assumptions. The total pension liability in the December 31, 2020 actuarial valuation was determined using thet following actuarial assumptions, applied to all periods included ini the measurement:  Inflation Salary increases Investment rate of return  2.5 percent factor including inflation  3.25 to 8.25 percent, including inflation and productivity 6.5 percent, net of pension plani investment expense,  The plan actuary currently uses mortality rates based on the RP-2014 Total Data Set for Healthy Annuitants Mortality Table that vary by age, gender, employee group (ie. general, law enforcement officer) and health status (ie. disabled and healthy). The current mortality rates are based on published tables and based on studies that cover significant portions oft the U.S. population. The healthy mortality rates also contain ap provision The actuarial assumptions used in the December 31, 2022 valuation were based on the results of an actuarial Future adl hoc COLA amounts are not considered tol be substantively automatic and are therefore noti included in The projected long-term investment returns and inflation assumptions are developed through review of current and historical capital markets data, sell-side investment research, consultant whitepapers, and historical performance of investment strategies. Fixed income retum projections reflect current yields across the U.S. Treasury yield curve and market expectations of forward yields projected and interpolated for multiple tenors and over multiple year horizons. Global public equity return projections are established through analysis oft the equity risk premium and the fixed income retumn projections. Other asset categories and strategies' return projections reflect the foregoing and historical data analysis. These projections are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation  tor reflect future mortality improvements  experience study fort the period December 31, 2015 through December 31, 2019.  the measurement.  percentage and by adding expected inflation.  33    Notes to the Financial Statements (continued)  a. Local Governmental Employees' Retirement System (continued)  The target allocation and best estimates of arithmetic real rates of retum for each major asset class as of June  30, 2021 are summarized in the following table:  Long-Term Expected Real Rate of Return  Asset Class Fixed Income Global Equity Real Estate Alternatives Credit Inflation Protection Total  Target Allocation  29.0% 42.0% 8.0% 8.0% 7.0% 6.0% 100%  1.4% 5.3% 4.3% 8.9% 6.0% 4.0%  The information above is based on 30 year expectations developed with the consulting actuary for the 20212asset liability and investment policy study for the North Carolina Retirement Systems, including LGERS. The long-term nominal rates of return underlying the real rates of return are arithmetic annualized figures. The real rates of return are calculated from nominal rates by multiplicatively subtracting a long-term inflation Discount rate. The discount rate used to measure the total pension liability was 6.50%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current contribution rate and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on these assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of the current plan members. Therefore, the long- term expected rate of return on pension plan investments was applied to all periods of projected benefit Sensitivity of the Town's proportionate share of the net pension asset to changes in the discount rate. The following presents the Town's proportionate share oft the net pension asset calculated using the discount rate of 6.50 percent, as well as what the Town's proportionate share of the net pension asset or net pension liability would be ifit were calculated using a discount rate that is one percentage point lower (5.50 percent) or one  assumption of 3.00%. Allr rates of return and inflation are annualized.  payments to determine thet total pension liability.  percentage point higher (7.50 percent) than the current rate:  1% Decrease (5.50%) $ 1,235,083 $  Discount Rate (6.50%)  1% Increase (7.50%)  Town's proportionate share of the net pension liability (asset)  684,305 $ 230,433  Pension plan fiduciary net position. Detailed information about the pension plan's fiduciary net position is available in the separately issued Comprehensive Annual Financial Report (CAFR) for the State of North  Carolina.  34    Notes to the Financial Statements (continued)  b. Law Enforcement Officers Special Allowance  1. Plan Description.  The Town of Oakboro administers a public employee retirement system (the Separation Allowance), a single- employer defined benefit pension plan that provides retirement benefits to the Town's qualified swor law enforcement officers under the age of 62 who have completed at least 30 years of creditable service or have attained 55 years of age and have completed five or more years of creditable service. The Separation Allowance is equal to 0.85 percent of the annual equivalent of the base rate of compensation most recently applicable to the officer for each year of creditable service. The retirement benefits are not subject to any increases in salary or retirement allowances that may be authorized by the General Assembly. Article 12Dc of G.S. Chapter 143 assigns the authority to establish and amend benefit provisions tot the North Carolina General  Assembly.  Allf full-time Town law enforcement officers are covered by the Separation. Allowance. At December 31, 2022, the Separation Allowance's membership consisted of: Terminated plan members entitled tol butr noty yet receiving benefits  0 8 8  Active plan members Total  2. Summary of Significant Accounting Policies  Basis of Accounting. The Town has chosen to fund the Separation Allowance on a pay as you go basis. Pension expenditures are made from the General Fund, which is maintained on the modified accrual basis of accounting. Benefits are recognized when due and payable in accordance with the terms oft the plan. The Separation Allowance has no assets accumulated in a trust that meets the criteria which are outlined in  GASB Statement? 73. 3. Actuarial Assumptions  The entry age actuarial cost method was used in the December 31, 2021 valuation. The total pension liability in the December 31, 2021 actuarial valuation was determined using the following actuarial assumptions, applied  toa all periods included in the measurement:  Inflation Salary increases Discount rate December 31, 2022. Scale AA.  2.50 percent 4.31 percent  3.25 to7.75 percent, including inflation and productivity factor  The discount rate is based on the yield of the S&P Municipal Bond 20 Year High Grade Rate Index as of Mortality rates are based on the RP-2000 Mortality tables with adjustments for mortality improvements based on  35    Notes to the Financial Statements (continued)  b. Law Enforcement Officers Special Allowance (continued)  4. Contributions.  The Town is required by Article 12D ofG.S. Chapter 143 to provide these retirement benefits and has chosen to fund the amounts necessary to cover the benefits earned on a pay as you go basis through appropriations made int the General Fund operating budget. There were no contributions made by employees. The Town's obligation to contribute to this plan is established and may be amended by the North Carolina General Assembly. Administration costs oft the Separation. Allowance are financed through investment eamings. The Town paid $-0- Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources At June 30, 2023, the Town reported a total pension liability of $124,853. The total pension liability was measured as of December 31, 2022 based on a December 31, 2021 actuarial valuation. The total pension liability was then rolled forward to the measurement date of December 31, 2022 utilizing update procedures incorporating the actuarial assumptions. For the year ended June 30, 2023, the Town recognized pension  as benefits came duei for the reporting period.  Related to Pensions  expense of$21,216.  Deferred Outflows Deferred Inflows of Resources $  of Resources 23,868 26,695  Differences between expected and actual experience Town benefit payments and plan administrative expense made  12,730 $ 38,343  Changes of assumptions subsequent tot the measurement date  Total  $  51,073 $  50,563  $0 reported as deferred outflows of resources related to pensions resulting from benefit payments made and administrative expenses incurred subsequent to the measurement date will be recognized as a decrease of the total pension liability in the year ended June 30, 2023. Other amounts reported as deferred inflows of resources  related to pensions will be recognized inj pension expense as follows:  Amount recognized in Pension Expense  Deferred Resources Resources $ 16,619 $ 12,099 $ 12,243 7,814 7,496 6,901  Deferred Pension Expense as an  Outflow of Inflow of Increase or (decrease) to  Year ended June 30: 2024 2025 2026 2027 2028 Thereafter  4,520 2,096 225 743 635 (7,709)  10,147 7,589 6,753 6,266 7,709  $0 paid as benefits came due and $0 of administrative expenses subsequent to the measurement date are  reported as deferred outflows of resources.  36    Notes to the Financial Statements (continued)  b. Law Enforcement Officers Special Allowance (continued)  Sensitivity oft the Town's total pension liability to changes in the discount rate. The following presents the Town's total pension liability calculated using the discount rate of4.31 percent, as wella as what the Town's total pension liability would be ifit were calculated using a discount rate that is -percentage-point lower (3.31 percent) or 1-  percentage-point higher (5.31 percent) than the current rate:  1% Decrease (3.31%) 136,961 $  Discount Rate (4.31%) 124,853 $  1% increase (5.31%) 113,689  Total pension liability  Schedule of Changes in Total Pension Liability Law Enforcement Officers' Special Separation Allowance  2023 135,403 $ 129,041 13,440 3,047  2022 13,977 2,490  Beginning balance Service Cost Interest on the total pension liability Changes of benefit terms of thet total pension liability Changes of assumptions or other inputs Benefit payments Other changes Ending balance of thet total pension liability  Differences between expected and actual experience in the measurement  (1,037) (26,000)  (5,961) (4,144)  124,853 $ 135,403  The plan currently uses mortality tables that vary by age, and health status (ie. disabled and healthy). The current mortality rates are based on published tables and based on studies that cover significant portions of the U.S. population. The healthy mortality rates also contain a provision to reflecti future mortality improvements. The actuarial assumptions used in the December 31, 2021 valuation were based on the results of an actuarial  experience study for the period December 31, 2015 through December 31, 2019.  37    Notes to the Financial Statements (continued)  Total Expense, Liabilities, and Deferred Outflows and Inflows of Resources of Related to Pensions Following isi information related tot the proportionate share and pension expense for all pension plans:  LGERS $  LEOSSA  Total 809,158  Pension Expense Pension Liability  103,864 $ 21,216 $ 125,080 684,305 124,853 0.01213% nla 29,486 68,278 226,170 5,149 116,175 2,891  Proportionate share oft ther net pension liability Deferred of Outflows of Resources Changes of assumptions investments  Differences between expected and actual experience Net difference between projected and actual earings onp plan Changesi inp proportion and differences between contributions and Benefit payments and administrative costs paids subsequent tot the  12,730 38,343  42,216 106,621 226,170 5,149 116,175 26,759 26,695  proportionate share of contributions measurement date Deferred ofl Inflows of Resources Changes of assumptions investments  Differences! between expected and actual experience Net difference between projected and actual eamings onp plan Changesi inp proportion and differences between contributions and  23,868 26,695  proportionate share of contributions  21,233  21,233  C.S Supplemental Retirement Income Plan for Law Enforcement Officers  Plan description. The Town contributes to the Supplemental Retirement Income Plan (Plan), a defined contribution pension plan administered by thel Department of State Treasurer and a Board of Trustees. The Plan provides retirement benefits to law enforcement officers employed by the Town. Article 5 of GS Chapter 135 assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. Funding Policy. Article 12E of GS Chapter 143 requires the Town to contribute each month an amount equal to five percent of each officer's salary, and all amounts contributed are vested immediately. Also, the law enforcement officers may make voluntary contributions to the plan. The Town also provided this same benefit to other eligible employees beginning on July 1, 1998. Contributions for the year ended June 30, 2023 were  $67,832, which consisted of $34,2091 from the Town and $33,723 from the employees.  38    Notes to the Financial Statements (continued)  d. Other Employment Benefits  The Town does not provide for any post retirement employee health benefits.  The Town has also elected to provide death benefits to employees through the Death Benefit Plan for members of the Local Govermental Employee's Retirement System (Death Benefit Plan), a multiple-employer, State- administered, cost-sharing plan funded on a one-year term cost basis. The beneficiaries of those law enforcement officers who die in active service after one year of contributing membership in the System, or who die within 180 days after retirement or termination of service and have at least one year of contributing membership service in the System at the time of death are eligible for death benefits. Lump sum death benefit payments to beneficiaries are equal to the employee's 121 highest month's salary in a row during the 24 months prior to the employee's death, but the benefit may not exceed $50,000 or be less than $25,000. All death benefit payments are made from the Death Benefit Plan. The Town has no liability beyond the payment of monthly contributions. Contributions are determined as a percentage of monthly payrolls, based upon rates established annually by the State. Separate rates are set for employees not engaged in law enforcement and for law enforcement officers. Because the benefit payments are made by the Death Benefit Plan and not by the Town, the Town does not determine the number of eligible participants. For the fiscal year ended June 30, 2023, the Town made contributions to the State for death benefits of $250. The Town's required contributions for law enforcement officers represented 0010% of covered payroll. The contributions to the Death Benefit Plan cannot  bes separated between the post-employment benefit amount and the other benefit amount.  2. Deferred Outflows and Inflows of Resources  Deferred outflows of resources at yeare endi is comprised of thet following:  Source  Amount $ 496,331 $ 496,331  Pension deferrals Total  Deferred inflows of resources at year-end are comprised of thet following:  Statement of Net Position $ 74,687 $ $ 74,687 $  General Fund Balance Sheet  Source  Pension deferrals Property tax receivable Total  38,326 38,326  39    Notes to the Financial Statements (continued)  3. Risk Management  The Town is exposed to various risks ofl loss related tot torts; theft or damage to, and destruction ofa assets; errors and omissions; injuries to employees; and natural disasters. The Town participates in three self-funded risk financing pools administered by the North Carolina League of Municipalities. Through this pool, the Town obtains general liability and auto liability coverage of $2 million per occurrence, property coverage up to thet total insurance values of the property policy, workers' compensation coverage up to the statutory limits, and employee health coverage up toa$ $1 million lifetime limit. The pooli is reinsured through commercial companies for single occurrence claims against general liability and property in excess of $500,000 and $300,000 up to statutory limits for workers' compensation. Thep pools are reinsured for annual employee health claims in excess of$150,000. The property liability pooll has an aggregate limit for the total property losses in single year, with the The Town carries commercial coverage for all other risks ofl loss. There have been no significant reductions in insurance coverage in the prior year and settled claims have not exceeded coverage in any of the past three The Town carries flood insurance through the National Flood Insurance Plan (NFIP). Because the Town is in an area of the State that has been mapped and designated an" "A" area (an area close to a river, lake ofs stream) by the Federal Emergency Management Agency, the Town is eligible to purchase coverage of $500,000 per structure through the NFIP. The Town also is eligible to and has purchased commercial flood insurance for another $5,000,000 of coverage per structure located in Zones B, C, and X. There is a deductible of $50,000 Ina accordance with G.S. 159-29, the Town's employees that have access to $100 or more at any given time of the Town's funds, are performance bonded through a commercial surety bond. The public employees that have access to funds are bonded under a blanket bond for $10,000. The finance officer has a bond based on  reinsurance limit based upon a percentage of the total insurance values.  fiscal years.  pers structure.  revenues.  4. Claims, Judgments and Contingent Liabilities  There are no known claims, judgments or contingent liabilities as of June 30, 2023.  5. Long-term Obligations a. Installment Purchases Serviced by the General Fund 5.L Long-term Obligations Serviced by the Water and Sewer Fund 2023, $703,705 was outstanding.  At. June 30, 2023, the Town had no general long-term debt obligations.  On July 2, 2012, The Town was approved for State General Revolving Loan Account from NCDENR of $2,019,292 at 0% interest for sewer improvements. At. June 30, 2016, $1,307,039 was advanced. At. June 30, On March 17, 2023, the Town entered into an Installment Purchase Agreement with Uwharrie Bank for $3,000,000 to fund water and sewer improvements. Monthly payments of $27,183 began April 17, 2023 including interest at 1.66% for 120 months. At June 30, 2023, $2,583,211 was outstanding.  40    Notes to the Financial Statements (continued)  5.Long-term Obligations (continued)  Future maturities fort the long-t term debt, including interest of $202,155, are as follows:  NCDENR Interest  Uwharrie Bank Interest 37,648 32,753 27,777 22,368 38,037  Principle 2024 $7 70,370 $ 2025 70,370 2026 70,370 2027 70,370 2028 70,370 2028-32 351,841 $703,691 $  Total 70,370 70,370 70,370 70,370 351,841  Principle 288,549 293,444 298,420 303,830 1,116,343  Total 326,197 326,197 326,197 326,197 1,154,380  $7 70,370 $ 282,625 $ 43,572 $ 326,197  $703,691 $ 2,583,211 $202,155 $2,785,365  b. Changes in Long-term Liabilities  Balance June 30, 2022 Increases $ $ 10,563 12,407 146,395 356,790 135,403  Balance Current $ $ 22,970 503,185 124,853  Governmental activities: Installment purchases Compensated Absences Pension liabity- -LGERS Pension liabity- LEO Business-type activities: Pension liability NCDEQI loan Installment purchases  Decreases June 30,2023 Maturities  10,550  Total Govenmental activities $ 292,361 $ 369,197 $  10,550 $ 651,008 $  Compensated absences $ 2,181 $  845 $ 136,582  $ 3,026 $ 181,120 703,691 2,583,211  44,538 774,061 2,931,074  70,370 347,863  70,370 282,625  Total Business activities $3,751,854 $ 137,427 $ 418,233 $ 3,471,048 $-352,95  Compensated absences for governmental activities have typically been liquidated int the General Fund. The legal debt margin fort the Town is $19,823,122 or8 8% oft the assessed valuation.  41    Notes to the Financial Statements (continued)  C. Interfund Balances and Activity There were no transfers during the current year. C. Net Investment in Capital Assets  Governmental Business-type $3 3,451,065 $ 14,412,204 3,451,065 $11,125;302  Capital Assets less: long-term debt add: unexpended debt proceeds Neti investmenti in capital assets  3,286,902  D. Fund Balance  The following schedule provides management and citizens with information on the portion of General fund  balance thati is available for appropriation:  Total fund balance- General Fund Less: Stabilization by State Statute Streets Powell Bill Prepaids nonspendable Appropriated Fund Balance ini future budget Working Capital /Fund Balance Policy Remaining Fund Balance  $ 1,443,282 173,373 81,365  $ 1,188,544  The outstanding encumbrances are amounts needed to pay any commitments related to purchase orders and  contracts that remain unperformed at year-end.  Encumbrances  General Fund $0  Non-Major Funds  IV. Summary Disclosure of Significant Contingencies Federal and State Assisted Programs  The Town has received proceeds from Federal and State grants. Periodic audits of these grants are required and certain costs may be questioned as not being appropriate expenditures under the grant agreement. Such audits could result in the refund of grant moneys to the grantor agencies. Management believes that any required refunds willl bei immaterial. No provision has been made int the accompanying financial statements for  the refund of grant moneys.  42    Notes to the Financial Statements (continued)  V.S Significant Effects of Subsequent Events  Subsequent events occurring after the statement of financial position date have been evaluated through  November6 6, 2023, whichi is the date thei financial statements were available to bei issued.  43            Town of Oakboro, North Carolina General Fund For the Year Ended June 30, 2023  Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual  (With Comparative Actual Amounts for the Year Ended June 30,2022)  Actual Year end June 30, 2022 $ 930,519 930,519 910 910 709,482 8,429 12,665 164,596 895,173 82,284 10,000 92,284 14,295 14,029 28,324 77,755 16,000 93,755 2,609 17,276 97,369 114,645 2,158,219  Variance Favorable (Unfavorable)  Budget  Actual 1,021,087 1,021,087 $ 675 675 775,970 9,789 93,635 179,157 1,058,551 82,261 82,261 12,005 50,937 62,942 85,982 19,762 105,744 12,188 22,227 14,875 91,895 128,997 2,472,445  REVENUES: Ad valorem taxes: Current) year Penalties andi interest Other taxes andl licenses: Privilege Licenses Unrestricted ntergovermental: Local option sales tax Beer and winet tax Sales taxr refund Utility franchise tax Restrictedi intergovermental: Powell Billa allocation DOC grant Permits andf fees: Building permits Police Sales and Services: Sanitation Cemetary Investment eamings: Miscellaneous: Donations SDF study reimbursement Other revenues Total revenues  $ 1,017,550  3,537 75  600  962,911  95,640  82,000  261  10,000  52,942  84,000 1,000  21,744 11,188  37,600 2,195,661  91,397 276,784  46    Town of Oakboro, North Carolina General Fund (Continued) For the Year Ended June 30, 2023  Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual  (With Comparative Actual Amounts for the Year Ended June 30,2022)  Actual Year end June 30, 2022 $ 75,730 6,644 12,868 95,243 212,223 79,832 292,055 20,803 4,777 21,981 47,560 434,857 119,470 540,068 21,758 81,081 28,073 68,723 739,704 859,174 174,218 34 31,565 25,564 231,381 231,381  Variance Favorable (Unfavorable)  Budget  Actual $ 42,942 15,074 10,841 68,857 185,808 74,539 260,347 21,981 3,853 31,176 57,010 386,213 142,287 652,073 14,373 67,626 28,439 720 102,847 866,078 1,008,365 119,658 45 30,927 84,658 235,289 235,289  EXPENDITURES: General Government: Professional services Membership dues Telephone Utilities Administration: Salaries and! benefits Other operating expenditures Public! building: Repairs & maintenance Other operating expenditures Liability insurance Total general government Public Safety: Fire: Assistance tol localf fire unit Police: Salaries and! benefits Maintenance- equipment Other operating expenditures Gas Debt payment Capital outlay Total public safety Transportation: Streets and highways: Powell Bille expenses Powell Bill capital outlay Maintenance Street lights Other operatinge expenditures Capital outlay Total Transportation  390,000  3,787  1,010,000  1,635  239,920  4,631  47    Town of Oakboro, North Carolina General Fund (Continued) Fort the Year Ended June 30, 2023  Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual  (With Comparative Actual Amounts for the Year Ended June 30,2022)  Actual Year end June 30, 2022  Variance Favorable (Unfavorable)  Budget  Actual  EXPENDITURES: Environmental Protection: Solid Waste: Contract services Cemetary: Salaries and benefits Other operating expenditures Total Environmental Protection  $ 220,549 220,549 39,879 198 40,077 260,626  $ 161,502 161,502 27,521 30 27,551 189,054  262,000  1,374  Culture and Recreation: Parks andi recreation: Salaries and benefits Contract services Maintenance Donations Other operating expenditures Capital outlay Total cultrural andi recreation Total expenditures Revenues over expenditures  197,508 3,430 32,188 20,907 75,153 329,185 2,219,679 252,767  176,024 1,685 28,977 24,776 85,726 317,188 2,031,654 126,565  330,000 2,231,920 (36,259)  815 12,241 289,026  48    Town of Oakboro, North Carolina General Fund (Continued) Fort the Year Ended June 30, 2023  Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual  (With Comparative Actual Amounts fort the Year Ended June 30, 2022)  Actual Year end June 30, 2022 $  Variance Favorable (Unfavorable) $  Budget $  Actual $  OTHERI FINANCING SOURCES (USES): Transfer to Other Funds: None Transfer from Other Funds: None Revenues over expenditures Fund Balance appropriations Net change inf fund balance Fund balances beginning of year Fund balances- end of year  (36,259) 36,259  252,767 252,767 1,190,515 1,443,282  289,026 (36,259) 252,767  126,565 126,565 1,063,950 1,190,515  49    Town of Oakboro, North Carolina Statement of Revenues, Expenditures and Changes in Fund Balances- Budget and Actual Special Revenue - ARPA Funds Fort the year ended June 30, 2023  Variance Favorable (Unfavorable)  REVENUES: Restrictedi intergovernmental ARPAF Funds Total revenues EXPENDITURES: Charlotte Pipe WSI Project Construction Total expenditures Revenues over expenditures OTHER FINANCING SOURCES: Operating transfers in (out): General Fund Revenue and other financing sources over expenditures Fund balances: Beginning ofy year, July1 End of year, June 30  Budget 300,000  Actual 298,675 298,675 $  1,325  298,675 298,675  300,000  1,325  50    Town of Oakboro, North Carolina Fort the Fiscal Year Ended June 30, 2023  Water Fund  Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) (With Comparative Actual Amounts for the Year Ended June 30, 2022)  Actual Year ended June 30, 2022 $ 669,949 $ 7,718 677,667 5,505 683,171 4,317 1,412 688,900  Variance Favorable (Unfavorable)  Budget  Actual $ 756,288 24,677 8,760 789,725 $ (320,655) 12,805 802,530 2,250 18,112 822,892  REVENUES: Operating! Revenues: Charges Fees Penalties  $1 1,110,380 1,110,380  Non-operating revenues Total operating revenues Other Sources: Interest Miscellaneous Total revenues EXPENDITURES: Administration: Telephone Professional services Insurance Other operating expenditures Water Operations: Salaries ande emplyee benefits Maintenance lines Maintenance- other Other operating expenditures Water system test Water purchases Debt Service: Principal Interest  12,805 (307,850) 2,250 17,112 (288,488)  1,000 1,111,380  3,236 21,600 7,500 9,103 41,438 179,806 80,604 13,775 32,181 5,565 311,931 252,157  4,958 3,560 7,749 7,964 24,232 147,958 50,924 10,558 44,868 4,725 259,032 233,285  50,000  8,562  320,000 575,000  8,069 322,843  91,380  91,380  51    Town of Oakboro, North Carolina Water Fund (Continued) Fort the Fiscal Year Ended June 30, 2023  Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP) (With Comparative Actual Amounts for the Year Ended June 30, 2022)  Actual Year ended June 30, 2022  Variance Favorable (Unfavorable)  Budget  Actual  Capital Outlay: Equipment Total expenditures Revenues over expenditures Other financing sources (uses): Transfers (to) from other funds: Total Other Financing (Uses) Fund Balance Appropriated Revenues over expenditures and other financing (uses) Reconciliation of modified accruall basis to fulla accrual basis: Reconcilingi items: Capital outlay Pension deferred outflows Pension deferredi inflows Pension liability Depreciation Change in accrued vacation Change in Net Position  $ 75,000 $ 66,743 $  8,258 $ 24,398 439,110 150,622  1,111,380  672,270 150,622  540,946 147,954  150,622 $ 150,622  147,954  66,743 19,309 32,516 (60,463) (151,189) (2,072) (95,157) 55,466  24,398 3,942 (34,349) 30,779 (142,787) 1,386 (116,632) 31,322  52    Town of Oakboro, North Carolina For the Fiscal Year Ended June 30, 2023  Sewer Fund  Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) (With Comparative Actual Amounts for the Year Ended June 30,2022)  Actual Year ended June 30, 2022 $ 500,141 71,340 119,678 691,160 743 743 691,902 7,184 124 1,177 8,485 145,007 310,979 35,858 3,968 16,103 28,512 147 540,574  Variance Favorable (Unfavorable)  Budget  Actual $ 681,642 33,230 90,694 92,623 898,190 $ (13,795) 23 23 898,213 7,410 418 7,828 212,098 275,218 82,239 4,000 16,904 16,091 49 606,598  REVENUES Operating revenues: Sewer charges Connection fees Sale of capacity Miscellaneous Non-operatingi revenues: Interest oni investments Totalr revenues EXPENDITURES Administration: Telephone Office expenses Other Total Administration Waste collection andt treament: Salaries ande employee benefits Wholesale costs Repairs andi maintenance Professional /( Contract Utilities Other Supplies and chemicals Settlement fees Total waste collection and treatment  $ 911,985  23 (13,772)  911,985  8,000  172  660,235  53,637  53    Town of Oakboro, North Carolina Sewer Fund (Continued) For the Fiscal Year Ended June 30, 2023  Schedule of Revenues and Expenditures Budget and Actual (Non-GAAP) (With Comparative Actual Amounts for the Year Ended June 30, 2022)  Actual Year ended June 30, 2022 $ 139,296 12,624 151,920 93,731 93,731 794,710 (102,808) 156,250 156,250 53,442  Variance Favorable (Unfavorable)  Budget  Actual $ 418,234 47,125 465,358 $ 48,993 48,993 1,128,777 (230,564) 156,250 156,250  Debt service: Principal retirement Interest andf fees Total debts service Capital outlay: Equipment Total capital outlay Total expenditures Revenues over (under) expenditures before other financing sources Other financing sources (uses): Sale ofs sewer system Fund balance appropriated Total otherf financing (uses) Revenues and other financing sources over (under) expenditures Reconciliation of modified accrual basis to full accrual basis: Revenues and other financing sources over (under) expenditures Collection on long-term receivable Depreciation Interest earned on project monies Grant income Deferred pension outflows Deferred pension inflows Pension liability Change in accrued vacation Purchases of capital assets Debt retirement Change inl Net Position  475,000 50,000 1,193,235 (281,250) 156,250 125,000 281,250  9,642 1,007 64,458 50,686 (125,000) (125,000)  (74,314) $ (74,314)  (74,314) (156,250) (103,552) 674,773 32,363 26,079 (75,654) 1,227 48,993 418,234 791,899  53,442 (156,250) (113,216) 1,334 4,593,728 1,808 (28,430) 28,022 (1,102) 93,731 139,296 4 4,612,362  54    Town of Oakboro, North Carolina Schedule of Revenues and Expenditures Water and Sewer Capital Project Fund Budget and Actual (Non-GAAP) From inception through June 30, 2023  Actual  Variance Positive  Project  Authorization Prior Year Current' Year Total to Date (Negative) 700,000 $ 298,675 $ 298,675 $ 597,350 $ (102,650)  REVENUES Sewer system improvements ARP grants NCI DOC grant Golden Leaf grant Other Total revenues EXPENDITURES Charlotte Pipe Water ands sewer system improvements Construction andi improvements Technical services Right of ways Administration Total expenditures ARP grant expenditures Water ands sewer system improvements Construction andi improvements Total expenditures Revenues under expenditures OTHER FINANCING SOURCES Transfers from Town Loan proceeds Total othert financing sources Revenues and other sources over expenditures  2,500,000 2,500,000 5,700,000  2,500,000 1,795,053 1,334 4,595,062  2,500,000 2,171,151 1,334 5,269,835  376,098 674,773  (328,849) 1,334 (430,165)  7,279,021 448,600 75,000 332,790 8,135,411 700,000 700,000 (3,135,411) 135,411 3,000,000 3,135,411 $  5,737,705 357,851 113,336 165,395 6,374,287  2,317,348 26,835 26 152,137 2,496,346  8,055,053 384,686 113,362 317,532 8,870,633 542,043 542,043 (4,142,841) 3,000,000 3,000,000  (776,032) 63,914 (38,362) 15,258 (735,222) 157,957 157,957 (272,208) 135,411 135,411  243,368 243,368 (2,022,593) 3,000,000 3,000,000  298,675 298,675 (2,120,248)  $ 977,407 $(2,120,248) $(1,142,841) $(1,142,841)  55    Town of Oakboro, North Carolina Schedule of Ad Valorem Taxes Receivable  General Fund June 30,2023  Uncollected Balance June 30, 2022 $  Uncollected Balance June 30, 2023 12,502 6,177 3,991 2,018 2,460 2,657 2,199 2,955 1,714 1,653 38,326  Collections and Credits 4,883 983 1,299 464 198 280 53 68 306 1,990 1,013,957 $  Fiscal Year 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012  Additions  1,015,935 $ 1,003,433 $  11,060 4,974 3,317 2,924 2,855 2,479 3,008 1,782 1,959 1,990 $ 36,348  ) 1,015,935  Reconciliation with revenues: Taxes-Ad' Valorem-General Abatement and adjustments Total collections and credits  1,021,087 (7,130) 1,013,957  56    Town of Oakboro, North Carolina Analysis of Current Taxl Levy Town-Widel Levy For the Year Ended June 30, 2023  Total Levy Property excluding Registered Motor Vehicles 867,148 $ 867,148 867,148  Registered Motor Vehicles 148,787 148,787 148,787  Total Property Valuation 211,499,512 36,289,512 247,789,024 247,789,024  Amount of Levy 148,787 1,015,935 1,015,935  Rate 0.41 $ 867,148 0.41 0.41  Original levy: Property taxed at current years rate Registeredi motor vehicles Total Discoveries: Current year taxes Total Abatements Net Levy  247,789,024  1,015,935 12,502 1,003,433 98.77%  867,148 12,502 854,646 $ 148,787 98.56%  148,787  Uncollected taxes at. June 30, 2023 Current year'st taxes collected Percent current year collected  100.00%  57    EDDIE CARRICK, CPA, PC Certified Public Accountant  Report On Internal Control Over Financial Reporting And On Compliance and Other Matters Based On An Audit Of Financial Statements Performed In Accordance With Government Auditing Standards  Independent Auditor's Report  Tot the Honorable Mayor and Board of Aldermen Town of Oakboro, North Carolina  Ihave audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards issued by the Comptroller General of the United States, the accompanying financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the Town of Oakboro, North Carolina, as of and for the year ended June 30, 2023, and the related notes to the financial statement, which collectively comprises the Town of Oakboro's basic financial statements, and have issued my report thereon dated November 6, Inp planning and performing my audit of the financial statements, Iconsidered the Town of Oakboro's internal control over financial reporting (interal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing my opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of Oakboro's internal control. Accordingly, I do not express A deficiency in intemal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on at timely basis. A: significant deficiencyi is a deficiency or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit My consideration oft thei internal control was fort the limited purpose describedi in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. I The expenditures for the Charlotte Pipe Capital Project exceeded budget in violation of NC General Statutes. The Town had changed finance officer and was unaware that the budget changes had not been adopted. Corrections to As part of obtaining reasonable assurance about whether the Town of Oakboro's financial statements are free from material misstatement, performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct andi material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of noncompliance or other matters that are required tol be reported under Govemnment. Auditing Standards.  2023.  Report on Internal Control Over Financial Reporting  an opinion on the effectiveness of the Town's internal control.  attention by those charged with governance.  identified the following material weakness.  the budget have been adopted in the current year. Report on Compliance and Other Matters  Member of the American. Institute ofCertified Public Accountants  151 Young Drive, Lexington, NC 27292 336-249-2545, Fax: 336-249-4745  58    Purpose oft this Report  The purpose of this report is solely to describe the scope of my testing ofi internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This reporti is an integral part of an audit performed in accordance with Govemment. Auditing Standards ino considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any  other purpose. Eddie Carrick CPA, PC  lc.crt Lexington, North Carolina November 6, 2023  59