CAFR- West Virginia

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West Virginia Comprehensive Annual

Financial Report For the Fiscal Year

Ended June 30, 2021

Jim Justice

Governor

Mark Scott

Cabinet Secretary

Department of Administration

Sarah H. Long, CPA

Chief Financial Officer and

Assistant Cabinet Secretary

Department of Administration

Prepared by the Financial

Accounting and Reporting Section

Governor Jim Justice

Jim Justice Governor of West Virginia

To the Honorable Members of the West Virginia Legislature and the Citizens of West Virginia:

I am pleased to provide you with the State of West Virginia's Comprehensive Annual Financial Report (CAFR) for the year ended June 30, 2021. An independent certified public accounting firm has audited the basic financial statements contained in this report.

The CAFR demonstrates West Virginia's commitment to financial accountability and national standards. This document provides the Legislature and citizens of West Virginia with the state's financial data. It can be accessed on the Internet at www.finance.wv.gov.

This report was compiled with the help of individuals throughout state government. Each state agency provided clear, concise information to ensure the highest level of financial accountability.

Sincerely,

Jim Justice Governor

State Capitol | 1900 Kanawha Blvd., East, Charleston, WV 25305 | (304) 558-2000

ACKNOWLEDGMENTS Report Prepared By:

West Virginia Department of Administration Finance Division Financial Accounting and Reporting Section 2101 Washington Street, East Building 17, 3rd Floor Charleston, West Virginia 25305 (304) 558-4083

Financial Reporting Team:

Stephanie Bailes, CPA Betsy Chapman, CGFM Samantha Chapman, CGFM Taylor Cole Melody Duke Cheryl Garner Reneé King Luke Murray Matthew Reynolds Timothy Scites Robert Tanner Kay Walden, CGFM Maria Yoakum

A Special Thanks To:

Sarah H. Long, CPA

Special appreciation is given to all personnel throughout the State whose extra effort to contribute accurate, timely financial data for their agencies made this report possible. The technical support of West Virginia Our Advanced Solution with Integrated Systems (wvOASIS) has been invaluable. Also, photo credit goes to the Division of Tourism.

We invite you to visit our website: http://www.finance.wv.gov.

West Virginia

TABLE OF CONTENTS

INTRODUCTORY SECTION

Letter of Transmittal ......................................................................................................................................................... x GFOA Certificate of Achievement ................................................................................................................................... xviii Organization Chart ............................................................................................................................................................ xix State of West Virginia Principal Officials ...................................................................................................................... xx

FINANCIAL SECTION

Report of Independent Auditors ...................................................................................................................................... 2 Management’s Discussion and Analysis ........................................................................................................................ 6

Basic Financial Statements

Government-wide Financial Statements

Statement of Net Position ................................................................................................................................... 22 Statement of Activities ......................................................................................................................................... 24

Governmental Funds Financial Statements

Balance Sheet ......................................................................................................................................................... 28 Reconciliation of the Governmental Funds

Balance Sheet to the Statement of Net Position ............................................................................................ 30 Statement of Revenues, Expenditures, and Changes in Fund Balances .................................................... 31 Reconciliation of the Statement of Revenues, Expenditures, and Changes in

Fund Balances to the Statement of Activities ............................................................................................. 32

Proprietary Funds Financial Statements

Statement of Net Position ................................................................................................................................... 34 Statement of Revenues, Expenses, and Changes in Fund Net Position .................................................... 36 Statement of Cash Flows ..................................................................................................................................... 38

Fiduciary Funds Financial Statements

Statement of Fiduciary Net Position ................................................................................................................ 44 Statement of Changes in Fiduciary Net Position ........................................................................................... 45

Discretely Presented Component Units Financial Statements

Combining Statement of Net Position .............................................................................................................. 48 Combining Statement of Activities .................................................................................................................... 52

West Virginia

Notes to the Financial Statements:

Note 1 – Summary of Significant Accounting Policies ................................................................................. 55 Note 2 – Restatements and Restricted Balances .......................................................................................... 77 Note 3 – Net Position/Fund Deficits ............................................................................................................... 80 Note 4 – Deposits and Investments ................................................................................................................. 83 Note 5 – Receivables ........................................................................................................................................... 124 Note 6 – Interfund Balances ............................................................................................................................. 128 Note 7 – Interfund Transfers ........................................................................................................................... 130 Note 8 – Restricted Assets ................................................................................................................................. 133 Note 9 – Capital Assets ...................................................................................................................................... 135 Note 10 – Long-Term Obligations ..................................................................................................................... 139 Note 11 – Leases .................................................................................................................................................... 153 Note 12 – Retirement Systems ........................................................................................................................... 156 Note 13 – Other Postemployment Benefits ..................................................................................................... 175 Note 14 – Risk Management ............................................................................................................................... 185 Note 15 – Commitments and Contingencies .................................................................................................... 191 Note 16 – Subsequent Events ............................................................................................................................. 195

Required Supplementary Information

Budgetary Comparison Schedule ....................................................................................................................... 198 Notes to Required Supplementary Information – Budgetary Reporting ................................................... 201 Budgetary Comparison Schedule, Budget-to-GAAP Reconciliation ........................................................... 204 Pension Plans Schedules ..................................................................................................................................... 206 Notes to Required Supplementary Information – Pension ........................................................................... 222 OPEB Plan Schedules .......................................................................................................................................... 224 Notes to Required Supplementary Information – OPEB .............................................................................. 227

Combining Financial Statements and Schedules

Nonmajor Governmental Funds

Combining Balance Sheet ......................................................................................................................... 232 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................... 234

Nonmajor Special Revenue Funds

Combining Balance Sheet ......................................................................................................................... 238 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................... 240

Nonmajor Debt Service Funds

Combining Balance Sheet ......................................................................................................................... 244 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................... 245

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Internal Service Funds

Combining Statement of Fund Net Position ........................................................................................ 248 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position .................... 249 Combining Statement of Cash Flows ..................................................................................................... 250

Nonmajor Proprietary Funds

Combining Statement of Net Position ................................................................................................... 253 Combining Statement of Revenues, Expenses, and Changes in Fund Net Position .................... 254 Combining Statement of Cash Flows ..................................................................................................... 255

Pension Trust and Other Employee Benefit Trust Funds

Combining Statement of Fiduciary Net Position ................................................................................. 260 Combining Statement of Changes in Fiduciary Net Position ........................................................... 262

Investment Trust Funds

Combining Statement of Fiduciary Net Position ................................................................................. 266 Combining Statement of Changes in Fiduciary Net Position ........................................................... 266

Custodial Funds

Combining Statement of Fiduciary Net Position ................................................................................. 269 Combining Statement of Changes in Fiduciary Net Position ........................................................... 270

Nonmajor Discretely Presented Component Units ........................................................................................ Combining Statement of Net Position ................................................................................................... 274 Combining Statement of Activities ......................................................................................................... 276

STATISTICAL SECTION

Index to Statistical Section

Schedule 1 – Net Position by Component ........................................................................................... 282 Schedule 2 – Changes in Net Position .................................................................................................. 284 Schedule 3 – Fund Balances – Governmental Funds ........................................................................ 288 Schedule 4 – Changes in Fund Balances – Governmental Funds ................................................... 290 Schedule 5 – Revenue Base ..................................................................................................................... 292 Schedule 6 – Revenue Rates ................................................................................................................... 294 Schedule 7 – Revenue Payers by Industry/Category ......................................................................... 296 Schedule 8 – Ratios of Outstanding Debt ............................................................................................ 298 Schedule 9 – Pledged Revenue Coverage ............................................................................................. 300 Schedule 10 – Demographic and Economic Indicators ....................................................................... 308 Schedule 11 – Principal Employers ......................................................................................................... 310 Schedule 12 – Education Enrollment ..................................................................................................... 311 Schedule 13 – State Employees by Function. ....................................................................................... 312 Schedule 14 – Operating Indicators by Function ................................................................................. 314 Schedule 15 – Capital Assets Statistics by Function ........................................................................... 316 Schedule 16 – Miscellaneous Statistics .................................................................................................. 318

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STATE OF WEST VIRGINIA DEPARTMENT OF ADMINISTRATION

Mark D. Scott CABINET SECRETARY

December 17, 2021

The Honorable Jim Justice, Governor The Honorable Members of the West Virginia Legislature Citizens of the State of West Virginia

Dear Governor, Senators, Delegates, and Citizens:

I am pleased to present the 2021 Comprehensive Annual Financial Report (2021 CAFR) of the State of West Virginia for the fiscal year ended June 30, 2021. This report was prepared by the Financial Accounting and Reporting Section (FARS) within the Finance Division of the Department of Administration (Management).

The 2021 CAFR was prepared in conformity with the reporting model outlined by the Governmental Accounting Standards Board (GASB) Statements No. 34 and No. 35, and other related statements. This reporting model's objective is to provide a clear picture of the government as a single, unified entity as well as to provide traditional fund-based financial statements. The State of West Virginia's financial statements for the fiscal year ended June 30, 2021, are fairly presented in conformity with generally accepted accounting principles in the United States (GAAP).

This independent audit of the financial statements of the State of West Virginia is part of a broader, federally mandated “Single Audit” designed to meet the requirements of federal grantor agencies. The standards governing Single Audit engagements require the independent auditors to report not only on the fair presentation of the basic financial statements, but also on West Virginia's internal controls and compliance with requirements applicable to major programs.

GAAP requires that Management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The State's MD&A can be found immediately following the Report of the Independent Auditors.

The 2021 CAFR consists of Management's representations concerning the financial information of the State of West Virginia. Consequently, Management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a reasonable basis for making these representations, Management of the State has

1900 KANAWHA BOULEVARD, EAST • BUILDING 1, ROOM E-119 • CHARLESTON, WEST VIRGINIA 25305-0120 • (304) 558-4331 • FAX: (304) 558-2999

established a comprehensive internal control framework that is designed to protect the government's assets from loss, theft, or misuse and to compile sufficiently reliable information for the preparation of the State's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the State's comprehensive framework of internal controls is designed to provide reasonable, rather than absolute, assurance that these financial statements are free from material misstatements. As Management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

The State of West Virginia's financial statements were audited by Ernst & Young, LLP. The independent auditors concluded, based upon their audit and the reports of other auditors, that there was a reasonable basis for rendering an unmodified opinion.

Profile of the Government

The State of West Virginia provides a full range of services, including education, social and health services, transportation, public safety, conservation of natural resources, and economic development. In addition to general government activities, this report includes financial information regarding various discretely presented component units which are financially accountable to the State, or for which the nature and significance of their relationship with the State are such that their exclusion would cause this report to be misleading or incomplete. The criteria used to determine financial accountability of a particular entity are the appointment by a state official of a voting majority of the entity's governing body and (1) the ability of the State to impose its will on that entity or (2) the potential for the entity to provide specific financial benefits to or impose specific financial burdens on the State. See Note 1 (Summary of Significant Accounting Policies) for a comprehensive discussion of the criteria used in determining the State's financial reporting entity.

Budgetary control is maintained through legislative appropriations and the Executive Branch quarterly allotment process. Agencies submit budgetary requests to the State Budget Office. The State Budget Office compiles the Executive Budget on behalf of the Governor, who submits it to the Legislature. After the approval of the budget, the State Budget Office maintains control over the spending patterns of the State at the activity level and by use of the quarterly allotments. The State Auditor exercises control over spending at the annual appropriation level. All appropriations, except funds which are reappropriated, expire 31 days after fiscal year-end.

Economic Review

West Virginia leads the nation with its commitment to energy research and a diverse energy portfolio that includes not only coal but natural gas, wind, hydroelectric, geothermal, biomass, and solar. The State has long been, and remains today, one of America's leading net exporters of electricity. West Virginia is a net supplier of electricity to the regional grid and is among the top five states in the nation in net interstate sales of electricity. West Virginia remains competitive in low-cost energy.

D E P A R T M E N T O F A D M I N I S T R A T I O N O F F I C E O F T H E C A B I N E T S E C R E T A R Y

The Honorable Jim Justice, Governor The Honorable Members of the West Virginia Legislature Citizens of the State of West Virginia

The State is the sixth-largest producer of marketed natural gas in the nation. This substantial increase in production can be attributed to the discovery of vast gas reserves in the Marcellus and Utica Shale formations beneath portions of the Appalachian region and the utilization of horizontal drilling techniques to access those reserves. The region's 6,000-foot-deep Marcellus Shale gas fields, extending from New York to West Virginia, are believed to contain more than 84 trillion cubic feet of recoverable natural gas, one of the world's largest natural gas fields.

West Virginia's business climate is among the best in the country and ranks tenth in the Business Facilities 2021 State Rankings Report. Business Facilities also ranked Charleston, WV, as third best business climate for populations less than 200k. Business Facilities considers the competitiveness of each state's infrastructure, workforce, economy, business friendliness, and access to capital when determining a state's business climate ranking.

West Virginia continues to diversify its economy, which includes industries such as technology, chemicals and polymers, automotive, manufacturing, natural gas, aerospace, metals, fulfillment distribution, and building products.

Global companies and organizations have selected West Virginia for their expansion because of its business climate and productive workforce. Below are examples of this economic growth in the State:

• Virgin Hyperloop announced it will locate its new Hyperloop Certification Center (HCC) on nearly 800 acres of land, spanning Tucker and Grant counties, where it will leverage intellectual capital and resources from West Virginia University, Marshall University, and from across the State. West Virginia was chosen over 17 others states for this development project and will now be at the center of developing the next innovation in barrier-breaking transportation.

• West Virginia Methanol, Inc., announced a $350 million investment to build West Virginia’s first methanol-producing plant in Pleasants County, generating construction and ongoing manufacturing jobs for the State.

• DataRobot, the leader in augmented intelligence, announced that the company is opening an office in Vantage Ventures in Morgantown, West Virginia.

• Gruppo Fanti, a metal packaging manufacturing company headquartered in Bologna, Italy, will open its first U.S.-based plant in Weirton. The new plant will initially create 40 new full-time jobs, and Gruppo Fanti plans to invest $30 million into the Brooke County operation.

• Clorox’s new manufacturing facility is under construction and hiring, bringing $190 million in economic impact to the Eastern Panhandle.

D E P A R T M E N T O F A D M I N I S T R A T I O N O F F I C E O F T H E C A B I N E T S E C R E T A R Y

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• Companies like Toyota Motor Manufacturing ($210 million facility upgrade investment), Macy’s ($120 million automation investment), and Proctor and Gamble continue to invest in and promote job growth in West Virginia.

• The Department of Economic Development has assisted with many significant tourism developments in 2021 and promoted the use of the Tourism Development Act tax incentive. Since 2019, the Tourism Development Act tax credit program has received more applications than the first decade of the program alone. Recent applications represent more than $250 million in investment in West Virginia’s tourism industry.

• The New River Gorge was named the nation's newest national park, promoting further economic growth for the state.

Looking forward, other significant developments for 2022 include:

• Mitsubishi Heavy Industries RJ signed a contract in May 2021, investing $20 million to expand the facility by 100,000 square feet and adding two hangars, expected to be completed in 2022. This will generate more jobs and growth for the State.

• Technologies and Materials North American manufacturing plant located in Jefferson County announced that it is set to add a $7 million expansion, which will double the size of the facility. This will increase construction and manufacturing jobs for the State.

• CS Global Group, a Turkish Mining company that specializes in barite manufacturing and sales, has chosen Moundsville, West Virginia, as the location for its first manufacturing plant in the United States. The company will create 47 new full-time jobs and plans to invest $10 million in the facility, which will be operational by the first quarter of 2022.

These investments reflect the increasingly diversified nature of the economy that West Virginia is building. West Virginia is well positioned as the ideal location for new and expanding companies that want to create good jobs in the State. West Virginia provides access to:

• A skilled and flexible workforce that has earned a reputation for dedication, loyalty and low turnover rate

• Business taxes that are among the lowest in the country

• Electricity rates that are 13% below the national average

• A strategic location within an eight-hour drive to half the U.S. population and a third of the Canadian market

• A community and technical college system that is highly responsive to business and workforce needs

D E P A R T M E N T O F A D M I N I S T R A T I O N O F F I C E O F T H E C A B I N E T S E C R E T A R Y

The Honorable Jim Justice, Governor The Honorable Members of the West Virginia Legislature Citizens of the State of West Virginia

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• High quality of life, low cost of living, and unparalleled outdoor recreational activities.

Major Initiatives

The State of West Virginia focused on several major initiatives during FY 2021. Some of these initiatives are outlined below:

Pro-Growth Tax Reforms

West Virginia enacted significant business tax reductions between 2006 and 2011 to help boost future investment in the State's economy. The Corporation Net Income Tax rate was reduced from 9% to 6.5%. In addition, West Virginia eliminated the Business Franchise Tax, the Corporate Charter Tax, the Telecommunications Tax, and a Business Registration Fee renewal requirement. The latest estimates project a net reduction of more than 70% in Corporation Net Income Tax for businesses over a ten-year period.

Beginning in 2022, the general multi-state corporation apportionment formula for income tax purposes changes from a three-factor formula involving the share of payroll, property, and sales in West Virginia to a single sales factor formula. As a result of this change, corporations with property and/or payroll in West Virginia face no direct marginal increase in tax liability associated with a decision to expand their physical presence in the State. An increase in either property investment or payroll in West Virginia has no direct impact on future corporation net income tax liability in the State.

In addition to lower business taxes, West Virginia offers a variety of tax credits, exemptions and special valuations for new and existing companies. Credits for manufacturers and certain other types of businesses that create new jobs can offset up to 100% of the State's business taxes. There are special valuations on aircraft, high technology, pollution abatement equipment, and property tied to specified customer supplier relations, which can dramatically reduce property taxes, and exemptions for manufacturers can eliminate sales tax for goods used in manufacturing. There are new tax credit programs that are now available for customer fulfillment and distribution centers as well as ethane cracker facilities.

Roads and Highways

During fiscal year 2021, the Department of Transportation (DOT) continued work on several of its major initiatives around the State, including Corridor H, the Wellsburg Bridge, US 35, WV 10, and the Airport Road - John Nash Boulevard portion of the King Coal Highway (to name a few). As a result of increased funding available from the Roads to Prosperity initiative, the DOT was able to direct additional resources toward secondary road and bridge preservation and renovation programs. During fiscal year 2021, the DOT authorized 995 highway and bridge construction projects statewide. Rugged mountainous terrain and numerous streams and rivers characterize the topography of the State, and, consequently, West Virginia's road system includes 7,232 vehicular bridges, of which the DOT is responsible for 7,124. The DOT’s bridge program

D E P A R T M E N T O F A D M I N I S T R A T I O N O F F I C E O F T H E C A B I N E T S E C R E T A R Y

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in fiscal year 2021, enhanced by an infusion of general obligation bond sales proceeds, in conjunction with the traditional State-Funded and Federal-Aid programs that started in 1988, allowed for 64 construction starts on bridge initiatives ranging from full replacement to deck overlays. The resurfacing initiative comprised 537 resurfacing projects, which addressed nearly 1,508 miles of roadway.

State Park Enhancements

The West Virginia State Park system is a recognized leader in park systems in the United States, and features a multitude of full-service restaurants, developed campgrounds, vacation lodges, golf courses, cabins ranging from pioneer to contemporary styles, conference centers, a tourist railroad, aerial tramways, rail trails, an island, and a major ski resort.

The system is composed of 35 state parks, nine state forests, the Greenbrier River Trail, the Elk River Rail Trail, and the North Bend Rail Trail. Facility inventory includes 798 lodge rooms, 358 cabins, 1546 campsites, 152 picnic shelters, and 559 playground units. More than 700 miles of hiking trails are provided across 46 areas.

The park system serves as a strong foundation for the growing tourism industry as destination locations. According to the Outdoor Industry Association research, the outdoor recreation economy in West Virginia contributes 82,000 direct state jobs resulting in $2 billion in wages and salaries. Consumers spend $7.6 billion annually on outdoor recreation.

The parks section manages or assists in managing more than 160,000 acres of public land and sees up to 10 million visitors annually. Traffic counts and projections show 2021 to be trending much higher in attendance with a projected four million attendees in July, August, and September 2021 alone. Currently, there are more than $150 million in renovations either completed, under construction, or in the planning stage.

Workers' Compensation Reforms

West Virginia continues to reduce its workers' compensation rates. The base rates have decreased for 17 consecutive filings since the privatization in January 2006. Employers will have saved $432 million since July 2006. The workers' compensation market is competitive, with more than 313 carriers providing workers' compensation.

As of June 30, 2021, the unfunded liability of the Workers' Compensation Old Fund has been eradicated and the June 30, 2021, net asset balance of the Workers' Compensation Old Fund is $58 million. Prior to the privatization, the unfunded liability for the former Workers' Compensation Fund exceeded $3 billion.

Long-Term Financial Planning and Relevant Financial Policies

In order to continue disciplined financial management, the State adheres to certain financial policies and prepares a long-term financial plan.

D E P A R T M E N T O F A D M I N I S T R A T I O N O F F I C E O F T H E C A B I N E T S E C R E T A R Y

The Honorable Jim Justice, Governor The Honorable Members of the West Virginia Legislature Citizens of the State of West Virginia

Long-Term Financial Planning

The State's Six-Year Financial Plan includes information on anticipated General and Lottery Funds revenues and expenditures over a six-year horizon with the goal of providing policymakers and citizens a clear understanding of not only the current budget but also the larger, long-term implications of budget decisions on the State's future fiscal outlook.

Financial Policies

Under current law, the State is required to deposit the first 50% of all surplus from the General Fund accrued during the fiscal year just ended into the Revenue Shortfall Reserve Fund A (Rainy Day Fund) until the aggregate amount of the fund is equal to 13% of total appropriations for the fiscal year just ended. For the fiscal year ending June 30, 2021, $15.4 million, half of the FY 2021 surplus, was deposited into the Rainy Day Fund. As of September 30, 2021, the aggregate amount of the Rainy Day Fund is 9.2% of FY 2021 appropriations.

Strong Financial Performance

In 2021, a strong recovery from the COVID-19 recession, along with roughly $200 million in deferred income tax receipts from the prior fiscal year, produced year-end revenues that were more than $413 million above original estimate. Per the Governor’s recommendations, the Legislature approved nearly $403.8 million in supplemental appropriations, including a $50 million surplus appropriation to the Rainy Day Fund. The final FY2021 year-end General Revenue Fund budgetary surplus was $30.8 million, half of which, by law, was transferred to the State’s Revenue Shortfall Reserve Fund (Rainy Day Fund A). West Virginia’s Rainy Day Funds rank in the top five in the country as a percentage of the State’s General Revenue appropriations at 20.5% as of September 30, 2021.

Conclusion

West Virginia continues to aggressively address the fiscal challenges associated with a changing economy. During Fiscal Year 2021, the State was able to manage its budgetary demands in a challenging economic environment. Governor Jim Justice and the members of the State Legislature worked collaboratively to ensure that financial and strategic decisions were made for the betterment of the State's citizens so that programs and services continue to operate efficiently. Meanwhile, our state’s leadership also maintains a competitive atmosphere for current and future businesses to ignite job growth.

Certificate of Achievement

The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the State of West Virginia for its CAFR for the fiscal years ended June 30, 1997 through 2020. The Certificate of

D E P A R T M E N T O F A D M I N I S T R A T I O N O F F I C E O F T H E C A B I N E T S E C R E T A R Y

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Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports.

A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to Certificate of Achievement Program requirements. We are again submitting it to the GFOA for consideration. Other State entities that have been awarded the Certificate of Achievement include the Board of Risk and Insurance Management, the Consolidated Public Retirement Board, the Department of Transportation, the Housing Development Fund, the Parkways Authority, the West Virginia Lottery, the Board of Treasury Investments, and the West Virginia Prepaid College Plan.

Acknowledgments

The annual budget document, prepared by the State Budget Office, provides additional information related to budget priorities and goals, including acknowledgement of significant accomplishments of various agency programs. The budget document has received the GFOA's Award for Distinguished Budget Presentation Program for the fiscal years 1997 through 2021 budgets.

The 2021 CAFR is an example of Governor Justice's unwavering belief in, and commitment to, the State's fiscal responsibility and accountability. Acknowledgment is given to the State Legislature and its leadership for their shared commitment to sound budgeting and to meeting the financial obligations of the State. This report would not be possible without the support of all West Virginia State agencies. The State's continued success directly depends on their cooperation and support.

Sincerely,

Sarah H. Long, CPA Chief Financial Officer Assistant Cabinet Secretary of Administration

D E P A R T M E N T O F A D M I N I S T R A T I O N O F F I C E O F T H E C A B I N E T S E C R E T A R Y

The Honorable Jim Justice, Governor The Honorable Members of the West Virginia Legislature Citizens of the State of West Virginia

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Community and Technical College Education

Sarah Armstrong Tucker, Ph. D. Chancellor

Dept. of Arts, Culture, and History

Randall Reid-Smith Commissioner

Dept. of Administration Allan L. McVey

Cabinet Secretary

Dept. of Health and Human Resources

Bill Crouch Cabinet Secretary

Dept. of Homeland Security Jeff Sandy

Cabinet Secretary

Dept. of Revenue Dave Hardy

Cabinet Secretary

Dept. of Transportation Byrd E. White

Cabinet Secretary

Dept. of Commerce Ed Gaunch

Cabinet Secretary

Dept. of Environmental Protection

Harold Ward Cabinet Secretary

Dept. of Veterans Assistance Randy Coleman

Acting Cabinet Secretary

Bureau of Senior Services Robert Roswall Commissioner

Dept. of Education W. Clayton Burch

Superintendent of Schools

Attorney General Patrick Morrisey

Agriculture Kent Leonhardt

Secretary of State Mac Warner

Auditor J.B. McCuskey

Treasurer Riley Moore

Magistrate Courts

Circuit Courts

Supreme Court

Family Courts

Legislative Auditor

House of Delegates

Senate

Legislative Services

Governor Jim Justice

Legislative Executive Judicial

As of June 30, 2021

State of WEST VIRGINIA

Principal Officials

Executive Branch Legislative Branch Judicial Branch

Governor Jim Justice

Senate President Craig Blair

Supreme Court Chief Justice Evan H. Jenkins

Agriculture Commissioner Kent Leonhardt

Speaker of the House Roger Hanshaw

Supreme Court Justice Tim Armstead

Attorney General Patrick Morrisey

Chairman Senate Finance Eric Tarr

Supreme Court Justice Elizabeth D. Walker

State Auditor J.B. McCuskey Chairman

Supreme Court Justice John A. Hutchison

Secretary of State Mac Warner

House Finance Eric Householder Supreme Court Justice

William R. Wooton

State Treasurer Riley Moore

A member firm of Ernst & Young Global Limited

Ernst & Young LLP 900 United Center 500 Virginia Street East Charleston, WV 25301

Tel: +1 304 343 8971 Fax: +1 304 357 5994 ey.com

Report of Independent Auditors

The MRC Global Retirement Plan Committee

Report on the Financial Statements

We were engaged to audit the accompanying financial statements of the MRC Global Retirement Plan, which comprise the statements of net assets available for benefits (modified cash basis) as of December 31, 2019 and 2018, and the related statement of changes in net assets available for benefits (modified cash basis) for the year ended December 31, 2019, and the related notes to the financial statements.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in conformity with the modified cash basis of accounting as described in Note 2; this includes determining that the modified cash basis of accounting is an acceptable basis for the preparation of the financial statements in the circumstances. Management also is responsible for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on conducting the audits in accordance with auditing standards generally accepted in the United States. Because of the matter described in the Basis for Disclaimer of Opinion paragraph, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.

Basis for Disclaimer of Opinion

As permitted by 29 CFR 2520.103-8 of the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, the plan administrator instructed us not to perform, and we did not perform, any auditing procedures with respect to the certified investment information described in Note 3, except for comparing such information with the related information included in the financial statements. We have been informed by the plan administrator that the entity that certified the investment information meets the requirements of 29 CFR 2520.103-8. The plan administrator has obtained certifications as of December 31, 2019 and 2018, and for the year ended December 31, 2019, stating that the investment information provided to the plan administrator is complete and accurate.

Disclaimer of Opinion on Financial Statements

Because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on these financial statements.

Report of Independent Auditors

The Honorable Jim Justice, Governor of the State of West Virginia

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund and the aggregate remaining fund information of the State of West Virginia (the State), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the basic financial statements listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in conformity with U.S. generally accepted accounting principles; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free of material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of certain entities or funds within the governmental activities, the business- type activities, the aggregate discretely presented component units, certain major funds, and certain entities or funds within the aggregate remaining fund information, which represent 59% of total assets, 66% of net position, and 10% of total revenues for the governmental activities; 92% of total assets, 94% of net position, and 72% of total revenues for the business-type activities; 100% of total assets, net position, and revenues for the aggregate discretely presented component units; 97% of total assets, 98% of fund balance, and 98% of revenues of the major Transportation Fund; 100% of total assets, fund balance/net position, and revenues of each of the following major funds—Tobacco Settlement Finance Authority, State Road Fund, Water Pollution Control Revolving Fund, Workers’ Compensation, Unemployment Compensation, West Virginia Infrastructure and Jobs Development Council, and Board of Risk and Insurance Management; and 86% of total assets, 89% of net position, and 23% of the total revenues for the aggregate remaining fund information, respectively. Those financial statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for certain entities or funds within the governmental activities, the business-type activities, the aggregate discretely presented component units, certain major funds, and certain entities or funds within the aggregate remaining fund information, is based solely on the reports of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

A member firm of Ernst & Young Global Limited

Modified Cash Basis of Accounting

As described in Note 2 to the financial statements, the financial statements have been prepared on the modified cash basis of accounting, which is a basis of accounting other than U.S. generally accepted accounting principles. Our disclaimer of opinion is not modified with respect to this matter.

Disclaimer of Opinion on Supplemental Schedule

The accompanying supplemental schedule (modified cash basis) of assets (held at end of year) as of December 31, 2019 is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. Because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph, we do not express an opinion on the supplemental schedule referred to above.

Report on Compliance of Form and Content with Department of Labor’s Rules and Regulations

The form and content of the information included in the financial statements and supplemental schedule, other than that derived from the certified investment information, have been audited by us in accordance with auditing standards generally accepted in the United States and, in our opinion, are presented in compliance with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.

September 30, 2020

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements 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 entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Opinions

In our opinion, based on our audit and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the State of West Virginia, at June 30, 2021, and the respective changes in its financial position and, where applicable, its cash flows thereof for the year then ended in conformity with U.S. generally accepted accounting principles.

Required Supplementary Information

U.S. generally accepted accounting principles require that the management’s discussion and analysis, budgetary comparison information for the general fund and each major special revenue fund when such information is presented as required supplementary information, Schedules of the State’s Proportionate Share of the Net Pension Liability, Schedules of State Contributions for Pension Plans, Schedules of Changes in the State’s Net Pension Liability and Related Ratios, Schedule of the State’s Proportionate share of the Net OPEB Liability, and Schedules of State Contributions for the OPEB Plan on pages 6 through 20 and 197 through 227 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, which considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic or historical context. We and the other auditors have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

A member firm of Ernst & Young Global Limited

Modified Cash Basis of Accounting

Disclaimer of Opinion on Supplemental Schedule

Report on Compliance of Form and Content with Department of Labor’s Rules and Regulations

September 30, 2020

Supplementary and Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the State of West Virginia’s basic financial statements. The accompanying supplementary information, such as the combining and individual nonmajor funds financial statements, and the other information such as the introductory and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The combining and individual nonmajor fund financial statements are the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied by us and the other auditors in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States. In our opinion, based on our audit, the procedures performed as described above, and the report of the other auditors, the accompanying combining and individual nonmajor funds financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

ey December 17, 2021

West Virginia

MANAGEMENT’S DISCUSSION AND ANALYSIS

This section of the State of West Virginia’s (the State) Comprehensive Annual Financial Report presents management’s discussion and analysis of the State’s financial performance during the fiscal year ended June 30, 2021. Please read it in conjunction with the transmittal letter in the Introductory Section of this report and the State’s financial statements, which follow this section.

FINANCIAL HIGHLIGHTS

Government-wide

The assets and deferred outflows of resources of the primary government exceeded its liabilities and deferred inflows of resources at the close of the fiscal year by $11 billion, reported as net position. Governmental activities reported $8.6 billion in net position, a $1.6 million increase, up 23% from last year, while the business-type activities reported net position of $2.5 billion, a $349 million increase.

Fund Level

At year-end, the governmental funds reported combined fund balances of $5.4 billion, an increase of $997 million, or 22% higher than the prior year. The unrestricted fund balance, including the committed, assigned, and unassigned balances, was $2.6 billion. The nonspendable balance was $195 million, and $2.6 billion was restricted to capital projects, debt service, general government operations, development, tourism and recreation, education, health and social services, public protection, and transportation. General Revenue cash surpluses allowed $15.4 million to be transferred to the Revenue Shortfall Reserve Fund (Rainy Day Fund); this transfer was up from the previous year by $1.4 million.

Long-Term Obligations

There was a net decrease in the State’s long-term obligations of $354 million. The Governmental Activities decreased by $197 million and the Business-type Activities decreased by $157 million. The net decrease of $354 million consisted of a decrease in net pension liability in the amount of $450 million, a decrease in other net postemployment benefit liability of $780 million, a decrease of $18.9 million in accrued and other liabilities, and an increase in payments on bonds, capital leases, and notes payable in the amount of $103 million. The decrease in accrued and other liabilities is related to a increase in Medicaid of $18.9 million, an increase of $8.2 million in taxes, and a decrease of $30.6 million in claims and judgments.

The insurance and compensation benefits liability decreased $140 million. The decrease consisted of a $15 million decrease at the Board of Risk and Insurance Management due to an increase in estimated claims expense, an increase in unpaid claims, and a $64 million decrease in Unemployment Compensation due to an increase in claims related to the COVID-19 pandemic. There was a $80 million decrease at the Offices of the Insurance Commissioner due to a decrease in estimated claims expense and a $20 million

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increase at the Public Employees Insurance Agency due to an increase in the incurred claims expense. See Note 14 for a more detailed explanation about risk management.

See Notes 10 and 11 for more information relating to bonds, capital leases, and notes payable.

OVERVIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the State of West Virginia’s basic financial statements. The basic financial statements include the government-wide financial statements, fund financial statements, and notes to the financial statements.

The basic financial statements include two kinds of statements that present different views of the State. The statement of net position and the related statement of activities are government-wide financial statements that provide both long-term and short-term information about the State’s overall financial status. The remaining statements are fund financial statements that focus on individual parts of the State’s government, reporting the State’s operations in more detail than the government-wide statements. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that presents budgetary comparisons, pension plans, and OPEB plan information as required by the Governmental Accounting Standards Board (GASB). In addition to these required elements, we have included a combining financial statements and schedules section that provides more details about our nonmajor governmental funds, nonmajor proprietary funds, fiduciary funds, and nonmajor discretely presented component units.

Government-wide Statements (Reporting the State as a Whole)

The statement of net position and the statement of activities together comprise the government-wide statements, which report information about the State as a whole using the full accrual basis of accounting, similar to those used by private-sector companies. This means all revenues and expenses are recognized regardless of whether cash has been received or paid, and all assets, deferred outflows of resources, liabilities, and deferred inflows of resources, including capital assets and long-term debt, are reported at the entity level.

The government-wide statements report the State’s net position, the difference between total assets and deferred outflows of resources and total liabilities and deferred inflows of resources, and how they have changed from the prior year. In evaluating the State’s overall condition, additional nonfinancial factors should be considered, such as the State’s economic outlook, changes in its demographics, and the condition of its capital assets, including infrastructure.

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The activities on the government-wide financial statements are divided into three categories:

• Governmental activities – Most of the State’s basic services are included under these activities, such as education, health and human resources, military affairs and public safety, judicial, and administration. Personal income taxes and consumer sales taxes finance most of these activities.

• Business-type activities – The State charges fees to customers to help it cover all or a significant portion of the costs of certain services it provides. The West Virginia Public Employees Insurance Agency and Board of Risk and Insurance Management, among other funds, are examples of these activities.

• Component units – The State includes several other entities in its report for which it is financially accountable, such as the West Virginia Housing Development Authority; Lottery; Parkways Authority; and Higher Education. Separately issued financial statements are also available for these component units.

Fund Financial Statements

The fund financial statements provide more detailed information about the State’s major funds, not the State as a whole. Funds are accounting devices that the State uses to track specific sources of funding and spending for particular purposes. Certain funds are required by the West Virginia Constitution, and others are required by bond covenants. The State Legislature establishes other funds to control and manage money for particular purposes or to show that certain taxes and grants are used properly.

The State has three kinds of funds:

• Governmental funds – Most of the State’s basic services are included in governmental funds, which focus on (1) cash and other financial assets that may readily be converted to cash flow in and out and (2) the balances left at year- end available for spending. Consequently, the governmental funds statements provide a detailed short-term view to help determine whether there are more or fewer financial resources that may be spent in the near future to finance the State’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, we provide additional information on the pages immediately following each statement, explaining the relationship (or differences) between them and the government-wide statements.

▪ Proprietary funds – Proprietary funds include enterprise funds and internal service funds. They account for state activities that are operated in a manner similar to private-sector businesses. Like the government-wide statements, proprietary fund statements are presented using the accrual basis of accounting and provide both long- and short-term financial information. Services for which the State charges external customers a fee are generally reported in enterprise funds. Activities where customers are mostly other state agencies are accounted

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for in internal service funds. The internal service funds are consolidated with the governmental activities on the government-wide statements because they predominantly benefit the governmental rather than business-type activities.

▪ Fiduciary funds – Fiduciary funds account for assets held for the benefit of parties outside of state government. The State is the trustee, or fiduciary, for its employees’ pension plans and other assets that, because of a trust arrangement, can be used only for the trust beneficiaries. Fiduciary funds are comprised of pension (and other employee benefit) trust funds, investment trust funds, private-purpose trust funds, and custodial funds. The State is responsible for ensuring that the assets reported in these funds are used for their intended purposes. All of the State’s fiduciary activities are reported in a separate statement of fiduciary net position and a statement of changes in fiduciary net position, where applicable. These funds are excluded from the State’s government-wide financial statements because the State cannot use these assets to finance its operations.

Reconciliation Between Government-wide and Fund Statements

The financial statements contain schedules that reconcile the differences between the government-wide financial statements (long-term focus, accrual accounting) and the fund financial statements (short-term focus, modified accrual accounting). The following summarizes the primary differences between modified accrual to accrual accounting:

• Capital assets and long-term debt are included on the government-wide statements but are not reported on the governmental fund statements.

• Capital outlay spending results in expenditures on the governmental fund statements; however, on the statement of activities, the cost of capital assets is allocated over their useful lives as depreciation expense. The excess of capital outlay over depreciation expense is included on the government-wide statement of activities.

• Repayment of long-term debt is reported as an expenditure in the governmental funds, but the repayment reduces the long-term liabilities on the government- wide statement of net position.

• Internal service funds are used by management to charge the costs of certain activities to individual funds. The assets, deferred outflow of resources, liabilities, deferred inflows of resources, and net revenue of the internal service funds are reported with governmental activities on the government-wide statements.

• Certain tax revenues that are earned, but not available, are reported as revenue on the government-wide statements but are deferred inflows of resources on the governmental fund statements.

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• Some revenues and expenses reported in the statement of activities do not provide or require the use of current financial resources and, therefore, are not reported as revenues and expenditures in the funds.

• Net pension and OPEB liabilities or assets, along with related deferrals, are reported on the government-wide statements but not reported in the funds.

Notes to the Financial Statements

The notes provide additional schedules and information that are essential to a complete understanding of the financial statements. The notes apply to both the government-wide financial statements and the fund financial statements.

Required Supplementary Information

Following the basic financial statements is the required supplementary information related to budgetary comparison schedules for the governmental funds, with legally adopted annual budgets, pension plans, and OPEB plan information, along with notes with explanatory information.

Combining Financial Statements and Schedules

The combining financial statements and schedules include combining statements for the State’s nonmajor governmental funds, nonmajor proprietary funds, fiduciary funds, and nonmajor discretely presented component units.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

The chart below represents financial information derived from the government-wide statement of activities and reflects the State’s net position as of June 30, 2021 and 2020 (expressed in thousands):

Net Position as of June 30 (Expressed in Thousands)

Governmental Activities

Business-type Activities

Total Primary Government

2021 2020 2021 2020 2021 2020

Current and Other Assets $ 8,827,767 $ 7,725,182 $ 4,616,036 $ 4,205,331 $ 13,443,803 11,930,513

Capital Assets 10,373,595 10,135,451 1,965 2,001 10,375,560 10,137,452

Total Assets 19,201,362 17,860,633 4,618,001 4,207,332 23,819,363 22,067,965

Deferred Outflows of Resources 1,507,521 1,199,349 3,557 2,300 1,511,078 1,201,649

Current and Other Liabilities 3,225,378 3,179,848 679,064 511,703 3,904,442 3,691,551

Long-term Liabilities 7,684,052 7,944,241 1,421,294 1,526,421 9,105,346 9,470,662

Total Liabilities 10,909,430 11,124,089 2,100,358 2,038,124 13,009,788 13,162,213

Deferred Inflows of Resources 1,220,951 977,905 2,908 2,184 1,223,859 980,089

Net Position

Net Investment in Capital Assets 9,139,616 9,192,701 1,965 2,001 9,141,581 9,194,702

Restricted 1,430,320 1,188,896 2,110,728 1,777,494 3,541,048 2,966,390

Unrestricted (Deficit) (1,991,434) (3,423,609) 405,599 389,829 (1,585,835) (3,033,780)

Total Net Position $ 8,578,502 $ 6,957,988 $ 2,518,292 $ 2,169,324 $ 11,096,794 $ 9,127,312

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Comparing June 30, 2021, to June 30, 2020, government-wide balances, current and other assets increased $1.5 billion due to a $1.2 billion increase in cash and equivalents, primarily from increases in operating grants and contributions related to the pandemic. Current and other liabilities increased $213 million primarily due to increase in Due to Federal government of $184 million for Unemployment Compensation’s Title XII Advance loans. These loans were paid off September 2021. The remaining increase is due to increases in the Premium Deficiency reserve for Public Employees Insurance Agency.

Deferred Outflows increased due to the Net Difference Between Projected and Actual Investment Earnings on Pension Plan Investments. The actuarial assumptions are based on a return on investments of 7.5% and the actual return on investments for FY 21 were 2.12%-2.4% for the second half of the year. This resulted in an increase of $61 million for PERS and $184 million for TRS. Deferred Inflows also increased by $311 million primarily due to an actuarial change in assumptions for OPEB.

Long-term liabilities decreased $365 million. Significant changes in capital assets and long-term liabilities are discussed later in this Management’s Discussion and Analysis.

The State’s combined net position, governmental and business-type, increased $2 billion over the course of this fiscal year’s operations. The net position of the governmental activities increased $1.6 billion, and the net position of the business-type activities increased $349 million. The increase in net position is due to the changes in net position described on the following pages.

Net Position

The largest component of the State’s net position is the amount invested in capital assets (e.g., land, buildings, equipment, infrastructure, and others), less any related debt outstanding needed to acquire or construct the assets. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt also should be included in this component of net position. Capital assets are used to provide services to citizens; therefore, they are not available for future spending or to pay off their related liabilities.

Restricted net position composes 32% of total net position and is subject to constitutional, legal, or external constraints on how it can be used. Net position that is restricted include funds for construction projects, debt service, lending activities, insurance activities, transportation, public protection, and economic development and tourism programs of the State.

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Changes in Net Position

The chart below represents financial information derived from the government-wide statement of activities and reflects the State’s total revenues, expenses, and changes in net position for the years ended June 30, 2021 and 2020 (expressed in thousands):

Governmental Activities

Business-type Activities

Total Primary Government

Revenues 2021 2020 2021 2020 2021 2020

Program Revenues:

Charges for Services $ 507,918 $ 493,549 $ 1,008,617 $ 975,533 $ 1,516,535 $ 1,469,082

Operating Grants and Contributions 7,347,681 5,511,368 — 7,347,681 5,511,368

Capital Grants and Contributions 508,221 343,682 — 508,221 343,682

General Revenues:

Personal Income Tax 2,194,829 2,023,079 — — 2,194,829 2,023,079

Consumer Sales Tax 1,668,378 1,514,838 — — 1,668,378 1,514,838

Business Taxes 777,371 550,918 — — 777,371 550,918

Transportation Taxes 701,541 680,902 — — 701,541 680,902

Other Taxes 645,992 620,640 — — 645,992 620,640

Lottery Revenue 389,012 266,124 46,000 38,198 46,389,012 304,322

Other Revenue 820,233 406,443 1,321,400 1,081,060 2,141,633 1,487,503

Total Revenue 15,561,176 12,411,543 2,376,017 2,094,791 17,937,193 14,506,334

Program Expenses:

Legislative 21,755 22,565 — — 21,755 22,565

Judicial 111,998 136,383 — — 111,998 136,383

Executive 714,308 368,025 — — 714,308 368,025

Administration 241,868 279,823 — — 241,868 279,823

Commerce 233,403 194,690 — — 233,403 194,690

Environmental Protection 88,978 103,259 — — 88,978 103,259

Employment Programs 211,110 50,785 — — 211,110 50,785

Education 3,064,713 2,991,209 — — 3,064,713 2,991,209

Health and Human Resources 6,880,969 5,934,351 — — 6,880,969 5,934,351

Homeland Security 515,711 559,734 — — 515,711 559,734

Revenue 126,387 63,132 — — 126,387 63,132

Transportation 1,325,447 1,386,393 — — 1,325,447 1,386,393

Veterans Assistance 17,407 20,152 — — 17,407 20,152

Senior Services 53,919 48,307 53,919 48,307

Regulatory Boards and Commissions 141,343 50,519 — — 141,343 50,519

Interest on Long-Term Debt 143,228 172,922 — — 143,228 172,922

Workers' Compensation Fund — — 62,049 59,151 62,049 59,151

Unemployment Compensation — — 1,063,978 1,415,646 1,063,978 1,415,646

West Virginia Infrastructure and Jobs Development Council — — 31,795 22,325 31,795 22,325

Water Pollution Control Revolving Fund — — 11,291 10,739 11,291 10,739

Public Employees' Insurance Agency — 701,087 597,217 701,087 597,217

Board of Risk and Insurance Management — — 88,562 70,377 88,562 70,377

Other Nonmajor Business-type — — 116,405 110,335 116,405 110,335

Total Expenses 13,892,544 12,382,249 2,075,167 2,285,790 15,967,711 14,668,039

Increase (Decrease) in Net Position

Before Transfers 1,668,632 29,294 300,850 (190,999) 1,969,482 (161,705)

Transfers (48,118) 7,147 48,118 (7,147) — —

Increase (Decrease) in Net Position, 1,620,514 36,441 348,968 (198,146) 1,969,482 (161,705)

Net Position, Beginning of Year, as Originally Reported 6,957,988 6,919,792 2,169,324 2,328,600 9,127,312 9,248,392

Restatement (See Note 2) — 1,755 — 38,870 — 40,625

Net Position, Beginning of Year, as Restated 6,957,988 6,921,547 2,169,324 2,367,470 9,127,312 9,289,017

Net Position, End of Year $ 8,578,502 $ 6,957,988 $ 2,518,292 $ 2,169,324 $ 11,096,794 $ 9,127,312

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Governmental Activities

For the year ended June 30, 2021, the State’s change in net position before transfers decreased by $1.7 billion for governmental activities. Revenues increased by $3.1 billion, and expenses were also higher by $1.5 billion comparing the years ended June 30, 2021 and 2020.

The revenue increase is primarily due to the increase in both operating and capital grants and contributions. Operating grants and contributions increased as a result of increase in federal funding of $1.8 billion for the Department of Health and Human Resources, Education, the Governor’s office, and Workforce. There was also an increase in capital grants and contributions of $165 million for the Department of Transportation that was related to Fixing America’s Surface Transportation Act (FAST). FAST is a five- year surface transportation program authorizing funding for highway and public transportation investments. The FAST Act was originally set to expire on September 30, 2020, but was extended to October 31, 2021.

Overall, tax revenue across all tax types increased $598 million. Personal income tax revenue increased by $172 million due to businesses reopening and people going back to work, which led to strong increases in annual tax returns and fiduciary income tax collections. The strong economic recovery and federal stimulus created significant increases in consumer sales and use taxes of $153 million. Business tax revenues increased by $226 million in 2021 due to increases in corporation net income tax with the pandemic market recovery and higher natural gas prices boosting severance tax collections. Transportation taxes increased $21 million due to strong motor vehicle sales in FY 2021 which resulted in a significant increase in privilege tax collections.

Lottery revenue increased $122 million due the reopening of all limited video lottery retailers and casinos that were temporarily shutdown in FY 2020 due to the Pandemic. This allowed Lottery to distribute surplus funds to the State in accordance with governing Legislation. Due to impacts of the Pandemic to Lottery’s operations in FY 2020, they were unable to satisfy all funding appropriations to the State. Other revenue also increased $ 414 million. This was attributed to increases in State appropriations and allocations from Parkways for use on construction projects in counties adjacent to the Turnpike for the Department of Transportation.

Program expenses increased approximately $1.5 billion in total. Department of Health and Human Resources expenses were up $946 million due to increased professional and contractual services and medical supplies and SNAP benefits provided to families as a result of COVID-19. Executive expenses were up $346 million primarily due to disbursements to Federal subrecipients and county and municipalities related to the CARES Act and American Rescue Plan Act funds. Employment programs had an increased cost of $160 million as a result of Lost Wages Assistance benefits granted by FEMA.

The charts on the next page depict revenues and expenses, respectively, of the governmental activities for the fiscal year. Approximately 34% of the total revenues came from personal income, consumer sales, business taxes, and transportation taxes, while 50% was in the form of grants and contributions (see Chart A). The State’s governmental activities expenses include 50% for health and human resources and 22% for education (see Chart B).

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Chart A

Chart B

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Business-type Activities

For the year ended June 30, 2021, business-type change in net position after transfers increased by $547 million. Revenues increased by $281 million and expense decreased by $211 million with transfers also decreasing by $55 million comparing the years ended June 30, 2021 and 2020. Significant contributors to these changes were:

• The Unemployment Compensation Fund had a decrease of $352 million in Unemployment expenses due to the West Virginia unemployment rate decreasing from 10.5% in June 2020 to 5.3% in June 2021.

• West Virginia Public Employees Insurance Agency saw a $104 million increase in

medical claims expense and drug claim expense. Medical claims increased $75 million due to demand shifting from the fourth quarter of FY 20 to FY 21 because of elective procedures being denied at the start of the Pandemic. Drug claims increased $32 million due to upward trend of price inflation in the pharmaceutical industry.

• Transfers out decreased primarily due to a reduction in statutory distributions of $43 million from the Alcohol Beverage Control Administration. These distributions are paid to the State’s General Revenue fund and are based on liquor sales and in FY 20 the revenue was much higher due to retail liquor license renewals.

• Other revenue increased by $240 million primarily due to improvements in the rate of return on noncurrent investments. The Workers’ Compensation Fund earned majority of the interest, increasing their fair value on investments by $229 million.

FINANCIAL ANALYSIS OF THE STATE’S FUNDS

Governmental Funds

The focus of the State’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the State’s financing requirements.

At the end of the current fiscal year, the State’s governmental funds reported a fund balance of $5.4 billion, a decrease of $997 million in comparison to that of the prior year.

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There was a net increase in revenue of $3.2 billion. This was a result of a number of factors. General fund revenue increased by $2.4 billion. This is primarily due to intergovernmental revenue increasing by $1.2 billion (primarily due to the increase in grant awards for Department of Health and Human Services and Education); food stamp revenue increasing $339 million (primarily due to needs driven by the COVID-19 pandemic): and Lottery revenue increasing by $122 million due to the reopening of all limited video lottery retailers and casinos that were temporarily shutdown in FY 2020 due to the Pandemic. This allowed Lottery to distribute surplus funds to the State in accordance with governing Legislation. Total tax revenues increased by $571 million due to the post pandemic economic recovery in both personal income tax and business and consumer taxes. There was also an increase of $496 million in Other revenue for Division of Transportation primarily due to increases in State appropriations and allocations from Parkways for use on construction projects located in counties adjacent to the Turnpike. Expenses were up by $1.6 billion, primarily due to spending from many agencies to aid in the recovery of the Coronavirus pandemic.

Governmental Fund Balances at June 30, 2021 (Expressed in Thousands)

General Fund Transportation

Tobacco Settlement

Finance Authority

State Road

Other Governmental

Funds Total

Nonspendable $ 136,684 $ 57,735 $ — $ — $ 1,007 $ 195,426

Restricted 25,851 504,595 517,267 1,292,482 291,529 2,631,724

Unrestricted: —

Committed 42,288 — — — 336,583 378,871

Assigned 7,950 278,485 — — 9,997 296,432

Unassigned 1,929,793 — — — — 1,929,793

Total $ 2,142,566 $ 840,815 $ 517,267 $ 1,292,482 $ 639,116 $ 5,432,246

The General Fund is the chief operating fund of the State. As a measure of the General Fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 16% of total General Fund expenditures, while total fund balance represents 17% of the same amount.

Cash and cash equivalents in the General Fund were up $629 million, primarily due to American Rescue Plan Act funds received. These funds were invested with the Board of Treasury Investments. General fund revenues increased in fiscal year 2021 from 2020 by $2.4 billion. This increase is due primarily to intergovernmental revenue of $1.2 billion. Food stamp revenue increased by $339 million. Lottery revenue increased by $122 million and tax revenue increased by $571 million. Revenues were $700 million more than expenditures. Expenses for general fund also increased by $1.7 billion, with the majority of the increase relating to the Health and Human Resource and Executive function of $1 billion in 2021.

West Virginia

At June 30, 2021, Transportation’s total fund balance was higher by approximately $625 million from 2020, primarily due an increase in total revenues. Intergovernmental revenues increased by $214 million and other revenue increased by approximately $430 million.

The Tobacco Settlement Finance Authority’s fund balance decreased by $59.6 million primarily due to the refunding of bonds. Proceeds from refunding bonds issued was $693.5 million and payments to refund bonds was $737 million. Required bond interest in the amount of $14 million was paid during the year along with principal payments of $40.3 million.

At year end, non-major governmental funds had a net increase in fund balance of approximately $19.9 million. There was a $51.6 million increase in investment earnings for Department of Environmental Protection, Insurance Commission and Wildlife Resources. There was an increase of $31.4 million in construction to the state parks, capital complex, and higher education institutions. Restricted fund balance is $292 million, of which $61 million was available for debt service; $33 million to fund capital projects; $78 million for development, tourism and recreation; $502 thousand for education; and $118 million for public protection. Committed fund balance is $337 million, $7 million for general government operations and $330 million for public protection.

Proprietary Funds

The State’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail. Proprietary funds are composed of enterprise and internal service funds. Enterprise funds are used when services the State provides are charged to external customers. Internal service funds are used when services are provided to other state agencies. The six major enterprise funds include the Water Pollution Control Revolving Fund, Workers’ Compensation Fund, Unemployment Compensation, West Virginia Infrastructure and Jobs Development Council, Public Employees Insurance Agency, and the Board of Risk and Insurance Management.

Other factors concerning the finances of the major enterprise funds have already been addressed in the discussion of business-type activities.

GENERAL REVENUE FUND BUDGETARY HIGHLIGHTS

The final amended budget revenues were higher than the amount originally anticipated. The general revenue fund budget to actual overall revenue variance was $5.6 million due to changes in revenue collection in several tax categories and other revenues. Consumer sales taxes increased $15.9 million, corporate income/business franchise taxes increased by $10.9 million, other taxes decreased $9.3 million, licenses, permits and fees decreased $7.6 million, and interest income decreased $5 million.

West Virginia

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets

At the end of 2021, the State had invested $10 billion, net of accumulated depreciation, in a broad range of capital assets shown below. Depreciation expense for the year totaled $386.7 million.

Capital Assets at Year-End (Expressed in Thousands)

Governmental Activities

Business-type Activities

Total Primary Government

2021 2020 2021 2020 2021 2020

Land and Improvements $ 1,486,079 $ 1,459,747 $ 611 $ 611 $ 1,486,690 $ 1,460,358

Building and Improvements 941,445 969,747 998 936 942,443 970,683

Equipment 146,643 135,912 145 243 146,788 136,155

Library Holdings 594 600 — — 594 600

Intangibles - Software 91,519 98,095 211 211 91,730 98,306

Intangibles - Land Rights 2,752 2,752 — — 2,752 2,752

Construction-in-Progress 2,063,133 1,752,147 — — 2,063,133 1,752,147

Infrastructure 5,641,430 5,716,451 — — 5,641,430 5,716,451

Totals $ 10,373,595 $ 10,135,451 $ 1,965 $ 2,001 $ 10,375,560 $ 10,137,452

The total increase, net of disposals and accumulated depreciation, in the State’s net investment in capital assets for the current fiscal year, approximated $238 million. The most significant changes in capital assets during the year were in the Transportation, Administration, and Commerce functions. Transportation continues to expand the state road system, focusing primarily on upgrading existing roadways and completion of Appalachian Highway Corridors. The $26 million increase in land and improvements was due to Transportation’s land acquisitions for various road and bridge projects. The $75 million decrease in infrastructure was due primarily to Transportation’s acquisitions of $230 million, offset by depreciation expense of $303 million. The net decrease of $28 million in buildings and improvements is primarily due to the General Services Division’s completion of renovation projects for various buildings offset by depreciation expense of $40 million. The net increase of $311 million in construction in progress was due to increased projects in Transportation, the Division of Natural Resources, and the General Services Division. Transportation saw an increase in construction-in-progress of $474 million for various bridge and roadway projects, including construction related to US 35 in Putnam County, the Coalfields Expressway in Wyoming County, and Corridor H in Tucker County, offset by a decrease of $230 million for completed projects that were placed in service. The Division of Natural Resources increased construction by $49 million for improvement projects to numerous state parks, while completing $1 million in construction projects. The General Services Division had an increase of $24 million in construction for improvement and restoration projects for the Capitol Campus, as well as other various projects to improve land and buildings; this increase in construction was

West Virginia

offset by $5 million in completed projects. Additional information concerning the State’s capital assets can be found in Note 9 of this report and under the capital assets heading in Note 1.

Long-Term Debt

At year-end, the State had $10.6 billion in bonds, capital leases, notes payable, claims and judgments, compensated absences, net pension and OPEB liability, and other long-term obligations outstanding, as shown in the following table. The State’s general obligation bonds are rated AA by Fitch Investors Service, Moody’s Investors Service rating is Aa2, and Standard & Poor’s Corporation have an AA- rating.

The State’s general obligation debt must be authorized by constitutional amendment. A proposed amendment must be approved by two-thirds of both the Senate and the House of Delegates before it can be ratified or rejected by the voters. Once the amendment has voter approval, the Legislature must pass specific legislation authorizing the issuance of the general obligation debt. Revenue bonds are issued pursuant to specific statutory provisions enacted by the Legislature primarily for the purpose of financing capital construction. Neither the West Virginia Constitution nor its statutes establish a general limit on any type of debt, although certain agencies have debt limits in their specific Code sections.

Outstanding Debt at June 30 (Expressed in Thousands)

Governmental Activities

Business-type Activities

Total Primary

Government

2021 2020 2021 2020 2021 2020

General Obligation Bonds $ 2,057,062 $ 1,865,314 $ — $ — $ 2,057,062 $ 1,865,314

Revenue Bonds 1,380,364 1,445,649 158,655 165,475 1,539,019 1,611,124

Capital Leases 191,186 220,626 — — 191,186 220,626

Notes Payable 27,210 21,472 — — 27,210 21,472

Accrued and Other Liabilities 1,286,578 1,261,569 11,791 32,039 1,298,369 1,293,608

Insurance and Compensation Benefits — — 1,598,864 1,739,069 1,598,864 1,739,069

Compensated Absences 98,319 93,111 652 633 98,971 93,744

Net Pension Liability 3,447,374 2,996,887 2,714 1,075 3,450,088 2,997,962

Net OPEB Liability 284,345 1,064,703 811 3,059 285,156 1,067,762

Totals $ 8,772,438 $ 8,969,331 $ 1,773,487 $ 1,941,350 $ 10,545,925 $ 10,910,681

West Virginia

In FY 21, Division of Highways issued the 2021 Roads to Prosperity General Obligation Bonds of $214.1 million. The Tobacco Settlement Authority issued $696.5 million in revenue bonds in FY 21. The Authority used the proceeds to fully refund $612 million of the 2007A Series bonds and partially refund $73.8 million of the 2007B Series bonds. The remaining decrease in revenue bonds was due to debt service payments. Net Pension Liability increased by $450 million primarily due to funding the retirement system based on investment assumptions that the State would receive 7.5% return on invested assets. Due to the COVID-19 pandemic, returns in the second half of the fiscal year were at 2.12% - 2.4% substantially below expectations. Net OPEB Liability decreased by $780 million primarily due to changes in demographics and change in actuarial assumptions and methodologies. See Notes 10 and 11 for more information relating to the State’s long-term debt activity.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET

The general revenue estimate for FY 2022 is projected to be $4.57 billion, or $412 million below the FY 2021 official revenue estimate. Our current FY 2021 General Revenue actual collections are projected to be more than the official revenue estimate by as much as $413 million. The Lottery Funds’ actual revenue collections for FY 2021 are projected to be more than their original estimates. Lottery revenues are projected to remain flat in FY 2022 and remain that way through FY 2025. Personal income tax revenues are also projected to be $15.9 million more that the original budget.

The budget for FY 2022 includes significant expenditure increases for health and human resources, education, and economic development. Health and human resources’ increase in expenditures are mainly due to an increase in medical costs and prices of prescription drugs. An aging population, new and more-costly medical technologies, and expensive new generation drugs are also contributing factors to the rising health care costs. Education’s increases are largely due to the yearly increase in demand for grant funding as well as cost of construction continuing to rise. Economic development expenditures increased to help improve programs related to economic development of the state.

CONTACTING THE STATES FINANCIAL MANAGEMENT

This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the State’s finances and to demonstrate the State’s accountability for the money it receives. If you have any questions about this report or need additional financial information, contact the Financial Accounting and Reporting Section, 2101 Washington St. East, Building 17, 3rd Floor, Charleston, WV 25305.

West Virginia

Statement of Net Position June 30, 2021 (Expressed in Thousands)

Primary Government

Governmental Activities

Business-type Activities Total

Component Units

Assets: Current Assets:

Cash and Cash Equivalents $ 5,901,828 $ 1,888,485 $ 7,790,313 $ 1,162,201 Investments 1,018,053 103,260 1,121,313 190,025 Receivables, Net 990,200 183,847 1,174,047 273,576 Capital Leases Receivable from Primary Government — — — 19,296

Due from Other Governments 621,015 13,264 634,279 — Due from Primary Government — — — 44,204 Due from Fiduciary Funds 71 1,722 1,793 — Due from Component Units 164,494 5,779 170,273 — Internal Balances (187,371) 187,371 — — Inventories 70,009 53 70,062 21,015 Other Assets 1,958 12,780 14,738 19,290 Restricted Assets:

Cash and Cash Equivalents 7,091 166,302 173,393 284,830 Investments — — — 83,275 Receivables, Net — 1,950 1,950 3,535 Other Restricted Assets — 251,189 251,189 4

Total Current Assets 8,587,348 2,816,002 11,403,350 2,101,251

Noncurrent Assets: Cash and Cash Equivalents — — — 156,294 Investments — 394,460 394,460 761,306 Receivables, Net — 1,322,444 1,322,444 311,509 Capital Leases Receivable from Primary Government — — — 171,889 Other Assets 150 — 150 79,120 Advance to Component Units 123,220 — 123,220 — Net Pension Asset 99,169 — 99,169 — Net OPEB Asset — — — 35

Restricted Assets: Cash and Cash Equivalents 17,880 9,403 27,283 330,086 Investments — 71,328 71,328 38,746 Receivables, Net — 2,399 2,399 796,004 Other Restricted Assets — — — 2,576 Land and Other Capital Assets Not Being Depreciated 3,530,066 611 3,530,677 512,680 Capital Assets, Being Depreciated (Net of Accumulated 6,843,529 1,354 6,844,883 3,729,464

Total Noncurrent Assets 10,614,014 1,801,999 12,416,013 6,889,709

Total Assets 19,201,362 4,618,001 23,819,363 8,990,960

Deferred Outflows of Resources: Deferred loss on bond refundings 53,539 740 54,279 49,386 Related to Pensions 1,166,799 2,184 1,168,983 62,088 Related to OPEB 287,183 633 287,816 49,833

Total Deferred Outflows of Resources 1,507,521 3,557 1,511,078 161,307

The accompanying notes are an integral part of the financial statements.

West Virginia

Primary Government

Governmental Activities

Business-type Activities

Total Component

Units

Liabilities: Current Liabilities:

Accounts Payable 356,025 9,522 365,547 118,374 Interest Payable 11,317 — 11,317 13,373 Accrued Tuition Contract Benefits — 10,828 10,828 — Accrued and Other Liabilities 866,756 11,791 878,547 342,047 Due to Other Governments 449,907 187,963 637,870 — Due to Primary Government — — — 170,273 Due to Fiduciary Funds 1,868 2 1,870 3,827 Due to Component Units 43,736 468 44,204 — Unearned Revenue 1,274,075 34,922 1,308,997 114,376 Premium Deficiency — 83,166 83,166 — Insurance and Compensation Benefits Obligations — 333,191 333,191 — General Obligation Debt 66,042 — 66,042 — Revenue Bonds Payable 65,669 7,090 72,759 191,701 Capital Leases and Other Debt 8,480 — 8,480 11,236 Capital Leases Payable to Component Units 19,296 — 19,296 — Compensated Absences 62,207 121 62,328 57,534

Total Current Liabilities 3,225,378 679,064 3,904,442 1,022,741

Noncurrent Liabilities: Accrued and Other Liabilities 419,822 — 419,822 117,698 Due to Other Governments 65 — 65 — Unearned Revenue — — — 321 Insurance and Compensation Benefits Obligations — 1,265,673 1,265,673 — Advances from Primary Government — — — 123,220 Liabilities Payable from Restricted Assets — — — 339,663 General Obligation Debt 1,991,020 — 1,991,020 — Revenue Bonds Payable 1,314,695 151,565 1,466,260 2,815,127 Capital Leases and Other Debt 18,730 — 18,730 208,439 Capital Leases Payable to Component Units 171,889 — 171,889 — Net Pension Liability 3,447,374 2,714 3,450,088 78,404 Net OPEB Liability 284,345 811 285,156 71,737 Compensated Absences 36,112 531 36,643 16,611

Total Noncurrent Liabilities 7,684,052 1,421,294 9,105,346 3,771,220 Total Liabilities 10,909,430 2,100,358 13,009,788 4,793,961

Deferred Inflows of Resources: Gain on Bond Refundings — — — 525 Related to Pensions 283,751 218 283,969 16,559 Related to OPEB 937,200 2,690 939,890 230,628 Service Concession Arrangements — — — 37,422 Grants and Contributions — — — 8,900

Total Deferred Inflows of Resources 1,220,951 2,908 1,223,859 294,034

Net Position: Net Investment in Capital Assets 9,139,616 1,965 9,141,581 2,951,978 Restricted for:

Capital Projects — — — 14,145 Debt Service 595,516 — 595,516 708,767 General Government Operations 28,987 3,149 32,136 — Permanent Funds:

Nonexpendable 1,000 — 1,000 376,433 Expendable 502 — 502 —

Lending Activities — 1,713,168 1,713,168 103,804 Insurance Activities — 394,411 394,411 — Development, Tourism, and Recreation 81,050 — 81,050 — Education 128 — 128 — Health and Social Services 701 — 701 — Public Protection 217,841 — 217,841 — Transportation 504,595 — 504,595 —

Specific Fund/Component Unit Purposes — — — 356,349 Unrestricted (Deficit) (1,991,434) 405,599 (1,585,835) (447,204)

Total Net Position 8,578,502 2,518,292 11,096,794 4,064,272

West Virginia

Statement of Activities For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Program Revenues

Expenses Charges for

Services

Operating Grants and

Contributions

Capital Grants and

Contributions

Functions Primary Government:

Governmental Activities:

Legislative $ 21,755 $ 1,078 $ 840 $ —

Judicial 111,998 1,067 2,170 —

Executive 714,308 33,892 668,297 —

Administration 241,868 61,505 — 239

Commerce 233,403 48,742 94,631 —

Environmental Protection 88,978 63,051 84,963 —

Employment Programs 211,110 — 149,770 —

Education 3,064,713 — 582,884 —

Health and Human Resources 6,880,969 61,783 5,531,583 — Homeland Security 515,711 — 91,125 —

Revenue 126,387 45,958 2,740 —

Transportation 1,325,447 170,990 50,000 505,348

Veterans Assistance 17,407 183 7,050 2,634

Senior Services 53,919 2 26,193 —

Regulatory Boards and Commissions 141,343 19,667 55,435 —

Interest on Long-Term Debt 143,228 — — —

Total Governmental Activities 13,892,544 507,918 7,347,681 508,221

Business-type Activities: Water Pollution Control Revolving Fund 11,291 5,763 — —

Workers' Compensation Fund 62,049 2,604 — — Unemployment Compensation 1,063,978 200,836 — —

West Virginia Infrastructure and Jobs Development Council 31,795 4,749 — —

Public Employees' Insurance Agency 701,087 571,567 — —

Board of Risk and Insurance Management 88,562 78,692 — —

Other Activities 116,405 144,406 — —

Total Business-type Activities 2,075,167 1,008,617 — —

Total Primary Government 15,967,711 1,516,535 7,347,681 508,221

Component Units:

West Virginia Lottery 1,251,378 1,177,971 — —

Economic Development Authority 5,245 8,614 — —

Housing Development Authority 112,152 41,692 84,161 —

Parkways Authority 528,104 167,262 — 38,075

Water Development Authority 7,263 10,943 — —

Higher Education 2,011,038 842,743 600,004 124,151

Regional Jail Authority 411,117 128,797 39,634 —

School Building Authority 99,385 — 5 —

Other Component Units 65,018 10,622 4,221 —

Total Component Units $ 4,490,700 $ 2,388,644 $ 728,025 $ 162,226

General Revenues: Taxes:

Personal Income

Consumer Sales

Business

Medicaid

Transportation

Other

Grants and Contributions not Restricted to Specific

Unrestricted Investment Earnings

Tobacco Settlement Revenue

Payments from State of West Virginia

Lottery Revenues

Miscellaneous

Transfers

Total General Revenues and Transfers

Change in Net Position

Net Position (Deficit), Beginning of Year

Net Position, End of Year

The accompanying notes are an integral part of the financial statements.

West Virginia

Net (Expense) Revenue and Changes in Net Assets Primary Government

Governmental Activities

Business-type Activities Total Component Units

$ (19,837) $ — $ (19,837) $ —

(108,761) — (108,761) —

(12,119) — (12,119) —

(180,124) — (180,124) —

(90,030) — (90,030) —

59,036 — 59,036 —

(61,340) — (61,340) —

(2,481,829) — (2,481,829) —

(1,287,603) — (1,287,603) —

(424,586) — (424,586) —

(77,689) — (77,689) —

(599,109) — (599,109) —

(7,540) — (7,540) —

(27,724) — (27,724) —

(66,241) — (66,241) —

(143,228) — (143,228) —

(5,528,724) — (5,528,724) —

— (5,528) (5,528) —

— (59,445) (59,445) —

— (863,142) (863,142) —

— (27,046) (27,046) —

— (129,520) (129,520) —

— (9,870) (9,870) —

— 28,001 28,001 —

— (1,066,550) (1,066,550) —

(5,528,724) (1,066,550) (6,595,274) —

— — — (73,407)

— — — 3,369

— — — 13,701

— — — (322,767)

— — — 3,680

— — — (444,140)

— — — (242,686)

— — — (99,380)

— — — (50,175)

— — — (1,211,805)

2,194,829 — 2,194,829 —

1,668,378 — 1,668,378 —

777,371 — 777,371 —

266,706 — 266,706 —

701,541 — 701,541 —

379,286 — 379,286 —

— — — 3,913

130,414 301,195 431,609 169,002

61,812 — 61,812 —

— — — 1,043,377

389,012 46,000 435,012 —

628,007 1,020,205 1,648,212 164,969

(48,118) 48,118 — —

7,149,238 1,415,518 8,564,756 1,381,261

1,620,514 348,968 1,969,482 169,456

6,957,988 2,169,324 9,127,312 3,894,816

$ 8,578,502 $ 2,518,292 $ 11,096,794 $ 4,064,272

West Virginia

GOVERNMENTAL FUNDS FINANCIAL STATEMENTS

Major Funds

General: This Fund is used as the State’s operating fund. It accounts for the financial resources and transactions that are not accounted for in other funds. The revenues are from taxes and other general revenues.

Transportation: The governmental fund types of the Department of Transportation (Transportation) are included in this Fund. The Division of Highways has statutory responsibility for the construction, maintenance, and improvement of all state roads. Transportation expenditures funded by registration fees, license fees, and automobile privilege taxes (fees and taxes) are recorded in the State Road Fund within the Division of Highways. These fees and taxes, among other revenue sources, are collected by the Division of Motor Vehicles, which is also in Transportation. Transportation also includes the Division of Public Transit, which administers all federal and state programs that develop public transportation facilities, services, equipment, and methods; the West Virginia Aeronautics Commission, which has general supervision and controls commercial, state, and municipal airports; and the West Virginia Public Port Authority.

The Tobacco Settlement Finance Authority: The Authority was created to issue revenue bonds related to the State’s portion of the tobacco receipts from the Master Settlement Agreement between tobacco manufacturers and the covered states. The revenue bonds were sold June 26, 2007. See Note 10 for more information.

State Road: This constitutionally established Fund is operated within the Department of Transportation. Certain taxes, fees, and other revenue sources are expended for the construction and maintenance of roads.

Nonmajor governmental funds are presented, by fund type, beginning on page 232.

West Virginia

Balance Sheet Governmental Funds June 30, 2021 (Expressed in Thousands)

Assets:

Cash and Cash Equivalents $ 3,271,675 $ 722,771 $ 54,709 $ 1,307,734 $ 515,208 $ 5,872,097

Investments 845,046 — — — 173,007 1,018,053

Receivables, Net 702,680 233,530 28,532 — 15,456 980,198

Due from Other Governments 613,110 — — — 7,905 621,015

Due from Other Funds 2,776 473 — — 60 3,309

Due from Component Units 157,860 788 — 4,726 1,055 164,429

Advances to Component Units 123,220 — — — — 123,220

Inventories 11,425 57,735 — — 7 69,167

Other Assets 1,665 186 — — — 1,851

Restricted Assets:

Cash and Cash Equivalents — — — — 1,694 1,694

Total Assets 5,729,457 1,015,483 83,241 1,312,460 714,392 8,855,033

Deferred Outflows of Resources:

Deferred Payments to Tobacco Settlement Finance Authority — — 462,558 — — 462,558

Total Deferred Outflows of Resources — — 462,558 — — 462,558

Total Assets and Deferred Outflows of Resources 5,729,457 1,015,483 545,799 1,312,460 714,392 9,317,591

Liabilities:

Accounts Payable 219,928 58,365 — 19,978 35,441 333,712

Accrued and Other Liabilities 916,524 23,663 — — 20,525 960,712

Unearned Revenue 1,270,766 3,309 — — — 1,274,075

Due to Other Governments 419,470 11,453 — — 18,655 449,578

Due to Other Funds 195,349 9,527 — — 641 205,517

Due to Component Units 43,601 121 — — 14 43,736

Total Liabilities 3,065,638 106,438 — 19,978 75,276 3,267,330

Deferred Inflows of Resources:

Tax Revenue 58,695 — — — — 58,695

Tobacco Settlement Revenue — — 28,532 — — 28,532

Advances to Tobacco Settlement Finance Authority 462,558 — — — — 462,558

Unavailable Revenue — 68,230 — — — 68,230

Total Deferred Inflows of Resources 521,253 68,230 28,532 — — 618,015

The accompanying notes are an integral part of the financial statements.

General Transportation

Tobacco Settlement

Finance Authority State Road

Other Governmental

Funds Total

West Virginia

Fund Balances:

Nonspendable:

Inventories 11,425 57,735 — — 7 69,167

Permanent Fund — — — — 1,000 1,000

Receivables 125,259 — — — — 125,259

Restricted for:

Capital Projects — — — 1,292,482 33,397 1,325,879

Debt Service — — 517,267 — 61,034 578,301

Government Operations 21,896 — — — — 21,896

Development, Tourism, and Recreation 2,769 — — — 78,281 81,050

Education 128 — — — 502 630

Health and Social Services 701 — — — — 701

Public Protection 357 — — — 118,315 118,672

Transportation — 504,595 — — — 504,595

Committed to:

General Government Operations 11,182 — — — 6,508 17,690

Development, Tourism, and Recreation 4,106 — — — — 4,106

Education 11,458 — — — — 11,458

Health and Social Services 13,652 — — — — 13,652

Public Protection 1,890 — — — 330,075 331,965

Assigned to:

Government Operations 5,545 — — — — 5,545

Development, Tourism, and Recreation 811 — — — — 811

Education 362 — — — — 362

Health and Social Services 907 — — — 3,904 4,811

Public Protection 325 — — — 6,093 6,418

Transportation — 278,485 — — — 278,485

Unassigned 1,929,793 — — — — 1,929,793

Total Fund Balances 2,142,566 840,815 517,267 1,292,482 639,116 5,432,246

Total Liabilities, Deferred Inflows of Resources, and Fund Balances $ 5,729,457 $ 1,015,483 $ 545,799 $ 1,312,460 $ 714,392 $ 9,317,591

General Transportation

Tobacco Settlement

Finance Authority State Road

Other Governmental

Funds Total

West Virginia

Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2021 (Expressed in Thousands)

Total Fund Balances - Governmental Funds $ 5,432,246

Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. These assets (excluding Internal Service Funds) consist of:

Land $ 1,449,848

Construction-in-Progress 2,017,639

Infrastructure Assets 13,433,814

Buildings, Equipment, and Other Depreciable Assets 1,937,078

Intangibles 52,116

Accumulated Depreciation (8,816,822)

Total Capital Assets 10,073,673

The Net Pension Asset is not recognized at the fund level. 99,169

Certain tax and other revenues are earned but not available and therefore are deferred inflows of resources in the funds. 155,457

Deferred inflows of resources for pensions and OPEB (excluding Internal Service Funds) are reported in the statement of net position but not reported in the funds. (1,213,528)

Internal Service Funds are used by management to charge the costs of certain activities, such as building rental and information services, to individual funds. The assets and liabilities of the Internal Service Funds are included in governmental activities in the statement of net position. 270,599

Bonds issued by the State have associated costs that are paid from current available financial resources in the funds. However, these costs are amortized over the life of the bonds in the statement of net position. 150

Deferred outflows of resources for pensions, OPEB, and loss on bond refundings (excluding Internal Service Funds) are reported in the statement of net position but not reported in the funds. 1,500,297

Some liabilities are not due and payable in the current period and therefore are not reported in the funds. These liabilities (excluding Internal Service Funds) consist of:

General Obligation Bonds (2,057,062)

Revenue Bonds (1,380,364)

Capital Leases (145,849)

Compensated Absences (96,147)

Net Pension Liability (3,441,243)

Net OPEB Liability (282,641)

Accrued Interest Payable and Other Liabilities (336,255)

Total Long-Term Liabilities (7,739,561)

Net Position of Governmental Activities $ 8,578,502

The accompanying notes are an integral part of the financial statements.

West Virginia

Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

General Transportation

Tobacco Settlement

Finance Authority State Road

Other Governmental

Funds Total

Revenues:

Taxes:

Personal Income $ 2,196,298 $ — $ — $ — $ — $ 2,196,298

Consumer Sales and Use 1,668,804 — — — — 1,668,804

Severance 326,363 — — — — 326,363

Corporate Net Income 317,670 — — — — 317,670

Business and Occupation 131,541 — — — — 131,541

Medicaid 267,979 — — — — 267,979

Gasoline and Motor Carrier — 404,425 — — — 404,425

Automobile Privilege — 297,116 — — — 297,116

Other 375,308 3,986 — — — 379,294

Intergovernmental 6,014,234 555,348 — — 283,834 6,853,416

Licenses, Permits, and Fees 116,963 6,802 — — 119,606 243,371

Motor Vehicle Registration — 146,836 — — — 146,836

Charges for Services 173,157 — — — — 173,157

Lottery Revenues 373,462 — — — 10,656 384,118

Food Stamp Revenue 872,884 — — — — 872,884

Investment Earnings 87,999 283 14 2,014 65,349 155,659

Other 228,004 449,640 63,563 — 7,718 748,925

Total Revenues 13,150,666 1,864,436 63,577 2,014 487,163 15,567,856

Expenditures:

Current:

Legislative 24,440 — — — 1,463 25,903

Judicial 135,586 — — — — 135,586

Executive 843,107 — — — — 843,107

Administration 99,863 — 5,232 — 4 105,099

Commerce 289,378 — — — — 289,378

Environmental Protection 305 — — — 126,859 127,164

Employment Programs 11,910 — — — 201,250 213,160

Education 3,109,129 — — — 1,969 3,111,098

Health and Human Resources 7,018,893 — — — — 7,018,893

Homeland Security 568,532 — — — — 568,532

Revenue 117,699 — — — 23,519 141,218

Transportation 13,002 726,914 — — — 739,916

Veterans Assistance 21,024 — — — 1 21,025

Senior Services 54,576 — — — — 54,576

Regulatory Boards and Commissions 112,056 — — — 22,735 134,791

Capital Outlay — 522,104 — 352,063 29,438 903,605

Debt Service:

Principal — 70,895 40,290 — 55,565 166,750

Interest — 84,451 14,024 — 25,752 124,227

Total Expenditures 12,419,500 1,404,364 59,546 352,063 488,555 14,724,028

Excess of Revenues Over (Under) Expenditures 731,166 460,072 4,031 (350,049) (1,392) 843,828

Other Financing Sources (Uses):

Face Value of Long-Term Debt Issued — 14,085 200,000 — 214,085

Tobacco Settlement Bond Issuance of Refunding Bonds — — 693,515 — — 693,515

Premiums on Bonds Issued — 860 — 62,511 — 63,371

Payments to Refunded Bond Escrow Agent — — (737,172) — — (737,172)

Transfers In 55,713 149,807 — — 73,241 278,761

Transfers Out (287,260) — (20,023) — (51,940) (359,223)

Total Other Financing Sources (Uses) (231,547) 164,752 (63,680) 262,511 21,301 153,337

Net Change in Fund Balance 499,619 624,824 (59,649) (87,538) 19,909 997,165

Fund Balances, Beginning of Year 1,642,947 215,991 576,916 1,380,020 619,207 4,435,081

Fund Balances, End of Year $ 2,142,566 $ 840,815 $ 517,267 $ 1,292,482 $ 639,116 $ 5,432,246

The accompanying notes are an integral part of the financial statements.

West Virginia

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances –

Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Net Change in Fund Balances - Total Governmental Funds $ 997,165

Amounts reported for governmental activities in the statement of activities are different because:

Capital outlays are reported as expenditures in governmental funds. However, in the statement of activities, the cost of capital assets is allocated over their estimated useful lives as depreciation expense. In the current period, these amounts are:

Capital Outlay $ 580,420

Depreciation Expense (358,263)

Excess of Capital Outlay Over Depreciation Expense 222,157

Accretion of interest related to capital appreciation bonds is an expense of the governmental activities. (985,434)

Repayment of long-term debt is reported as an expenditure in governmental funds, but the repayment reduces long-term liabilities in the statement of net position. For the current year, these amounts consist of:

Bond Principal Retirement 19,215

Capital Lease Payments 835,870

Total Long-Term Debt Repayment 855,085

Internal Service Funds are used by management to charge the costs of certain activities, such as building and vehicle maintenance and leasing, data processing, and investment and management of state monies, to individual funds. The net position in net position of the Internal Service Funds is reported with governmental activities.

23,323

Revenues in the statement of activities that do provide current financial resources are not reported as revenues in the funds. 65,100

Loss on issuance of new refunding bonds in the current fiscal year but was deferred on the statement of activities. 49,364

Retirement contributions (excluding Internal Service Funds) to defined benefit pension plans in the current fiscal year are not included on the statement of activities. 502,984

OPEB contributions (excluding Internal Service Funds) to defined benefit OPEB plan in the current fiscal year are not included on the statement of activities. 122,092

Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. These activities consist of:

Decrease of Accrued Interest (Asset) (8)

Increase of Compensated Absences (5,083)

Decrease of Accrued and Other Liabilities 30,351

Increase of Net Pension Liability (Asset), net of deferrals (424,137)

Increase of Net OPEB Liability, net of deferrals 144,455

Amortization of Bond Premiums/Discounts 23,100

Total Change in Expenditures (231,322)

Change in Net Position of Governmental Activities $ 1,620,514

The accompanying notes are an integral part of the financial statements.

West Virginia

PROPRIETARY FUNDS FINANCIAL STATEMENTS Major Funds

Water Pollution Control Revolving Fund (Water Pollution): Low-interest loans are made to communities that need to upgrade an existing waste water system, establish a new utility, or clean up the State’s water supply. Water Pollution is to remain in perpetuity by recirculating the principal and interest earned from the loans.

Workers’ Compensation Fund: On December 31, 2005, the Workers’ Compensation Commission (WCC) ceased to exist as a separate state entity. The WCC’s regulatory powers transferred to the Offices of the Insurance Commissioner, along with the residual assets and liabilities of the former WCC. Disbursements from the State’s Workers’ Compensation Fund are related to the liabilities and appropriate administrative expenses necessary for the administration of all claims, actual and incurred but not reported, for any claim with a date of injury on or before June 30, 2005.

Unemployment Compensation: The Fund is administered by the Bureau of Employment Programs doing business as WORKFORCE West Virginia. The Fund receives contributions from employers and provides for the payment of benefits to eligible unemployed workers under provisions of the Federal Unemployment Tax Act.

West Virginia Infrastructure and Jobs Development Council: The Council coordinates the review and funding of water, wastewater, and economic development projects in the State. The proceeds from the Council’s bond programs provide financial assistance to infrastructure and economic development projects throughout the State. The primary source of repayment for the revenue and refunding bonds is the receipt of payments of principal and interest on a set of loans, known as defined loans, previously made to projects from general obligation and revenue bond proceeds.

Public Employees Insurance Agency The Agency, a public entity risk pool, is responsible for providing health and life insurance to current and retired state and county employees. The Agency, empowered to set the premium rates charged to its participants, utilizes a third-party administrator to process claims and make payments to doctors and hospitals on a cost reimbursement basis.

Board of Risk and Insurance Management The Board, a public entity risk pool, is responsible for the self-insurance of all state buildings, automobiles, and legal and civil actions, as well as insuring various county and local governments and charitable organizations. The Board is funded from the premiums assessed to the organizations it insures.

Nonmajor proprietary funds are presented beginning on page 253.

West Virginia

Statement of Net Position Proprietary Funds June 30, 2021 (Expressed in Thousands)

Business-type Activities – Enterprise Funds

Water Pollution Control Revolving

Fund

Workers' Compensation

Fund Unemployment Compensation

West Virginia Infrastructure and Jobs

Development Council Assets:

Current Assets: Cash and Cash Equivalents $ 176,081 $ 1,452,789 $ 81,532 $ 38,277 Investments — — — 101,018 Receivables, Net 36,239 220 51,247 26,705 Due from Other Governments — — 13,217 — Due from Other Funds — — 185,239 — Due from Component Units — — 287 — Inventories — — — — Other Assets — — — —

Restricted Assets: Cash and Cash Equivalents — — — 155,082 Receivables, Net — — — — Other Restricted Assets — — — —

Total Current Assets 212,320 1,453,009 331,522 321,082

Noncurrent Assets: Investments — — — — Receivables, Net 650,810 — — 537,146

Restricted Assets: Cash and Cash Equivalents — — — — Investments — — — — Receivables, Net — — — —

Capital Assets, Net — — — — Total Noncurrent Assets 650,810 — — 537,146

Total Assets 863,130 1,453,009 331,522 858,228

Deferred Outflows of Resources: Deferred loss on bond refundings — — — 740 Related to Pensions 301 — — 111 Related to OPEB 72 — — 15 Total Deferred Outflows of Resources 373 — — 866

Liabilities: Current Liabilities: Accounts Payable 134 — — 49 Accrued Tuition Contract Benefits — — — — Accrued and Other Liabilities — 3,223 3,050 2,427 Premium Deficiency — — — — Unearned Revenue 4,954 — — — Due to Other Governments — — 187,963 — Due to Other Funds — — 366 — Due to Component Units 60 — — 320 Insurance and Compensation Benefits Obligations — 135,000 33,578 — Revenue Bonds Payable — — — 7,090 Capital Leases and Other Debt — — — — Capital Leases Payable to Component Units — — — — Compensated Absences 81 — — —

Total Current Liabilities 5,229 138,223 224,957 9,886

Noncurrent Liabilities: Insurance and Compensation Benefits Obligations — 1,120,900 — — Revenue Bonds Payable — — — 151,565 Capital Leases and Other Debt — — — — Capital Leases Payable to Component Units — — — — Compensated Absences 58 — — — Net Pension Liability 397 — — 133 Net OPEB Liability 143 — — 12

Total Noncurrent Liabilities 598 1,120,900 — 151,710 Total Liabilities 5,827 1,259,123 224,957 161,596

Deferred Inflows of Resources: Related to Pensions 34 — — 13 Related to OPEB 454 — — 41

Total Deferred Inflows of Resources 488 — — 54

Net Position: Net Investment in Capital Assets — — — — Restricted for:

Capital Projects — — — — General Government Operations — — — — Lending Activities 857,188 — — 659,591 Insurance Activities — 193,886 106,565 —

Unrestricted (Deficit) — — — 37,853

Total Net Position $ 857,188 $ 193,886 $ 106,565 $ 697,444

The accompanying notes are an integral part of the financial statements.

West Virginia

Public Employees' Insurance Agency

Board of Risk and Insurance

Management Other Enterprise

Funds Total

Governmental Activities - Internal

Service Funds

$ 30,387 $ 18,911 $ 90,508 $ 1,888,485 $ 29,731 — — 2,242 103,260 — 58,361 1,672 9,403 183,847 10,002 47 — — 13,264 — 4,882 — — 190,121 13,619 5,492 — — 5,779 65 — — 53 53 842 — — 12,780 12,780 107

— 11,220 — 166,302 7,091 — 1,184 766 1,950 — — 251,189 — 251,189 — 99,169 284,176 115,752 2,817,030 61,457

270,948 123,512 — 394,460 — — — 134,488 1,322,444 — 9,403 — — 9,403 16,186 — 71,328 — 71,328 — — — 2,399 2,399 — 66 — 1,899 1,965 299,922 280,417 194,840 138,786 1,801,999 316,108 379,586 479,016 254,538 4,619,029 377,565

— — — 740 — 468 438 866 2,184 4,791 232 111 203 633 2,433 700 549 1,069 3,557 7,224

2,865 1,443 5,031 9,522 22,313 — — 10,828 10,828 — 2,448 359 284 11,791 928 83,166 — — 83,166 — 19,889 10,079 — 34,922 — — — — 187,963 394 660 2 2 1,030 579 28 17 43 468 — 98,087 61,326 5,200 333,191 — — — — 7,090 — — — — — 8,133 — — — — 1,865 — — 40 121 — 207,143 73,226 21,428 680,092 34,212

9,403 128,270 7,100 1,265,673 — — — — 151,565 — — — — — 12,978 — — — — 49,570 — 172 301 531 2,172 566 533 1,085 2,714 6,131 186 113 357 811 1,704 10,155 129,088 8,843 1,421,294 72,555 217,298 202,314 30,271 2,101,386 106,767

38 35 98 218 713 576 347 1,272 2,690 6,710 614 382 1,370 2,908 7,423

66 — 1,899 1,965 232,852

— — — — 14,508 — — 3,149 3,149 7,091 — — 196,389 1,713,168 — — 80,155 13,805 394,411 — 162,308 196,714 8,724 405,599 16,148

$ 162,374 $ 276,869 $ 223,966 $ 2,518,292 $ 270,599

West Virginia

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

Proprietary Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Business-type Activities – Enterprise Funds

Water Pollution Control

Revolving Fund

Workers' Compensation

Fund Unemployment Compensation

West Virginia Infrastructure

and Jobs Development

Council

Operating Revenues:

Charges for Services and Sales $ — $ — $ 200,835 $ 4,749

Insurance Premiums — 2,604 — —

Investment Earnings 2,733 — — —

Licenses, Permits, and Fees 3,030 — — —

Other — 33 1,013,850 —

Total Operating Revenues 5,763 2,637 1,214,685 4,749

Operating Expenses:

Cost of Sales and Services — — — —

Insurance Claims and Claims Adjustment Provisions — 55,173 — —

Tuition Contract Benefits and Expenses — — — —

Infrastructure and Economic Development — — — 24,113

Unemployment Insurance Benefits — — 1,063,978 —

General and Administration 11,370 6,876 — 1,297

Pension Expense 110 — — 45

OPEB Expense (174) — — 21

Depreciation and Amortization — — — —

Provisions for Uncollectible Loans — — — 300

Other — — — —

Total Operating Expenses 11,306 62,049 1,063,978 25,776

Operating Income (Loss) (5,543) (59,412) 150,707 (21,027)

Nonoperating Revenues (Expenses):

Gain (Loss) on Sale of Equipment — — — —

Interest and Other Investment Income 1,833 228,709 851 290

Interest Expense — — — (6,019)

Lottery Revenues — — — 46,000

Other Nonoperating Revenues 14 1 — 1

Other Nonoperating Expenses — — — —

Total Nonoperating Revenues (Expenses), Net 1,847 228,710 851 40,272

Income (Loss) Before Capital Contributions and Transfers (3,696) 169,298 151,558 19,245

Capital Contributions and Transfers:

Capital Contributions — — — —

Transfers In 29,728 20,000 — 14

Transfers Out — — — (2,202)

Total Capital Contributions and Transfers 29,728 20,000 — (2,188)

Change in Net Position 26,032 189,298 151,558 17,057

Net Position (Deficit), Beginning of Year 831,156 4,588 (44,993) 680,387

Net Position (Deficit), End of Year $ 857,188 $ 193,886 $ 106,565 $ 697,444

The accompanying notes are an integral part of the financial statements.

West Virginia

Public Employees' Insurance

Agency

Board of Risk and Insurance Management

Other Enterprise

Funds Total

Governmental Activities -

Internal Service Funds

$ — $ — $ 129,432 $ 335,016 $ 145,189

571,575 78,800 8,930 661,909 —

— — — 2,733 —

— — 6,090 9,120 —

4,915 — 111 1,018,909 34

576,490 78,800 144,563 2,027,687 145,223

— — 97,083 97,083 121,824

677,841 70,259 8,330 811,603 —

— — 1,640 1,640 —

— — — 24,113 —

— — — 1,063,978 —

19,491 4,588 6,779 50,401 14,801

147 143 280 725 1,349

(115) 80 (349) (537) (1,386)

52 — 176 228 20,911

— — — 300 —

3,719 — 2,212 5,931 —

701,135 75,070 116,151 2,055,465 157,499

(124,645) 3,730 28,412 (27,778) (12,276)

— — — — (92)

40,617 28,845 50 301,195 1

— — — (6,019) (2,168)

— — — 46,000 4,894

— 11 1,269 1,296 381

— (13,500) (344) (13,844) —

40,617 15,356 975 328,628 3,016

(84,028) 19,086 29,387 300,850 (9,260)

— — — — 239

21,000 — 8,115 78,857 37,844

— — (28,537) (30,739) (5,500)

21,000 — (20,422) 48,118 32,583

(63,028) 19,086 8,965 348,968 23,323

225,402 257,783 215,001 2,169,324 247,276

$ 162,374 $ 276,869 $ 223,966 $ 2,518,292 $ 270,599

West Virginia

Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Business-type Activities – Enterprise Funds

Water Pollution Control Revolving

Fund

Workers' Compensation

Fund Unemployment Compensation

West Virginia Infrastructure and Jobs Development

Council

Cash Flows from Operating Activities:

Receipts from Customers $ 40,912 $ 2,551 $ 169,795 $ 29,191

Receipts from State Agencies — — — —

Payments to Suppliers — (13,032) — (707)

Payments to Employees (1,400) (2) — (578)

Payments to Beneficiaries — — — —

Payments for Loans Originated (42,199) — — (60,436)

Payments for Premiums — — — —

Payments to Claimants — (135,473) (954,785) —

Other Operating Cash Receipts — 33 850,832 —

Other Operating Cash Payments (10,095) — — —

Net Cash Provided by (Used For)

Operating Activities (12,782) (145,923) 65,842 (32,530)

Cash Flows from Noncapital Financing Activities:

Repayment of Operating Debt — — — (5,985)

Interest Paid on Operating Debt — — — (6,874)

Transfers In 34,708 20,000 — 14

Transfers Out — — — —

Entitlements and Grants — — — —

Distributions or Subsidies from (to) Other Organizations — — — 46,000

Receipts from Notes Receivable — — — —

Provided from Issuing Liquor Licenses — — — —

Net Cash Provided by (Used for) Noncapital Financing Activities 34,708 20,000 — 33,155

Cash Flows from Capital and Related Financing Activities:

Proceeds from Sale of Capital Bonds and Other Debts — — — —

Repayment of Capital Debt — — — —

Interest Paid on Capital Debt — — — —

Acquisition and Construction of Capital Assets — — — — Net Cash Provided by (Used for) Capital and

Related Financing Activities — — — —

Cash Flows from Investing Activities:

Purchase of Investments — — — (183,414)

Proceeds from Sale of Investments — — — 172,408

Investment Earnings 1,833 228,709 851 779

Net Cash Provided by (Used for) Investing Activities 1,833 228,709 851 (10,227)

Net Increase (Decrease) in Cash and Cash Equivalents 23,759 102,786 66,693 (9,602)

Cash and Cash Equivalents, Beginning of Year 152,322 1,350,003 14,839 202,961

Cash and Cash Equivalents, End of Year $ 176,081 $ 1,452,789 $ 81,532 $ 193,359

West Virginia

Public Employees' Insurance Agency

Board of Risk and Insurance

Management Other Enterprise

Funds Total

Governmental Activities -

Internal Service Funds

$ 567,098 $ 80,544 $ 159,035 $ 1,049,126 $ —

— — — — 145,457

(21,340) (2,960) (99,029) (137,068) (107,598)

(1,917) (2,066) (4,989) (10,952) (27,384)

(698,401) (85,459) (5,230) (789,090) —

— — (10,149) (112,784) —

— — (8,267) (8,267) —

— — (8,188) (1,098,446) —

81,912 — 1,622 934,399 —

— 12,826 (288) 2,443 —

(72,648) 2,885 24,517 (170,639) 10,475

— — — (5,985) —

— — — (6,874) —

4,735 — 7,772 67,229 37,844

— (13,500) (28,537) (42,037) (5,500)

— — 71 71 —

26,000 — — 72,000 4,894

— — 715 715 —

— — 1,165 1,165 —

30,735 (13,500) (18,814) 86,284 37,238

— — — — 6,498

— — — — (10,988)

— — — — (2,167)

(17) — (175) (192) (36,533)

(17) — (175) (192) (43,190)

(138,575) (39,517) (7) (361,513) —

128,014 39,515 3,742 343,679 —

40,617 (1,331) 97 271,555 1

30,056 (1,333) 3,832 253,721 1

(11,874) (11,948) 9,360 169,174 4,524

51,664 42,079 81,148 1,895,016 48,484

$ 39,790 $ 30,131 $ 90,508 $ 2,064,190 $ 53,008

West Virginia

Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands) (Continued)

Business-type Activities – Enterprise Funds

Water Pollution Control

Revolving Fund

Workers' Compensation

Fund Unemployment Compensation

West Virginia Infrastructure

and Jobs Development

Council

Reconciliation of Operating Income (Loss) to Net Cash

Provided by (Used for) Operating Activities:

Operating Income (Loss) $ (5,543) $ (59,412) $ 150,707 $ (21,027)

Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities:

Bad Debt Expense — — — —

Depreciation and Amortization — — — —

Provisions for Uncollectible Loans — — — 300

Pension Expense 110 — — 45

OPEB Expense (174) — — 21

Changes in Assets and Liabilities and Deferred Outflows and Inflows of Resources:

Receivables (7,049) (63) (11,383) (9,678)

Inventories — — — —

Other Assets — — — —

Accounts Payable and Accrued Liabilities 54 (80,300) 109,193 (2,184)

Tuition Contracts Benefits and Expenses — — — —

Unearned Revenue — — — —

Escrow Deposits — — — —

Due to/from Other Funds — — (182,675) 42

Unpaid Claims Liabilities — — — —

Other Liabilities — (6,148) — —

Compensated Absences (8) — — —

Net Pension Liability — — — —

Deferred Outflows of Resources Related to Pensions/ OPEB (172) — — (49)

Deferred Inflows of Resources Related to Pensions/ OPEB — — — —

$ (12,782) $ (145,923) $ 65,842 $ (32,530)

Schedule of Noncash Capital and Financing Activities:

Loans Originated with Principal Foregivenss Features $ — $ — $ — $ —

Unrealized Gain (Loss) on Investments — — — —

On Behalf OPEB Payments 14 — — 1

The accompanying notes are an integral part of the financial statements.

West Virginia

Public Employees' Insurance

Agency

Board of Risk and Insurance Management

Other Enterprise Funds Total

Governmental Activities -

Internal Service Funds

$ (124,645) $ 3,730 $ 28,412 $ (27,778) $ (12,276)

— — — — 2,891

52 — 176 228 20,911

— — — 300 —

147 143 280 725 1,349

(115) 80 (349) (537) (1,386)

(9,569) 1,330 1,058 (35,354) 233

— — (10) (10) 52

— — — — (73)

23,580 — (1,034) 49,309 977

— — (3,346) (3,346) —

6,035 (244) — 5,791 —

— 12,825 — 12,825 —

— — — (182,633) —

— (15,200) — (15,200) —

32,127 415 (160) 26,234 248

— — 6 (2) —

— — (453) (453) —

(260) (194) (381) (1,056) (2,451)

— — 318 318 —

$ (72,648) $ 2,885 $ 24,517 $ (170,639) $ 10,475

$ — $ — $ 2,051 $ 2,051 $ —

40,561 30,176 — 70,737 —

— — 33 48 163

West Virginia

FIDUCIARY FUNDS FINANCIAL STATEMENTS

Private Purpose Trust Fund This fund type is used to report a trust arrangement under which principal and income benefit individuals.

SMART 529: The West Virginia College Savings Program (the Program) operates under the West Virginia State Code Chapter 18, Article 30, and is administered by the Office of the State Treasurer under the direction of the Program’s Board. All funds paid into or invested through the Program will be available for use at any two-year or four-year college or university in the country, with refund and transfer options available. Since the Program is an Internal Revenue Service Section 529 Qualified State Tuition Program, earnings on the funds are federally tax deferred until used for college.

The individual Pension and Other Employee Benefit Trust Funds, Investment Trust Funds, and Custodial Funds descriptions and financial statements begin on page 260.

West Virginia

Statement of Fiduciary Net Position Fiduciary Funds June 30, 2021 (Expressed in Thousands)

Pension and Other Employee

Benefit Trust Funds

Investment Trust Funds SMART 529 Custodial Funds

Assets:

Cash and Cash Equivalents $ 84,663 $ 631,801 $ — $ 162,052 Investments:

Equity Pooled Investments 22,221,143 — — 11,769 Mutual Funds 703,293 — 3,202,110 —

Receivables, Net:

Contributions 35,560 — 2,831 — Participant Loans 1,866 — — — Accrued Interest — — — 72 Accounts 7,097 — — — Due from Other Funds 2,108 — — 391 Due from Component Units 3,827 — — —

Total Assets 23,059,557 631,801 3,204,941 174,284

Deferred Outflows of Resources:

Related to Pensions 249 — — — Related to OPEB 118 — — —

Total Deferred Outflows of Resources 367 — — —

Liabilities:

Accounts Payable 110 — 2,484 — Accrued and Other Liabilities 31,911 — 594 — Due to Other Governments — — — 96,755 Due to Other Funds 2,422 — — — Due to Component Units — — — — Insurance Claims Payable 8,613 — — — Custodial Liabilities — — — 15,363 Net Pension Liability 305 — — — Net OPEB Liability 100 — — —

Total Liabilities 43,461 — 3,078 112,118

Deferred Inflows of Resources:

Related to Pensions 21 — — — Related to OPEB 310 — — —

Total Deferred Inflows of Resources 331 — — —

Net Position:

Restricted for:

Pension Benefits 21,343,108 — — — Other Postemployment Benefits 1,673,024 — — —

Held in Trust for:

External Investment Pool Participants — 631,801 — — Individuals and Organizations — — 3,201,863 62,166

Total Net Position $ 23,016,132 $ 631,801 $ 3,201,863 $ 62,166

The accompanying notes are an integral part of the financial statements.

West Virginia

Statement of Changes in Fiduciary Net Position Fiduciary Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Pension and Other Employee

Benefit Trust Funds

Investment Trust Funds SMART 529 Custodial Funds

Additions:

Contributions:

Members $ 196,954 $ — $ — $ —

Employer 425,941 — — —

Account Holder Contributions — — 201,982 —

Deposits, Pool Participants — 952,272 — —

Other 381,818 — — —

Total Contributions 1,004,713 952,272 201,982 —

Investment Income (Loss): Net Appreciation (Depreciation) in

Fair Value of Investments 5,461,872 586 499,741 —

Interest 124,395 — 133,615 —

Investment Expense — — (5,163) —

Net Investment Income 5,586,267 586 628,193 —

Other 6,055

Funds Received for Local Government — — — 1,336,234

Grants Received for Local Governments — — — 76,855

Funds Received for Individuals and Organizations — — — 214,056

Collateral Received and Related Additions — — — 169,478 Funds Received from Local Governments for Bond

Payments — — — 779,034

Total Additions 6,597,035 952,858 830,175 2,575,657

Deductions:

Benefits Expense 1,519,230 — — —

Forfeitures 766 — — —

Payments in Accordance with Trust Agreements — — 266,147 —

Refunds of Contributions 42,462 — — —

Withdrawals — 783,467 — —

Pension Expense 76 — — —

OPEB Expense 77 — — —

Administrative Expenses 16,835 — 6,114 —

Funds Disbursed to Local Governments — — — 1,336,234

Grants Disbursed to Local Governments — — — 76,855

Funds Disbursed to Individuals and Organizations — — — 214,056

Collateral Disbursed and Related Deductions — — — 167,698

Funds Disbursed to Bond Escrow Agents — — — 779,034

Total Deductions 1,579,446 783,467 272,261 2,573,877

Change in Net Position Restricted for:

Individuals and Organizations — — — 1,780

Change in Net Position Held in Trust For:

Pension Benefits 4,569,207 — — —

Other Postemployment Benefits 448,382 — — —

External Investment Pool Participants — 169,391 — —

Individuals and Organizations — — 557,914 —

Net Position, Beginning of Year, as Restated 17,998,543 462,410 2,643,949 60,386

Net Position, End of Year $ 23,016,132 $ 631,801 $ 3,201,863 $ 62,166

The accompanying notes are an integral part of the financial statements.

West Virginia

DISCRETELY PRESENTED COMPONENT UNITS FINANCIAL STATEMENTS Major Component Units

West Virginia Lottery: The West Virginia Lottery’s responsibilities include the distribution and sale of lottery tickets and the awarding of prizes. The West Virginia Lottery has a duty to establish rules for conducting games, to select the type and number of gaming systems or games, and to enter into contracts and agreements to operate in a highly efficient manner. The Lottery derives its revenues from instant, online, video-type games, and table games. To the extent available, remaining net profits are to be distributed to the State and local governments as required by law.

Economic Development Authority: The Authority, responsible for developing and advancing the business prosperity and economic welfare of the State, is authorized to make loans and enter into direct financing and operating leases with industrial development agencies for the promotion and retention of new and existing commercial and industrial development. The Authority is empowered to borrow money and issue bonds, notes, commercial paper, and other debt instruments to furnish money for the enhancement of business development projects, and additionally maintains the discretionary ability to set loan terms and interest rates.

Housing Development Fund: The Fund is responsible for providing residential housing programs for low- and moderate income families, elderly persons, and other eligible persons and families, as well as financing certain nonresidential projects. The Fund is empowered to issue bonds payable from mortgage payments and to issue general obligation bonds payable from other assets. The bonds of the Housing Development Fund do not constitute the debt of the State.

Parkways Authority: The Authority is responsible for the operation and maintenance of the State’s turnpike and economic development and tourism projects approved by the Department of Transportation. The Authority is empowered to issue Parkway revenue refunding bonds and set rates for crossing the turnpike. The State has discretionary authority to reappropriate any surplus from the Authority.

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Water Development Authority: The Authority is responsible for assisting in the preservation, protection, improvement, and management of the State’s water resources. The Authority oversees a loan pool program which provides low-interest financing to local governments for water and wastewater projects. The Authority issues bonds to fund the loan pool and uses the proceeds to purchase local government revenue bonds. The revenue bonds are payable solely from the revenues of the projects.

West Virginia Higher Education Fund: The Fund is responsible for providing the delivery of postsecondary education, which is competitive, affordable, and has the capacity to deliver the programs and services necessary to meet the regional and statewide needs of young people and working-age adults. The focus and collaboration of the institutions within the Fund are to create a system of higher education that is equipped to increase the competitiveness and to diversify and to expand the State’s workforce by increasing the number of college degrees produced. The Fund obtains revenues from state and federal student aid programs; tuition and fees; state and federal appropriations; sales and services of educational activities and auxiliary enterprises; federal, state, local, and nongovernmental grants and contracts; and gifts and contributions.

West Virginia Division of Corrections and Rehabilitation: The Division has statutory responsibility for the establishment and operation of correctional facilities, juvenile services, and regional jails in the State and the acquisition, construction, and renovation of those facilities for prisoner confinement. The Division has program revenues that consist of charges for incarceration of inmates.

School Building Authority: The Authority’s responsibilities include providing state funds for the acquisition and construction of elementary and secondary public school facilities in order to satisfy the educational needs of the State’s citizens in an efficient and economical manner. The Authority’s programs are designed to provide modern, efficient public school facilities throughout the State by promoting the consolidation of elementary and secondary public schools, enabling the State to more efficiently utilize its educational resources.

Nonmajor component units are presented beginning on page 274.

West Virginia

Combining Statement of Net Position Discretely Presented Component Units June 30, 2021 (Expressed in Thousands)

West Virginia Lottery

Economic Development

Authority

Housing Development

Fund Parkways Authority

Assets:

Current Assets:

Cash and Cash Equivalents $ 198,583 $ 72,795 $ 10,510 $ 18,390

Investments — — — —

Receivables, Net 35,058 14,146 4,583 12,534

Capital Leases Receivable from Primary Government — 19,296 — —

Due from Primary Government 6 — — 2

Due from Component Units 13 — — —

Inventories 911 — — 4,460

Other Assets 1,806 — — 463

Restricted Assets:

Cash and Cash Equivalents — 302 113,921 122,202

Investments — — — 83,275

Receivables, Net — — 2,924 —

Other Restricted Assets — — — —

Total Current Assets 236,377 106,539 131,938 241,326

Noncurrent Assets:

Cash and Cash Equivalents — — — —

Investments — 1,661 — —

Receivables, Net — 178,331 89,805 —

Capital Leases Receivable from Primary Government — 171,889 — —

Other Assets — — — —

Net OPEB Asset — — 35 —

Restricted Assets:

Cash and Cash Equivalents — 6,322 307,628 —

Investments — — 38,746 —

Receivables, Net — — 645,523 —

Other Restricted Assets — — 2,132 —

Capital Assets, Net 42,420 31,125 8,132 554,051

Total Noncurrent Assets 42,420 389,328 1,092,001 554,051

Total Assets 278,797 495,867 1,223,939 795,377

Deferred Outflows of Resources:

Loss on bond refundings — — — —

Related to Pensions 2,096 159 1,561 4,510

Related to Other Post-Employment Benefits 441 32 789 1,075

Total Deferred Outflows of Resources 2,537 191 2,350 5,585

The accompanying notes are an integral part of the financial statements.

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Water Development

Authority Higher

Education

Division of Corrections & Rehabilitation

School Building

Authority

Other Component

Units Total

$ 38,977 $ 498,762 $ 39,346 $ 219,697 $ 65,141 $ 1,162,201

— 186,453 — — 3,572 190,025

18,119 185,297 2,877 — 962 273,576

— — — — — 19,296

423 37,747 53 — 5,973 44,204

— 4,884 — — — 4,897

— 3,539 12,089 — 16 21,015

11 16,181 771 — 58 19,290

— — 28,626 — 19,779 284,830

— — — — — 83,275

— — — — 611 3,535

4 — — — — 4

57,534 932,863 83,762 219,697 96,112 2,106,148

— 156,294 — — — 156,294

— 757,234 — — 2,411 761,306

7,891 33,051 — — 2,431 311,509

— — — — — 171,889

— 79,113 — — 7 79,120

— — — — — 35

15,386 — — — 750 330,086

— — — — — 38,746

149,543 — — — 938 796,004

70 — — — 374 2,576

3,907 3,399,882 156,790 591 45,246 4,242,144

176,797 4,425,574 156,790 591 52,157 6,889,709

234,331 5,358,437 240,552 220,288 148,269 8,995,857

6,043 39,710 — 3,633 — 49,386

137 2,673 46,253 152 4,547 62,088

40 36,302 10,037 31 1,086 49,833

6,220 78,685 56,290 3,816 5,633 161,307

West Virginia

Combining Statement of Net Position Discretely Presented Component Units June 30, 2021 (Expressed in Thousands) (Continued)

West Virginia Lottery

Economic Development

Authority

Housing Development

Fund Parkways Authority

Liabilities:

Current Liabilities:

Accounts Payable 23,644 46 — 5,954

Interest Payable — — 1,350 991

Accrued and Other Liabilities 32,065 169 17,308 7,696

Unearned Revenue — — — —

Due to Primary Government 157,124 450 — 4,728

Due to Component Units 4,884 13 — —

Revenue Bonds Payable — 19,296 22,285 8,940

Capital Leases and Other Debt — 195 — —

Compensated Absences 836 43 659 1,378

Total Current Liabilities 218,553 20,212 41,602 29,687

Noncurrent Liabilities:

Unearned Revenue — 282 — —

Advances from Primary Government — 123,220 — —

Liabilities Payable from Restricted Assets — — 323,886 —

Accrued and Other Liabilities — — — —

Revenue Bonds Payable — 171,889 290,250 584,891

Capital Leases and Other Debt — 1,878 386 —

Net Pension Liability 2,740 208 1,957 5,768

Net OPEB Liability 654 56 163 1,770

Compensated Absences — 46 — —

Total Noncurrent Liabilities 3,394 297,579 616,642 592,429

Total Liabilities 221,947 317,791 658,244 622,116

Deferred Inflows of Resources:

Gain on bond refundings — — — —

Related to Pensions 214 25 171 381

Related to OPEB 2,141 277 924 5,632

Service Concession Arrangements — — — —

Grants and Contributions — — — —

Total Deferred Inflows of Resources 2,355 302 1,095 6,013

Net Position:

Net Investment in Capital Assets 42,420 31,125 7,888 554,051

Restricted for:

Capital Projects — — — —

Debt Service — — 387,784 196,829

Nonexpendable — — — —

Lending Activities — 6,022 76,547 —

Specific Component Unit Purposes — — — —

Unrestricted 14,612 140,818 94,731 (578,047)

Total Net Position (Deficit) $ 57,032 $ 177,965 $ 566,950 $ 172,833

The accompanying notes are an integral part of the financial statements.

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Water Development

Authority Higher

Education

Corrections and

Rehabilitation

School Building

Authority

Other Component

Units Total

$ 12 $ 64,754 $ 20,060 $ — $ 3,904 $ 118,374

1,266 9,664 102 — — 13,373

— 264,040 13,550 6,550 669 342,047

— 113,886 — — 490 114,376

— 6,688 4,292 — 818 174,100

— — — — — 4,897

9,563 115,777 — 15,840 — 191,701

— 9,997 1,044 — — 11,236

— 54,138 — 90 390 57,534

10,841 638,944 39,048 22,480 6,271 1,027,638

— — — — 39 321

— — — — — 123,220

— — — — 15,777 339,663

— 117,498 — — 200 117,698

143,266 1,283,114 — 341,717 — 2,815,127

5,756 192,698 7,721 — — 208,439

169 11,620 49,569 425 5,948 78,404

35 54,245 13,393 35 1,386 71,737

94 5,028 10,132 — 1,311 16,611

149,320 1,664,203 80,815 342,177 24,661 3,771,220

160,161 2,303,147 119,863 364,657 30,932 4,798,858

525 — — — — 525

16 5,821 9,168 38 725 16,559

125 172,616 43,900 117 4,896 230,628

— 37,422 — — — 37,422

— 8,900 — — — 8,900

666 224,759 53,068 155 5,621 294,034

3,907 2,118,732 148,025 591 45,239 2,951,978

— 14,145 — — — 14,145

— 27,137 9,023 87,994 — 708,767

— 376,059 — — 374 376,433

21,235 — — — — 103,804

— 322,126 — — 34,223 356,349

54,582 51,017 (33,137) (229,293) 37,513 (447,204)

$ 79,724 $ 2,909,216 $ 123,911 $ (140,708) $ 117,349 $ 4,064,272

West Virginia

Combining Statement of Activities Discretely Presented Component Units For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Program Revenues

Expenses Charges for

Services

Operating Grants and

Contributions

Capital Grants and

Contributions Net (Expense)

Revenue

Component Units:

West Virginia Lottery $ 1,251,450 $ 1,177,971 $ — $ — $ (73,479)

Economic Development Authority 5,245 8,614 — — 3,369

Housing Development Fund 112,152 41,692 84,161 — 13,701

Parkways Authority 528,104 167,262 — 38,075 (322,767)

Water Development Authority 7,263 10,943 — — 3,680

Higher Education 2,011,038 842,812 600,004 124,151 (444,071)

Division of Corrections & Rehabilitation 411,116 128,797 39,634 — (242,685)

School Building Authority 99,385 — 5 — (99,380)

Other Component Units 65,016 10,622 4,221 — (50,173)

Total Component Units $ 4,490,769 $ 2,388,713 $ 728,025 $ 162,226 $ (1,211,805)

The accompanying notes are an integral part of the financial statements.

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General Revenue

Unrestricted Investment Earnings

Grants and Contributions Not Restricted

for Specific Programs Miscellaneous

Payments from the State of

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Total General Revenues and Special Item

Change in Net Position

Net Position, (Deficit)

Beginning of Year

Net Position (Deficit)

End of Year

$ 622 $ — $ 74,300 $ — $ 74,922 $ 1,443 $ 55,589 $ 57,032

371 — 3,447 — 3,818 7,187 170,778 177,965

262 — — — 262 13,963 552,987 566,950

123 — 168 — 291 (322,476) 495,309 172,833

30 — 3 — 33 3,713 76,011 79,724

166,556 — 86,421 573,569 826,546 382,475 2,526,741 2,909,216

22 — — 294,242 294,264 51,579 72,332 123,911

119 — 3 126,760 126,882 27,502 (168,210) (140,708)

897 3,913 627 48,806 54,243 4,070 113,279 117,349

$ 169,002 $ 3,913 $ 164,969 $ 1,043,377 $ 1,381,261 $ 169,456 $ 3,894,816 $ 4,064,272

West Virginia

STATE OF WEST VIRGINIA NOTES TO THE FINANCIAL STATEMENTS FOR THE FISCAL YEAR ENDED JUNE 30, 2021

NOTE 1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The State of West Virginia (the State) is governed by elected officials. These financial statements present the State (the primary government) and its component units. The component units discussed below are included in the State’s reporting entity because of the significance of their operational or financial relationships with the State.

Individual Component Unit Disclosures

United States generally accepted accounting principles (GAAP) define component units as those entities which are legally separate organizations for which the State’s elected officials are financially accountable, or other organizations for which the nature and significance of their relationship with the State are such that exclusion would cause the State’s financial statements to be misleading or incomplete. GAAP specifies two methods of presentation: blending the financial data of the component units’ balances and transactions in a manner similar to the presentation of the State’s balances and transactions, or discrete presentation of the component units’ financial data in columns separate from the State’s financial data.

Blended Component Units

The entities below are legally separate from the State and meet the GAAP criteria for component units. These entities are blended with the primary government because they provide services entirely or almost entirely to the State or there is a financial benefit or burden relationship with the primary government.

Transportation

The Division of Highways, within the Department of Transportation (Transportation), is governed by a commissioner appointed by the Governor; it does not have a governing board separate from the State Legislature. It is a legally separate entity defined by the State Constitution. Since its operations are to improve the State’s roads, Transportation is blended in the major special revenue funds of the State.

West Virginia Investment Management Board

The West Virginia Investment Management Board (IMB) is governed by a 13-member Board of Trustees. The IMB was created as a public corporation by West Virginia Code §12-6-1 to serve as the administrator, investor, and manager of the State’s pension, Workers’ Compensation, Pneumoconiosis, and other state funds. The Governor, the State Auditor, and the State Treasurer are members of the Board, and the other members are appointed by the Governor. Because there is a financial benefit-burden relationship between the State and the

West Virginia

IMB, and assets of the State and its component units comprise over 90% of the assets managed by the IMB, it is blended in the internal service funds of the State.

West Virginia Board of Treasury Investments

The West Virginia Board of Treasury Investments (BTI) is governed by a five-member board. The Governor, the State Auditor, and the State Treasurer are members of the Board and the other two members are appointed by the Governor. The BTI was created as a public corporation by West Virginia Code §12-6C-4 to provide prudent fiscal administration, investment, and management for the Consolidated Fund and is blended in the internal service funds of the State.

Tobacco Settlement Finance Authority

The Tobacco Settlement Finance Authority (TSFA) is governed by a five-member board, including the Secretary of Administration, the State Treasurer, and three persons appointed by the Governor. The TSFA was created to issue bonds related to the State’s portion of the tobacco receipts from the Master Settlement Agreement between tobacco manufacturers and the covered states. The revenue bonds, secured by the tobacco revenues, are not a general obligation of the State. The TSFA is blended in the debt service funds of the State since its activities only benefit the State.

Blended Component Unit Financial Statements

Audited financial statements for these blended component units can be obtained directly from their respective administrative offices.

Administrative Offices:

Transportation West Virginia Investment Management Board

1900 Kanawha Blvd., East 500 Virginia St. East, Suite 200

Building 5, Room A-109 Charleston, WV 25301

Charleston, WV 25305

Board of Treasury Investments Tobacco Settlement Finance Authority

1900 Kanawha Blvd., East 1900 Kanawha Blvd., East

Building 1, Room E-122 Building 1, Room E-119

Charleston, WV 25305 Charleston, WV 25305

Discretely Presented Component Units

Discretely presented component units are entities which are legally separate from the State but are financially accountable to the State, or whose relationship with the State is such that exclusion would cause the State’s financial statements to be misleading or incomplete. Because of the nature of the services they provide and the State’s ability to impose its will on them, the following component units are discretely presented. The State has both governmental (providing services to the government) and proprietary (providing services to

West Virginia

external parties) component units. The component units are presented in a single column on the government-wide statements.

The major discretely presented component units are composed of the following entities:

West Virginia Lottery

The West Virginia Lottery (Lottery) is governed by a seven-member board appointed by the Governor. It was formed to assist the State in funding education, debt service, the promotion of tourism, and other basic governmental activities. Even though the Lottery was created primarily to generate revenue for the State, the service provided by the Lottery – the opportunity for financial gain – is provided to anyone who chooses to participate. When prizes are awarded to winners and financial gain is achieved, the lottery operation does not exclusively, or almost exclusively, benefit the primary government as an institution, not meeting the criteria for blending and thus requiring discrete component unit presentation.

Economic Development Authority

The Economic Development Authority (EDA) is administered by a nine-member board composed of the Governor, Secretary of Revenue, and seven other members appointed by the Governor. EDA is responsible for developing and advancing the business prosperity and economic welfare of the State. EDA is authorized to make loans, including direct financing and operating leases to industrial development agencies for the promotion and retention of new and existing commercial and industrial development. EDA is empowered to borrow money and issue bonds (with approval of the State), notes, commercial paper, and other debt instruments to furnish money for the enhancement of business development projects and has the ability to establish loan terms, including interest rates, at its discretion. EDA promotes economic development among private industries, and though its services benefit the State by increasing the tax base, its primary function is to provide jobs.

Housing Development Fund

The Housing Development Fund (HDF) is governed by an 11-member board consisting of the Governor, the Attorney General, the Commissioner of Agriculture, the State Treasurer, and seven other members appointed by the Governor. The Governor or his designee is the chair of the board of directors. HDF is responsible for providing residential housing programs for low-income and moderate-income families, elderly persons, and other eligible persons and families, as well as financing certain nonresidential projects. It is empowered to issue bonds which are payable from the mortgage payments. The assets and revenues of the bond programs of the HDF are restricted by resolution to repay the outstanding debt. As the State is able to impose its will over the HDF, it is included as a discretely presented component unit.

Parkways Authority

The Parkways Authority (Parkways) is composed of seven members. The Governor or his designee serves as its chairperson, the Secretary of the Department of Transportation is on the board, and five members are appointed by the Governor. Its responsibilities include the operation and maintenance of the West Virginia Turnpike (the Turnpike) as well as economic development and tourism projects approved by Transportation. Parkways sets the rates for

West Virginia

using the Turnpike and may issue Parkways’ revenue refunding bonds payable solely from revenues of the Turnpike. Transportation, as well as the State, is able to impose its will on Parkways.

Water Development Authority

The Water Development Authority (Water Development) is governed by a seven-member board. The Governor, the Secretary of the Department of Environmental Protection, and the Commissioner of the Bureau for Public Health are members ex-officio of the board. Four members are appointed by the Governor, who serves as the chair. Water Development is responsible for assisting in the preservation, protection, improvement, and management of the State’s water resources. Water Development oversees a loan pool program which provides low-interest financing to local governments for water and wastewater projects. Water Development issues bonds to fund the loan pool and uses the proceeds to purchase local government revenue bonds. The revenue bonds are payable solely from the revenues of the projects. Water Development also serves as the financial administrator of the West Virginia Infrastructure and Jobs Development Council and the Drinking Water Treatment Revolving Fund, which are enterprise funds.

Higher Education Fund

Each college and university in the Higher Education Fund (the Fund) is governed by a Governing Board, which is responsible for the general determination, control, supervision, and management of the financial business and educational policies and affairs of the institution(s). The West Virginia Higher Education Policy Commission (the Policy Commission), in accordance with Senate Bill No. 653, is the single accountability point responsible for developing, gaining consensus around, and overseeing the implementation and development of a higher education public policy agenda. It is comprised of ten persons appointed by the Governor with the advice and consent of the Senate. The Policy Commission is responsible for preparing and submitting a consolidated budget and allocating state appropriations to supplement institutional operating revenues.

Senate Bill 448 created the West Virginia Council for Community and Technical College Education (the Council), which has responsibility for developing, overseeing, and advancing the State’s public policy agenda as it relates to community and technical college education. The Council is comprised of 12 persons appointed by the Governor with the advice and consent of the Senate.

The Fund is comprised of the following: Bluefield State College, BridgeValley Community and Technical College, New River Community and Technical College, Concord University, Eastern West Virginia Community and Technical College, Fairmont State University, Glenville State College, Marshall University (including Marshall University Graduate College), Mountwest Community and Technical College, Pierpont Community and Technical College, Shepherd University, Blue Ridge Community and Technical College, Southern West Virginia Community and Technical College, West Liberty University, West Virginia Higher Education Policy Commission (including West Virginia Network for Educational Telecomputing), West Virginia Council for Community and Technical College Education, West Virginia Northern Community College, West Virginia State University, West Virginia School of Osteopathic Medicine, West Virginia University (including Potomac State College and West Virginia University Institute of Technology), and West Virginia University at Parkersburg Community and Technical College. These entities are included in the Fund

West Virginia

financial statements as blended component units: Concord University Research and Development Corporation, Glenville State College Research Corporation, Glenville State College Housing Corporation, Marshall University Research Corporation, Shepherd University Research and Development Corporation, West Liberty University Research Corporation, West Virginia State University Research and Development Corporation, West Virginia University Research and Development Corporation, and West Virginia Regional Technology Park.

The Fund’s component units’ financial statements are included in the Fund’s component unit column in the Discretely Presented Major Component Units Financial Statements of the CAFR. The component units are the separate private nonprofit organizations of each applicable institution. Those organizations report under Financial Accounting Standards Board (FASB) standards. As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features.

Various foundations have been established as separate nonprofit organizations incorporated in the State of West Virginia having as their purpose “. . . to aid, strengthen and further in every proper and useful way, the work and services of the (individual institutions within the Fund), and their affiliated nonprofit organizations.” Oversight of the foundations is the responsibility of separate and independently elected Boards of Directors, not otherwise affiliated with the Fund. In carrying out its responsibilities, the Boards of Directors of the foundations employ management, form policy, and maintain fiscal accountability over funds administered by the foundations. Although the individual institutions within the Fund do not control the timing or amount of receipts from the foundations, the majority of resources, or income thereon, which the foundations hold and invest are restricted to the activities of the individual institutions within the Fund by donors. Because these restricted resources held by the foundations as detailed in the basic financial statements can only be used by, or for the benefit of, the individual institutions within the Fund, the foundations are considered component units of the individual institutions and are therefore included with the Fund’s financial statements.

The West Virginia University Foundation Inc. is appropriately not reported because the economic resources held do not entirely or almost entirely benefit West Virginia University. The Kanawha Valley Community and Technical College Foundation, Inc.; the Bridgemont Community and Technical College Foundation; the Eastern West Virginia Community and Technical College Foundation Inc.; the Mountwest Foundation, Inc.; and Tech Foundation, Inc. are not included because they were not significant to their institutions. The Higher Education Foundation is not included because it was not significant to the Fund.

Complete financial statements for any college, university, or foundation can be obtained by contacting the Business Office of the West Virginia Higher Education Policy Commission, 1018 Kanawha Boulevard, E., Suite 700, Charleston, WV 25301.

West Virginia Division of Corrections and Rehabilitation

The West Virginia Division of Corrections and Rehabilitation (the Division) oversees the State’s adult and juvenile offender populations. It combined the West Virginia Division of Corrections, the West Virginia Regional Jail and Correctional Facility, and the West Virginia Division of Juvenile Services into one agency. The Division is governed by a nine-member board consisting of the Commissioner of the Division of Corrections, the Assistant Commissioner of the Bureau of Juvenile Service, the Secretary of the Department of

West Virginia

Homeland Security, the Secretary of the Department of Administration, and five members appointed by the Governor.

School Building Authority

The School Building Authority (SBA) is governed by a ten-member board appointed by the Governor. The State Superintendent of Schools serves as president of the Authority. The remaining nine members consist of three members of the State Board of Education and six citizens, one of whom must be a representative of the construction trades. The SBA is to “facilitate and provide State funds for the acquisition, construction, and maintenance of elementary and secondary public school facilities so as to meet the educational needs of the people of the State in an efficient and economical manner.” The SBA’s program is designed to provide modern, efficient public-school facilities throughout the State by promoting the consolidation of elementary and secondary public schools, enabling the State to more efficiently utilize its educational resources.

The nonmajor discretely presented component units are composed of the following entities:

Educational Broadcasting Authority

The Educational Broadcasting Authority (EBA) consists of 11 members. Seven members are appointed by the Governor. The other four members include the State Superintendent of Schools, one member from the West Virginia Board of Education, and two members from the Policy Commission. EBA is responsible for extending educational, cultural, and informational experiences to all state citizens. This is accomplished through the construction and operation of noncommercial educational television and radio stations and related facilities statewide. EBA provides statewide telecommunication services for other state and public service agencies for nonbroadcasted activities such as teleconferencing, in-service training, and data delivery. EBA’s revenues are derived primarily through donations, with a portion of operational costs supplemented by state and federal grants.

Jobs Investment Trust

The Jobs Investment Trust (JIT) consists of 13 members. The Governor, the President of West Virginia University, the President of Marshall University, the Chancellor of the West Virginia Higher Education Policy Commission, and the Executive Director of the West Virginia Housing Development Fund serve on the board by virtue of their respective positions. One member is appointed by the Governor from a list of two names submitted by the Board of Directors of the Housing Development Fund. One member is appointed by the Governor from a list of two names submitted by the Commissioner of the Division of Tourism. The other six members are appointed from the general public by the Governor. JIT is responsible for the development, promotion, and expansion of West Virginia’s economy and to provide opportunities to businesses and college and university students to develop and implement plans for innovative projects and investment opportunity.

West Virginia State Rail Authority

The West Virginia State Rail Authority (Rail Authority) consists of seven members. Six members are appointed by the Governor and the seventh member is the Secretary of the Department of Transportation. The Rail Authority is responsible for the rehabilitation, improvement, and restoration of the financial stability of the railway system in the State. It

West Virginia

can issue bonds and set rates for the rail system. The Rail Authority receives federal and state grants to supplement its cost of operations.

Solid Waste Management Board

The Solid Waste Management Board (Solid Waste) is composed of seven members. Five members are appointed by the Governor and the remaining members are the Secretary of the Department of Health and Human Resources and the Director of the Division of Environmental Protection. Solid Waste is responsible for improving collection and disposal of solid wastes and encouraging recycling, reuse, and recovery of resources from wastes. Solid Waste is the financing mechanism for solid waste projects and is empowered to issue bonds (with approval of the Water Development Authority) and set a rate structure.

Racing Commission

The Racing Commission consists of three members appointed by the Governor, by and with the consent of the Senate. The State Legislature has the ability to approve and modify the Racing Commission’s budget. The Racing Commission has full jurisdiction over and shall supervise all horse race meetings, all dog race meetings, and all persons involved in the holding and conducting of horse and dog race meetings. It has the power to set fees and grant licenses and permits pertaining to horse and dog race meetings, as well as to regulate the horse and dog race wagering.

Public Defender Corporation

The Public Defender Corporation represents the combined nonprofit corporations, created under authority of West Virginia Code §29-21, for the purpose of fulfilling the State’s obligation to provide legal representation to eligible clients. Funding of the individual public defender corporations is by appropriation disbursed in periodic allotments determined by the Executive Director of the Public Defender Services, who is appointed by the Governor. The governing body of each public defender corporation is a Board of Directors appointed by the county commissions and the Governor.

Municipal Pension Oversight Board

The Municipal Pension Oversight Board is responsible for monitoring and improving the performance of the municipal policemen’s and firemen’s pension and relief funds. The board, which is the governing body, ensures legal compliance of the funds and distribution of tax revenues to the relief funds as well as any reasonable actions necessary to provide for the security and fiscal integrity of pension funds. The board consists of nine members, including the executive directors of the State’s IMB and Consolidated Public Retirement Board, an active or retired member from both the Municipal Policeman’s Pension and Relief Fund, and the Municipal Fireman’s Pension and Retirement Fund, an attorney experienced in finance and investment matters related to pensions management, two persons experienced in pension management, a certified public accountant experienced in auditing, and one person chosen from a list of three persons submitted to the Governor. It would be misleading to exclude the Municipal Pension Oversight Board, so it is presented as a discretely presented component unit.

West Virginia

Discretely Presented Component Unit Financial Statements

Complete audited financial statements of the individual discretely presented component units can be obtained directly from their respective administrative offices.

Administrative Offices:

West Virginia Lottery Economic Development Authority

900 Pennsylvania Avenue Northgate Business Park

Charleston, WV 25302 180 Association Drive

Charleston, WV 25311-1217

Housing Development Fund

5710 MacCorkle Avenue, S.E. Parkways Authority

Charleston, WV 25304 P.O. Box 1469

Charleston, WV 25325-1469

Water Development Authority

1009 Bullitt Street Higher Education Policy Commission

Charleston, WV 25301 Administrative Services

1018 Kanawha Boulevard, East

Division of Corrections and Rehabilitation Suite 700

Building 84, Suite 230 Charleston, WV 25301

1409 Greenbrier Street

Charleston, WV 25311 School Building Authority

Finance Division

Educational Broadcasting Authority 2300 Kanawha Boulevard, East

600 Capitol Street Charleston, WV 25311

Charleston, WV 25301

Jobs Investment Trust

West Virginia State Rail Authority 1012 Kanawha Boulevard, East

120 Water Plant Drive 5th Floor

Moorefield, WV 26836 Charleston, WV 25301-2877

Solid Waste Management Board Racing Commission

601 57th Street, SE 900 Pennsylvania Avenue, Ste. 553

Charleston, WV 25304 Charleston, WV 25302

Public Defender Corporation Municipal Pension Oversight Board

One Players Club Drive, Suite 301 301 Eagle Mountain Road, Suite 251

Charleston, WV 25311 Charleston, WV 25311

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Basis of Presentation

The accompanying basic financial statements of the State of West Virginia conform to United States GAAP for governments. The GASB is the accepted standard-setting body for governmental accounting and financial reporting. In addition, GAAP requires that the State’s proprietary activities apply GAAP in a similar manner as applied for business activities in the private sector. As a result, the financial statements of certain component units follow the specialized reporting practices of the insurance, housing finance agency, and other not-for-profit industries, as prescribed by the GASB. Certain net position and fund balance amounts presented for the preceding year have been restated. See Note 2 for further explanation.

The basic financial statements have been prepared primarily by the Financial Accounting and Reporting Section (FARS) of the Department of Administration from accounts maintained by the State Auditor’s Office, the State Treasurer’s Office, the Board of Treasury Investments, and the Investment Management Board. Additional data has been derived from the audited financial statements of certain entities and from reports and data prepared by various state agencies and departments, based on independent or subsidiary accounting records maintained by them.

Government-wide and Fund Financial Statements

Government-wide Financial Statements

The government-wide financial statements, which are the statement of net position and the statement of activities, report information on all the nonfiduciary activities of the primary government and its component units. These activities are reported as governmental activities, business-type activities, or component units. The governmental activities are normally supported by taxes, intergovernmental revenues, and other nonexchange revenues, and are reported separately from the business-type activities. The business-type activities rely significantly on fees and charges to external parties. The primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

The statement of net position presents the State’s nonfiduciary assets, deferred outflows of resources, liabilities, and deferred inflows of resources, with the difference reported as net position. Net position is reported in three categories:

• Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any bonds, notes, and other debt of resources that are attributed to the acquisition, construction, or improvement of those assets. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt also should be included in this component of net position.

• Restricted net position results when constraints are placed on net position used by external creditors, grantors, contributors, etc. or imposed by law through constitutional provisions or enabling legislation and reduced by liabilities and deferred inflows of resources related to those assets.

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• Unrestricted net position consists of net position which does not meet the definition of the two preceding categories. Unrestricted net position is often designated, which indicates that management does not consider it available for general operations. They also often have constraints on resources imposed by management but can be removed or modified.

The statement of activities demonstrates the degree to which the direct expenses of a given function or program are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or program. Program revenues include (1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or program and (2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or program. Taxes and other items not properly included in program revenues are reported as general revenue.

Fund Financial Statements

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide statements. Major individual governmental funds and major individual proprietary funds are reported as separate columns in the fund financial statements, with nonmajor funds being combined into a single column.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when they become both measurable and available. “Available” means expected to be collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, revenues are primarily considered available if received in the first 60 days of the new fiscal year. Significant revenues susceptible to accrual include income, sales and use, corporation, and other taxes; federal awards; federal reimbursements; and other reimbursements for use of materials and services. Revenues from federal awards are considered available when the related expenditures have been incurred and if received in 12 months. Receipts and disbursements of U.S. Government food stamps are accounted for in the General Fund. The electronic benefits transfer (EBT) process for food stamp revenue equal to expenditures is recognized when the underlying transaction (food purchase) occurs. Revenues from other sources are recognized when received.

Expenditures generally are recorded when the related liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to retirement costs, compensated absences, environmental obligations, and claims and judgments, are recorded only when payments are due.

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Governmental Fund Types

Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted, committed, or assigned to expenditures for specified purposes (other than debt service and capital projects).

Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest.

Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets (other than those financed by proprietary funds).

Permanent Funds are used to account for and report resources that are restricted to the extent that only earnings, and not principal, may be used for purposes that benefit the State or its citizenry. The Irreducible School Fund was constitutionally established for educational purposes.

The State reports the following major governmental funds:

The General Fund is the primary operating fund of the State. It is used to account for all financial resources obtained and spent for those services normally provided by the State (e.g., health, social assistance, public safety, primary and secondary education), which are not required to be accounted for within other funds.

Transportation, a special revenue fund, has responsibility for the construction, maintenance, and improvement of all state roads; development of public transportation facilities, services, equipment, and methods; and supervision and control of commercial, state, and municipal airports and ports. Financial resources for these responsibilities are federal grants, registration fees, license fees, and taxes.

The TSFA, a debt service fund, was established to sell bonds that are being funded by projected future cash flows from the Master Settlement Agreement between the manufacturers and the states. The TSFA acquired the State’s rights to the revenue under the Master Settlement Agreement. The TSFA receives the cash flows and transfers the monies to the trustee upon receipt.

State Road is a constitutionally established fund that is operated within the Department of Transportation. Certain taxes, fees, and other revenue sources are expended for the construction and maintenance of roads.

Proprietary Fund Types

Enterprise Funds are used to account for operations of those state agencies providing goods or services to the general public on a user-charge basis, or where the State has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. This fund type is also used when the activity is financed with debt that is secured by a pledge of the net revenues from the fees and charges of the activity. These funds include the State’s risk management and insurance funds as well as the Alcohol Beverage Control Administration, two water treatment loan programs, the West Virginia Prepaid

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College Plan, the West Virginia Infrastructure and Jobs Development Council, and Correctional Industries.

Internal Service Funds account for the operations of those state agencies that provide goods and services to other state agencies and governmental units on a cost-reimbursement basis. These services include government building and vehicle maintenance and leasing, data processing functions, and the investment and management of state funds. In the government-wide statements, internal service funds are included with governmental activities.

The State reports the following major enterprise funds:

The Water Pollution Control Revolving Fund provides low-interest loans to communities to upgrade or establish sewer service, to clean up the State’s water supply, and to assist local governmental entities in complying with the Clean Water Act.

The Workers’ Compensation Fund provides compensation for injury or illness sustained during the course of employment with a date of injury on or before June 30, 2005 (see Note 14).

Unemployment Compensation operates local offices throughout the State to provide temporary assistance to eligible unemployed workers.

The West Virginia Infrastructure and Jobs Development Council coordinates the review and funding of water, wastewater, and economic development projects within the State through proceeds of its bond program, certain mineral severance taxes, repayments of principal and interest, and statutorily dedicated legislative appropriations from the excess lottery revenue fund.

The Public Employees’ Insurance Agency and the Board of Risk and Insurance Management are the State’s health insurance and risk management funds and are shown with the proprietary major funds due to their importance to management.

Types of Fiduciary Funds

Additionally, the State reports the following types of fiduciary funds:

Pension and Other Employee Benefit Trust Funds report resources that are required to be held in trust for the members and beneficiaries of the State’s defined benefit retirement plans, the defined contribution retirement plan, and the multiemployer, cost-sharing other postemployment benefit plan, in which the State is a participating employer.

Investment Trust Funds report resources in external investment pools that belong to local governments and municipalities.

Private Purpose Trust Funds report resources of all other trust arrangements in which principal and income benefit individuals, private organizations, or other governments. The SMART 529 College Savings Plan allows citizens to invest monies for college tuition and defer taxes on earnings from those investments.

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Custodial Funds report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private-purpose trust funds. These funds are taxes that will be remitted to respective local governments, hospital patient and inmate funds, performance bonds, and interest earnings.

Interfund Activity and Balances

As a general rule, the effect of interfund activity has been eliminated from the government- wide statements. Exceptions to this rule are activities between funds reported as governmental activities and funds reported as business-type activities, and activities between funds that are reported in different functional categories in either the governmental or business-type activities column. Elimination of these activities would distort the direct costs and program revenues for the functions concerned.

In the fund financial statements, transfers represent flows of assets without equivalent flows of assets in return or a requirement for repayment. In addition, transfers are recorded when a fund receiving revenue provides it to the fund expending the resources.

Interfund receivables and payables have been eliminated from the statement of net position, except for the residual amounts due between governmental and business-type activities.

Major Reserve/Stabilization Funds

The Revenue Shortfall Reserve Fund (Rainy Day Fund) was established in the State Code, which requires that the first 50% of all surplus General Revenue funds accrued during the fiscal year just ended must be deposited into the fund until the aggregate amount of the fund exceeds 13% of the total appropriations from the General Revenue Fund for the fiscal year just ended.

The Legislature is permitted to make appropriations from the fund for emergency revenue needs caused by acts of God or natural disasters or for other fiscal needs as determined by the Legislature. The Rainy Day Fund can also be invested and can retain those earnings. The first $100 million is invested by the BTI, and any amounts over $100 million are invested by the IMB. As of June 30, 2021, the fund contained $441.7 million, which amounted to almost 10% of FY 2021 total appropriations. The Rainy Day Fund is reported in the General Fund as part of the unassigned fund balance

The Legislature also authorized the Governor, by executive order, to borrow funds from the Rainy Day Fund when revenues are inadequate to make timely payments of the State’s obligations. The amount borrowed may not exceed 1.5% of the General Revenue Fund estimate for the fiscal year in which the funds are borrowed and shall be repaid to the fund within 90 days of its withdrawal. Because of an expected cash flow shortfall experienced each year in the first quarter of the fiscal year, the Governor has borrowed from the fund each year since August 1996 in order to pay obligations in a timely manner. The loans were repaid before September 30 of each year, all within the 90-day limit allowed by law.

The Revenue Shortfall Reserve Fund – Part B (Rainy Day Fund – Part B) was established with the cash balance of the West Virginia Tobacco Settlement Medical Trust Fund on June 9, 2006, the effective date of the bill, West Virginia Code §11B-2-20. The funds are invested by the IMB, and interest and other returns on the invested funds are credited to the fund.

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Expenditures may not be made from the Rainy Day Fund—Part B unless all monies in the Revenue Shortfall Reserve Fund have been first expended. After June 30, 2025, interest and other amounts earned on monies held in the Rainy Day Fund—Part B may be appropriated by the Legislature for continued support of the programs offered by the Public Employees’ Insurance Agency; funding for expansion of the federal-state Medicaid program; funding for public health programs, services, and agencies; funding for any State owned or operated health facilities; or in instances of revenue shortfalls or fiscal emergencies of an extraordinary nature. On June 30, 2021, the balance in the Rainy Day Fund—Part B was $5.6 billion, and it is reported in the General Fund as part of the unassigned fund balance.

The Income Tax Refund Reserve Fund was established to pay personal income tax refunds, interest, and penalties to taxpayers in a timely manner. It may also be used by the Legislature to make appropriations from the fund to address other items as the Legislature so desires. Personal income taxes received by the State can be added to this fund, if the state tax commissioner determines the balance in the fund is not sufficient to ensure the timely payment of income tax refunds. On June 30, 2021, the balance in the Income Tax Refund Reserve Fund was $45 million, and it is reported in the General Fund as part of the unassigned fund balance.

Assets and Liabilities

Cash and Cash Equivalents – Cash equivalents are short-term investments with maturities, when purchased, of three months or less. The State Treasurer principally deposits the State’s cash in investment pools maintained by the BTI and IMB, and such deposits are generally available with overnight notice. Cash deposits in outside bank accounts are considered to be cash and cash equivalents.

Investments – Amounts reported as investments include certain deposits with the IMB, the BTI, and other investments maintained in outside accounts. The investments at IMB are maintained in investment pools having long-term investment securities designated as trading securities or established to acquire participant-directed securities. IMB’s investments in the Short-Term Fixed Income Pool are carried at amortized cost. Futures and option contracts are valued at the last settlement price established each day by the exchange on which they are traded. Investments in commingled investment pools are valued at the net asset value of the individual funds. The State also participates in three external investment pools managed by the BTI. Two are reported at amortized cost, which approximates fair value. The third is a longer-term investment pool that carries investments at fair value. The fair value of investments is derived from quoted prices for identical assets or liabilities in active markets that a government can access at the measurement date and by inputs that are observable for an asset or a liability, either directly or indirectly. Because fair value of the investments of the State Building Fund approximates amortized cost, no noncash change in fair value is reported.

Receivables – Amounts reported as receivables in the governmental funds consist primarily of Federal revenues, taxes, and interest on investments. Receivables in all other funds represent amounts that have arisen in the ordinary course of business and are shown net of allowances for uncollectible amounts. Further disaggregation of receivable balances is disclosed in Note 5.

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Inventories – Consumable inventories, consisting of expendable materials and supplies held for consumption, are valued and reported for financial statement purposes. Materials and supplies inventories are physically counted and primarily valued at the first-in, first-out (FIFO) and average cost methods at year-end. Inventories of governmental funds are recorded using the consumption method. Nonspendable fund balance is recorded for the ending inventory amount, indicating that inventory does not constitute “expendable available financial resources.” Proprietary fund and component units’ inventories are valued at the lower of cost or market, cost being determined on FIFO, and are expensed when used.

Capital Assets – Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are recorded at historical cost, or at estimated historical cost if actual historical cost is not available. Donated capital assets are recorded at acquisition value at the time of the donation. In accordance with the capitalization policy adopted by the State for financial reporting, equipment with a purchase price in excess of $25,000 is capitalized. Certain small blended component units follow other capitalization policies which range from $5,000 to $25,000 for equipment. The Fund component unit uses $1,000 and $5,000 thresholds. Buildings and improvements which extend the useful lives and/or significantly increase values of capitalized buildings with a combined value in excess of $100,000 are capitalized. All land, regardless of acquisition price, is capitalized. Intangibles include off-the-shelf computer software, patents, easements, and mineral rights over $25,000 and internally generated software over $1 million.

West Virginia is one of few states that owns all the paved roads in the State, except for municipal streets. Infrastructure was capitalized for the first time in fiscal year 2002. Transportation’s infrastructure constructed from July 1, 1980 to July 1, 2001, has been recorded at estimated historical cost. The estimated historical cost for years 1980-2001 was based on capital outlay expenditures reported by Transportation in the annual reports for those years, less an amount estimated for the historical cost of the acquisition of land for right-of-way. Transportation has not capitalized any infrastructure expenditures for assets constructed prior to July 1, 1980. The costs of normal maintenance and repairs that do not add to the asset’s value or materially extend an asset’s useful life are not capitalized. No interest was capitalized during the fiscal year. Other agencies are capitalizing all infrastructure assets.

Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.

The capital assets are depreciated over their estimated useful lives using the straight-line depreciation method. Amortization of capital lease assets is included with depreciation expense. Equipment, depending on type, is depreciated over 3-20 years. Buildings are depreciated over various lives, ranging from 20-50 years. The infrastructure assets are depreciated over a period of 20-50 years. Improvements are capitalized and depreciated over the remaining useful lives of the related capital assets. Impaired assets and insurance recoveries are analyzed for significance and recorded accordingly.

The State possesses certain capital assets that have not been capitalized and depreciated, including works of art and historical treasures, such as monuments; historical documents;

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paintings; antiques; pioneer Native American, and Civil War artifacts, etc. Works of art and historical treasures that are held for public exhibition, education, or research in furtherance of public service, rather than financial gain; protected, kept unencumbered, cared for, and preserved; and subject to an organizational policy that requires the proceeds from sales of collection items to be used to acquire other items for collections are not capitalized.

Accrued Tuition Contract Benefits – An accrued tuition contract benefits liability is recognized based upon the actuarial present value of the future tuition contract obligation. This valuation method reflects the present value of estimated tuition contract benefits that will be paid in future years and is adjusted for the effects of projected tuition and fee increases and termination of contracts. When a beneficiary of the prepaid tuition program is accepted to an eligible college or university, the contract becomes redeemable. Benefits can be transferred to any fully accredited private or out-of-state college or university within the United States in an amount based on the average cost of tuition and fees then charged by West Virginia public colleges and universities. While a beneficiary has up to ten years after high school to use the plan benefit, four other options are available: (1) the purchaser may transfer the contract benefits to an eligible substitute beneficiary; (2) at any time four years or more after the beneficiary’s expected college entrance date, the purchaser may request a refund of the contract benefit value, less a termination fee and an earnings penalty required by federal law; (3) at any time, the purchaser may cancel the contract and receive a refund of payments made, less administrative fees and any benefits already paid; or (4) the purchaser may transfer the prepaid contract value to the West Virginia College Prepaid Tuition and Saving Program in accordance with state and federal regulations.

Insurance and Compensation Benefits – The Board of Risk and Insurance Management (BRIM), the Public Employees’ Insurance Agency (PEIA), and the Workers’ Compensation Fund (WCF) each represent and are accounted for as insurance enterprise funds of the State. BRIM and PEIA are considered public entity risk pools (enterprise funds). Each organization has included the required supplementary information in its separately audited financial statements.

Capital Leases Payable to Component Units – The EDA has issued revenue bonds to provide financial assistance to the State’s governmental entities for the acquisition and construction of facilities. The EDA has entered into a lease purchase agreement with the State. A Capital Leases Payable to Component Units has been recorded in the governmental activities at June 30, 2021, of approximately $191.2 million. There is also an offset of Capital Leases Receivable from Primary Government recorded by the EDA.

Advances – The amount of EDA loans held by the State’s General Fund at June 30, 2021, is approximately $123 million and is recorded as Advances to/from Component Units. There is a revolving loan agreement with the BTI to borrow up to $175 million ($123 million outstanding) to be reloaned for economic development purposes, with interest equal to the 12-month average of BTI’s yield on its cash liquidity pool, adjusted annually. Monthly payments must be sufficient to repay outstanding principal over ten years, secured by a security interest in the investments derived from the loan. Another revolving loan agreement exists with the BTI to borrow up to $50 million to provide loan insurance for broadband projects, with interest equal to the 12-month average of BTI’s yield on its money market pool, adjusted quarterly. There is also a note payable to the BTI, nonrecourse with right of offset against a note receivable, amount not to exceed $25 million, interest at 3%, principal due in annual installments through June 2022, unsecured. Note repayments are dependent upon the proceeds received from the investments in venture capital funds. The nonrecourse note has been written down based upon the borrowing agreement with BTI.

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Long-Term Liabilities – In the government-wide financial statements and proprietary fund financial statements, long-term obligations (including claims and judgments, environmental obligations, net pension liability, net other post-employment benefits liability (OPEB), and compensated absences) are reported as liabilities. Bond premiums and discounts are amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are charged to expenses as incurred.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Pollution Remediation Obligations – In the government-wide statement of net position, pollution remediation obligations, including landfills, mine reclamation, oil and gas wells, and underground storage tanks, are reported in the Accrued and Other Liabilities line item at the current value of expected outlays to fund remediation costs using a technique substantially similar to the expected cash flow technique. The technique uses contracts issued, measuring averages and standard deviations, and variances to all the other sites without contracts. A range of possible estimated amounts is used, as well as all expectations about possible cash flows on a site-specific basis. Ranges are based on actual remediation cost experience, remediation cost estimates, and/or discrete cost remediation treatment possibilities. All reported obligation amounts are estimates and are subject to change resulting from price increases or reductions, technology, or changes in applicable laws or regulations. In cases when remediation costs are not reasonably estimable liabilities, a liability for such cases is not reported. For a more detailed explanation of the liability, see Note 15, Commitments and Contingencies.

Pensions – The State’s retirement pension plans cover all employees of the State and are funded according to matching portions of employee payroll prescribed by the Plans. The Plans’ fiduciary net position has been determined on the same basis used by the pension plan. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan. Investments are carried at fair value as determined by a third-party pricing service utilized by the respective investment management companies. Investment transactions are accounted for on a trade-date basis. Unrealized gains and losses are included in investment income. Investment income is determined monthly and distributed to each of the defined benefit plans participating in the investment pools on the last day of the month in the form of reinvested shares.

Other Postemployment Benefits (OPEB) – The State OPEB plan covers all employees of the State as set forth in the West Virginia Code. Accordingly, the basic financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America for governmental entities as prescribed or permitted by the GASB. Revenues are derived mainly from contributions from plan members and employers. Members’ contributions are recognized in the period in which the contributions are due. Employers’ contributions to the RHBT are recognized pursuant to a legal requirement, when there is a reasonable expectation of collection. Benefits and refunds are recognized when due and payable. RHBT cash and cash equivalents principally consist of the deposits in the Board of

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Treasury Investments (BTI) pooled funds recorded at fair value, as more fully described in Note 4.

Compensated Absences – Employees accumulate annual leave (vacation) balances to maximum amounts ranging from 240 to 320 hours. Most employees receive a 100% termination payment upon separation based upon their final rate of pay. The liability for annual leave is valued at 100% of the balance plus the State’s share of Social Security and retirement contributions. In lieu of a cash payment, at retirement, an employee can elect to use accumulated annual leave toward their postemployment health care insurance premium. State employees earn sick leave benefits, which accumulate but do not vest. When separated from employment with the State, an employee’s sick leave benefits are considered ended and no reimbursement is provided. However, eligible employees may convert, at the time of retirement, any unused accumulated sick leave to pay a portion of the employee’s postemployment health care insurance premium. See the Other Postemployment Benefits discussion in Note 13.

Deferred Inflows/Outflows – A deferred inflow of resources is an acquisition of net assets that is applicable to a future reporting period. A deferred outflow of resources is a consumption of net assets that is applicable to a future reporting period.

Net Position/Fund Balance – The difference between assets plus deferred outflows of resources less liabilities plus deferred inflows or resources is “Net Position” on the government-wide, proprietary, and fiduciary fund statements, and “Fund Balance” on the governmental fund statements. Net position is reported in three categories:

• Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowing used for the acquisition, construction, or improvement of those assets. Deferred outflows of resources and deferred inflows of resources that are attributable to the acquisition, construction, or improvement of those assets or related debt also should be included in this component of net position.

• Restricted net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Net position that is restricted due to legal restrictions from creditors, grantors, or laws and regulations of other governments, and, in some cases, by legally enforceable enabling legislation or constitution of the State is a restricted net position.

• Unrestricted net position consists of net position which does not meet the definition of the two preceding categories.

The fund balance category, general government operations, is based primarily on the extent to which the State is bound to honor constraints on the specific purposes for which the amounts in those funds can be spent. Fund balances are reported in the following categories:

• Nonspendable fund balances include amounts that cannot be spent because they are in a nonspendable form, such as inventory, or they are legally or contractually required to be maintained intact, such as the corpus of a permanent fund.

• Restricted fund balances are restricted due to legal restriction from creditors, grantors, or laws and regulations of other governments, or by legally enforceable enabling legislation or constitution of the State.

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• Committed fund balances are amounts that can only be used for specific purposes pursuant to constraints imposed by appropriation legislation passed by the State Legislation, which is the highest level of decision-making authority for the State. Those committed amounts cannot be used for any other purpose unless the Legislature passes new legislation concerning those amounts. Committed fund balance also incorporates contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements.

• Assigned fund balances are constrained by the government’s intent to use such funds for specific purposes, but are neither restricted nor committed, except for major reserve/stabilization arrangements. The specific purpose for which the funds are intended is expressed within the appropriation requests of the agencies and approved by the State Budget Office, according to the West Virginia State Code. Assigned fund balances include all remaining amounts (except negative amounts) that are reported in the governmental funds, other than the general fund, that are not classified as nonspendable and are neither restricted nor committed. Amounts in the General Fund that are intended to be used for a specific purpose are also assigned. By reporting particular amounts that are not restricted or committed in a special revenue, capital projects, debt service, or permanent fund, the State has assigned those amounts to the purposes of the respective funds.

• Unassigned fund balance is the residual classification for the General Fund. This classification represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. Any negative fund balances are unassigned. The General Fund is the only fund that reports a positive unassigned fund balance.

Agency level assigned and unassigned fund balance spending is at the discretion of the agency, with approval of the State Budget Office. It is the State’s overall policy to use restricted balances first, then unrestricted balances in the following order: committed, assigned, and unassigned.

Revenues and Expenditures/Expenses

In the government-wide Statement of Activities, revenues and expenses are segregated by activity (governmental or business-type and discretely presented component units), then further by function (e.g., administration, education, transportation). Additionally, revenues are classified between program and general revenues. Program revenues include charges to customers or applicants for goods, services, or privileges provided; operating grants and contributions; and capital grants and contributions. Internally dedicated resources are reported as general revenues rather than as program revenue. General revenues include all taxes. Certain indirect costs are included in the program expenses reported for individual functions.

In the governmental fund financial statements, revenues are reported by source. For budgetary control purposes, revenues are further classified as either “general purpose” or “restricted.” General purpose revenues are available to fund any activity accounted for in the fund. Restricted revenues are, either restricted by state law or by outside restriction (e.g.,

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federal awards), available only for specified purposes. Unused restricted revenues at year-end are recorded as restricted fund balance.

In the governmental fund financial statements, expenditures are reported by character: “Current,” “Capital Outlay,” or “Debt Service.” Current expenditures are subclassified by function and are for items such as salaries, grants, supplies, and services. Capital outlay includes expenditures for real property or infrastructure. Debt service includes both interest and principal outlays related to bonds and payments on capital leases.

Revenues and expenses of proprietary funds are classified as operating or nonoperating and are subclassified by object (e.g., sales, depreciation). Operating revenues and expenses generally result from providing services and producing and delivering goods. All other revenues and expenses are reported as nonoperating.

Retiree Drug Subsidies – The retiree drug subsidy (RDS) revenue from the federal government under the provisions of Medicare Part D has been recorded by the Retiree Health Benefit Trust Fund (RHBT). RHBT has accounted for the RDS revenue as voluntary nonexchange transactions. Accordingly, RDS estimated revenue is recognized as RHBT incurs Medicare-eligible retiree prescription drug expenditures.

Other Financing Sources – These additions to governmental fund balances in the fund financial statements include resources and financing provided by bond proceeds, capital leases, and transfers from other funds.

Other Financing Uses – These reductions of governmental fund resources in the fund financial statements are uses of funds that could substantially distort a government’s regular operations. They include discounts on debt issued, refunding transactions, and transfers.

Interfund Services Provided and Used – When a sale or purchase of program-related goods and/or services between funds occurs, for a price approximating their external exchange value, the seller reports revenue and the purchaser reports an expenditure or expense, depending on the fund type. Transactions between the primary government and a discretely presented component unit are generally classified as revenues and expenses, unless they represent repayments of loans or similar activities.

Effect of New Accounting Pronouncements

The GASB issued Statement No. 84, “Fiduciary Activities,” which improves guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. The State implemented this GASB as of July 1, 2020. Net position was restated in Custodial Funds for the Consolidated Escrow Fund. See Footnote 2 for additional discussion.

The GASB issued Statement No. 95, “Postponement of the Effective Dates of Certain Authoritative Guidance,” which provides temporary relief to governments and other stakeholders in light of the COVID-19 pandemic by postponing the effective dates of certain provisions in Statements and Implementation Guides that first became effective or are scheduled to become effective for periods beginning after June 15, 2018. The requirements of Statement No. 95 were effective immediately. Effective dates for the following statements reflect their postponements.

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The GASB issued Statement No. 87, “Leases,” to improve the accounting and financial reporting for leases by governments and to increase the usefulness of the governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that were previously classified as operating leases. This statement is effective for fiscal year 2022, and management has not yet determined the financial statement impact of the pronouncement.

The GASB issued Statement No. 91, “Conduit Debt Obligations,” which provides a single method of reporting conduit debt obligations by issuers and eliminates diversity in practice associated with commitments extended by issuers, arrangements associated with conduit debt obligations, and related note disclosures. This statement is effective for fiscal year 2023, and management has not yet determined the financial statement impact of the pronouncement.

The GASB issued Statement No. 92, “Omnibus 2020,” enhances comparability in accounting and financial reporting and improves the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. Requirements relating to Statement No. 73, No. 74, No. 84, and to the measurement of liabilities associated with AROs in a government acquisition are effective for fiscal year 2022. Management has not yet determined the financial statement impact of the pronouncement.

The GASB issued Statement No. 93, “Replacement of Interbank Offered Rates,” which prompts governments to amend or replace financial instruments for the purpose of replacing the London Interbank Offered Rate (LIBOR) with other reference rates, by either changing the reference rate or adding or changing fallback provisions related to the reference rate. The removal of LIBOR as an appropriate benchmark interest rate is effective for fiscal year 2022. Management has not yet determined the financial statement impact of the pronouncement.

The GASB issued Statement No. 94, “Public-Private and Public-Public Partnerships and Availability Payment Arrangements,” which aims to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements and also provides guidance for accounting and financial reporting for availability payment arrangements. This statement is effective for fiscal year 2023, and management has not yet determined the financial statement impact of the pronouncement.

The GASB issued Statement No. 96, “Subscription-Based Information Technology Arrangements,” which provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users. This statement defines SBITA, establishes that a SBITA results in a right-to-use subscription asset, an intangible asset, and a corresponding subscription liability, provides capitalization criteria for outlays other than subscription payments, and requires note disclosures regarding SBITA. This statement is effective for fiscal year 2023, and management has not yet determined the financial statement impact of the pronouncement.

The GASB issued Statement No. 97, “Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans – An Amendment of GASB Statements No. 14 and No. 84, and a Supersession of GASB Statement No. 32,” which aims to increase consistency and comparability related to the reporting of fiduciary component units, to mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution OPEB plans, and employee

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benefit plans, as well as to enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code Section 457 plans that meet the definition of a pension plan. The requirements of the statement related to the accounting and financial reporting for Section 457 plans are effective for fiscal year 2022. Certain requirements related to the application of certain component unit criteria are effective for fiscal year 2022. Management has not yet determined the financial statement impact of the pronouncement.

The GASB issued Statement No. 98, “The Annual Comprehensive Financial Report,” which establishes the term annual comprehensive financial report and its acronym ACFR. That new term and acronym replace instances of comprehensive annual financial report and its acronym in generally accepted accounting principles for state and local governments. This statement is effective for fiscal year 2022, and management has determined that there will be no financial statement impact of the pronouncement.

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NOTE 2

RESTATEMENT AND RESTRICTED BALANCES

Restatement of Beginning Balances

As reflected in the separately presented financial statements, the Consolidated Public Retirement Board has restated beginning net position, restricted for pensions of the TDCRS as of July 1, 2020, to record forfeiture activity, which was not reported in accordance with GAAP in prior periods.

Due to the implementation of GASB 84, Custodial Funds has restated beginning net position, restricted for Individuals and Organizations for the Consolidated Escrow Fund.

The effects of the adjustment is as follows (expressed in thousands):

Fund Balances or Net Position

Entity /Reporting Unit

As Previously Reported Adjustment As Restated

Pension, Trust, and Other Employee Benefit Trust:

Teachers’ Defined Contribution Retirement System $ 584,349 $ (13,983) $ 570,366

Total Pension, Trust, and Other Employee Benefit Trust Funds $ 18,012,526 $ (13,983) $ 17,998,543

Custodial Funds: Held in Trust for Individuals and Organizations $ — $ 60,386 $ 60,386

Total Custodial Funds $ — $ 60,386 $ 60,386

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Restricted Net Position

The following table summarizes the restricted net position of funds included in “other” columns at June 30, 2021 (expressed in thousands):

Total Reporting

Entity

Restricted for:

Fund Type/Fund Capital Projects

Lending Activities

Insurance Activities

General Government Operations

Non- Expendable

Other Specific

Fund Purposes

Enterprise Funds:

Drinking Water Treatment Revolving Fund $ 193,222 $ — $ 193,222 $ — $ — $ — $ —

Alcohol Beverage Control Administration 3,167 3,167

West Virginia Prepaid College Plan 3,149 — — — 3,149 — —

State Entities Worker's Compensation 13,805 — — 13,805 — — —

213,343 — 196,389 13,805 3,149 — —

Internal Service Funds:

State Building Fund 14,508 14,508 — — — — —

Travel Management 7,091 — — — — — 7,091

21,599 14,508 — — — — 7,091

Discretely Presented Component Units:

Educational Broadcasting Authority 374 — — — — 374 —

Solid Waste Management Board 4,577 — — — — — 4,577

Municipal Pensions Oversight Board 29,646 — — — — — 29,646

34,597 — — — — 374 34,223

Total $ 269,539 $ 14,508 $ 196,389 $ 13,805 $ 3,149 $ 374 $ 41,314

The government-wide statement of net position reports $3.6 million of restricted net position for the primary government, of which $1.6 million is restricted by enabling legislation.

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Restricted Fund Balance

The following table summarizes, by fund, the restricted fund balance of each of the funds included in “other” columns at June 30, 2021 (expressed in thousands):

Fund Type/Fund

Total Reporting

Entity Capital Projects

Debt Service

Development, Tourism, and Recreation Education

Public Protection

Governmental Funds:

Special Revenue Funds:

Environmental Protection $ 108,275 $ — $ — $ — $ — $ 108,275

Public Service Commission 10,040 — — — — 10,040

Wildlife Resources 78,281 — — 78,281 — —

196,596 — — 78,281 — 118,315

Capital Projects Funds:

State Road — — — — — —

Education, Arts, Sciences, and Tourism Fund 2,275 2,275 — — — —

Cacapon Project Fund 2,084 2,084 — — — —

State Parks Projects 18,298 18,298 — — — —

Lease Purchase Accounts 10,740 10,740 — — — —

33,397 33,397 — — — —

Debt Service:

Lease Purchase Accounts 6,291 — 6,291 — — —

Education, Arts, Sciences, and Tourism Fund 1,012 — 1,012 — — —

Economic Development Project Fund 49,125 — 49,125 — — —

Cacapon Project Fund 1,483 — 1,483 — — —

State Parks Projects 3,123 — 3,123 — — —

61,034 — 61,034 — — —

Permanent Funds:

Irreducible School 502 — — — 502 —

Total $ 291,529 $ 33,397 $ 61,034 $ 78,281 $ 502 $ 118,315

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NOTE 3

NET POSITION/FUND DEFICITS

Individual funds with net position/fund balance deficits at June 30, 2021, were as follows (expressed in thousands):

Net Position/ Fund Balance

Deficit

Enterprise Funds:

West Virginia College Prepaid Tuition and Savings Program $ 4,157

Discretely Presented Component Units:

School Building Authority 140,708

Racing Commission 353

Total Deficits $ 145,218

Enterprise Funds

West Virginia College Prepaid Tuition and Savings Program (the Program) has a net position deficiency of $4.2 million as of June 30, 2021. This deficiency was created over time by investment performance, tuition rate growth, various actuarial assumption adjustments, and certain economic events. The West Virginia College Prepaid Tuition and Savings Program’s ability to pay obligations of the Prepaid Tuition Plan is dependent on long-term investment programs and adequate levels of future cash flows.

The Plan sought and received support from the State Legislature to support payment of plan benefits. In March 2003, the Legislature created the Prepaid Tuition Trust Escrow Account (the Escrow Account) to guarantee payment of plan contracts. Under the legislative action, the Escrow Account may receive transfers of up to $1 million each year there is an actuarially determined unfunded liability of the Plan. All earnings on the transferred funds will remain in the Escrow Account. In April 2021, the West Virginia Legislature passed Senate Bill 294, which authorized the early closure of the Prepaid Tuition Trust Fund. As of September 30, 2021, any account owner having remaining semester units were paid $4,808 for each remaining plan unit. Funds available in the Prepaid Trust Fund and the Escrow Account were used to make terminating payments totaling $9.6 million to 560 account holders on September 30, 2021.

In the event the Plan is unable to cover the amount of money needed to meet its current obligations, funds may be withdrawn from the Escrow Account to meet those obligations. The funds were invested and have had a net investment gain of $4.6 million for the 17 years ended June 30, 2021, leaving the account with a balance of $27.8 million at June 30, 2021. There was $1 million transferred in fiscal year 2021 because of the actuarial unfunded liability at the end of fiscal year 2020, in accordance with the provisions enacted by the Legislature.

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Discretely Presented Component Units

The School Building Authority of West Virginia’s (the SBA) combined net position deficiency at June 30, 2021, is approximately $140.7 million, which is primarily driven by future obligations related to long-term debt. These revenue bonds are secured by and satisfied from certain net profits of the West Virginia Lottery.

At year-end, the SBA had $357.6 million in bonds outstanding, compared to $374.2 million at June 30, 2020, a decrease of 4.43%. This decrease of $16.6 million was due to the scheduled retirement of the existing bonds. Since the SBA receives all its debt service funding from allocations from the West Virginia Lottery, any bonds issued by the SBA will always be assigned a debt rating based on the performance of the West Virginia Lottery.

The West Virginia Racing Commission net position deficiency at June 30, 2021, is $353 thousand. The deficiency is due to the increase of the net pension liability and a change in the net effect of the related deferred inflows and deferred outflows.

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NOTE 4

DEPOSITS AND INVESTMENTS

Deposits

The State’s deposit policy is described in West Virginia’s Code §12-2-2 and 3. All monies are to be maintained in the State’s accounting system or in an outside bank account approved by the State Treasurer’s Office.

Custodial credit risk is risk associated with the failure of a depository financial institution. In the event of a depository financial institution’s failure, the State would not be able to recover its deposits or collateralized securities that are in possession of the outside parties. According to State Code §12-1-5, the amount of funds on deposit in any depository financial institution in excess of the amount insured by the FDIC shall not exceed 90% of the value of collateral pledged by the depository institution. The State minimizes custodial credit risk by obtaining the required amount of collateral in the name of the State. The State Treasurer has statutory responsibility for the daily cash management of the State’s agencies, departments, boards, and commissions.

Primary Government

At June 30, 2021, the reported amount of the primary government’s deposits was ($198,603,000) and the bank balance was $203,988,000. Of that bank balance, $4,454,000 was uninsured and collateralized with securities held by the pledging financial institution but not in the name of the State, and ($356,000) was uninsured and collateralized with securities held by the pledging financial institution’s trust department or agent but not in the name of the State.

Component Units

At June 30, 2021, the reported amount of the component units’ deposits was $711,701,000 and the bank balance was $403,834,000. Of that bank balance, $24,702,000 was uninsured and collateralized with securities held by the pledging financial institution but not in the name of the State, and $2,001,000 was uninsured and collateralized with securities held by the pledging financial institution’s trust department or agent but not in the name of the State.

Investments

The Board of Treasury Investments (BTI) manages the individual investment pools and accounts of the Consolidated Fund under authority of West Virginia Code, §12-6C, West Virginia Treasury Investments Act. The Consolidated Fund provides for the investment of monies not currently needed to fund state governmental operations, as well as provides the opportunity for local governments to participate in large investment pools, and for those funds statutorily required to be invested in the Consolidated Fund.

The BTI is authorized by West Virginia Code, §12-6C-9, to invest in United States government and agency obligations, commercial paper, corporate bonds, repurchase agreements, asset- backed securities, and investments in accordance with the Linked Deposit Program, which is a program using financial institutions in the State to reduce loan costs to small businesses by offsetting interest reductions on the loans with certificates of deposit, loans approved by the Legislature, and any other programs authorized by the Legislature. In addition to the

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restrictions in investment types, at no time shall more than 75% of the Consolidated Fund be invested in any bond, note, debenture, commercial paper, or other evidence of indebtedness of any private corporation or association, and at no time shall more than 5% be invested in securities issued by a single private corporation or association. Further, no less than 15% of the Consolidated Fund shall be invested in any direct obligation of or obligation guaranteed by the United States government.

The Investment Management Board (IMB) focuses on the State’s long-term trust investments. The IMB provides prudent fiscal administration and investment management services to designated state pension funds, the State’s Workers’ Compensation and Coal Workers’ Pneumoconiosis funds, and certain other state government funds. The State Treasurer’s Office determines which funds to transfer to the IMB and BTI for investment in accordance with West Virginia Code, policies set by the IMB and BTI, and by provisions of bond indentures and trust agreements, when applicable.

Investment Valuation

Fair value of an investment is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price).

A hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical financial instruments (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities at the reporting date.

Level 2: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not considered active; observable inputs other than observable quoted prices for the asset or liability; or inputs derived principally from or corroborated by observable market data.

Level 3: Unobservable pricing inputs for assets and liabilities.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment.

Generally, the fair value of IMB’s fund portfolio securities are determined as outlined in the hierarchy levels above and more specifically as follows and applicable:

• Equity securities and money market mutual funds are valued at the last sale price or official closing price reported in the market in which they are primarily traded.

• Equity securities that trade in non-U.S. markets are valued in U.S. dollars using period-end spot market exchange rates as supplied by the pool’s custodian.

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• Fixed income securities are valued according to prices furnished by independent pricing services to the pool’s custodian. These services determine the security prices by a number of methods, including, but not limited to, dealer quotes, live market trading levels when available, live feeds of trade execution data, spreads over U.S. Treasury securities, and other models and formulae appropriate to the specific security type.

• Open-end regulated investment companies or other commingled investment funds are valued at the net asset value of the fund as reported by the fund’s administrator.

• Futures and option contracts are valued at the last settlement price established each day by the exchange on which they are traded.

• Credit default, interest rate, and total return swaps are valued at the last settlement price established each day by the exchange on which they are traded, are based on market values received from third parties, or are determined by valuation models.

• Foreign currency forward contracts are valued at the prevailing market exchange rates at respective dates of transactions.

• Investments in private credit & income funds, private equity partnerships, real estate limited partnerships and funds, and other private funds are not securities for which market quotations are readily available. The IMB has concluded that the net asset value reported by the general partners or fund administrators approximates the fair value of these investments, and, consequently, these investments are carried at net asset value as a practical expedient for fair value. Due to the nature of the investments held by the funds, changes in market conditions and the economic environment may significantly impact the net asset value of the funds, and, consequently, the fair value of the IMB’s interest in the funds. Although a secondary market exists for these investments, it is not active and individual transactions are typically not observable. When transactions do occur in this limited secondary market, they may occur at discounts to the reported net asset value. It is therefore reasonably possible that if the IMB were to sell these investments in the secondary market, a buyer may require a discount to the reported net asset value, and the discount could be significant. The IMB believes that the net asset value of such investments is a reasonable estimate of fair value at June 30, 2021.

• Investments in alternative risk premia funds are not securities for which market quotations are readily available. The IMB has concluded that the net asset value reported by the underlying funds approximates the fair value of these investments, and, consequently, these investments are carried at net asset value as a practical expedient for fair value. These investments are redeemable with the fund at net asset value under the original terms of the agreements and operations of the underlying fund. However, it is possible that these redemption rights may be restricted or eliminated by the funds in the future in accordance with the underlying fund agreements. Due to the nature of the investments held by the funds, changes in market conditions and the economic environment may significantly impact the net asset value of the funds, and, consequently, the fair value of the IMB’s interests in the funds. The IMB believes that the net asset value of such investments is a reasonable estimate of fair value at June 30, 2021.

• Investments in hedge funds are not securities for which market quotations are readily available. The IMB has concluded that the net asset value reported by the general partners or fund administrators approximates the fair value of these investments,

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and, consequently, these investments are carried at net asset value as a practical expedient for fair value. These investments are redeemable with the fund at net asset value under the original terms of the agreement and operations of the underlying fund. However, it is possible that these redemption rights may be restricted or eliminated by the funds in the future in accordance with the underlying fund agreements. Due to the nature of the investments held by the funds, changes in market conditions and the economic environment may significantly impact the net asset value of the funds, and, consequently, the fair value of the IMB’s interests in the funds. Although a secondary market exists for these investments, it is not active and individual transactions are typically not observable. When transactions do occur in this limited secondary market, they may occur at discounts to the reported net asset value. It is therefore reasonably possible that if the IMB were to sell these investments in the secondary market, a buyer may require a discount to the reported net asset value, and the discount could be significant. The IMB believes that the net asset value of such investments is a reasonable estimate of fair value at June 30, 2021.

Investments not generally described above are described in detail in the individual pool disclosures in the pages that follow.

The BTI is an investment vehicle of the State and its component units, all of which are government entities. The investments of the WV Money Market, WV Government Money Market, WV Bank, Loan, and Reserve pools and accounts are carried at amortized cost. The pools transact with their participants at a stable net asset value per share and meet the requirements for portfolio maturity, portfolio quality, portfolio diversification, portfolio liquidity, and shadow pricing. The BTI does not place any limitations or restrictions on participant withdrawals from the WV Money Market and WV Government Money Market pools, such as redemption notice periods, maximum transaction amounts, and any authority to impose liquidity fees or redemption gates. The specific exceptions to fair value reporting for the other pools as defined in professional standards are as follows:

Pool Exception

WV Bank Nonnegotiable certificates of deposit which are nonparticipating interest-earning investment contracts

Loan Loans receivable arising from lending activities of economic development authorities

Reserve Banks’ depository account that has no market

The investments of the remaining pools and participant accounts are reported at fair value, which is determined by a third-party pricing service based on asset portfolio pricing models and other sources. The BTI measures fair value at the end of each month. Investments in commingled investment pools are valued at the reported unit values of the individual funds. Commissions on the purchases of securities by the BTI are a component of the security price quoted by the seller and are included in the investment cost.

A more detailed discussion of the IMB’s and BTI’s investment pools can be found in the IMB’s and BTI’s annual reports. A copy of the IMB’s annual report can be obtained from the following address: 500 Virginia Street East, Suite 200, Charleston, WV 25301 or http:// www.wvimb.org. A copy of the BTI’s annual report can be obtained from the following address: West Virginia Board of Treasury Investments, 315 70th Street SE, Charleston, WV 25304 or http://www.wvbti.org.

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Except as specifically disclosed in this note, the State currently does not have specific overall policies addressing limitations on specific risk types, such as credit risk, custodial credit risk, concentration of credit risk, interest rate risk, or foreign currency risk.

In addition to amounts invested with the IMB and BTI, certain governmental funds and discretely presented component units are permitted to invest bond proceeds with third-party trustees named in bond indentures. Governmental funds, including the State Building Fund; Education, Arts, Sciences, and Tourism Fund; West Virginia Infrastructure and Jobs Development Council; Tobacco Settlement Finance Authority; the Department of Health and Human Resources; and the Department of Administration have investments with bond trustees. The West Virginia Infrastructure and Jobs Development Council enterprise fund also has investments with bond trustees. The following discretely presented component units have reported investments held with third-party trustees: Corrections and Rehabilitation; Economic Development Authority (EDA); Educational Broadcasting Authority; Jobs Investment Trust; Housing Development Fund; Parkways Authority; Water Development Authority; School Building Authority; and Higher Education Fund. IMB has operating funds in an institutional Treasury Money Market Fund. The Teachers’ Defined Contribution Retirement System of the Consolidated Public Retirement Board and the SMART 529 College Savings Plan have their assets held by outside third parties.

Permissible investments for all agencies include those guaranteed by the United States of America, its agencies and instrumentalities (U.S. Government obligations); equities; corporate debt obligations, including commercial paper, which meet certain ratings; certain money market mutual funds; investment agreements with certain financial institutions; repurchase agreements; state and local government series (SLGS) securities; and other investments. Other investments consist primarily of single-family mortgage loans and collateralized mortgage obligations. SLGS are direct obligations of the U.S. Government, issued to state and local government entities to provide those governments with required cash flows at yields which do not exceed IRS arbitrage limits.

Repurchase Agreements

In connection with repurchase agreement transactions, it is the IMB’s policy that its designated custodian or mutual third party take possession of the underlying collateral securities, the fair value of which exceeds the principal amount of a repurchase transaction at all times. If a seller defaults and the fair value of the collateral declines, realization of the collateral by the IMB may be delayed or limited.

The BTI uses only tri-party repurchase agreements. Under the terms of a tri-party repurchase agreement, the seller transfers collateral securities to an account of the BTI’s manager/agent at the seller’s custodian bank. This arrangement perfects the BTI’s lien on the collateral and effectively protects the BTI from a default by the seller. The BTI requires sellers in repurchase transactions to pledge collateral of at least 102% of the cash borrowed from the BTI. If a seller defaults and the fair value of the collateral declines, realization of the collateral by the BTI may be delayed or limited.

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Derivatives

The State’s investment strategy includes the use of derivatives as a tool in managing market risk and providing an opportunity for enhanced return. The IMB invests in derivative financial investments as authorized by its Board of Trustees. As of June 30, 2021, the IMB held derivative financial investments that included Futures Contracts, Foreign Exchange Forward Contracts, Currency Swaps, and Interest Rate Swaps. Additionally, the IMB also held derivative instruments in option contracts and credit default swaps which were deemed immaterial to the State’s financial statements. The IMB is indirectly exposed to derivative risk through participation in institutional commingled funds. Credit risk and interest rate risk pertaining to derivatives are disclosed in each participating pool’s section in this note. The change in fair value of derivatives is included in the Unrestricted Investment Earnings on the Government-wide Statement of Activities; Interest and Other Investment Income on the Statement of Revenues, Expenses, and Changes in Fund Net Position, Proprietary Funds; and Net Appreciation in Fair Value of Investments on the Statement of Changes in Fiduciary Net Position, Fiduciary Funds. The fair value of derivatives is included in the Investments and Cash Equivalents on the Government-wide Statement of Net Position; Investments on the Statement of Net Position, Proprietary Funds; and Investments on the Statement of Fiduciary Net Position, Fiduciary Funds. More details of the changes in fair value may be obtained from the financial statements of the IMB.

Foreign Currency

Amounts denominated in or expected to settle in foreign currencies are translated into United States dollars at exchange rates reported by the pool’s custodian, Northern Trust, on the following basis:

• Fair value of investment securities, other assets, and liabilities - at the closing rate of exchange at the valuation date.

• Purchases and sales of investment securities, income, and expenses - at the rate of exchange prevailing on the respective dates of such transactions.

Asset-Backed Securities

The IMB invests in various asset-backed securities, mortgage-backed securities, and structured corporate debt. The BTI has certain pools that invest in various asset-backed securities and structured corporate debt. The securities are reported at fair value. The IMB and BTI invest in these securities to enhance yields on investments. Changes in market interest rates affect the cash flows of these securities and may result in changes in fair value. The overall return or yield on these securities depends on the changes in the interest and principal payment patterns and market value of the underlying assets.

Securities Lending

The IMB is authorized by statute and policy to participate in a securities lending program. Through November 2020, the IMB, through its lending agent, Northern Trust, lent securities of the pool to various brokers on a temporary basis. The IMB receive compensation in the form of loan premium fees and income from the investment of the cash collateral. Expenses related to the lending of securities are rebates paid by the lending agent to brokers and the lending agent’s

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fees for its services. The income earned by the IMB is reported in the statement of operations as net securities lending income. The agent fees and broker rebates are reported as expenses. Unrealized gains or losses resulting from changes in the value of the investment of cash collateral are reported as part of the change in unrealized appreciation or depreciation of investments. The IMB continues to receive interest and dividends on the securities loaned. Gains or losses in the fair value of the securities loaned that may occur during the term of the loans are reflected in the financial statements of the various investment pools. The IMB cannot pledge or sell such collateral without a default.

At June 30, 2021, the fair value of securities on loan and collateral held by the pools of the IMB are as follows (expressed in thousands). Of the collateral held, $201.9 million was received as cash. The collateral received as cash is invested in the West Virginia Custom Account.

Fair Value of Securities on Loan

Collateral Held

Non-Large Cap Domestic Equity Pool $ 105,771 $ 109,264

International Equity Pool 130,621 141,121

Total Return Fixed Income Pool 289,255 295,605

Core Fixed Income Pool 151,189 154,733

Private Markets Pool 22,974 23,665

Total $ 699,810 $ 724,388

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Investment Pools

Schedule of Participation

The following schedule details the participation in the various IMB pools exclusive of those pools comprising the Consolidated Fund or Participant Directed Accounts as of June 30, 2021 (expressed in thousands):

Portable Alpha Pool

Large Cap Domestic Equity

Non-Large Cap Domestic Equity

International

Qualified Nonqualified Equity

Primary Government:

Revenue Shortfall Reserve Fund $ — $ — $ — $ — $ — $ —

Revenue Shortfall Reserve Fund B — 58,820 10,147 — 17,763 42,650

Workers’ Compensation Old Fund — 153,094 26,839 — 46,570 110,905

Workers’ Compensation Self-Insured Employer Guaranty Risk Pool — 5,639 975 — 1,675 4,126

Workers’ Compensation Self-Insured Employer Security Risk Pool — 7,906 1,382 — 2,405 5,803

Workers’ Compensation Uninsured — 2,392 412 — 687 1,767

Pneumoconiosis — 35,133 6,144 — 10,659 25,552

Wildlife Endowment Fund 17,708 — 3,018 — 5,275 12,935

State Parks and Recreation Endowment Fund — — — — — —

Board of Risk & Insurance Management — 27,605 4,738 — 8,061 20,241

Public Employees’ Insurance Agency — 32,032 5,426 — 9,573 23,308

WV Department of Environmental Protection Trust — 3,556 619 — 1,033 2,640

WV Department of Environmental Protection Agency — 46,111 7,901 — 13,191 34,298

Total Primary Government 17,708 372,288 67,601 — 116,892 284,225

Percentage of Ownership 0.35 % 99.84 % 7.30 % — % 53.35 % 7.26 %

Fiduciary Funds:

Judges’ Retirement System 64,243 — 10,830 19,676 — 46,199

Emergency Medical Services Retirement System 27,136 — 4,567 8,263 — 19,566

Public Employees’ Retirement System 2,014,704 — 341,413 621,044 — 1,437,612

Teachers’ Retirement System 2,248,941 — 381,614 696,272 — 1,602,687

Municipal Police Officers and Firefighters’ Retirement System 5,251 — 878 1,571 — 3,889

Municipal Policemen’s or Firefighter’s Pension and Relief Funds 1,703 589 390 708 — 1,644

Natural Resources Police Officer Retirement System 5,665 — 944 1,704 — 4,115

State Police Retirement System 68,297 — 11,510 20,792 — 49,684

State Police Death, Disability and Retirement Fund 190,006 — 32,539 59,755 — 135,397

Retiree Health Benefit Trust 368,871 — 61,930 — 101,668 275,089

Deputy Sheriff’s Retirement System 71,732 — 12,113 21,986 — 51,592

Total Fiduciary Funds 5,066,549 589 858,728 1,451,771 101,668 3,627,474

Percentage of Ownership 99.61 % 0.16 % 92.67 % 100.00 % 46.40 % 92.70 %

Other Participants:

Berkeley County Development Authority 1,928 — 325 — 544 1,431

Total Amount $ 5,086,185 $ 372,877 $ 926,654 $ 1,451,771 $ 219,104 $ 3,913,130

State Percentage of Ownership 99.96 % 100.00 % 99.97 % 100.00 % 99.75 % 99.96 %

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Short-Term Fixed

Income

Total Return Fixed

Income

Core Fixed

Income Private Equity

Hedge Funds

Total (Memorandum

Only)TIPS

$ — $ 102,505 $ 44,017 $ 147,016 $ — $ — $ 293,538

— 211,778 90,670 125,630 — — 557,458

47,573 302,382 129,061 109,547 — 160,637 1,086,608

1,831 9,668 4,142 4,000 — 7,716 39,772

2,415 13,733 5,880 5,672 — 11,005 56,201

1,694 3,515 1,506 1,693 — 3,243 16,909

9,634 60,700 25,989 25,097 — 48,755 247,663

521 7,690 3,297 — 20,733 7,104 78,281

6,465 — — — — — 6,465

9,591 47,257 20,252 19,529 — 37,565 194,839

— 75,232 32,254 40,744 — 52,379 270,948

— 1,221 524 — — 2,244 11,837

— 67,800 29,074 — — 47,017 245,392

79,724 903,481 386,666 478,928 20,733 377,665 3,105,911

41.47 % 29.48 % 29.39 % 100.00 % 0.35 % 15.72 % 12.25 %

452 27,516 11,811 — 74,355 25,588 280,670

239 11,687 5,018 — 31,488 10,805 118,769

15,975 860,124 369,817 — 2,341,876 804,530 8,807,095

74,745 953,290 409,963 — 2,619,894 899,252 9,886,658

770 2,267 974 — 6,164 2,052 23,816

121 1,387 595 — 1,994 684 9,815

315 2,435 1,050 — 6,591 2,244 25,063

1,738 29,691 12,753 — 79,519 27,172 301,156

17,265 80,271 34,451 — 224,877 76,959 851,520

— 160,742 69,018 — 427,762 146,684 1,611,764

878 31,074 13,352 — 83,255 28,651 314,633

112,498 2,160,484 928,802 — 5,897,775 2,024,621 22,230,959

58.53 % 70.49 % 70.59 % — % 99.61 % 84.25 % 87.71 %

— 838 359 — 2,236 767 8,428

$ 192,222 $ 3,064,803 $ 1,315,827 $ 478,928 $ 5,920,744 $ 2,403,053 $ 25,345,298

100.00 % 99.97 % 99.97 % 99.98 % 99.97 % 100.00 % 99.97 % 99.96 % 99.97 % 99.97 % 99.97 % 99.96 %

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Investment Pool Descriptions

Portable Alpha Pool

On July 1, 2020, the IMB created the Portable Alpha Pool. Portable alpha is an investment strategy that uses derivatives to obtain market index returns (beta). Cash that is not needed to support the derivative investments is invested in a separate investment strategy designed to provide additional return (alpha). The pool’s objective is to exceed, net of external investment management fees, the S&P 500 Index over three-year to five-year periods.

Credit Risk and Interest Rate Risk The pool is exposed to credit risk from the money market mutual fund investment and investments made with cash collateral for securities loaned. The money market mutual fund has the highest credit rating. The pool is exposed to interest rate risk from its money market mutual fund investments and certain investments made with cash collateral for securities loaned. As of June 30, 2021, the money market mutual fund has a weighted-average maturity (WAM) of 41 days.

The following table provides credit ratings for the pool’s fixed income investments as of June 30, 2021:

Rating Fair Value

Long-Term

AAA $ 365,241

AA 25,419

A 68,428

BBB 17,563

Short-Term

A-1 192,091

A-2 7,098

Total Investments $ 675,840

The Portable Alpha Pool invests in asset-backed securities. The cash flows from these securities are based on the payment of the underlying collateral. The modified duration and yield to maturity of these securities are dependent on the estimated prepayment assumptions that consider historical experience, market conditions, and other criteria. Actual prepayments may vary with changes in interest rates. Rising interest rates often result in a slower rate of prepayments while declining rates tend to lead to faster prepayments. As a result, the fair values of these securities are highly sensitive to interest rate changes. At June 30, 2021, Portable Alpha Pool held $22,397,000 of these securities. This represents approximately 3% of the value of the pool’s fixed-income securities and less than 0.5% of the value of the pool’s total investments.

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The following table provides the weighted average modified for the various asset types in the pool as of June 30, 2021:

Investment Type Fair Value

Effective Duration (years)

Certificates of Deposit $ 20,003 0.2

Commercial Paper 179,186 0.1

Corporate Asset Backed Issues 22,397 0.4

Foreign Corporate Bonds 69,371 0.3

U.S. Corporate Bonds 35,764 0.5

U.S. Government Agency Bonds 6,275 2.9

U.S. Treasury Bonds 228,071 6.7

U.S. Treasury Inflation Protected Security 114,773 7.1

Total $ 675,840

Fair Value Measurements U.S. GAAP does not require the pool to categorize within the fair value hierarchy table investments for which fair value is measured using the net asset value per share practical expedient. All of the pool’s investments in alternative risk premia funds were valued using the net asset value per share; as such, they have not been categorized in the fair value hierarchy. The fair value measurement valuation techniques for the Portable Alpha Pool’s asset categories can be found on pages 84-85, except for the investments in other funds, which are measured using the net asset value per share practical expedient.

The table below summarizes the valuation of investment securities in accordance with the fair value hierarchy levels as of June 30, 2021 (expressed in thousands):

Assets Level 1 Level 2 Level 3 Total

Certificate of Deposit $ — $ 20,003 $ — $ 20,003

Commercial Paper — 179,186 — 179,186

Commingled Equity Fund 2,852,933 — — 2,852,933

Corporate Asset-Backed Issues — 22,397 — 22,397

Foreign Corporate Bonds — 69,371 — 69,371

Futures Contracts 32,308 — — 32,308

Money Market Mutual Fund 427,319 — — 427,319

U.S. Corporate Bonds — 35,764 — 35,764

U.S. Government Agency Bond — 6,275 — 6,275

U.S. Treasury Bonds — 228,071 — 228,071

U.S. Treasury Inflation-Protected Securities — 114,773 — 114,773

Total $ 3,312,560 $ 675,840 $ — 3,988,400

Investments in Other Funds 1,186,123

Total $ 5,174,523

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The following table presents information on investments measured at the NAV as of June 30, 2021 (expressed in thousands):

ARP Fund Strategies Fair Value

Redemption Frequency

Redemption Notice Period

Directional (a) $ 149,016 Monthly 10 days

Multi-Premia (b) 1,037,107 Weekly, Semimonthly, Monthly 3 to 30 days

Total Investment Measured at NAV $ 1,186,123

(a) Directional strategies employ various techniques to forecast the direction of segments of the market and then invest in either short or long positions to take advantage of that. The segments may be geographic economies, industry sectors, currency, or asset class. The investments may be in physical securities or derivatives. The strategies may be trend-following or mean-reverting and may be specific to that segment or universally applied across them.

(b) Multi-premia strategies combine several strategies within the same fund in order to provide diversification benefits to reduce return volatility and decrease asset- class and single-strategy risks. These funds typically add incremental returns through allocation adjustments based on market opportunities. Risk is managed through a variety of quantitative constraints, including, but not limited to, active risk, liquidity risk, currency risk, manger risk, derivatives risk, and leverage risk. Investments representing approximately 15% of the fair value of the investments in this strategy are subject to maximum withdrawal restrictions.

Large Cap Domestic Equity Pool

On July 1, 2020, IMB created the Large Cap Domestic Equity Pool to invest in U.S. equities of large cap growth and value stocks. The pool’s objective is to exceed, net of external management fees, the S&P 500 Stock Index over three-year to five-year periods. Large Cap Domestic Equity Pool invests in the BlackRock Equity Index Fund B. BlackRock uses a replication indexing approach to achieve investment results that correspond generally to the price and yield performance, before fees and expenses, of the S&P 500 Stock Index.

Credit Risk and Interest Rate Risk The pool is exposed to credit risk from the money market mutual fund investment. As of June 30, 2021, the money market mutual fund has the highest credit rating and has a weighted average maturity (WAM) of 41 days. The pool is not exposed to concentration of credit risk, custodial risk, or foreign currency risk.

Fair Value Measurements The table below summarizes the valuation of the investment securities in accordance with the fair value hierarchy levels as of June 30, 2021 (expressed in thousands):

Assets Level 1 Level 2 Level 3 Total

Commingled Equity Fund $ 367,198 $ — $ — $ 367,198

Money Market Mutual Fund 5,700 — — 5,700

Total $ 372,898 $ — $ — $ 372,898

The fair value measurement valuation techniques used for the investments in the Large Cap Domestic Equity Pool can be found on pages 84-85.

Non-Large Cap Domestic Equity Pool

On July 1, 2020, IMB created the Non-Large Cap Domestic Equity Pool to invest in U.S. equities of small and mid-cap growth and value stocks. The pool’s objective is to exceed, net of external management fees, the Russell 2500 Index over three-year to five-year periods.

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the highest credit rating. The pool is exposed to interest rate risk from its money market mutual fund investments and certain investments made with cash collateral for securities loaned. As of June 30, 2021, the money market mutual fund has a WAM of 41 days. Except for repurchase agreements that can have up to 95 days to maturity, investments in the cash collateral account are limited to overnight investments and as of June 30, 2021, the WAM for cash collateral was 1 day.

Foreign Currency Risk The pool is exposed to foreign currency risk through a foreign common stock denominated in Canadian Dollars with a fair value, in U.S. dollars, of $6,561 as of June 30, 2021.

Fair Value Measurements The table below summarizes the valuation of the investment securities in accordance with the fair value hierarchy levels as of June 30, 2021 (expressed in thousands):

Assets Level 1 Level 2 Level 3 Total

Domestic Common Stock $ 753,773 $ — $ — $ 753,773

Foreign Common Stock 62,032 — — 62,032

Money Market Mutual Fund 125,371 — — 125,371

Securities Lending Collateral 54,346 — — 54,346

Total $ 995,522 $ — $ — $ 995,522

The fair value measurement valuation techniques used for the investments in the Non-Large Cap Domestic Equity Pool can be found on pages 84-85.

International Qualified

Funds of this pool are invested in Silchester International Investors’ International Value Equity Group Trust. This pool’s objective is to produce investment returns that exceed the Morgan Stanley Capital International’s Europe Australasia Far East (EAFE) Index by 200 basis points on an annualized basis over three-year to five-year periods, net of external investment management fees. Only “qualified participants” (as defined by the Internal Revenue Code) may invest in this pool. Silchester invests in a diversified developed country, non-U.S. equity, bottom- up value oriented portfolio of securities with limited exposure to emerging markets and no unreasonable concentration exposure to any single issuer or country. Redemptions from Silchester can be made monthly with ten days advance written notice. Redemptions will generally be made within seven business days following month-end. The value of this investment at June 30, 2021, was $1,451,822. This investment, although denominated in U.S. dollars, is exposed to foreign currency risk through the underlying investments.

Fair Value Measurements U.S. GAAP does not require the pool to categorize within the fair value hierarchy table investments for which fair value is measured using the net asset value per share practical expedient. The investment in Silchester is valued using the net asset value per share practical expedient. As Silchester is the only investment in the pool, a fair value hierarchy table is not presented.

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International Nonqualified

Funds of this pool are invested in Silchester International Investors’ International Value Equity Group Trust. This pool’s objective is to produce investment returns that exceed the Morgan Stanley Capital International’s EAFE Index by 200 basis points on an annualized basis over three- to five-year periods, net of external investment management fees. This pool exists for participants who are not “qualified.” Silchester invests in a diversified developed country, non- U.S. equity, bottom-up value oriented portfolio of securities with limited exposure to emerging markets and no unreasonable concentration exposure to any single issuer or country. Redemptions from Silchester can be made monthly with ten days advance written notice. Redemptions will generally be made within seven business days following month-end. The value of this investment at June 30, 2021, was $219,112. This investment, although denominated in U.S. dollars, is exposed to foreign currency risk through the underlying investments.

Fair Value Measurements U.S. GAAP does not require the pool to categorize within the fair value hierarchy table investments for which fair value is measured using the net asset value per share practical expedient. The investment in Silchester is valued using the net asset value per share practical expedient. As Silchester is the only investment in the pool, a fair value hierarchy table is not presented.

International Equity

This pool invests in the equities of international companies. The objective of the International Equity Pool is to exceed, net of external investment management fees, Morgan Stanley Capital International’s All Country World Free Ex US Index over three- to five-year periods.

Credit Risk and Interest Rate Risk The pool is exposed to credit risk from the money market mutual fund investments and investments made with cash collateral for securities loaned. The money market mutual fund has the highest credit rating. The pool is exposed to interest rate risk from its money market mutual fund investments and certain investments made with cash collateral for securities loaned. As of June 30, 2021, the money market mutual fund has a weighted-average maturity (WAM) of 41 days. Except for repurchase agreements that can have up to 95 days to maturity, investments in the cash collateral account are limited to overnight investments. As of June 30, 2021, the WAM for the cash collateral account was 1 day.

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This pool has both equity securities and cash that are denominated in foreign currencies and are exposed to foreign currency risks. The amounts at fair value (in U.S. dollars) of investments and cash denominated in foreign currencies as of June 30, 2021, consisted of the following (expressed in thousands):

Currency Equity

Investments Cash

Foreign Currency

Spot Contracts Total Australian Dollar $ 104,378 $ 30 $ — $ 104,408 Brazil Real 70,455 233 — 70,688 British Pound 268,235 179 — 268,414 Canadian Dollar 140,558 120 — 140,678 Chilean Peso 4,312 — — 4,312 Chinese Yuan 65,675 2,068 — 67,743 Danish Krone 17,419 5 — 17,424 Emirati Dirham 5,243 — — 5,243 Euro Currency Unit 467,252 172 — 467,424 Hong Kong Dollar 405,762 1,167 — 406,929 Hungarian Forint 15,976 166 — 16,142 Indian Rupee 115,465 5,632 — 121,097 Indonesian Rupiah 33,103 1 1 33,105 Israeli Shekel 542 (1) — 541 Japanese Yen 383,698 1,535 — 385,233 Malaysian Ringgit 10,160 1 — 10,161 Mexican Peso 54,171 11 — 54,182 New Taiwan Dollar 177,597 32 — 177,629 New Zealand Dollar 384 35 — 419 Norwegian Krone 34,169 14 — 34,183 Philippine Peso 5,102 4 — 5,106 Polish Zloty 3,913 15 — 3,928 Qatar Riyal 159 11 — 170 Singapore Dollar 25,575 160 — 25,735 South African Rand 18,783 7 — 18,790 South Korean Won 258,055 — (5) 258,050 Swedish Krona 100,537 33 — 100,570 Swiss Franc 101,305 52 — 101,357 Thailand Baht 42,631 9 — 42,640 Turkish Lira 4,720 108 — 4,828 Subtotal 2,935,334 11,799 (4) 2,947,129 United States Currency 877,326 — — 877,326 Total Assets $ 3,812,660 $ 11,799 $ (4) $ 3,824,455

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Fair Value Measurements The table below summarizes the valuation of the investment securities in accordance with the fair value hierarchy levels as of June 30, 2021 (expressed in thousands):

Assets Level 1 Level 2 Level 3 Total

Common Stock $ 3,232,533 $ — $ — $ 3,232,533

Money Market Mutual Funds 79,084 — — 79,084

Preferred Stock 43,947 — — 43,947

Securities Lending Collateral 45,134 — — 45,134

Total $ 3,400,698 $ — $ — 3,400,698

Commingled Equity Fund 536,180

Total $ 3,936,878

The Pool’s commingled equity fund investments was measured at the NAV as of June 30, 2021. The fund invests primarily in Chinese A-Share publicly listed equity securities. The IMB defines the investment style as growth at a reasonable price with limited concentration to any single issuer or sector. Redemptions can be made daily with five international business days advance written notice of the withdrawal date, subject to maximum withdrawal restrictions. The fund will pay withdrawal proceeds within 30 days following the withdrawal date.

The fair value measurement valuation techniques used for the investments in the International Equity Pool can be found on pages 84-85.

Short-Term Fixed Income

This pool is structured as a money market fund to maintain sufficient liquidity to fund withdrawals by the participant plans and to invest any contributions until such time as the money can be transferred to other asset classes without sustaining capital losses while earning a small return on investment. For purposes of evaluating investment returns, net of external investment management fees, this pool is expected to meet or exceed the FTSE 3 Month T-Bill index.

Credit Risk and Interest Rate Risk The IMB limits the exposure to credit risk in the Short-Term Fixed Income Pool by requiring all corporate bonds to be rated AA or higher. Commercial paper must be rated A-1 by Standard & Poor’s and P-1 by Moody’s. Additionally, the pool must have at least 10% of its assets in United States Treasury issues. All the pool’s investments had the highest credit rating as of June 30, 2021. The pool is exposed to interest rate risk from its fixed income investments and money market mutual fund investments. The IMB monitors interest rate risk of the pool by limiting the weighted average maturity (WAM) of the investments of the pool to 60 days. The maturity of floating rate notes is assumed to be the next interest rate reset date.

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The following table provides the WAM for the different asset types in the pool as of June 30, 2021, of the Short-Term Fixed Income pool’s investments (expressed in thousands):

Investment Type Carrying

Value WAM Days

Commercial Paper $ 26,920 55

Money Market Mutual Fund 39,753 1

U.S. Treasury Bills 102,887 44

Repurchase Agreements (Underlying Securities):

U.S. Treasury Issues* 47,669 1

Total Investments $ 217,229 28

* U.S. Treasury issues are explicitly guaranteed by the U.S. Government and are not subject to credit risk.

Fair Value Measurements The table below summarizes the valuation of the investment securities in accordance with the fair value hierarchy levels as of June 30, 2021 (expressed in thousands):

Assets Level 1 Level 2 Level 3 Total

Commercial Paper $ — $ 26,920 $ — $ 26,920

Money Market Mutual Fund 39,753 — — — 39,753

Repurchase Agreement* — 47,669 — 47,669

U.S. Treasury Bonds — 102,887 — 102,887

Total $ 39,753 $ 177,476 $ — $ 217,229

*Underlying Securities: U.S. Treasury Issues $47,669

All securities of the Short-Term Fixed Income Pool are valued at amortized cost provided such amount approximates fair value. The basic premise underlying the use of the amortized cost method of valuation is that high-quality, short-term debt securities held until maturity will eventually return to their amortized cost value, regardless of any current disparity between the amortized cost value and fair value, and would not ordinarily be expected to fluctuate significantly in value. The pool values its securities at amortized cost so long as the deviation between the amortized cost and current market value remains minimal and results in the computation of a share price that represents fairly the current net asset value per share of the fund.

Total Return Fixed Income

The main objective of the Total Return Fixed Income Pool is to generate investment income and provide stability and diversification, but not at the expense of total return. The pool’s investment objective is to outperform the Bloomberg Barclays U.S. Universal bond index over three-year to five-year periods, net of investment management fees.

Credit Risk and Interest Rate Risk The pool is exposed to credit risk from its fixed income investments, money market mutual fund investment, and cash collateral account investment. The IMB limits the exposure to credit risk in the pool by maintaining at least an average rating of investment grade as defined by a nationally recognized statistical rating organization. The IMB reviews available ratings from Standard & Poor’s, Moody’s, and Fitch, and reports the rating indicative of the greatest degree

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of risk. The pool holds some securities that have not received a rating from the aforementioned rating organizations. These securities have been listed as not rated in the table below. The absence or lack of a rating does not necessarily indicate a greater degree of risk. The money market mutual fund has the highest credit rating. The cash collateral account is not rated.

The following table provides credit ratings for the pool’s fixed income investments as of June 30, 2021 (expressed in thousands):

Rating Fair Value

AAA $ 15,315

AA 1,231,457

A 98,223

BBB 580,929

BB 388,622

B 360,429

CCC 24,868

CC 4,947

D 3,992

Withdrawn 701

Total Rated 2,709,483

Not Rated 82,383

Total fixed income investments $ 2,791,866

The Total Return Fixed Income Pool invests in commercial and residential mortgage-backed securities, asset-backed securities, and collateralized mortgage obligations. The cash flows from these securities are based on the payment of the underlying collateral. The effective duration and yield to maturity of these securities are dependent on estimated prepayment assumptions that consider historical experience, market conditions, and other criteria. Actual prepayments may vary with changes in interest rates. Rising interest rates often result in a slower rate of prepayments while declining rates tend to lead to faster prepayments. As a result, the fair values of these securities are highly sensitive to interest rate changes. At June 30, 2021, the Total Return Fixed Income Pool held $712,895,000 of these securities. This represents approximately 26% of the value of the pool’s securities.

The pool is exposed to interest rate risk from its fixed income investments, money market mutual fund investment, and cash collateral account investment. As of June 30, 2021, the money market mutual fund has a WAM of 41 days. Except for repurchase agreements that can have up to 95 days to maturity, investments in the cash collateral account are limited to overnight investments. As of June 30, 2021, the WAM for the cash collateral account was 1 day.

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The following table provides the weighted average effective duration for the various asset types in the pool as of June 30, 2021 (expressed in thousands):

Investment Type Fair Value

Effective Duration (years)

Commingled Debt Funds $ 415,969 2.7

Corporate Asset-Backed Issues 88,145 0.9

Corporate CMO 68,170 1.3

Corporate CMO Interest-Only 6 —

Foreign Asset-Backed Issues 45,895 0.5

Foreign Corporate Bonds 294,249 5.5

Foreign Government Bonds 331,607 6.7

Municipal Bonds 28,917 8.8

U.S. Corporate Bonds 406,148 8.4

U.S. Government Agency Bonds 170 0.3

U.S. Government Agency CMO 62,411 1.3

U.S. Government Agency CMO Interest-Only 5,866 3.5

U.S. Government Agency MBS 379,822 4.1

U.S. Government Agency TBA 62,580 4.3

U.S. Treasury Bonds 601,911 11.9

Total $ 2,791,866

Foreign Currency Risk The pool has foreign fixed income, foreign equity investments, and cash that is denominated in foreign currencies and exposed to foreign currency risks. Additionally, the pool has indirect exposure to foreign currency risk through its ownership interests in certain of the commingled debt funds. Approximately $82,977, or 20%, of the commingled debt funds hold substantially all of their investments in securities denominated in foreign currencies. This represents approximately 3% of the value of the pool’s fixed income securities.

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The amounts at fair value (in U.S. dollars) of investments and cash denominated in foreign currencies as of June 30, 2021, are as follows:

Currency

Foreign Fixed

Income Common

Stock Cash Total

Argentine Peso $ 3,547 $ — $ 1,420 $ 4,967

Australian Dollar — — 2,751 2,751

Belarusian Ruble 1,638 — — 1,638

Brazil Real 22,293 — 698 22,991

British Pound — 739 3,065 3,804

Canadian Dollar — — 1,105 1,105

Colombian Peso 4,703 — — 4,703

Deutsche Mark 230 — — 230

Dominican Peso 4,018 — — 4,018

Egyptian Pound 3,039 — — 3,039

Euro Currency Unit 8,685 — 6,776 15,461

Georgia Lari 2,275 — — 2,275

Ghana Cedi 2,327 — — 2,327

Indonesian Rupiah 21,388 — — 21,388

Japanese Yen 5,292 — 4,620 9,912

Kazakhstani Tenge 3,311 — 9 3,320

Kenyan Shilling 3,347 — — 3,347

Mexican Peso 63,982 — 593 64,575

New Zealand Dollar — — 823 823

Peruvian Nuevo Sol 146 — — 146

Russian Ruble 75,397 — — 75,397

South African Rand 13,536 — — 13,536

Swedish Krona — — 515 515

Turkish Lira 3,106 — — 3,106

Uruguayan Peso 6,875 — — 6,875

Uzbekistan Som 995 — — 995

Total foreign-denominated investments $ 250,130 $ 739 $ 22,375 $ 273,244

U.S. Dollar 421,621 — (3,013) 418,608

Total $ 671,751 $ 739 $ 19,362 $ 691,852

Fair Value Measurements U.S. GAAP does not require the pool to categorize within the fair value hierarchy table investments for which fair value is measured using the net asset value per share practical expedient. All of the pool’s investments in other funds were valued using the net asset value per share; as such, they have not been categorized in the fair value hierarchy. The fair value measurement valuation techniques for the Total Return Fixed Income Pool’s asset categories can be found on pages 84-85, except for the investments in other funds, which are measured using the net asset value per share practical expedient.

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The table below summarizes the valuation of investment securities in accordance with the fair value hierarchy levels as of June 30, 2021 (expressed in thousands):

Assets Level 1 Level 2 Level 3 Total

Corporate ABS Residual $ — $ 1,637 $ — $ 1,637

Corporate Asset-Backed Issues — 88,145 — 88,145

Corporate Collateralized Mortgage Obligations — 68,170 — 68,170

Corporate CMO Interest-Only — 6 — 6

Corporate Preferred Security 10,851 — — 10,851

Foreign Asset-Backed Issues — 45,895 — 45,895

Foreign Corporate Bonds — 294,249 — 294,249

Foreign Currency Forward Contracts — 803 — 803

Foreign Equity Investments 739 — — 739

Foreign Government Bonds — 331,607 — 331,607

Futures Contracts 7,001 — — 7,001

Money Market Mutual Fund 304,104 — — 304,104

Municipal Bonds — 28,917 — 28,917

Options Contracts Purchased 1,318 135 — 1,453

Securities Lending Collateral 62,253 — — 62,253

Swaps — 42,292 — 42,292

U.S. Corporate Bonds — 406,148 — 406,148

U.S. Government Agency Bond — 170 — 170

U.S. Government Agency CMO — 62,411 — 62,411

U.S. Government Agency CMO Interest-Only — 5,866 — 5,866

U.S. Government Agency MBS — 379,822 — 379,822

U.S. Government Agency TBAs — 62,580 — 62,580

U.S. Treasury Bonds — 601,911 — 601,911

Total $ 386,266 $ 2,420,764 $ — 2,807,030

Investments in Other Funds 415,969

Total $ 3,222,999

Liabilities Level 1 Level 2 Level 3 Total

Foreign Currency Forward Contracts $ — $ (2,456) $ — $ (2,456)

Futures Contracts (8,416) — — (8,416)

Options Contracts Written (1,850) (61) — (1,911)

Securities Sold Short — (2,274) — (2,274)

Swaps — (25,987) — (25,987)

Total $ (10,266) $ (30,778) $ — $ (41,044)

The pool’s investments in commingled debt funds were measured at the net asset value (NAV) as of June 30, 2021. These commingled debt funds invest in certain niche sectors, particularly ones that are not a significant percentage to the pool, to provide economies of scale and efficiencies in establishing and managing a diversified portfolio that would otherwise be difficult to achieve.

The pool can redeem these investments daily.

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Core Fixed Income Pool

The main objective of the Core Fixed Income Pool is to generate investment income and provide stability and diversification, but not at the expense of total return. JP Morgan Investment Advisors, Inc. manages this pool. This pool’s investment objective, net of external investment management fees, is to outperform the Bloomberg Barclays U.S. Aggregate Bond Index over three-year to five-year periods, net of external management fees.

Credit Risk and Interest Rate Risk The IMB limits the exposure to credit risk in the pool by maintaining at least an average rating of investment grade as defined by a nationally recognized statistical rating organization. The IMB reviews available ratings from Standard & Poor’s, Moody’s, and Fitch, and reports the rating indicative of the greatest degree of risk. The money market mutual fund has the highest credit rating and the cash collateral account is not rated.

The following table provides the credit ratings in the Core Fixed Income Pool’s fixed income investments as of June 30, 2021 (expressed in thousands):

Rating Fair Value

AAA $ 39,264

AA 616,520

A 111,180

BBB 328,988

BB 21,582

B 869

CCC 172

D 57

Withdrawn 13,036

Total Rated 1,131,668

Not Rated 106,192

Total Investments $ 1,237,860

The IMB monitors interest rate risk by evaluating the effective duration of the investments in the pool. Effective duration is a method of disclosing interest rate risk that measures the expected change in the price of a fixed income security for a 1% change in interest rates. The effective duration calculation considers the most likely timing of variable cash flows, which is particularly useful for measuring interest rate risk of callable bonds, commercial and residential mortgage-backed securities, asset-backed securities, and collateralized mortgage obligations.

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The following table provides the weighted average effective duration for the pool’s fixed income investments as of June 30, 2021 (expressed in thousands):

Investment Type Fair Value

Effective Duration (years)

Corporate Asset-Backed Issues $ 122,533 2.5

Corporate CMO 96,489 2.4

Corporate CMO Interest-Only 197 (1.7)

Corporate CMO Principal-Only 47 3.0

Foreign Asset-Backed Issues 3,508 1.1

Foreign Corporate Bonds 116,081 6.2

Foreign Government Bonds 6,606 11.8

Municipal Bonds 12,058 13.8

U.S. Corporate Bonds 295,067 8.4

U.S. Government Agency CMO 108,672 3.8

U.S. Government Agency CMO Interest-Only 3,402 6.2

U.S. Government Agency CMO Principal-Only 3,225 5.5

U.S. Government Agency MBS 175,912 4.4

U.S. Government Agency TBAs 32,366 4.2

U.S. Treasury Bonds 261,215 8.7

U.S. Treasury Inflation-Protected Security 482 0.5

Total $ 1,237,860

Fair Value Measurements The table below summarizes the valuation of the investment securities in accordance with the fair value hierarchy levels as of June 30, 2021 (expressed in thousands):

Assets Level 1 Level 2 Level 3 Total

Corporate Asset-Backed Issues $ — $ 122,533 $ — $ 122,533

Corporate CMO — 96,489 — 96,489

Corporate CMO Interest-Only — 197 — 197

Corporate CMO Principal-Only — 47 — 47

Corporate Preferred Securities — 1,226 — 1,226

Foreign Asset-Backed Issues — 3,508 — 3,508

Foreign Corporate Bonds — 116,081 — 116,081

Foreign Government Bonds — 6,606 — 6,606

Money Market Mutual Fund 112,553 — — 112,553

Municipal Bonds — 12,058 — 12,058

Securities Lending Collateral 33,706 — — 33,706

U.S. Corporate Bonds — 295,067 — 295,067

U.S. Government Agency CMO — 108,672 — 108,672

U.S. Government Agency CMO Interest-Only — 3,402 — 3,402

U.S. Government Agency CMO Principal-Only — 3,225 — 3,225

U.S. Government Agency MBS — 175,912 — 175,912

U.S. Government Agency TBAs — 32,366 — 32,366

U.S. Treasury Bonds — 261,215 — 261,215

U.S. Treasury Inflation-Protected Security — 482 — 482

Total $ 146,259 $ 1,239,086 $ — $ 1,385,345

The fair value measurement valuation techniques used for the Core Fixed Income Pool can be found on pages 84-85.

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TIPS Pool

The pool invests in Treasury Inflation-Protected Securities (TIPS) and its objective is to generate a return that exceeds the rate of inflation over a market cycle, to provide investment income and stability of principal, and to diversify interest rate exposure. The pool is measured against the Bloomberg Barclay’s U.S. Treasury Inflation Protection Index on an annualized basis over rolling three-year to five-year periods, gross of fees. The pool invests in the BlackRock U.S. Treasury Inflation Protected Securities Fund B (BlackRock). BlackRock invests primarily in a portfolio of debt securities with the objective of closely approximating the total rate of return for all outstanding U.S. Treasury Inflation-Protected Securities with a maturity of one year or greater.

Credit Risk and Interest Rate Risk The pool invests in a commingled bond fund that holds primarily U.S. Treasury inflation protected securities and a money market mutual fund. These investments are exposed to credit and interest rate risk. The commingled bond fund is not rated by a nationally recognized statistical rating organization and the money market mutual fund has the highest credit rating. Effective duration is a method of disclosing interest rate risk that measures the expected change in the price of a fixed income security for a 1% change in interest rates. As of June 30, 2021, the commingled bond fund has an effective duration of 7.51 years.

Fair Value Measurements The table below summarizes the valuation of the investment securities in accordance with GASB 72 fair value hierarchy levels as of June 30, 2021 (expressed in thousands):

Assets Level 1 Level 2 Level 3 Total

Commingled Bond Funds $ 478,962 $ — $ — $ 478,962

Total $ 478,962 $ — $ — $ 478,962

The fair value measurement valuation techniques used for the TIPS Pool can be found on pages 84-85.

Private Markets Pool

The objective of the pool is to enhance the diversification and stability of the portfolio, while generating a higher level of income than generally available in the public fixed income markets and to provide for long-term growth of participants’ assets and risk-reduction through diversification. The pool primarily holds the IMB’s investments in private credit & income funds, private equity funds, real estate investment trusts (REITs), and real estate limited partnerships and funds.

Credit Risk and Interest Rate Risk The pool is exposed to credit risk from its fixed income investments, money market fund investments, investments in unrated opportunistic income funds, and certain investments made with cash collateral for securities loaned. The IMB limits the exposure to credit risk in the pool by maintaining at least an average rating of investment grade as defined by a Nationally Recognized Statistical Rating Organization. The IMB reviews available ratings from Standard & Poor’s and Moody’s, and reports the rating indicative of the greatest degree of risk. The money market fund has the highest credit rating. Credit risk associated with the unrated opportunistic

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income funds is limited by requiring that underlying fund holdings are at least 90% collateralized by one or more assets of the issuer.

The following table provides the credit ratings in the Private Markets Pool’s fixed income investments as of June 30, 2021 (expressed in thousands):

Rating Fair Value

A $ 334

BBB 12,582

BB 351

Total Investments $ 13,267

Credit risk from securities lending collateral investments is limited by requiring minimum ratings on debt instruments. Long-term debt instruments must be rated A or better by Moody’s or Standard & Poor’s at the time of purchase. The IMB reviews available ratings from Standard & Poor’s and Moody’s, and reports the rating indicative of the greatest degree of risk.

The Pool is exposed to interest rate risk through its investments in U.S. corporate bonds, opportunistic income funds, securities lending collateral investments, and a money market mutual fund. The IMB monitors interest rate risk of U.S. corporate bonds by evaluating the effective duration. Effective duration is a method of disclosing interest rate risk that measures the expected change in the price of a fixed income security for a 1% change in interest rates. The effective duration calculation takes into account the most likely timing of variable cash flows, which is particularly useful for measuring interest rate risk of callable bonds. As of June 30, 2021, the effective duration for U.S. corporate bonds was 5.5 years. The IMB manages interest rate risk of the private credit and income funds by investing primarily in funds that originate or invest in loans that have a variable or floating interest rates, most of these investments have relatively short durations, and final maturities are within three-years to five- years. As of June 30, 2021, the money market mutual fund has a weighted average maturity (WAM) of 41 days. Except for repurchase agreements that can have up to 95 days to maturity, investments in the Cash Collateral Account are limited to overnight investments. As of June 30, 2021, the WAM for securities lending collateral was 1 day.

Foreign Currency Risk The Pool holds foreign common stock, real estate limited partnerships and funds, and cash that is denominated in foreign currencies that are exposed to foreign currency risks. The investments in private equity partnerships and opportunistic income funds might be indirectly exposed to foreign currency risk.

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The amounts at fair value (U.S. dollars) if investments and cash denominated in foreign currencies as of June 30, 2021, are as follows:

Currency

Foreign Common

Stock

Real Estate Limited

Partnerships and Funds Cash Total

Australian Dollar $ 5,212 $ — $ — $ 5,212

British Pound 4,961 — — 4,961

Canadian Dollar 1,949 41,385 — 43,334

Euro Currency Unit 10,311 138,485 — 148,796

Hong Kong Dollar 6,273 — — 6,273

Japanese Yen 10,605 — 13 10,618

Singapore Dollar 3,103 — — 3,103

Swedish Krona 2,285 — — 2,285

Total foreign-denominated investments $ 44,699 $ 179,870 $ 13 $ 224,582

U.S. Dollar 3,417 1,776,105 — 1,779,522

Total $ 48,116 $ 1,955,975 $ 13 $ 2,004,104

Fair Value Measurements The fair value measurement valuation techniques for the Private Markets Pool’s asset categories can be found on pages 84-85, except for private credit and income funds, private equity partnerships, and real estate limited partnerships and funds which are measured using the net asset value per share practical expedient. The table that follows sets forth information about the level within the fair value hierarchy at which the pool’s assets and liabilities are measured at June 30, 2021. All the investments valued using the net asset value per share practical expedient are not required to be categorized in the fair value hierarchy below as of June 30, 2021 (expressed in thousands):

Assets Level 1 Level 2 Level 3 Total

Foreign Common Stock $ 48,116 $ — $ — $ 48,116

Money Market Mutual Fund 165,668 — — 165,668

Securities Lending Collateral 6,501 — — 6,501

U.S. Common Stock 110,101 — — 110,101

U.S. Corporate Bonds — 13,267 — 13,267

U.S. Preferred Stock 14,545 — — 14,545

Total $ 344,931 $ 13,267 $ — 358,198

Private Credit & Income Funds 690,713

Private Equity Partnerships 2,910,517

Real Estate Limited Partnership and Funds 1,955,975

Total $ 5,915,403

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The following table presents information on investments measured at the NAV as of June 30, 2021 (expressed in thousands):

Strategies Fair Value Unfunded

Commitments

Contractual Termination

Date Range (a) Redemption Frequency

Redemption Notice Period

Private Credit & Income Funds:

Commercial Debt Funds (b) $ 303,471 $ 186,027 2026 N/A N/A

Real Estate Debt Funds (c) 387,242 114,319 2022 to 2031 Quarterly 45 days

Private Equity Partnerships:

Corporate Finance – Buyout (d) 1,733,330 677,787 2021 to 2035 N/A N/A

Corporate Finance – Distressed Debt (e) 59,018 16,249 2021 to 2022 N/A N/A

Corporate Finance – Growth Equity (f) 136,154 88,435 2021 to 2030 N/A N/A

Corporate Finance – Hard Assets (g) 124,205 35,980 2021 to 2028 N/A N/A

Corporate Finance – Mezzanine (h) 1,679 480 2021 N/A N/A

Corporate Finance – Structured Capital (i) 73,407 38,358 2023 to 2028 N/A N/A

Corporate Finance – Turnaround (j) 107,199 84,759 2021 to 2032 N/A N/A

Venture Capital (k) 675,525 82,362 2023 to 2034 N/A N/A

Real Estate Limited Partnerships and Funds:

Core Funds (l) 1,060,410 38,218 2022 Quarterly 30-60 days

Opportunistic Funds (m) 313,101 158,719 2021 to 2029 N/A N/A

Value Funds (n) 582,464 493,586 2021 to 2031 N/A N/A

Total $ 5,557,205 $ 2,015,279

(a) Investments without standard redemption frequencies cannot be redeemed until termination of the partnership. (b) Commercial Debt Funds seek to generate current income while preserving capital through investments primarily in senior-secured loans to business enterprises. (c) Real Estate Debt funds seek to generate income while preserving capital through investments in real estate mortgages and debt investments. (d) Corporate Finance – Buyout funds acquire controlling or influential interests in companies. (e) Corporate Finance – Distressed Debt funds acquire the debt of companies experiencing operational or financial distress, usually converting the debt to equity and

exercising control of the business. (f) Corporate Finance – Growth Equity funds invest in companies to expand or restructure operations, enter new markets, or finance an acquisition. (g) Corporate Finance – Hard Assets funds acquire controlling or influential interests in companies operating in natural resources or infrastructure. (h) Corporate Finance – Mezzanine funds acquire or issue subordinated debentures frequently in businesses controlled by the General Partner, but in another fund. (i) Corporate Finance - Structured Capital funds combine common equity, preferred equity, fixed income, and/or customized debt instruments to off capital

appreciation with downside protection. (j) Corporate Finance – Turnaround funds acquire the debt and or equity of companies experiencing operational or financial distress in order to radically reorganize

and improve the business. (k) Venture Capital funds make investments in early-stage through late-stage companies, frequently start-ups in technology or healthcare. (l) Core funds are more conservative real estate investments that use a very modest level of financing to acquire and hold high-quality, stable properties typically

located in major markets. These assets tend to have high occupancy rates, higher credit tenants, and staggered lease terms, with a number of long-term leases expiring in five to ten years.

(m) Opportunistic funds have higher risk/return profiles and have broad strategies to achieve these types of returns. Common strategies are properties that need significant rehabilitation or a total redevelopment to transition to a different type of property (for example, converting an office building to condominiums). It may also include new development, distressed debt strategies, and more complex transactions, as well as a more traditional value-add strategy that is financed with a higher amount of leverage.

(n) Value funds typically use more leverage than core funds and target higher return opportunities by acquiring properties that the manager believes they can add value through capital renovations to the physical facility or enhanced leasing and management activities. Most of these properties have in-place cash flow, which is expected to increase as the business plans are implemented. This could include making physical improvements to the asset that will allow it to command higher rents, increasing efforts to lease vacant space at the property to quality tenants, or improving the management of the property and thereby increasing customer satisfaction or lowering operating expenses where possible.

Hedge Fund

This pool was established to hold the IMB’s investments in hedge funds. The objective of this pool is to reduce risk through diversification of participants’ assets. The primary performance benchmark is the Hedge Funds Research, Inc. Fund of Fund Composite index plus 100 basis points. The secondary benchmark is the FTSE 3 Month US T-Bill Index plus 500 basis points. This pool holds shares in hedge funds and shares of a money market fund. As of June 30, 2021, the money market mutual fund is highest rated and has a WAM of 41 days. The investments in hedge funds might be indirectly exposed to foreign currency risk, interest rate risk, and/or custodial credit risk.

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All of the pool’s investments in hedge funds were valued using the net asset value per share practical expedient.

Assets Level 1 Level 2 Level 3 Total

Money Market Mutual Fund $ 85,669 $ — $ — $ 85,669

Hedge Funds 2,231,493

Total $ 2,317,162

The following table presents information on investments measured at the NAV as of June 30, 2021 (expressed in thousands):

Hedge Fund Strategies

Fair Value

Redemption Frequency

Redemption Notice Period

Directional (a) $ 232,059 Monthly, Quarterly 5 to 30 days

Equity Long/Short (b) 410,931 Monthly, Quarterly 30 to 90 days

Event-Driven (c) 97,398 Quarterly 180 days

Long-Biased (d) 77,353 Monthly 90 days

Multi-Strategy (e) 1,153,207 Monthly, Quarterly, Semiannually, Annually 45 to 95 days

Relative-Value (f) 229,993 Weekly, Quarterly 5 to 60 days

2,200,941

In liquidation (g) 30,552

Total Investment Measured at NAV $ 2,231,493

(b) An equity long/short strategy involves taking long positions in stocks that are expected to increase in value and short positions in stocks that are expected to decrease in value. Investments representing approximately 66% of the fair value of the investments in this strategy are subject to maximum withdrawal restrictions.

(c) Event-driven funds maintain positions in companies currently or prospectively involved in various corporate transactions, including, but not limited to, mergers, restructurings, financial distress, tender offers, shareholder buybacks, debt exchanges, security issuance, or other capital structure adjustments. Security types can range from most senior in the capital structure to most junior or subordinated, and frequently involve additional derivative securities. Event-driven exposure includes a combination of sensitivities to equity markets, credit markets and company-specific developments. The sole fund in this investment strategy is subject to maximum withdrawal restrictions.

(d) Long-biased strategies employ analytical techniques in which the investment thesis is predicated on assessment of the valuation characteristics on the underlying companies, with the goal of identifying undervalued companies. Long-biased strategies may vary the investment level or the level of long exposure over market cycles, but the primary distinguishing characteristic is that the manager maintains consistent long exposure.

(e) Multi-strategy funds combine several strategies within the same fund in order to provide diversification benefits to reduce return volatility and decrease asset-class and single-strategy risks. These funds typically add incremental returns through active allocation adjustments based on market opportunities. Risk is managed through a combination of quantitative and qualitative constraints, including, but not limited to, active risk, liquidity risk, currency risk, manager risk, derivative risk, and leverage risk. Investments representing approximately 78% of the fair value of the investments in this strategy are subject to maximum withdrawal restrictions.

(f) Relative-value funds maintain positions in which the investment thesis is predicated on the realization of a valuation discrepancy in the relationship between multiple securities. Managers employ a variety of fundamental and quantitative techniques to establish investment insights, and security types range broadly across equity, fixed income, derivative, or other security types. Fixed income strategies are typically quantitatively driven to measure the existing relationship between investments and, in some cases, identify attractive positions in which the risk-adjusted spread between these instruments represents an attractive opportunity. Investments representing approximately 60% of the fair value of the investments in this strategy are subject to maximum withdrawal restrictions.

(g) Funds currently in liquidation are no longer managed to a defined strategy. As the remaining underlying assets of these funds are monetized, their proceeds are distributed to shareholders. The timing of these future distributions is unknown.

Investments in hedge funds are not securities for which market quotations are readily available. The IMB has concluded that the net asset value reported by the underlying funds approximates the fair value of these investments and consequently these investments are carried at net asset value as a practical expedient for fair value. Due to the nature of the investments held by the funds, changes in market conditions and the economic environment may significantly impact the net asset value of the funds and, consequently, the fair value of the IMB’s interest in the funds.

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Although a secondary market exists for these investments, it is not active and individual transactions are typically not observable. When transactions do occur in this limited secondary market, they may occur at discounts to the reported net asset value. It is therefore reasonably possible that if the IMB were to sell these investments in the secondary market, a buyer may require a discount to the reported net asset value, and the discount could be significant. The IMB believes that the net asset value of such investments is a reasonable estimate of fair value at June 30, 2021.

Consolidated Fund

The Consolidated Fund is a statutory term for the collective investment of those monies not currently needed to fund state governmental operations or participation by local governments, or those monies that are required by other statutory provisions to be invested in the Consolidated Fund. The following seven investment pools and participant-directed accounts comprise the Consolidated Fund and are managed by the BTI.

WV Money Market

This pool consists of the operating funds of the State, funds held by state agencies, and funds from local governments that desire the opportunity to invest with the State. Its purpose is to provide for the investment of all surplus funds and to supply the daily cash needs of the State. The pool is co-managed by Federated Hermes and UBS Global Asset Management.

Credit Risk The BTI limits the exposure to credit risk in the WV Money Market Pool by requiring all corporate debt to be rated A+ or higher by Standard & Poor’s (or its equivalent) and short- term corporate debt be rated as A-1 or higher by Standard & Poor’s (or its equivalent). The pool must have at least 15% of its assets in U.S. Treasury issues.

The following table provides information on the credit ratings as of June 30, 2021, of the WV Money Market Pool’s investments (expressed in thousands):

Credit Rating

Security Type Moody’s S&P Carrying

Value Percent of Pool Assets

U.S. Treasury Notes * Aaa AA+ $ 37,505 0.55%

U.S. Treasury Bills * P-1 A-1+ 354,997 5.19%

Commercial Paper P-1 A-1+ 1,302,573 19.04%

P-1 A-1 2,634,701 38.50%

Negotiable Certificates of Deposit P-1 A-1+ 138,500 2.02%

P-1 A-1 812,504 11.88%

Money Market Funds Aaa AAAm 1,600 0.02%

NR AAAm 217,022 3.17%

Repurchase Agreements (Underlying Securities):

U.S. Treasury Bonds and Notes * Aaa AA+ 1,325,680 19.37%

U.S. Agency Bonds and Notes Aaa AA+ 17,920 0.26%

Total $ 6,843,002 100%

* U.S. Treasury issues are explicitly guaranteed by the U.S. Government and are not subject to credit risk.

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Interest Rate Risk The overall weighted average maturity of the investments of the WV Money Market Pool cannot exceed 60 days. Maximum maturity of individual securities cannot exceed 397 days from date of purchase, except for government floating rate notes, which can be up to 762 days. The following table provides information on the WAM for the various asset types in the WV Money Market Pool as of June 30, 2021 (expressed in thousands):

Security Type

Total Carrying

Value Primary

Government Investment Trust Funds

Custodial Funds

Component Units

WAM (Days)

U.S. Treasury Notes $ 37,505 $ 30,499 $ 2,164 $ 296 $ 4,546 $ 1 1

U.S. Treasury Bills 354,997 288,684 20,483 2,804 $ 43,026 13

Commercial Paper 3,937,274 3,201,791 227,181 31,104 477,198 73

Negotiable Certificates of Deposit 951,004 773,356 54,873 7,513 115,262 65

Repurchase Agreements 6

(Underlying Securities):

U.S. Treasury Bonds and Notes 1,325,680 1,078,043 76,492 10,473 160,672

U.S. Agency Bonds and Notes 17,920 14,572 1,034 142 2,172

Money Market Funds 218,622 177,784 12,614 1,727 26,497 1

Total $ 6,843,002 $ 5,564,729 $ 394,841 $ 54,059 $ 829,373 52

Percentage of Ownership 100 % 81.32 % 5.77 % 0.79 % 12.12 %

WV Government Money Market

This pool consists of investors who wish to invest in a pool that restricts its investments to U.S. Government Obligations, U.S. Government Agency Obligations, or repurchase agreements. The pool is managed by UBS Global Asset Management.

Credit Risk The BTI limits the exposure to credit risk in the WV Government Money Market Pool by limiting the pool to U.S. Treasury issues, U.S. Government Agency issues, money market funds investing in U.S. Treasury issues and U.S. Government Agency issues, and repurchase agreements collateralized by U.S. Treasury issues and U.S. Government Agency issues. The pool must have at least 15% of its assets in U.S. Treasury issues.

The following table provides information on the credit ratings of the WV Government Money Market Pool’s investments as of June 30, 2021 (expressed in thousands):

Security Type

Credit Rating Carrying

Value Percent of Pool AssetsMoody’s S&P

U.S. Treasury Bills * P-1 A-1+ $ 102,496 45.87 %

U.S. Agency Bonds and Notes Aaa AA+ 47,124 21.08 %

U.S. Agency Discount Notes P-1 A-1+ 52,697 23.58 %

Money Market Funds Aaa AAAm 149 0.07 %

Repurchase Agreements (Underlying Securities):

U.S. Treasury Bonds and Notes * Aaa AA+ 21,000 9.40 %

Total $ 223,466 100 %

* U.S. Treasury issues are explicitly guaranteed by the U.S. Government and are not subject to credit risk.

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Interest Rate Risk The overall weighted average maturity of the investments of the WV Government Money Market Pool cannot exceed 60 days. Maximum maturity of individual securities cannot exceed 397 days from date of purchase, except for government floating rate notes, which can be up to 762 days.

The following table provides information on the WAM for the various asset types in the WV Government Money Market Pool as of June 30, 2021 (expressed in thousands):

Security Type Carrying

Value Primary

Government Investment Trust Fund

Component Units

WAM (Days)

U.S. Treasury Bills $ 102,496 $ 1,794 $ 98,181 $ 2,521 54

U.S. Agency Bonds and Notes 47,124 825 45,140 1,159 50

U.S. Agency Discount Notes 52,697 923 50,478 1,296 41

Repurchase Agreements (Underlying Securities): 1

U.S. Treasury Notes 21,000 367 20,116 517

Money Market Funds 149 2 143 4 1

Total $ 223,466 $ 3,911 $ 214,058 $ 5,497 45

Percentage of Ownership 100 % 1.75 % 95.79 % 2.46 %

WV Short-Term Bond

This pool consists of the operating funds of the State that are not immediately needed to fund the State’s liquidity requirements. The pool is managed by Sterling Capital Management.

Credit Risk The BTI limits the exposure to credit risk in the WV Short-Term Bond Pool by requiring all corporate debt be rated BBB- by Standard & Poor’s (or its equivalent) and all short-term corporate debt be rated A-1 or higher by Standard & Poor’s (or its equivalent). Mortgage-backed and asset-backed securities must be rated AAA by Standard & Poor’s and Aaa by Moody’s.

The following table provides information on the credit ratings of the WV Short-Term Bond Pool’s investments as of June 30, 2021 (expressed in thousands):

Security Type

Credit Rating Carrying

Value

Percent of Pool

AssetsMoody’s S&P

U.S. Treasury Notes * Aaa AA+ $ 123,066 15.08 % U.S. Agency Collateralized Mortgage Obligations:

U.S. Government Guaranteed* Aaa AA+ 16,295 2.00 % Non-U.S. Government Guaranteed Aaa AA+ 6,779 0.83 %

Corporate Bonds and Notes Aaa AAA 3,627 0.44 % Aaa AA+ 6,684 0.82 % Aa1 AA 2,549 0.31 % Aa2 AA+ 1,354 0.17 % Aa2 AA 5,665 0.69 % Aa2 AA- 4,019 0.49 % Aa2 A+ 4,400 0.54 % Aa2 NR 5,858 0.72 % Aa3 AA+ 5,258 0.64 % Aa3 AA- 21,288 2.61 %

*U.S. Treasury issues and certain U.S. agency collateralized mortgage obligations are explicitly guaranteed by the U.S. Government and are not considered to have credit risk.

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Aa3 A+ 7,793 0.96 % Aa3 A 4,168 0.51 % A1 AA 1,623 0.20 % A1 AA- 8,860 1.09 % A1 A+ 28,261 3.46 % A1 A 14,323 1.76 % A1 A- 10,621 1.30 % A1 BBB+ 8,103 0.99 % A2 A+ 15,952 1.96 % A2 A 48,388 5.93 % A2 A- 28,214 3.46 % A2 BBB+ 27,127 3.32 % A3 AA- 2,329 0.29 % A3 A+ 9,145 1.12 % A3 A 9,351 1.15 % A3 A- 21,011 2.58 % A3 BBB+ 24,656 3.02 %

Baa1 A- 5,451 0.67 % Baa1 BBB+ 19,851 2.43 % Baa1 BBB 3,115 0.38 % Baa1 NR 1,976 0.24 % Baa2 A- 6,101 0.75 % Baa2 BBB+ 11,436 1.40 % Baa2 BBB 27,925 3.42 % Baa2 BBB- 10,177 1.25 % Baa3 BBB 17,015 2.09 % Baa3 BBB- 22,599 2.77 %

Baa3 NR 5,846 0.72 % Ba1 BBB- 6,703 0.82 % NR A+ 6,290 0.77 % NR A- 5,935 0.73 % NR BBB+ 4,507 0.55 % NR BBB 7,927 0.97 % NR BBB- 1,588 0.19 %

Collateralized Mortgage Obligations NR AAA 79 0.01 % Municipal Securities Aa1 AAA 2,484 0.30 %

Aa1 AA+ 11,211 1.37 % Aa1 AA 2,789 0.34 % Aa2 AA+ 6,630 0.81 % Aa2 AA 15,973 1.96 % Aa2 AA- 8,230 1.01 % Aa2 NR 8,556 1.05 % Aa3 AA- 2,233 0.27 % NR AAA 2,876 0.35 % NR AA+ 3,172 0.39 %

Asset-Backed Securities Aaa AAA 19,696 2.41 % Aaa NR 27,153 3.33 % Aa1 NR 8,183 1.00 % NR AAA 49,648 6.09 %

Money Market Funds Aaa AAAm 5,756 0.71 % Total $ 815,878 100 % NR = Not Rated

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Interest Rate Risk The overall effective duration of the investments of the WV Short-Term Bond Pool is limited to a +/- 20% band around the effective duration of the portfolio’s benchmark (the ICE BofAML 1-3 US Corporate & Government Index.) As of June 30, 2021, the effective duration of the benchmark was 664 days. Maximum effective duration of individual securities cannot exceed 1,827 days (five years) from date of purchase. The following table provides information on the effective duration for the various asset types in the WV Short-Term Bond Pool as of June 30, 2021 (expressed in thousands):

Security Type

Total Carrying

Value Primary

Government Investment Trust Funds

Component Units

Effective Duration

(Days)

U.S. Treasury Bonds and Notes $ 123,066 $ 109,590 $ 3,803 $ 9,673 638

U.S. Agency Collateralized Mortgage Obligations 23,074 20,547 713 1,814 213

Corporate Fixed-Rate Bonds and Notes 461,933 411,351 14,274 36,308 720

Corporate Floating-Rate Bonds and Notes 33,136 29,508 1,024 2,604 (6)

Collateralized Mortgage Obligations 79 71 2 6 752

Municipal Securities 64,154 57,129 1,982 5,043 608

Asset-Backed Securities 104,680 93,217 3,235 8,228 626

Money Market Funds 5,756 5,126 178 452 —

Total $ 815,878 $ 726,539 $ 25,211 $ 64,128 638

Percentage of Ownership 100 % 89.05 % 3.09 % 7.86 %

Fair Value Measurements The table below summarizes the valuation for the WV Short-Term Bond Pool in accordance with the fair value hierarchy levels as of June 30, 2021 (expressed in thousands):

Investment Type Level 1 Level 2 Level 3 Total

U.S. Treasury Notes $ 123,066 $ — $ — $ 123,066

U.S. Agency Collateralized Mortgage Obligations — 23,074 — 23,074

Corporate Fixed-Rate Bonds and Notes — 461,933 — 461,933

Corporate Floating-Rate Bonds and Notes — 33,136 — 33,136

Collateralized Mortgage-Backed Obligations — 79 — 79

Municipal Securities — 64,154 — 64,154

Asset-Backed Securities — 104,680 — 104,680

Money Market Funds 5,756 — — 5,756

Total $ 128,822 $ 687,056 $ — $ 815,878

The fair value measurement valuation techniques used for the WV Short-Term Bond Pool can be found on pages 84-85.

WV Bank Pool

This pool consists of certificates of deposit purchased by the State through the West Virginia CD program. The program purchases CDs from eligible banks and depositories to make state investment funds available for consumer and business loans within the State. The non- negotiable certificates of deposit in this pool total approximately $60.1 million, with maturities

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ranging from July 2021 to December 2021, and an interest in a money market mutual fund valued at approximately $114,000.

Loan Pool

This pool is composed of loans made by the State. The $1 unit price is utilized for accounting purposes only. The State is the sole participant in this pool. This pool primarily holds intergovernmental loans and an investment in a money market mutual fund in the amount of approximately $25,000 with a weighted-average maturity of one day which is rated AAAm by Standard & Poor’s and Aaa by Moody’s. The loans are not rated by any nationally recognized statistical rating organization; however, as there is the potential for defaults, they are exposed to credit risk. For financial statement purposes, the intergovernmental loans are reflected in the Advances to Component Units line on the Statement of Net Position. The BTI addresses the credit risk by evaluating the need for and establishing a reserve for uncollectible loans.

Reserve Pool

This pool is composed of an interest-bearing depository account, with funds totaling approximately $19,938,000 in a bank depository and an interest in a money market mutual fund valued at approximately $2,000. The pool was created to provide an added layer of security for the WV Money Market and WV Government Money Market pools. The objective of this pool is to provide support for the WV Money Market and WV Government Money Market pools to ensure their unit net position levels do not fall below $0.9985. The State is the sole participant in this pool.

Participant-Directed Accounts

The BTI also maintains pools for individual state agencies with specific investment needs. These pools include the following: Municipal Bond Commission (MBC), School Fund, and Economic Development Authority-American Woodmark (EDA-AW). Each agency is the sole owner of the investments in its pool and is responsible for the investment decisions in accordance with the legal restrictions applicable to those assets.

Municipal Bond Commission

This account only holds three securities issued by the State and Local Government Series (SLGS) with a weighted average maturity of 302 days. The BTI’s policy does not specifically address maturity restrictions as a means of managing exposure to fair value losses in the MBC account arising from increasing interest rates. The MBC is not subject to credit risk.

Fair Value Measurements The MBC account’s SLGS are reported at historical cost (face value) of $28,916,000. SLGS are special purpose securities the U.S. Department of the Treasury issues to state and local government entities, upon request by the those entities, to assist them in complying with federal tax laws and Internal Revenue Service arbitrage regulations when they have cash proceeds to invest from their issuance of tax exempt bonds. There is no market for these securities as they may only be redeemed at the U.S. Department of Treasury on or before their stated maturity date at face value plus accrued interest.

West Virginia

116

School Fund

The School Fund account holds an interest in a money market mutual fund valued at $1 million using Level 1 inputs with a weighted-average maturity of one day. The mutual fund is rated AAAm by Standard & Poor’s and Aaa by Moody’s as of June 30, 2021 (expressed in thousands):

Investment Maturities

Security Type Carrying

Value Less

than 1 1-5 6-10 More

than 10

Governmental Activities:

Money Market $ 1,000 $ 1,000 $ — $ — $ —

EDA-AW

This account holds a U.S. Treasury bond valued at $1,627,000 using Level 1 inputs that mature on August 15, 2023. The EDA’s investment policy limits this account to holding only U.S. Treasury securities with 20 year maturities at time of purchase as of June 30, 2021 (expressed in thousands):

Investment Maturities

Security Type Carrying

Value Less

than 1 1-5 6-10 More

than 10

Component Unit Activities:

U.S. Treasury Bond $ 1,627 $ — $ 1,627 $ — $ —

West Virginia

117

This schedule reconciles disclosed investment values to net asset values of the pools as reflected in the accompanying financial statements, at IMB and BTI at June 30, 2021 (expressed in thousands):

IMB Pools Disclosed

Value

Pool Receivables/ (Payables)

Net Asset

Values

Portable Alpha Pool $ 1,186,123 $ 3,900,062 $ 5,086,185

Large Cap Domestic Equity Pool 367,198 5,679 372,877

Non-Large Cap Domestic Equity Pool 815,805 110,849 926,654

International Qualified 1,451,822 (51) 1,451,771

International Nonqualified 219,112 (8) 219,104

International Equity** 3,812,660 100,470 3,913,130

Short-Term Fixed Income 102,887 89,335 192,222

Total Return Fixed Income** 2,791,866 272,937 3,064,803

Core Fixed Income 1,237,860 77,967 1,315,827

TIPS Pool 478,962 (34) 478,928

Private Markets Pool 5,557,205 363,539 5,920,744

Hedge Fund 2,231,493 171,560 2,403,053

BTI Pools

WV Money Market Pool 6,843,002 (382) 6,842,620

WV Government Money Market Pool 223,466 (34) 223,432

WV Short-Term Bond Pool 815,878 2,404 818,282

WV Bank Pool 60,214 29 60,243

Loan Pool 123,245 162 123,407

Reserve Pool 19,940 2 19,942

Municipal Bond Commission Account 28,916 80 28,996

School Fund Account 1,000 — 1,000

EDA-AW 1,628 34 1,662

Total Pooled Investments 28,370,282 5,094,600 33,464,882

Less EDA 123,220 — 123,220

Less MBC 28,916 80 28,996

Less Nonnegotiable Certificates of Deposit 60,100 29 60,129

Less Reserve Pool in Depository 19,938 2 19,940

Total for Disclosure $ 28,138,108 $ 5,094,489 $ 33,232,597

**Pools had cash denominated in foreign currencies.

Outside Investments

In addition to the amounts invested with the IMB above, certain funds are permitted to invest bond proceeds with a third-party trustee named in the bond indenture. The following information relates to these outside investments.

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118

Credit Risk The following table provides information on the credit ratings of the State’s third-party trustee investments as of June 30, 2021 (expressed in thousands):

Credit Rating

Security Type Carrying S&P Moody’s

Primary Government: Money Market/Mutual Funds $ 352,062 AAAm Aaa-mf Money Market/Mutual Funds 4,451 AAA Aaa Corporate Bonds 14,788 Unrated P-1 U.S. Government and Agency Obligations 86,229 AA+ Aaa

Total Primary Government $ 457,530

Pension & Private Purpose Trust Funds: Money Market/Mutual Funds $ 3,330,886 Unrated Unrated Guaranteed Investment Contract 574,517 Unrated Unrated

Total Pension & Private Purpose Trust Funds $ 3,905,403

Component Units: Common and Preferred Stocks $ 205,259 Unrated Unrated Corporate Bonds 6,276 AAA-BBB AAA-Baa3 Corporate Bonds 35,243 Unrated Unrated Corporate Stock 3,250 Unrated Unrated Fixed Income Fund 2,661 Unrated Unrated Fixed Income Fund 172 AAA Unrated Fixed Income Fund 13,280 Unrated Aa2 Fixed Income Fund 14,066 Unrated Aaa Fixed Income Fund 8,120 Unrated Ba2 Money Market/Mutual Funds 302,445 AAAm Aaa-mf Money Market/Mutual Funds 8,988 Unrated A3 Money Market/Mutual Funds 22,131 AA+ Aaa Money Market/Mutual Funds 7 AAA Aaa Money Market/Mutual Funds 448,971 Unrated Unrated Mortgages Held for Investment 9,084 Unrated Unrated Other Investments 302 AAA Unrated Other Investments 86,338 Unrated A+ Other Investments 190,459 Unrated Unrated Repurchase Agreements * 3,008 Unrated Unrated State and Local Government Securities 492 AAA Aaa U.S. Government and Agency Obligations 38,388 AAA Aaa U.S. Government and Agency Obligations 4,513 AA+ Aaa U.S. Government and Agency Obligations 5,554 AAAm Aaa-mf U.S. Government and Agency Obligations 32,877 Unrated Unrated

Total Component Units $ 1,441,884

Underlying Securities: * Component Units:

The $3,008 is invested in U.S. Government National Mortgage Association Securities.

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119

Concentration of Credit Risk As of June 30, 2021, the State had investment balances with the following issuers which are greater than or equal to 5% of the respective third-party trustee investment balance (expressed in thousands):

Security Type Carrying

Value Issuer Percentage of Concentration

Component Units:

Other Investments $ 190,137 The $96,634,000 of the $190,137,000 is invested by the Foundations at the Higher Education institutions, which are reported under FASB and the information is not available.

13.2%

Common & Preferred Stock 202,848 Common Stock 14.1%

Interest Rate Risk The following table provides information on the interest rate risk of the State’s third-party trustee investments as of June 30, 2021 (expressed in thousands):

Investment Maturities (Years)

Security Type Carrying

Value Less

Than 1 1-5 6-10 More

Than 10 N/A

Primary Government:

Money Market/Mutual Funds $ 356,513 $ 356,513 $ — $ — $ — $ —

Corporate Bonds 14,788 14,788 — — — —

U.S. Government and Agency Obligations 86,229 86,229 — — — —

Total Primary Government 457,530 457,530 — — — —

Pension & Private Purpose Trust Funds:

Money Market/Mutual Funds 3,330,886 3,330,886 — — — —

Guaranteed Investment Contract 574,517 574,517 — — — —

Total Pension & Private Purpose Trust Funds 3,905,403 3,905,403 — — — —

Component Units:

Common and Preferred Stocks 205,259 — — — 2,411 202,848

Corporate Bonds 41,519 862 12,220 — — 28,437

Corporate Stock 3,250 3,250 — — — —

Fixed Income Fund 38,299 2,128 18,911 14,765 2,495 —

Money Market/Mutual Funds 782,542 443,425 40,142 8,988 6 289,981

Mortgages Held for Investment 9,084 — 525 793 7,766 —

Other Investments 277,099 624 100 — — 276,375

Repurchase Agreements* 3,008 3,008 — — — —

State and Local Government Securities 492 — — 118 374 —

U.S. Government and Agency Obligations 81,332 6,786 27,555 20,634 2,333 24,024

Total Component Units 1,441,884 460,083 99,453 45,298 15,385 821,665

Total Outside Investments $ 5,804,817 $ 4,823,016 $ 99,453 $ 45,298 $ 15,385 $ 821,665

Underlying Securities:

*Component Units: The $3,800 is invested in U.S. Government National Mortgage Association Securities.

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120

Fair Value Measurements

U.S. GAAP does not require the categorization within the fair value hierarchy table investments for which fair value is measured using the net asset value per share practical expedient. All of the outside investments were valued using the net asset value per share practical expedient. These investments involve varying degrees of illiquidity and varying times of commitments to those investments.

The table below summarizes the valuation of the investment securities in accordance with the fair value hierarchy levels as of June 30, 2021 (expressed in thousands):

Security Type Investment

Amount

Level Amounts

1 2 3

Primary Government:

Money Market/Mutual Funds $ 356,513 $ 356,513 $ — $ —

Corporate Bonds 14,788 — 14,788 —

U.S. Government & Agency Obligations 86,229 — 86,229 —

Total Primary Government 457,530 356,513 101,017 —

Pension & Private Purpose Trust Funds:

Money Market/Mutual Funds 3,330,886 3,330,886 — —

Guaranteed Investment Contract 574,517 — 574,517 —

Total Pension & Private Purpose Trust Funds 3,905,403 3,330,886 574,517 —

Component Units:

Common and Preferred Stocks 75,943 73,359 173 2,411

Corporate Bonds 41,519 9,968 31,551 —

Corporate Stock 3,250 3,250 — —

Fixed Income Fund 38,299 4,596 33,703 —

Money Market/Mutual Funds 751,673 719,397 31,936 340

Mortgages Held for Investment 9,084 — — 9,084

Other Investments 195,999 91,451 99,955 4,593

Repurchase Agreements* 3,008 3,008 — —

State & Local Government Securities 492 — 492 —

U.S. Government & Agency Obligations 81,332 66,700 14,632 —

Total Component Units 1,200,599 971,729 212,442 16,428

Outside Investments @ Fair Value 5,563,532 $ 4,659,128 $ 887,976 $ 16,428

FV Investments @ Net Asset Value 241,285

Total Outside Investments $ 5,804,817

Underlying Securities: *Component Units

The $3,800 is invested in U.S. Government National Mortgage Association Securities.

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121

Reconciliation to Financial Statements

The following schedule reconciles the amount disclosed as deposits and investments included in this footnote to cash and cash equivalents, investments, and restricted cash and investments in the Statement of Net Position at June 30, 2021 (expressed in thousands):

Deposits: Cash and Cash Equivalents as Reported on the Statement of Net Position $ 9,108,808

Cash and Cash Equivalents as Reported on the Statement of Fiduciary Net Position 878,516

Add:

Restricted Cash and Cash Equivalents as Reported on the Statement of Net Position 815,592

Less:

Cash Equivalents and Restricted Cash Disclosed as Investments (10,208,504)

Cash with U.S. Treasury for Unemployment Programs (81,314)

Reported Value of Deposits as Disclosed in this Footnote $ 513,098

Investments:

Investments as Reported on the Statement of Net Position $ 2,467,104

Investments as Reported on the Statement of Fiduciary Net Position 26,138,315

Add:

Restricted Investments as Reported on the Statement of Net Position 193,349

Cash Equivalents and Restricted Cash Disclosed as Investments 10,208,504

Mortgages Held for Investment Disclosed as Investments 9,084

Accrued Interest Disclosed as Investments 72,182

Reported Value of Investments as Disclosed in this Footnote $ 39,088,538

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122

West Virginia

123

NOTE 5

RECEIVABLES (Expressed in Thousands)

Receivables at June 30, 2021, consisted of the following:

Governmental Funds

General Transportation

Tobacco Settlement

Finance Authority

Other Governmental

Total Governmental

Receivables

Taxes $ 500,740 $ 83,184 $ — $ — $ 583,924

Accounts 524,061 150,346 28,532 13,163 716,102

Loans 2,404 — — — 2,404

Accrued Interest 5,719 — — 3,722 9,441

Total Receivables 1,032,924 233,530 28,532 16,885 1,311,871

Allowance for doubtful accounts (330,244) — — (1,429) (331,673)

Receivables, net $ 702,680 $ 233,530 $ 28,532 $ 15,456 $ 980,198

As reported on the financial statements

Current receivables $ 702,680 $ 233,530 $ 28,532 $ 15,456 $ 980,198

Noncurrent receivables — — — — —

Total receivables (net) $ 702,680 $ 233,530 $ 28,532 $ 15,456 $ 980,198

Fiduciary Funds

Pension and Other

Benefit Trust Funds SMART 529

Custodial Funds

Accounts $ 7,097 $ — $ —

Loans 1,866 — —

Leases - — —

Contributions 35,737 2,831 —

Accrued Interest - — 72

Total Receivables 44,700 2,831 72

Allowance for Doubtful Accounts (177) -

Receivables, Net $ 44,523 $ 2,831 $ 72

As reported on the Fund/Component Units Financial Statements:

Current Receivables, Net $ 44,523 $ 2,831 $ 72

Noncurrent Receivables, Net — — —

Total Receivables, Net $ 44,523 $ 2,831 $ 72

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124

Enterprise Fund

Water Pollution Control

Revolving Fund

Workers' Compensation

Unemployment Compensation

West Virginia Infrastructure

and Jobs Development

Council

Public Employees' Insurance

Agency

Board of Risk and

Insurance Management

Other Enterprise

Total Enterprise

Internal Service Funds

$ — $ — $ — $ — $ — $ — $ — $ — $ —

474 220 51,247 16 58,427 2,856 963 114,203 10,002

686,575 — — 561,684 — — 146,020 1,394,279 —

— — — 2,151 — — 73 2,224 ~

687,049 220 51,247 563,851 58,427 2,856 147,056 1,510,706 10,002

— — — — (66) — (66) —

$ 687,049 $ 220 $ 51,247 $ 563,851 $ 58,361 $ 2,856 $ 147,056 $ 1,510,640 $ 10,002

$ 36,239 $ 220 $ 51,247 $ 26,705 $ 58,361 $ 2,856 $ 10,169 $ 185,797 $ 10,002

650,810 — — 537,146 — 136,887 1,324,843 —

$ 687,049 $ 220 $ 51,247 $ 563,851 $ 58,361 $ 2,856 $ 147,056 $ 1,510,640 $ 10,002

Discretely Presented Component Units

West Virginia Lottery

Economic Development

Authority

Housing Development

Fund Parkways Authority

Water Development

Authority Higher

Education

Division of Corrections & Rehabilitation

School Building

Authority

Other Component

Units

Total Discretely Presented

Component Units

$ 35,058 $ — $ 756,738 $ 12,534 $ — $ 211,058 $ 2,877 $ — $ 1,175 $ 1,019,440

— 146,616 105,090 — 172,920 51,067 — — 3,507 479,200

— 48,294 — — — — — — — 48,294

— — — — — — — — — —

— 5,167 596 — 2,633 — — — 260 8,656

35,058 200,077 862,424 12,534 175,553 262,125 2,877 — 4,942 1,555,590

- (7,600) (119,589) — — (43,777) — — (170,966)

$ 35,058 $ 192,477 $ 742,835 $ 12,534 $ 175,553 $ 218,348 $ 2,877 $ — $ 4,942 $ 1,384,624

$ 35,058 $ 14,146 $ 7,507 $ 12,534 $ 18,119 $ 185,297 $ 2,877 $ — $ 1,573 $ 277,111

— 178,331 735,328 — 157,434 33,051 — — 3,369 1,107,513

$ 35,058 $ 192,477 $ 742,835 $ 12,534 $ 175,553 $ 218,348 $ 2,877 $ — $ 4,942 $ 1,384,624

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125

Taxes Receivable

Taxes receivable at June 30, 2021, consisted of the following:

Governmental Funds

General Transportation Total

Taxes Receivable:

Consumer Sales & Use $ 141,395 $ — $ 141,395

Personal Income 179,913 — 179,913

Severance 67,839 — 67,839

Business & Occupation 9,899 — 9,899

Automobile Privilege Taxes — 24,767 24,767

Gasoline Excise — 56,077 56,077

Registration Fees — 1,977 1,977

Insurance 40,790 — 40,790

Corporate Net Income 13,536 — 13,536

Medicaid 37,895 — 37,895

Other 9,473 363 9,836

Subtotoal for Taxes Receivable 500,740 83,184 583,924

Refunds Allowance (25,220) — (25,220)

Total $ 475,520 $ 83,184 $ 558,704

Leases Receivable

The Economic Development Authority (EDA) has entered into long-term direct financing lease agreements with commercial entities for land, buildings, and equipment. A schedule of future lease amounts due to the EDA is as follows:

Year Ending June 30

Direct Financing Leases

Amount Due

2022 $ 8,336

2023 8,331

2024 5,948

2025 4,908

2026 4,853

2027-2042 24,551

Total Minimum Amount Due 56,927

Less Amount Representing Interest (8,633)

Present Value of Minimum Lease Amount Due $ 48,294

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127

NOTE 6

INTERFUND BALANCES AND DUE TO/DUE FROM COMPONENT UNITS

The following table details the interfund balances and due to/due from component units activity as of and for the year ended June 30, 2021 (expressed in thousands):

Due From

Governmental Proprietary

Due To General Transportation Other

Nonmajor

Water Pollution Control

Revolving Fund

West Virginia Infrastructure

and Jobs Development

Council

Governmental Funds:

General $ — $ 1,756 $ 184 $ — $ —

Transportation 463 — — — —

Other Nonmajor Governmental — — — — —

Total Governmental Funds 463 1,756 184 — —

Proprietary Funds:

Unemployment Compensation 185,170 (a) 63 6 — —

Public Employees Insurance Agency 11 2,627 — — —

Internal Service Funds 8,832 4,090 447 — —

Total Proprietary Funds 194,013 6,780 453 — —

Fiduciary Funds:

Pension and Other Employee Benefit Trust Funds 873 600 4 — —

Custodial Funds — 391 — — —

Total Fiduciary Funds 873 991 4 — —

Discretely Presented Component Units

Major:

West Virginia Lottery — — — — —

Parkways & Economic Development — — — — —

Water Development Authority — — — 60 320

Higher Education 37,645 71 14 — —

Corrections and Rehabilitation — 50 — — —

Nonmajor:

Educational Broadcasting Authority 4,900 — — — —

State Rail Authority 1,056 — — — —

Total Discretely Presented Component Units 43,601 121 14 60 320 14

Total $ 238,950 $ 9,648 $ 655 $ 60 $ 320

(a) Due from general includes $184.9 million from the Office of the Governor to repay funds that were drawn on a loan to continue paying unemployment claims.

(b) Due from discretely presented component units includes $156 million from the Lottery. The General Fund received $120.4 million to be appropriated at a later date. The Legislature also approved the following distributions from the Lottery to the Senior Services ($17.8 million), Library Commission ($4.6 million), Department of Education – Public Education ($5.7 million), and various other general purposes.

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Due From

Proprietary

Unemployment Compensation

Public Employees Insurance

Agency

Board of Risk and

Insurance Management

Other Nonmajor Enterprise

Internal Service Funds

Pension and Other

Employee Benefit

Trust Funds Total

Discretely Presented

Component Units

$ 355 $ 378 $ — $ — $ 32 $ 71 $ 2,776 $ 157,860

— 10 — — — — 473 788

11 49 — — — — 60 5,781

366 437 — — 32 71 3,309 164,429 (b)

— — — — — — 185,239 287

— — — — 522 1,722 4,882 5,492

— 223 2 — 25 — 13,619 65

— 223 2 — 547 1,722 203,740 5,844

— — — 2 — 629 2,108 3,827

— — — — — — 391 —

— — — 2 — 629 2,499 3,827

— 6 — — — — 6 13

— 2 — — — — 2 —

— — — 43 — — 423 —

— — 17 — — — 37,747 4,884

— 3 — — — — 53 —

— 11 — — — — 4,911 —

— 6 — — — — 1,062 —

— 28 17 43 — — 44,204 4,897

$ 366 $ 688 $ 19 $ 45 $ 579 $ 2,422 $ 253,752 $ 178,997

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129

NOTE 7

INTERFUND TRANSFERS

Interfund transfers for the year ended June 30, 2021, consisted of the following (expressed in thousands):

Transfers From

Governmental

Transfers To General

Tobacco Settlement

Finance Authority

Other Nonmajor

Governmental Funds:

General $ — $ 20,023 (a) $ 8,153

Transportation 149,807 (c) — —

Other Nonmajor Governmental 67,741 (b) — —

Total Governmental Funds 217,548 20,023 8,153

Proprietary Funds:

Water Pollution Control Revolving Fund 4,955 — 24,773 (d)

West Virginia Infrastructure and Jobs Development Council — — 14

Workers' Compensation Fund — — 19,000

Public Employees Insurance Agency 21,000 (e) — —

Other Nonmajor Proprietary 5,913 — —

Internal Service Funds 37,844 — —

Total Proprietary Funds 69,712 — 43,787

Total $ 287,260 $ 20,023 $ 51,940

(a) The deferred charge of the amortization of the future tobacco settlement revenue of the Tobacco Settlement Finance Authority resulted in a transfer of $20 million to the General Fund.

(b) The General Fund transferred $22 million to the West Virginia Infrastructure and Jobs Development Council and $19 million to the Economic Development Project Fund for bond debt service.

(d) The Water Pollution Revolving Fund received $30 million in grants from the West Virginia Department of Environmental Protection. All other transfers are made to finance various programs to the Legislation.

(e) PEIA received a $21 million State Appropriation from the General Fund.

(f) Alcohol Beverage Control Administration transferred $27.5 million that are statutory transfers based on operations and liquor license renewals.

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130

Transfers From

Proprietary

Workers’ Compensation

Fund

West Virginia Infrastructure

and Jobs Development

Council

Other Nonmajor Enterprise

Internal Service Funds Total

$ — $ — $ 27,537 (f) $ — $ 55,713

— — — — 149,807

— — — 5,500 73,241

— — 27,537 5,500 278,761

— — — — 29,728

— — — — 14

— — — — 19,000

— — — — 21,000

— 2,202 — — 8,115

— — — — 37,844

— 2,202 — — 115,701

$ — $ 2,202 $ 27,537 $ 5,500 $ 394,462

West Virginia

131

West Virginia

132

NOTE 8

RESTRICTED ASSETS

Restricted assets are held by special revenue funds, enterprise funds, internal service funds, and discretely presented component units, primarily for the repayment of future long-term obligations and benefits payments. The restricted assets, composed of cash, investments, and other similar assets at June 30, 2021, are as follows (expressed in thousands):

Cash Investments Other Totals Special Revenue:

Environmental Programs $ 251 $ — $ — $ 251 Public Service Commission 1,443 — — 1,443

Total Special Revenue 1,694 — — 1,694

Enterprise: Public Employees Insurance Agency 9,403 — — 9,403 Board of Risk and Insurance Management 11,220 71,328 252,373 334,921 Alcohol Beverage Control Administration — — — 3,165 3,165

Total Enterprise 20,623 71,328 255,538 347,489

Internal Service: State Building Fund 16,186 — — 16,186 Travel Management 7,091 — — 7,091

Total Internal Services 23,277 — — 23,277

Discretely Presented Component Units: Economic Development Authority 6,624 — — 6,624 Housing Development Authority 421,549 38,746 650,579 1,110,874 Parkways Authority 122,202 83,275 — 205,477 Water Development Authority 15,386 — 149,617 165,003 Corrections and Rehabilitation 28,626 — — 28,626 Solid Waste Management Board 3,701 — 1,076 4,777 Educational Broadcasting Authority 1,051 — 374 1,425 Racing Commission 15,777 — 473 16,250

Total Discretely Presented Component Units 614,916 122,021 802,119 1,539,056

Total Restricted Assets $ 660,510 $ 193,349 $ 1,057,657 $ 1,911,516

Special Revenue Funds

Environmental Protection has restricted cash held in trust “to protect human health and the environment, in accordance with the terms of the State and Federal Consent Decrees.…” The Public Service Commission (PSC) has restricted cash held in trust in accordance with PSC General Order 250-T. The funds are for Telecommunications Relay Services under the Americans with Disabilities Act.

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Enterprise Funds

The Public Employees’ Insurance Agency’s restricted assets are the premium stabilization fund consisting of accumulated dividends and interest on optional life insurance policies to defray future premium increases. The Board of Risk and Insurance Management’s (BRIM) cash and investment assets include funds to provide mine subsidence coverage to the general public. BRIM’s other restricted assets include advance deposits with insurance companies of $252 million and $1.2 million in receivables. The Alcohol Beverage Control Administration’s assets are restricted through enabling legislation that consists of notes and interest receivable from the Retail Liquor License Board re-bid, which are required by state code to be distributed to the State of West Virginia.

Internal Service Funds

The State Building Fund’s restricted assets are held in trust primarily for the costs of asbestos removal and other capital projects. Travel Management Fund’s restricted assets are held in escrow for capital outlay.

Discretely Presented Component Units

The Economic Development Authority’s assets are restricted to provide assurance that adequate amounts will be available to repay notes secured by the real estate being leased and to guarantee portions of certain loans made for economic development purposes. The Housing Development Fund’s cash and cash equivalents assets are restricted on behalf of mortgagors and for payments collected on mortgages for which the fund acts as service only. The investments are primarily United States government and agency obligations, investment agreements, and certificates of deposit with maturities greater than 90 days to meet the requirements of bond resolutions. Other restricted assets for the Housing Development Fund of $651 million include certain foreclosed properties, properties developed for flood activities, other land for restricted housing purposes, and miscellaneous receivables. These assets are restricted subject to the provisions of bond resolutions, or state or federal regulations. The Parkways Authority’s assets, restricted by the Tri-Party Agreement dated December 1988, can only be used for turnpike maintenance and operation, and debt service. The Parkways Authority’s assets restricted by the 2018 Master Trust Indenture are restricted for Turnpike capital costs, renewal and replacement costs, operation and maintenance expenses, and debt service. The cash and investment assets of the Water Development Authority are restricted as part of applicable bond covenants and the other restricted assets are $150 million restricted for revenue bonds receivable net of unamortized discount. The WV Division of Corrections and Rehabilitation’s assets are restricted because of a safekeeping arrangement with inmates and for debt service and compliance with bond covenants. The Educational Broadcasting Authority’s (EBA) other restricted assets are in a charitable trust allowing the use of part of the interest to benefit the EBA. The Solid Waste Management Board’s assets are restricted because their use is limited by applicable repayment agreements and certain assets are set aside to administer a revolving loan program in accordance with appropriations by the Legislature. The West Virginia Racing Commission’s cash is restricted for unclaimed winning tickets and other trust holdings which are mandated by West Virginia Code.

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NOTE 9

CAPITAL ASSETS

Governmental Activities (Expressed in Thousands)

Beginning Balance July 1, 2020 Increases Decreases

Ending Balance June 30, 2021

Governmental Activities:

Capital Assets, Not Being Depreciated: Land $ 1,435,638 $ 28,543 $ — $ 1,464,181 Construction-in-Progress 1,752,147 548,776 (237,790) 2,063,133 Intangibles 2,752 — — 2,752

Total Capital Assets, Not Being Depreciated 3,190,537 577,319 (237,790) 3,530,066

Capital Assets, Being Depreciated: Building and Improvements 1,664,800 12,520 (57) 1,677,263 Equipment 554,516 39,854 (11,779) 582,591 Infrastructure 13,204,035 229,864 — 13,433,899 Library Holdings 17,419 362 (311) 17,470 Land Improvements 49,574 100 — 49,674 Intangibles 176,473 2,693 — 179,166

Total Capital Assets, Being Depreciated 15,666,817 285,393 (12,147) 15,940,063

Less Accumulated Depreciation for: Building and Improvements (695,053) (40,822) 57 (735,818) Equipment (418,604) (28,893) 11,549 (435,948) Infrastructure (7,487,584) (304,885) — (7,792,469) Library Holdings (16,819) (368) 311 (16,876) Land Improvements (25,465) (2,311) — (27,776) Intangibles (78,378) (9,269) — (87,647)

Total Accumulated Depreciation (8,721,903) (386,548) 11,917 (9,096,534)

Total Capital Assets, Being Depreciated, Net 6,944,914 (101,155) (230) 6,843,529

Governmental Activities Capital Assets, Net $ 10,135,451 $ 476,164 $ (238,020) $ 10,373,595

Depreciation expense was charged to function as follows:

Legislative $ 92 Judicial 302 Executive 2,025 Administration 26,738 Commerce 7,479 Environmental Protection 115 Employment Programs 10 Education 2,800 Health and Human Resources 4,440 Military Affairs and Public Safety 4,028 Revenue 251 Transportation 321,724 Veterans Assistance 95 Regulatory Boards and Commissions 16,449

Total Governmental Activities Depreciation Expense $ 386,548

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Business-type Activities (Expressed in Thousands)

Beginning Balance July 1, 2020 Increases Decreases

Ending Balance June 30, 2021

Business-type Activities:

Capital Assets, Not Being Depreciated:

Land $ 611 $ — $ — $ 611

Total Capital Assets, Not Being Depreciated 611 — — 611

Capital Assets, Being Depreciated:

Buildings and Improvements 2,400 148 (6) 2,542

Equipment 3,174 44 (13) 3,205

Intangibles 9,026 — — 9,026

Total Capital Assets, Being Depreciated 14,600 192 (19) 14,773

Less Accumulated Depreciation for:

Building and Improvements (1,464) (86) 6 (1,544)

Equipment (2,931) (142) 13 (3,060)

Intangibles (8,815) — — (8,815)

Total Accumulated Depreciation (13,210) (228) 19 (13,419)

Total Capital Assets, Being Depreciated, Net 1,390 (36) — 1,354

Business-type Activities Capital Assets, Net $ 2,001 $ (36) $ — $ 1,965

Depreciation expense was charged to function as follows:

Public Employees Insurance Agency $ 52

Alcohol Beverage Control Administration 176

Total Business-type Activities Depreciation Expense $ 228

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Discretely Presented Component Units (Expressed in Thousands)

Beginning Balance July 1, 2020 Increases Decreases

Ending Balance June 30, 2021

Discretely Presented Component Units:

Capital Assets, Not Being Depreciated:

Land $ 268,189 $ 4,219 $ (1,461) $ 270,947

Construction-in-Progress 157,945 189,407 (105,619) 241,733

Total Capital Assets, Not Being Depreciated 426,134 193,626 (107,080) 512,680

Capital Assets, Being Depreciated:

Buildings and Improvements 4,363,211 108,877 (33,062) 4,439,026

Equipment 568,649 50,977 (17,942) 601,684

Infrastructure 1,706,588 30,523 (71) 1,737,040

Library Holdings 209,249 4,367 (379) 213,237

Land Improvements 110,945 4,832 (2,165) 113,612

Intangibles 208,348 71,432 (224) 279,556

Total Capital Assets, Being Depreciated 7,166,990 271,008 (53,843) 7,384,155

Less Accumulated Depreciation for:

Buildings and Improvements (1,459,119) (89,876) 55,443 (1,493,552)

Equipment (415,591) (71,055) 16,884 (469,762)

Infrastructure (1,145,627) (55,478) 62 (1,201,043)

Library Holdings (187,885) (6,010) 301 (193,594)

Land Improvements (72,349) (5,955) 1,890 (76,414)

Intangibles (201,923) (18,627) 224 (220,326)

Total Accumulated Depreciation (3,482,494) (247,001) 74,804 (3,654,691)

Total Capital Assets, Being Depreciated, Net 3,684,496 24,007 20,961 3,729,464

Discrete Component Unit Activities Capital Assets, Net $ 4,110,630 $ 217,633 $ (86,119) $ 4,242,144

Depreciation expense charged to functions as follows:

Economic Development Authority $ 998

Housing Development Fund 314

Parkways Authority 47,991

Water Development Authority 145

Higher Education 183,729

Corrections and Rehabilitation 9,099

Lottery 1,659

School Building Authority 27

Other Nonmajor Component Units 3,039

Total Discrete Component Unit Depreciation Expense $ 247,001

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NOTE 10 LONG-TERM OBLIGATIONS

Primary Government: Long-term obligations at June 30, 2021, and changes for the fiscal year then ended, are as follows (expressed in thousands):

Governmental Activities:

Balance June 30, 2020 Additions Accretions Reductions

Balance June 30, 2021

Amount Due Within

One Year

General Obligation Bonds:

Transportation $ 1,465,285 $ 214,085 $ — $ (51,920) $ 1,627,450 $ 38,110

Premium/(Discount) 258,657 63,371 — (16,208) 305,820 15,773

Total Transportation 1,723,942 277,456 — (68,128) 1,933,270 53,883

WV Infrastructure and Jobs

Development Council 131,720 — 2,647 (18,645) 115,722 10,420

Premium/(Discount) 9,652 — — (1,582) 8,070 1,739

Total WV Infrastructure and Jobs Development Council 141,372 — 2,647 (20,227) 123,792 12,159

Total General Obligation Bonds 1,865,314 277,456 2,647 (88,355) 2,057,062 66,042

Revenue Bonds:

Transportation 265,720 — — (18,975) 246,745 19,930

Premium/(Discount) 41,423 — — (4,170) 37,253 4,171

Total Transportation 307,143 — — (23,145) 283,998 24,101

Economic Development Project Fund 97,910 — — (13,130) 84,780 13,840

Premium/(Discount) 0 (280) — — 70 (210) (70)

Total Economic Development Project Fund 97,630 — — (13,060) 84,570 13,770

Economic Development Project DNR 78,895 — — (2,556) 76,339 2,678

Premium/(Discount) 10,426 — — (576) 9,850 575

Total Economic Development DNR 89,321 — — (3,132) 86,189 3,253

Education, Arts, Sciences, & Tourism Fund 133,780 — — (4,185) 129,595 4,395

Premium/(Discount) 12,708 — — (635) 12,073 635

Tourism Fund 146,488 — — (4,820) 141,668 5,030

Total Revenue Bonds 640,582 — — (44,157) 596,425 46,154

Revenue Bonds:

Direct Borrowings & Direct Placements Tobacco Settlement Finance Authority 805,067 693,515 11,816 (726,459) 783,939 19,515

Notes Payable 21,472 5,960 — (8,474) 18,958 8,002

Total Direct Borrowings & Direct Placements 826,539 699,475 11,816 (734,933) 802,897 27,517

Capital Leases – Governmental 8,589 — — (2,490) 6,099 347

Capital Leases – Internal Service Funds 2,307 — — (154) 2,153 131

Capital Leases Payable to Component Units 209,730 — — (18,545) 191,185 19,296

Total Capital Leases (see Note 11) 220,626 — — (21,189) 199,437 19,774

Other Obligations:

Medicaid 415,819 42,576 — (11,812) 446,583 446,011

Tax Refunds 328,074 336,321 — (328,074) 336,321 283,507

Claims and Judgments (see Note 15) 357,289 55,919 — (86,587) 326,621 29,144

Other 160,387 270,369 — (253,703) 177,053 108,094

Total Accrued and Other Liabilities 1,261,569 705,185 — (680,176) 1,286,578 866,756

Compensated Absences 93,111 20,419 — (15,211) 98,319 62,207

Net Pension Liability, including ISF 2,996,887 450,487 — 3,447,374 —

Net OPEB Liability, including ISF 1,064,703 — — (780,358) 284,345 —

Total Other Obligations 5,416,270 1,176,091 — (1,475,745) 5,116,616 928,963

Total Governmental Activities

Long-Term Obligations $ 8,969,331 $ 2,153,022 $ 14,463 $ (2,364,379) $ 8,772,437 $ 1,088,450

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Business-type Activities:

Balance June 30,

2020 Additions Reductions

Balance June 30,

2021

Amount Due Within

One Year

Revenue Bonds

WV Infrastructure and Jobs

Development Council Revenue Bonds $ 151,545 $ — $ (5,985) $ 145,560 $ 6,255

Premium/(Discount) 13,930 — (835) 13,095 835

Total WV Infrastructure and Jobs Development Council Revenue Bonds 165,475 — (6,820) 158,655 7,090

Other Obligations

Accrued Tuition Contract Benefits 14,174 2,104 (5,450) 10,828 10,828

Insurance and Compensation Benefits 1,739,069 701,350 (841,555) 1,598,864 331,191

Compensated Absences 633 66 (47) 652 121

Net Pension Liability (see Note 12) 1,075 1,639 — 2,714 —

Net OPEB Liability (See Note 13) 3,060 — (2,249) 811 —

Accrued and Other 17,865 349 (6,423) 11,791 11,791

Total Business-type Activities Long Term $ 1,941,351 $ 705,508 $ (862,544) $ 1,784,315 $ 361,021

The assets of the general, special revenue, and internal service funds are used to liquidate the capital lease obligations and accrued and other liabilities of their respective fund types. Compensated absences liabilities are liquidated by the applicable governmental and internal service funds that account for the salaries and wages of the related employees, with the majority of the funds coming from the General Fund. The net pension liabilities are liquidated by the State’s governmental and internal service funds that contribute toward the pension funds based on plans established by the action of the State Legislature. The net pension liability and other postemployment benefits liability (OPEB) are adjusted each year based upon changes to participants, investment performance, contributions received and changes to actuarial assumptions. Please refer to Notes 12 and 13 for additional information related to the pension liability and OPEB. Internal service funds predominantly serve the governmental funds. Accordingly, long-term liabilities for them are included as part of the totals for governmental activities. At year-end, $2 million of internal service funds’ compensated absences are included in the governmental amounts.

Senate Bill No. 1002, enacted in January 2005, provides that on and after February 1, 2005, bonds may not be issued or refunded by the State or any of its agencies, boards, or commissions without the express written direction of the governor if (1) the ultimate user of the proceeds of the bonds is the State or any of its agencies, boards, commissions, or departments or (2) the issuance or refunding of the bonds implicates the State’s credit rating.

Compliance – Various debt agreements governing the State’s bonds contain a number of covenants, including continuing disclosure requirements, debt service coverage ratio, and maintaining debt service reserve and maintenance reserve funds. It is required that debt service reserve funds and maintenance reserve funds are to be held with a trustee. As of June 30, 2020, the debt service reserve funds approximated $43.2 million, and the maintenance reserve funds approximated $10.7 million.

General Obligation Bonds – The State has constitutionally limited its ability to incur debt. The State’s general obligation debt must be authorized by constitutional amendment. A proposed amendment must be approved by two-thirds of both the Senate and the House of Delegates before it can be ratified or rejected by the voters. Once the amendment has voter

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approval, the Legislature must pass specific legislation authorizing the issuance of general obligation debt, such as bonds for the facilitation of the construction of highways, secondary roads and bridges, as well as for utility upgrades for water and sewer systems. The general obligation bonds are secured by pledged receipts of annual tax revenue.

General obligation bonds outstanding at June 30, 2021, were as follows (expressed in thousands):

Final Maturity

Date Interest Rate(s)% Balance

Transportation Bonds: Payable from State Road Fund to build roads, issued under:

1996 SAFE Roads Amendment 2025 4.00%-5.00% $ 77,747 2019 Roads to Prosperity Bonds 2043 2.00%-5.00% 745,795 2020 Roads to Prosperity Bonds 2044 2.00%-5.00% 834,384

2021 Roads to Prosperity Bonds 2045 2.00%-5.00% 275,344

Infrastructure Bonds: Payable from dedicated severance tax revenues to fund water,

wastewater, and economic development projects 2027 2.00%-7.625% 123,792

Total $ 2,057,062

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Future amounts required to pay principal and interest on general obligation bonds at June 30, 2021, were as follows (expressed in thousands):

Year Ending June 30 Principal Interest Total

2022 $ 48,530 $ 82,853 $ 131,383

2023 66,431 80,298 146,729

2024 72,084 77,065 149,149

2025 78,150 73,450 151,600

2026 58,885 69,672 128,557

2027-2031 284,165 306,615 590,780

2032-2036 347,600 230,418 578,018

2037-2041 444,830 133,177 578,007

2042-2046 295,325 25,870 321,195

Total 1,696,000 1,079,418 2,775,418

Premium 313,890 — 313,890

Total $ 2,009,890 $ 1,079,418 $ 3,089,308

Capital Appreciation Bonds

Year Ending June 30

Principal, Net of

Accreted Amounts

Future Accreted Amounts Total

2022 $ 8,568 $ 157 $ 8,725

2023 8,092 608 8,700

2024 8,282 1,118 9,400

2025 7,844 1,556 9,400

2026 7,312 1,939 9,251

2027-2031 7,074 2,375 9,449

Total $ 47,172 $ 7,753 $ 54,925

Total General Obligation Bonds $ 2,057,062

Revenue Bonds – Revenue bonds are issued by various state departments, agencies and authorities, and economic development projects. Revenue bonds are issued pursuant to specific statutory provisions enacted by the Legislature primarily for the purpose of financing capital construction. Principal and interest payments are made from specifically dedicated fees and other revenues. Revenue bonds do not constitute a general obligation of the State.

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Revenue bonds outstanding (including premium or discount) at June 30, 2021, were as follows (expressed in thousands):

Issue Date

Final Maturity

Date Interest

Rate(s) % Balance

Transportation 2019 2043 5.00 $ 283,998

Economic Development Project Fund 2004 2027 1.20-6.07 84,570

Economic Development Project Fund DNR 2018 2038 1.20-6.07 26,365

Economic Development DNR Parks Projects 2019 2039 1.20-6.07 59,824

Education, Arts, Sciences, and Tourism Fund 2010/2018 2040 2.00-5.00 141,668

Subtotal Governmental 596,425

WV Infrastructure and Jobs Development Council 2006-2016 2046 2.00-5.00 158,655

Total Governmental and Business-Type Activities $ 755,080

Future amounts required to pay principal and interest on revenue bonds at June 30, 2021 were as follows (expressed in thousands):

Year Ending June 30 Principal Interest Total

2022 $ 47,075 $ 32,912 $ 79,987

2023 49,570 30,380 79,950

2024 52,155 27,715 79,870

2025 54,915 24,927 79,842

2026 57,615 22,009 79,624

2027-2031 213,520 71,370 284,890

2032-2036 126,430 32,165 158,595

2037-2041 74,565 9,233 83,798

2042-2046 7,175 763 7,938

683,020 251,474 934,494

Premium 72,060 — 72,060

Total $ 755,080 $ 251,474 $ 1,006,554

Certain revenue bonds have call provisions providing for redemption at the option of the State, beginning ten years following the date of issuance, in whole or in part, in inverse order of maturity, and pay a redemption price not exceeding 103% of par value.

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The following describes the purpose and dedicated revenue source of revenue bonds outstanding at June 30, 2021:

Agency Purpose Revenue Source

Transportation Highway, road, and bridge construction Federal reimbursement allowed by Title 23, Section 122

Economic Development Project Fund

To provide grants for various economic development projects

Certain net profits of the West Virginia Lottery

Education, Arts, Sciences, and Tourism Fund

Capital projects which promote education, arts, sciences, and tourism

Certain net profits of the West Virginia Lottery

WV Infrastructure and Jobs Development Council

To fund water and sewer infrastructure projects

Certain repayments of defined loans

The Division of Highways

The Division of Highways has been authorized to issue revenue bonds in the amount of $500 million by constitutional amendment. The Division has issued $352 million, and paid off $105.3 million, leaving $272.6 million in bonds authorized but not issued. The revenue notes are secured by pledged receipts of eligible Federal Highway Administration (FHWA) funds received by the Division, representing reimbursement of the costs incurred in connection with the federal-aid projects financed by Surface Transportation Improvements Special Obligation Notes, GARVEE revenue notes.

Economic Development Project Fund

The Economic Development Project Fund bonds, issued by EDA in FY 2004 in the amount of $249.9 million to provide financing for various economic development project grants, are payable through 2029. The State has committed to appropriate each year, from the West Virginia Lottery net profits, amounts sufficient to cover the principal and interest requirements on the EDA debt. EDA has pledged these revenues as the sole security for the bonds. Total principal and interest remaining on the debt is $84.8 million with annual requirements ranging from $19 million in FY 2021 to $7.1 million in the final year. For the current year, principal and interest paid were $18.9 million and the net profits of the Lottery committed to the debt were $19 million.

Economic Development DNR

In FY 2018, the EDA issued bonds in conjunction with the Division of Natural Resources. These bonds are primarily payable from money transferred from the State Excess Lottery Revenue fund. The funds will be used to acquire land and build and maintain the newly created Cacapon Resort State Park. The initial bond of $22.9 million was issued at 3.23% interest, and the maintenance reserve bond of $2 million was issued at 2.03% interest. Both bonds mature in June 2040.

In FY 2019, the EDA issued $55.2 million in bonds in conjunction with the Division of Natural Resources for state park projects. The funds will be used for capital improvement projects at any state park. The bonds are payable solely from the special revenue fund named the “State Parks Lottery Revenue Debt Service Fund” within the State Treasury. The bonds bear interest at 3.125% to 5.00% and are payable through 2040.

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EAST Fund

New Education, Arts, Sciences, and Tourism Fund (EAST) bonds were issued by the EDA in FY 2018 in the amount of $142.6 million to provide financing for capital projects which promote education and tourism, payable through 2040. The State has committed to appropriate each year, from the Lottery’s net profits, amounts sufficient to cover the principal and interest requirements on the EDA debt. EDA has pledged these revenues as the sole security for the bonds. Total principal and interest remaining on the debt is $129.6 million. For the current year, principal and interest paid were $10 million, and the net profits of the Lottery committed to the debt were $10 million.

Direct Placements & Direct Borrowings

Revenue Bonds

The following describes the purpose and dedicated revenue source of direct placement revenue bonds outstanding at June 30, 2021:

Agency Purpose Revenue Source

Tobacco Settlement Finance Authority

To issue bonds to receive lump sum in lieu of future annual payments from MSA

100% of receipts from Tobacco MSA until bonds are paid

Tobacco Settlement Finance Authority

The Taxable Tobacco Settlement Asset-Backed Bonds, Series 2007 are composed of two series of turbo term bonds, the Taxable Tobacco Settlement Asset-Backed Bonds, Series 2007A, which are current interest bonds issued in the amount of $845.8 million, and the Taxable Tobacco Settlement Asset-Backed Bonds, Series 2007B, which are capital appreciation bonds in the amount of $65.3 million. The Series 2007 Bonds are direct placement bonds and are secured by and are payable solely from the right, title, and interest of the TSFA of 100% of the Tobacco Receipts, and investment earnings on the accounts with the trustee under the Indenture. These were partially defeased in 2021 leaving only $130.7 million of the Asset- Backed Bonds Series 2007B.

On October 28, 2020, the Authority issued Taxable Tobacco Settlement Asset-Backed Refunding Bonds, Series 2020 Senior Bonds, consisting of $528.3 million Series 2020A (Fixed Amortization Serial/Term bonds) Class 1 Senior Current Interest Bonds as Class 1 Senior Bonds to fully refund $612.3 million of the Taxable Tobacco Settlement Asset-Backed Bonds, Series 2007A through redemption and defeasance and partially refund $738 million of the Series 2007B through payment of the purchase price thereof and cancellation. The proceeds were also used to establish Maintenance Reserve Accounts to comply with the bond covenants in the amount of $42.9 million. Bond issuance costs for this refunding were $5.3 million.

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Direct placement revenue bonds outstanding at June 30, 2021, were as follows (expressed in thousands):

Issue Date

Maturity Date

Interest Rate(s)% Balance

Tobacco Settlement Finance Authority 2007 2040 7.47-8.50 $ 130,714

Tobacco Settlement Finance Authority 2020 2053 7.47-8.50 $ 653,225

$ 783,939

Future amounts required to pay principal and interest on direct placement revenue bonds at June 30, 2021, were as follows (expressed in thousands):

Year Ending June 30 Principal Interest Total

2022 $ 19,515 $ 22,918 $ 42,433

2023 18,405 22,733 41,138

2024 18,320 22,514 40,834

2025 17,770 22,240 40,010

2026 17,815 21,947 39,762

2027-2031 91,480 103,913 195,393

2032-2036 128,525 89,627 218,152

2037-2041 96,405 67,491 163,896

2042-2046 88,590 48,037 136,627

2047-2051 156,400 19,692 176,092

$ 653,225 $ 441,112 $ 1,094,337

Premium — — —

Total $ 653,225 $ 441,112 $ 1,094,337

Capital Appreciation Bond

Year Ending June 30

Principal, Net of

Accreted Amounts

Future Accreted Amounts Total

2022 $ — $ 11,350 $ 11,350

2023 — 12,329 12,329

2024 — 13,411 13,411

2025 — 14,560 14,560

2026 — 15,836 15,836

2027-2031 — 102,310 102,310

2032-2036 — 155,133 155,133

2037-2041 — 235,210 235,210

2042-2046 356,635 356,635

2047-2051 130,714 90,937 221,651

Total $ 130,714 $ 1,007,711 $ 1,138,425

Total Revenue Bonds $ 783,939

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Notes Payable – Notes payable are a direct borrowing issued by Information Services and Communications and Travel Management internal service funds for financing various equipment and vehicles.

The outstanding notes from direct borrowings contain a provision that in an event of default, the note is terminated, and the owner make retake possession of the equipment and vehicles. The note is immediately declared due and payable and will proceed to court action to recover the value of the amount due.

Direct Borrowings

Final Maturity

Date Interest Rate(s)% Balance

Travel Management 2017-2021 0.99-2.65 18,958

Total Notes Payable $ 18,958

Future amounts required to pay principal and interest on direct borrowings notes payable at June 30, 2021, were as follows (expressed in thousands):

Notes from Direct Borrowings

Year Ending June 30 Principal Interest Total

2022 $ 8,002 $ 217 $ 8,219

2023 6,195 102 6,297

2024 3,628 29 3,657

2025 1,133 4 1,137

Total Notes Payable $ 18,958 $ 352 $ 19,310

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Discretely Presented Component Units Summary of Discretely Presented Component Unit Debt (Expressed in Thousands)

Balance June 30,

2020 Additions/

Debt Issued Reductions/ Debt Paid

Other Changes

Balance June 30,

2021

Amount Due

Within One Year

Revenue Bonds:

Housing Development Fund $ 333,040 $ 74,940 $ (26,785) $ (68,660) $ 312,535 $ 22,285

Parkways Authority 174,915 421,701 (2,785) — 593,831 8,940

Water Development Authority 154,866 — (8,912) — 145,954 9,207

Higher Education 1,377,595 94,143 (72,847) — 1,398,891 115,777

Corrections and Rehabilitation 8,420 — (8,420) — — —

School Building Authority 374,150 — (16,593) — 357,557 15,840

Total Discretely Presented

Component Unit Revenue Bonds $ 2,422,986 $ 590,784 $ (136,342) $ (68,660) $ 2,808,768 $ 172,049

Capital Leases:

Higher Education $ 95,828 $ 1,550 $ (25,438) $ — $ 71,940 $ 3,420

Direct Borrowings & Direct Placements Revenue Bonds:

Economic Development Authority $ 209,730 $ — $ (18,545) $ — $ 191,185 $ 19,296

Water Development Authority 7,219 — (344) — 6,875 356

Total Discretely Presented Component Units Direct Borrowings & Direct Placements Revenue Bonds $ 216,949 $ — $ (18,889) $ — $ 198,060 $ 19,652

Notes Payable:

Housing Development Fund $ 507 $ — $ (121) $ — 386 $ —

Economic Development Authority 2,945 — (872) — 2,073 195

Correction and Rehabilitation 9,785 — (1,020) — 8,765 1,044

Water Development Authority 4,111 1,645 — — 5,756 —

Higher Education 97,922 43,297 (10,464) — 130,755 6,577

Total Discretely Presented Component

Notes Payable $ 115,270 $ 44,942 $ (12,477) $ — 147,735 $ 7,816

Other Debt-Related Items:

Accrued and Other $ 441,585 $ 22,899 $ (4,739) $ — $ 459,745 $ 342,047

Compensated Absences 73,429 3,572 (2,856) — 74,145 57,534

Net Pension Liability (see Note 12) 38,067 63,040 (22,703) — 78,404 —

Other Postemployment Benefits 269,614 13,536 (211,413) — 71,737 —

Total Discretely Presented Component Unit Other Items $ 822,695 $ 103,047 $ (241,711) $ — $ 684,031 $ 399,581

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Revenue Bonds – Revenue bonds are issued by various component units pursuant to specific statutory provisions enacted by the Legislature for the purpose of financing capital construction. Principal and interest payments are made from specifically dedicated fees and other revenue sources, such as tuition and registration fees, dedicated court fees, and certain non-toll revenues. Revenue bonds do not constitute general debt of the State (expressed in thousands):

Issue Date

Final Maturity

Date Interest Rate(s)% Balance

Housing Development Fund 2007-2019 2050 1.05-4.35 $ 312,535

Parkways Authority 2002-2018 2048 3.75-5.25 593,831

Water Development Authority 2005-2016 2044 2.00-5.125 145,954

Higher Education 1998-2016 2045 0.58-7.65 1,398,891

Corrections and Rehabilitation 1998 2021 5.12-5.35 —

School Building Authority 2007-2016 2032 2.00-6.92 357,557

Total Revenue Bonds $ 2,808,768

Future amounts required to pay principal and interest on revenue bonds of the discretely presented component units at June 30, 2021, were as follows (expressed in thousands):

Year Ending June 30 Principal Interest Total

2022 $ 171,337 $ 95,303 $ 266,640

2023 103,374 92,648 196,022

2024 133,199 89,895 223,094

2025 111,241 86,286 197,527

2026 161,579 82,513 244,092

2027-2031 622,414 350,905 973,319

2032-2036 426,765 228,794 655,559

2037-2041 385,690 148,397 534,087

2042-2046 350,604 69,204 419,808

2047-2051 161,090 17,264 178,354

2052-2056 220 3 223

2,627,513 1,261,212 3,888,725

Discount (745) — (745)

Premium 182,000 — 182,000

Total $ 2,808,768 $ 1,261,212 $ 4,069,980

Parkways Authority

In August 2018, the Authority issued $166.4 million Series Lien Turnpike Toll Revenue Bonds at 3.75% to 5.00% due in varying installments from June 2019 to June 2048.

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Direct Borrowing & Direct Placements

Revenue Bonds – Direct placement revenue bonds are issued by various component units listed below pursuant to specific statutory provisions enacted by the Legislature for the purpose of financing capital construction. Principal and interest payments are made from specifically dedicated fees and other revenue sources, such as mortgage loan repayments.

Revenue bonds do not constitute general debt of the State (expressed in thousands):

Issue Date

Final Maturity

Date Interest Rate(s)% Balance

Economic Development Authority 1999-2016 2040 2.07-5.23 $ 191,185

Water Development Authority 2005-2016 2044 2.00-5.125 6,875

Total Revenue Bonds $ 198,060

Future amounts required to pay principal and interest on direct placement revenue bonds of the discretely presented component units at June 30, 2021, were as follows (expressed in thousands):

Year Ending June 30 Principal Interest Total

2022 $ 19,652 $ 8,646 $ 28,298

2023 19,237 7,888 27,125

2024 17,168 7,238 24,406

2025 17,932 6,356 24,288

2026 18,628 5,501 24,129

2027-2031 69,411 14,693 84,104

2032-2036 21,747 5,438 27,185

2037-2041 14,285 1,456 15,741

Total $ 198,060 $ 57,216 $ 255,276

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Notes Payable – Direct Borrowings

Notes payable are issued for various reasons, including construction and the purchase of land, buildings, and vehicles. The Housing Development Fund (HDF) has a partnership with the DEP that allows HDF to borrow funds from the DEP that are then loaned to state residents to upgrade, replace, or repair inadequate septic systems. For detailed information on specific notes, see the separately issued financial statements of the discretely presented component units.

The following is a summary of notes payable at June 30, 2021 (expressed in thousands):

Issue Date

Final Maturity

Date Interest Rate(s)% Balance

Economic Development Authority 2007 & 2017 2029 3.00 $ 2,073

Water Development Authority 2019 2022 2.24 5,756

Higher Education 2008-2014 2033 1.90-6.65 130,755

Housing Development Fund 2008-2014 N/A 0.00 386

Division of Corrections & Rehabilitation 2015 2020 1.23 8,765

Total Notes Payable $ 147,735

Future amounts required to pay principal and interest on direct borrowings notes payable of the discretely presented component units at June 30, 2021, were as follows (expressed in thousands):

Year Ending June 30 Principal Interest Total

2022 $ 7,816 $ 3,262 $ 11,078

2023 11,682 3,413 15,095

2024 8,328 3,227 11,555

2025 5,687 3,053 8,740

2026 5,613 2,910 8,523

2027-2031 42,349 12,494 54,843

2032-2036 18,626 9,721 28,347

2037-2041 15,809 7,260 23,069

2042-2046 11,213 5,407 16,620

2047-2051 7,689 3,801 11,490

2052-2056 9,601 1,889 11,490

2057-2061 3,322 126 3,448

Total $ 147,735 $ 56,563 $ 204,298

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Debt Contingencies and No-Commitment Debt

As a vehicle to assist the local and other nonstate governments in West Virginia, the State may appropriate sufficient amounts to meet any deficiencies that may arise because of failures by such entities to provide for debt service payments for obligations under the supervision and control of the Municipal Bond Commission. For the year ended June 30, 2021, no such amounts were transferred to the Municipal Bond Commission under this agreement.

The Hospital Finance Authority (HFA) and the Economic Development Authority (EDA) have issued special limited obligations on behalf of third parties that in no way obligate the State, HFA, or EDA for these debt issuances, unless these entities or the State serve in a third-party role. The obligations become an obligation of the third party when issued because all rights to payments and/or obligations have been irrevocably assigned to a trustee. Payments are made directly to the trustee from dedicated revenues of the third parties, in accordance with the related bond indentures. The amount of such no-commitment debt outstanding at June 30, 2021, is approximately $2.8 billion and $3.9 billion for HFA and EDA, respectively.

Prior Defeasances

In prior years, the State defeased certain revenue bonds by placing the proceeds of new bonds in irrevocable trusts to provide for all future debt service payment on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in these financial statements. At June 30, 2021, the following outstanding bonds are considered defeased (expressed in thousands):

Outstanding Amount Primary Government $ 701,030 Discretely Presented Component Units 20,630 Total $ 721,660

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NOTE 11

LEASES

The State has entered into various lease/purchase agreements with the private sector, primarily for buildings, equipment, and intangibles. These agreements, accounted for as capital leases, are for various terms. While most of these agreements contain fiscal funding clauses indicating that their continuation is subject to continuing appropriation by the Legislature, these leases are accounted for as capital leases and are considered noncancelable for financial reporting purposes.

The State has also entered into lease/purchase agreements with the Economic Development Authority (EDA), which issued bonds to finance construction and acquisition of various capital assets as well as an energy savings project. The State becomes the tenant of the facility under a lease/purchase agreement, which provides for the payment of rentals sufficient to cover the related bond debt service and for the passage of title to the State after the bonds have been repaid. These capital leases, totaling $197 million, are shown separately on the government-wide Statement of Net Position as capital leases payable to component units. More information on the related debt of EDA is included in Note 10.

GAAP requires a lease that transfers substantially all of the benefits and risks of ownership to the lessee to be accounted for as the acquisition of a capital asset and the incurrence of an obligation by the lessee. For capital leases in governmental funds, other financing sources are recorded at lease inception. Lease payments are recorded as debt service expenditures. For budgetary purposes, lease payments are only reported as expenditures when paid. In the government-wide and proprietary fund statements, assets and liabilities resulting from capital leases are recorded at lease inception.

The following table is an analysis of the capital leases, including capital leases between the primary government and the EDA described above, by asset category at June 30, 2021 (expressed in thousands):

Primary Government Governmental Activities

Asset Type Assets Acquired By Capital Lease

Accumulated Depreciation

Land $ 2,362 $ 2,362

Buildings and Improvements 401,852 153,347

Infrastructure 1,175 1,175

Total $ 405,389 $ 156,884

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Future minimum commitments under capital leases as of June 30, 2021, were as follows (expressed in thousands):

Capital Leases

Year Ending June 30

Governmental Activities, Including Payable to EDA

Discretely Presented

Component Units Total

2022 $ 28,611 $ 7,034 $ 35,645

2023 27,403 6,063 33,466

2024 24,657 6,073 30,730

2025 23,114 5,132 28,246

2026 24,398 4,641 29,039

2027-2031 85,461 19,476 104,937

2032-2036 27,134 18,555 45,689

2037-2041 15,825 18,341 34,166

2042-2046 — 19,566 19,566

2047-2051 — 23,137 23,137

2052-2056 — 14,754 14,754

Total Minimum Lease Payments 256,603 — 142,772 399,375

Less: Interest (57,164) (70,832) (127,996)

Present Value of Future Minimum Lease Payments $ 199,439 $ 71,940 $ 271,379

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Other leases, principally for equipment, are classified as operating leases with the lease payments recorded as expenditures or expenses during the life of the lease. Operating lease expenditure/expense for the year ended June 30, 2021, was $43 million. Future minimum commitments under operating leases as of June 30, 2021, were as follows (expressed in thousands):

Operating Leases

Year Ending June 30

Governmental Activities

Business-type Activities

Discretely Presented

Component Units Total

2022 $ 18,960 $ — $ 15,904 $ 34,864

2023 15,523 — 11,970 27,493

2024 11,892 — 9,095 20,987

2025 8,968 — 7,173 16,141

2026 7,071 — 5,303 12,374

2027-2031 15,835 — 18,963 34,798

2032-2036 5,259 — 5,630 10,889

2037-2041 1,931 — 5,217 7,148

2042-2046 — — 4,255 4,255

2047-2051 — — 4,255 4,255

2052-2056 — — 4,255 4,255

2057-2061 — — 2,765 2,765

Total Minimum Lease Payments $ 85,439 $ — $ 94,785 $ 180,224

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NOTE 12

RETIREMENT SYSTEMS

Plan Description

The West Virginia State Legislature has established nine defined benefit plans (the Plans) and a defined contribution plan to provide retirement benefits for eligible employees. The Plans are a group of defined benefit public employee retirement systems. The Consolidated Public Retirement Board (CPRB) administers the Plans under the direction of its Board of Trustees. The Governmental Employees Deferred Compensation Plan is administered by a third-party administrator and has been excluded from these financial statements in accordance with Governmental Accounting Standards Board (GASB) Statement No. 32, “Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans.”

CPRB prepares separately issued financial statements covering the retirement systems, which can be obtained from the Consolidated Public Retirement Board, 4101 MacCorkle Avenue, SE, Charleston, WV 25304 or http://www.wvretirement.com. The Plans’ financial statements are prepared using fund accounting principles and the accrual basis of accounting, under which expenses are recorded when liabilities are incurred and revenues are recorded in the accounting period in which they are earned and become measurable. The Plans’ fiduciary net position has been determined on the same basis used by the pension plan. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan. Investments are carried at fair value as determined by a third-party pricing service utilized by the respective investment management companies. Investment transactions are accounted for on a trade-date basis. Unrealized gains and losses are included in investment income. Investment income is determined monthly and distributed to each of the defined benefit plans participating in the investment pools on the last day of the month in the form of reinvested shares.

The Plans are comprised of the following groups of defined benefit plans which provide substantially all employees of the State, its public education system, and other political subdivisions of the State with retirement and death and disability benefits:

• The Public Employees Retirement System (PERS) is a multiple-employer, cost-sharing, public employee retirement system. The number of local government employers participating in PERS at June 30, 2021, was 634, including 121 West Virginia state agencies, 100 cities and towns, 358 special districts, and 55 counties.

Benefits Provided

For PERS, a member is eligible for normal retirement at age 60 with five or more years of service, or at least age 55 with age and service equal to 80 or greater. A member may retire with the pension reduced actuarially if the member is at least age 55 and has at least ten years of contributory service or at any age with 30 years of contributory service. A member hired after July 1, 2015, may retire with the pension reduced actuarially if the member is between ages 60 and 62 with at least 30 years of contributory service. The straight-life annuity retirement benefit is equivalent to 2% of average salary multiplied by years of

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service. Average salary is the average of the three consecutive highest annual earnings out of the last 15 years of earnings. For all employees hired after July 1, 2015, average salary is the average of the five consecutive highest annual earnings out of the last 15 years of earnings. Terminated members with at least five years of contributory service who do not withdraw their accumulated contributions may elect to receive their retirement annuity beginning at age 62. For all employees hired after July 1, 2015, this age increases to 64 with at least ten years of contributory service, or age 63 with at least 20 years of contributory service.

• The Deputy Sheriffs’ Retirement System (DSRS) is a multiple-employer, cost-sharing, public employee retirement system which was established for all deputy sheriffs hired on or after July 1, 1998. Current employees were eligible to transfer from PERS. The State makes no employer contributions to DSRS.

• The Emergency Medical Services Retirement System (EMSRS) is a multiple-employer, cost-sharing public employee retirement system which was established for eligible emergency medical service officers. Participation is voluntary. The State makes no employer contributions to EMSRS.

• The Municipal Police Officers and Firefighters Retirement System (MPFRS) is a multiple-employer, cost-sharing public employee retirement system which was established for any municipality or municipal subdivision employing municipal police officers or firefighters. Participation is voluntary. The MPFRS had 595 participating members as of June 30, 2021. The State makes no employer contributions to MPFRS.

• The Natural Resources Police Officers Retirement System (NRPORS) is a single- employer defined benefit public employee retirement system which was established for all natural resources police officers hired by the West Virginia Division of Natural Resources (DNR) on or after January 2, 2021. This plan was also made available to any natural resources police officers employed in covered employment participating in PERS on the effective date. Approximately 115 natural resources police officers elected to participate and were transferred from the PERS plan.

• The Teachers’ Retirement System (TRS) is a multiple-employer, cost-sharing, public employee retirement system. Fifty-five county public school systems, certain personnel of the thirteen State-supported institutions of higher education, West Virginia Department of Education, and boards of higher education participate in the TRS plan. There were 81 employers and one nonemployer contributing entity (the State) participating in the plan as of June 30, 2021.

Benefits Provided

For TRS, a member is eligible for normal retirement at age 60 with 5 years of service, age 55 with 30 years of service, or any age with 35 years of service. A member may retire with the pension reduced actuarially if the member is less than age 55 and has between 30 and 35 years of service. For all employees hired after July 1, 2015, qualification for normal retirement is age 62 with 10 years of service. All members hired after July 1, 2015, may retire with the pension reduced actuarially if the member is between ages 60 and 62 with 10 years of service or between ages 55 and 62 with 30 years of service. Terminated members with at least 5, but less than 20, years of credited service who do not withdraw

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their accumulated contributions are entitled to a deferred retirement beginning at age 62. Terminated members with at least 20 years of credited service who do not withdraw their accumulated contributions are entitled to a deferred retirement commencing at age 60. For all employees hired after July 1, 2015, this age increases to 64 with 10 years of service, or age 63 with 20 years of service. Retirement benefits are equivalent to 2% of average annual salary multiplied by years of service. Average salary is the average of the five highest fiscal years of earnings during the last 15 fiscal years of earnings.

• The State Police Death, Disability, and Retirement System (SPDDRS), the State Police Retirement System (SPRS), and the Judges’ Retirement System (JRS) are single- employer, public employee retirement systems.

Benefits Provided

For SPDDRS, a member is eligible for normal retirement at age 50 after 20 years of contributory service, or at any age upon completion of 25 years of service. There is no vesting in the State’s contributions prior to ten years of service. Benefits payable to members retiring prior to age 50 are deferred until the normal retirement date. The annual retirement benefit is 5.5% of the members’ aggregate salary, but not less than $6,000 per year. Total service-related disability benefits are equal to the member’s annual salary, but not less than $15,000 per year. Aggregate salary may include up to five years of active military service credited at the average departmental salary. Aggregate salary for purposes of determining disability benefits may include salary that would have been earned had the participant served at least 25 years. An annual cost of living adjustment of 3.75% is granted to retirees and beneficiaries. For service-connected total disability retirees, the adjustment begins at age 65.

For SPRS, a member is eligible for normal retirement at age 50 with 25 years of service or age 52 with 20 years of credited service. A member retiring before age 52 with 20 years of credited service is eligible for a reduced benefit. The annual regular retirement benefit is equal to 2.75% of the final average salary multiplied by the years of service. Final average salary is the average of the five highest calendar years of earnings during the last ten years of earnings. Annual retirement annuity adjustments are 1% for regular retirement and are payable on July 1 of each year after the member reaches 63 years of age.

For JRS, members who were elected or appointed to the bench prior to July 2, 2005, are eligible for normal retirement after reaching 24 years of service, of which at least 12 years were as a sitting judge or justice, 16 years of service at age 65, of which at least 12 years were as a sitting judge or justice, or 8 full years of service at age 65. A member who was appointed or elected to the bench on or after July 2, 2005, is eligible for normal retirement upon the attainment of 24 years of service, of which at least 14 years were as a sitting judge or justice, or 16 years of service at age 65, of which 14 years were as a sitting judge or justice. A member on the bench prior to July 2, 2005, is eligible for a deferred benefit upon termination of service prior to normal retirement, provided the member completes 16 years of service, of which 12 years of service were as a sitting judge or justice. A member of the bench on or after July 2, 2005, is eligible for a deferred benefit upon termination of service prior to normal retirement, provided the member completes 16 years of service, of which 14 years of service were as a sitting judge or justice.

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Plan membership consisted of the following as of the plan valuation date, June 30, 2021:

SPDDRS SPRS JRS

Retirees and beneficiaries currently receiving benefits 759 59 59

Terminated members entitled to benefits but not yet receiving them 3 17 2

Terminated nonvested members 1 134 —

Active members 4 626 77

Total 767 836 138

Basis of Accounting

The CPRB is included in the fiduciary funds financial statements. Accordingly, the pension fund financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting. Member contributions are recognized in the period when contributions are due. Employer contributions are recognized when due and the employer has made a formal commitment to provide contributions. Benefits and refunds are recognized when due and payable in accordance with the terms of each system. The internal service fund financial statements have also been prepared using the economic resources measurement focus and the accrual basis of accounting. Operating revenues and expenses generally result from fees charged in connection with the operation of the plans. The Board’s assets are held primarily in accounts maintained by the State Treasurer, the West Virginia Investment Management Board, and the third-party administrator of its defined contribution system.

Funding Policy

Funding policies for all the Plans have been established and changed from time to time by action of the State Legislature. Actuarial valuations are performed to assist the Legislature in determining appropriate contribution rates. As a condition of participation in the Plans, employers and/or employees are required to contribute certain percentages of salaries and wages as authorized by statute and specified by CPRB. The following schedule summarizes each defined benefit plan’s required contribution rates at June 30, 2021:

Statutory Contribution Rates as a Percent of Covered Payroll

System Member Employer

PERS 4.5% - 6.0% 10.0% TRS 6.0% 15.0% State

15.0% Counties SPDDRS 9.0% 15.0% SPRS 12.0% 23.0% JRS 7.0% Appropriated by the Legislature

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The State’s required and actual contributions for the year ended June 30, 2021, were (expressed in thousands):

System Actual

Contribution PERS $ 107,612 TRS 394,053 SPDDRS 16,699 SPRS 7,928 JRS 886

Special Funding Situation

The State is a non-employer contributing entity that provides funding through the School Aid Formula (SAF) to subsidize employer contributions of county boards of education and to fund the unfunded liability of TRS for all participating employers. These amounts qualify as a special funding situation in accordance with GASB 68. The State assumes a share of the net pension liability on behalf of the various county boards of education for contributions related to the SAF. The State also assumes a share of the net pension liability on behalf of all participating employers for contributions related to funding of the non-employer contributing entity unfunded liability. The State reports a liability, deferred outflow of resources and deferred inflow of resources, and expense as a result of its requirement to contribute to the TRS plan.

The State Supreme Court has required the State to fund the TRS in an actuarially sound manner to eliminate the unfunded liability over a 40-year period beginning on July 1, 1994, and to meet the cash flow requirements of the TRS in fulfilling its future anticipated obligations to its members. The State Supreme Court has further ordered the State, through the Governor, to require the appropriate funding should the State Legislature fail to do so. Since this ruling, the Legislature has supplemented the funding of the TRS to meet this special funding situation requirement in the amount of $283,332,000 for FY 2020, which is exclusive of the SAF appropriation.

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Pension Assets, Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions

The State’s net pension asset (liability), deferred outflows of resources, deferred inflows of resources and pension expense relating to the governmental, business-type, fiduciary, and component units’ activities for the PERS plan, governmental and component units’ activities for the TRS plan, and governmental activities for the single employer plans are as follows for June 30, 2021 (expressed in thousands):

Description Governmental

Activities Business-type

Activities Fiduciary

Discretely Presented

Component Units Total

Net Pension Asset $ 99,169 $ — $ — $ — $ 99,169

Net Pension Liability (3,447,374) (2,714) (305) (78,404) (3,528,797)

Deferred Outflows of Resources 1,166,799 2,184 249 62,088 1,231,320

Deferred Inflows of Resources (283,694) (218) (21) (16,559) (300,492)

Pension Expense 419,819 725 76 19,448 440,068

Refer to pages 162-163 for amounts reported for the PERS cost-sharing plan as it relates to governmental activities, business-type activities, fiduciary funds, and component units. Refer to page 165 for amounts reported for the TRS cost-sharing plan as it relates to governmental activities and component units. Refer to page 167 for amounts reported for the single-employer plans as they relate to governmental activities.

At June 30, 2021, the State reported a net pension liability of $3,401,951,000 for its proportionate share of the multiple-employer, cost-sharing plans, which were measured as of June 30, 2020. The total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019, rolled forward to the measurement date of June 30, 2020. The pension liability, deferred outflows of resources and deferred inflows of resources related to pension, and pension expense are allocated to the internal service funds of the State. The State’s proportionate share of the net pension liability for the PERS and TRS was based on the State’s share of contributions to the pension plan relative to the contributions of all employers participating in PERS and TRS for the year ended June 30, 2020.

The State’s share of the net pension liabilities for the PERS and TRS plans determined by the actuarial valuation as of June 30, 2019, was $145,121,000 (67.49%) and $2,806,820,000, including a special funding situation (94.34%), respectively, along with various assumptions. At June 30, 2020, the State’s share of the net pension liability for the PERS and TRS plans was $360,808,000 (68.25%) and $3,041,143,000, including a special funding situation (94.43%), respectively. The State’s share for FY 2020 has increased by 0.76% for the PERS and increased by 0.09% for the TRS plan, which results in a change in net pension liability of $215,687,000 and $234,323,000 related to PERS and TRS, respectively.

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The State’s amounts for net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense were allocated to the governmental, business-type, fiduciary, and component units’ activities based on each reporting unit’s share of the State’s employer contributions to the PERS and TRS plans. The pension-related amounts for primary government, fiduciary, and component units are as follows:

PERS (expressed in thousands):

Governmental Activities

Water Pollution Infrastructure

Proportionate share of statewide amount 80.77 % 0.11 % 0.04 %

Net pension liability $ (291,566) $ (397) $ (133)

Pension expense 70,019 110 45

Deferred outflows of resources representing contributions subsequent to the measurement date 86,570 114 42

Deferred outflows of resources representing the changes in employer proportion 6,487 3 8

Deferred outflows of resources representing difference between expected and actual experience 42,798 58 19

Net deferred outflows of resources representing the difference between projected/actual earnings on investments 91,011 126 42

Deferred inflows of resources representing the changes in employer proportion (4,535) (9) (4)

Deferred inflows of resources representing change in assumptions (12,814) (17) (6)

Deferred inflows of resources representing the difference between expected and actual experience (5,994) (8) (3)

Amortization of applicable deferred amounts in current period 116,954 152 56

Amortization of applicable deferred amounts in future periods:

2022 (10,568) (23) (2) 2022

2023 42,895 57 20

2024 52,172 73 23

2025 32,455 45 15

Sensitivity Analysis:

Net pension liability at 6.5% discount rate (742,527) (1,012) (338)

Net pension liability at 7.5% discount rate (291,430) (397) (133)

Net pension asset (liability) at 8.5% discount rate 89,980 123 41

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PEIA BRIM Nonmajor

Business-type Total

Business-type Fiduciary

Funds Component

Units Total

0.16 % 0.15 % 0.30 % 0.76 % 0.08 % 18.39 % 100 %

$ (566) $ (533) $ (1,085) $ (2,714) $ (305) $ (66,359) $ (360,944)

147 143 280 725 76 17,445 88,265

41 158 343 698 93 20,134 107,495

39 33 20 103 15 8,331 14,936

123 78 159 437 45 9,832 53,112

265 169 344 946 96 20,966 113,019

— — (29) (42) (1) (6,408) (10,986)

(37) (24) (47) (131) (14) (2,918) (15,877)

(1) (11) (22) (45) (6) (1,374) (7,419)

391 245 424 1,268 135 28,429 146,786

(26) (14) (50) (115) (12) (2,569) (13,264)

146 86 156 465 50 10,427 53,837

171 105 194 566 60 12,682 65,480

100 68 124 352 37 7,889 40,733

(1,442) (1,358) (2,765) (6,915) (777) (169,074) (919,293)

(566) (533) (1,085) (2,714) (305) (66,359) (360,808)

175 165 335 839 (94) 20,489 111,214

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Deferred outflows of resources and deferred inflows of resources related to the PERS pension were from the following sources (expressed in thousands):

Deferred Outflows

of Resources Deferred Inflows

of Resources

Net difference between projected and actual earnings on pension plan investments $ 113,019 $ —

Changes in proportion and difference between employer contributions and proportionate share of contributions 14,936 (10,986)

Difference between expected and actual experience 53,112 (7,419)

Change in assumptions — (15,876)

Contributions made subsequent to the measurement date 107,495 —

Total $ 288,562 $ (34,281)

Deferred outflows of resources of $107,495,000 related to pensions are the result of contributions made subsequent to the measurement date of June 30, 2020, and will be recognized as a reduction of the net pension liability in the subsequent fiscal year ending June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows (expressed in thousands):

Year Ending June 30 Amount

2022 $ (13,264)

2023 53,837

2024 65,480

2025 40,733

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TRS, including special funding situation (expressed in thousands):

Governmental Activities

Component Units Total

Proportionate share of statewide amount 99.61 % 0.39 % 100 %

Net pension liability $ (3,029,098) $ (12,045) $ (3,041,143)

Pension expense, net of interfund special funding situation 335,804 2,003 337,807

Deferred outflows of resources representing contributions subsequent to the measurement date 392,811 1,242 394,053

Deferred outflows of resources representing the changes in employer proportion 185,811 467 186,278

Deferred outflows of resources representing the net difference between expected and actual experience 69,610 348 69,958

Deferred outflows of resources representing difference in assumptions 42,683 169 42,852

Deferred outflows of resources representing net difference between projected and actual earnings on investments 183,532 599 184,131

Deferred inflows of resources representing the changes in employer proportion (177,905) (5,652) (183,557)

Deferred inflows of resources representing the net difference between expected and actual experience (66,522) (207) (66,729)

Amortization of applicable deferred amounts in current period 237,209 (4,276) 232,933

Amortization of applicable deferred amounts in future periods:

2022 4,542 (81) 4,461

2023 63,906 (1,151) 62,755

2024 86,241 (1,554) 84,687

2025 82,630 (1,489) 81,141

2026 (110) (1) (111)

Sensitivity Analysis:

Net pension liability at 6.50% discount rate (4,092,435) (16,271) (4,108,706)

Net pension liability at 7.50% discount rate (3,029,098) (12,045) (3,041,143)

Net pension liability at 8.50% discount rate (2,123,582) (8,443) (2,132,025)

Deferred outflows of resources and deferred inflows of resources related to the TRS pension plan were from the following sources (expressed in thousands):

Deferred Outflows of Resources

Deferred Inflows of Resources

Net difference between projected and actual earnings on pension plan investments $ 184,131 $ —

Changes in proportion and difference between employer and proportionate share of contributions 186,278 (183,557)

Difference in expected and actual experience 69,958 (66,729)

Difference in assumptions 42,852 —

Contributions made subsequent to the measurement date 394,053 —

Total $ 877,272 $ (250,286)

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Deferred outflows of resources of $394,053,000 related to pensions are the result of contributions made subsequent to the measurement date of June 30, 2020, and will be recognized as a reduction of the net pension liability in the subsequent fiscal year ending June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows (expressed in thousands):

Year Ending June 30, Amount

2022 $ 4,461

2023 62,755

2024 84,687

2025 81,141

2026 (111)

As of June 30, 2021, the State reported a net pension asset and a net pension liability of $99,169,000 and $126,710,000, respectively, for the single employer plans, which were measured as of June 30, 2020. The total pension liability used to calculate the net pension asset/liability was determined by an actuarial valuation as of June 30, 2019, rolled forward to the measurement date of June 30, 2020. The amounts for net pension asset, net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense were allocated to reporting units related to governmental activities based on each reporting unit’s employer contributions to the SPDDRS, SPRS, and JRS plans.

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Single Employer Plans (expressed in thousands):

SPRS SPDDRS JRS Total

Net pension asset/(liability) $ (28,569) $ (98,141) $ 99,169 $ (27,541)

Pension expense 8,230 14,794 (8,142) 14,882

Deferred outflows of resources representing contributions subsequent to the measurement date 7,928 16,699 886 25,513

Deferred outflows of resources representing the change in assumptions 6,356 — 389 6,745

Deferred outflows of resources representing the difference between expected and actual experience 7,609 — — 7,609

Deferred outflows of resources representing the net difference between projected and actual earnings on pension plan investments

4,973 16,077 4,569 25,619

Deferred inflows of resources representing the difference between expected and actual experience (5,440) — (10,485) (15,925)

Amortization of applicable deferred amounts in current period 13,498 16,077 (5,527) 24,048

Amortization of applicable deferred amounts in future periods:

2022 703 (3,523) (4,545) (7,365)

2023 3,040 5,531 (1,513) 7,058

2024 3,745 8,227 358 12,330

2025 3,214 5,842 723 9,779

2026-2028 2,796 — (550) 2,246

Sensitivity Analysis:

Net pension asset/(liability) 6.5% (70,340) (194,428) 86,443 (178,325)

Net pension asset/(liability) 7.5% (28,569) (98,141) 99,169 (27,541)

Net pension asset/(liability) 8.5% 4,975 (19,131) 109,972 95,816

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Changes in the Net Pension Liability (Asset) (Expressed in Thousands):

Increase (Decrease)

SPDDRS Total Pension Liability (a)

Plan Fiduciary Net Position (b)

Net Pension Liability (Asset)

(a) – (b)

Balance at 6/30/2019 $ 762,838 $ 689,820 $ 73,018

Changes for the year:

Service cost 153 — 153

Interest 55,378 — 55,378

Difference between expected and actual experience 4,601 — 4,601

Contributions – employer — 13,246 (13,246)

Contributions – employee — 35 (35)

Net investment income — 21,252 (21,252)

Benefit payments (49,225) (49,225) —

Administrative expense — (54) 54

Other changes — 530 (530)

Net changes 10,907 (14,216) 25,123

Balances at 6/30/2020 $ 773,745 $ 675,604 $ 98,141

Increase (Decrease)

SPRS Total Pension Liability (a)

Plan Fiduciary Net Position (b)

Net Pension Liability (Asset)

(a) – (b)

Balance at 6/30/2019 $ 218,293 $ 207,102 $ 11,191

Changes for the year:

Service cost 8,533 — 8,533

Interest 16,918 — 16,918

Difference between expected and actual experience 7,888 — 7,888

Contributions – employer — 4,850 (4,850)

Contributions – employee — 4,168 (4,168)

Net investment income — 7,010 (7,010)

Benefit payments (2,498) (2,498) —

Administrative expense — (67) 67

Net changes 30,841 13,463 17,378

Balances at 6/30/2020 $ 249,134 $ 220,565 $ 28,569

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Increase (Decrease)

JRS Total Pension Liability (a)

Plan Fiduciary Net Position (b)

Net Pension Liability (Asset)

(a) – (b)

Balance at 6/30/2019 $ 115,950 $ 212,653 $ (96,703)

Changes for the year:

Service cost 2,640 — 2,640

Interest 8,711 — 8,711

Difference between expected and actual experience (5,885) — (5,885)

Contributions – employer — 791 (791)

Contributions – employee — 301 (301)

Net investment income — 6,850 (6,850)

Benefit payments (4,897) (4,897) —

Administrative expense — (10) 10

Net changes 569 3,035 (2,466)

Balances at 6/30/2020 $ 116,519 $ 215,688 $ (99,169)

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Actuarial Methods and Assumptions

The total pension liabilities for financial reporting purposes were determined by an actuarial valuation as of July 1, 2019, rolled forward to June 30, 2020, using the actuarial assumptions and methods.

Significant assumptions used in the actuarial valuations are as follows:

PERS TRS SPDDRS

Actuarial cost method Entry age normal Entry age normal Entry age normal Asset valuation method 4-year, 25% level

smoothing of gain or (loss). Gain or (loss) is determined as the actual return on market value during the period less the expected return on the actuarial value of assets

4-year, 25% level smoothing of gain or (loss). Gain or (loss) is determined as the actual return on market value during the period less the expected return on the actuarial value of assets

Market value

Amortization method Level dollar, fixed period Level dollar, fixed period Level dollar, fixed period Amortization period Through FY 2035 Through FY 2034 Through FY 2025 Actuarial assumptions:

Investment rate of return 7.5% 7.5% 7.5% Projected salary increases:

PERS: State 3.1% – 5.3% — — Nonstate 3.35% – 6.5% — —

TRS: Teachers — 3.00% – 6.16% — Non-Teachers — 3.00% – 6.76% —

SPDDRS: — — 4% Inflation rate 3.0% 3.0% 3.0% Discount rate 7.5% 7.5% 7.5% Mortality rates Working Participants – 100% of

Pub-2010 general employees table, below-median, headcount-weighted, projected with scale MP-2018; retired males – 108% of Pub-2010 general retiree male table, below median, headcount- weighted, projected with scale MP-2018; retired females – 122% of Pub-2010 general retiree female table, below median, headcount- weighted, projected with scale MP-2018; disabled males – 118% of Pub-2010 general/teachers disabled male table, headcount- weighted, projected generationally with scale MP-2018; retired disabled females – 117% of Pub-2010 general/teachers disabled female table, headcount- weighted, projected generationally with scale MP-2018.

Actives – RP-2000 non-annuitant mortality table, projected with scale AA on a fully generational basis; retired healthy males – 97% of RP-2000 healthy annuitant table, projected with Scale AA on a fully generational basis; retired healthy females – 94% of RP-2000 healthy annuitant table, projected with Scale AA on a fully generational basis; retired disabled males – 96% of RP-2000 disabled annuitant table, projected with Scale AA on a fully generational basis; retired disabled females – 101% of RP-2000 disabled annuitant table, projected with Scale AA on a fully generational basis.

Actives – RP-2014 total employee mortality table, rolled back to 2006 and projected with Scale MP-2016 on a fully generational basis; retired healthy males – 103% of RP-2014 healthy annuitant mortality table, rolled back to 2006 and projected with Scale MP-2016 on a fully generational basis; retired healthy females – RP-2014 healthy annuitant mortality table, rolled back to 2006 and projected with Scale MP-2016 on a fully generational basis; disabled – RP-2014 disabled retiree mortality table, rolled back to 2006 and projected with Scale MP-2016 on a fully generational basis.

Withdrawal rates: State 2.28% - 45% Teachers: 1.6% - 35% 0.0% - 2.67%

Nonstate 2.5% - 35.9% Non-teachers: 2.3% - 23.51%

Disability rates 0.0% - 0.5% 0.0% - 0.6% .04% - 0.6%

Retirement rates 12% - 100% 0% - 100% 25% - 100%

Date range of most recent experience study 2013-2018 2014-2019 2011 - 2016

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SPRS JRS

Actuarial cost method Entry age normal Entry age normal Actuarial valuation method Market value Market value Amortization method Level dollar, fixed period Level dollar, fixed period Amortization period Through FY 2029 N/A Actuarial assumptions:

Investment rate of return 7.5% 7.5% Projected salary increases 4.0% 4.25% Inflation rate 3.0% 3.0% Discount rate 7.5% 7.5% Mortality rates Active –RP-2014 total employee

mortality table, rolled back to 2006 and projected with Scale MP-2016 on a fully generational basis; retired healthy males – 103% of RP-2014 healthy annuitant mortality table, rolled back to 2006 and projected with Scale MP-2016 on a fully generational basis; retired healthy females – 100% of RP-2014 healthy annuitant mortality table, rolled back to 2006 and projected with Scale MP-2016 on a fully generational basis; disabled – RP-2014 disabled retiree mortality table, rolled back to 2006 and projected with Scale MP-2016 on a fully generational basis.

Active – N/A - retired healthy males – 103% of RP-2014 healthy annuitant mortality table, rolled back to 2006 and projected with Scale MP-2016 on a fully generational basis; retired healthy females – 100% of RP-2014 healthy annuitant mortality table, rolled back to 2006 and projected with Scale MP-2016 on a fully generational basis; disabled – 100% of RP-2014 disabled retiree mortality table, rolled back to 2006 and projected with Scale MP-2016 on a fully generational basis.

Withdrawal rates 0.0% - 5.7% — Disability rates 0.04% - 0.4% — Retirement rates 20% - 100% 5.0% - 100% Date range of most recent

experience study 2011-2016 2011-2016

Long-Term Expected Rates of Return

The long-term geometric rates of return on pension plan investments were determined using the building-block method in which estimates of expected real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges 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 percentages and by adding expected inflation. Rates summarized in the following table include the inflation component and were used for all defined benefit plans as of June 30, 2021:

Asset Class

Long-Term Expected

Rate of Return Target

Allocation

Domestic Equity 5.5% 27.5%

International Equity 7.0% 27.5%

Fixed Income 2.2% 15.0%

Real Estate 6.6% 10.0%

Private Equity 8.5% 10.0%

Hedge Funds 4.0% 10.0%

Total 100%

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Discount Rate

The discount rate used to measure the total pension liability was 7.5% for all defined benefit plans. The projections of cash flows used to determine the discount rates assumed that employer contributions will continue to follow the current funding policies. Based on those assumptions, the fiduciary net position of each defined benefit pension plan was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rates of return on pension plan investments were applied to all periods of projected benefit payments to determine the total pension liabilities of each plan. The discount rate used to measure the total pension liability did not change for the June 30, 2019 valuation from the June 30, 2018 valuation.

Detailed pension plan fiduciary net position for all pension plans are available in a separately issued Consolidated Public Retirement Board annual financial report, and each plan has its own Audited Schedules of Employer Allocations and Pension Amounts by Employer report.

Defined Contribution Plans

The Teachers’ Defined Contribution Retirement System (TDCRS)

TDCRS, administered by the Consolidated Public Retirement Board, is a multiple-employer defined contribution retirement system primarily covering the full-time employees of the State’s 55-county public school systems, the State Department of Education, the School for the Deaf and the Blind, and the Marshall University Research Corporation who were hired between July 1, 1991 and June 30, 2005. TDCRS members also include former TRS plan members, including higher education employees, who have elected to participate in the TDCRS plan. There are approximately 3,922 and 4,041 members in the TDCRS plan at June 30, 2021 and 2020, respectively. TDCRS retirement benefits depend solely on amounts contributed to the plan plus investment earnings. TDCRS closed participation to new members effective June 30, 2005.

State legislation requires enrolled employees to contribute 4.5% of their gross compensation, and the employers contribute 7.5% of covered members’ gross compensation from amounts allocated to the employers through the State School Aid Formula. Employer contributions for each employee (and interest allocated to the employee’s account) become partially vested after 6 years and fully vested after 12 years of completed service. Employer contributions and earnings thereon forfeited by employees who leave employment prior to becoming vested are available, in the event the employee does not return to active participant status within five years, to reduce the employer’s current-period contribution requirement. Any such forfeitures arising from contributions, plus earnings thereon, will be used to reduce future employer contributions.

The TDCRS investments are held and managed by an investment company as the third-party administrator for the plan. As prescribed by West Virginia Code, the TDCRS investments are placed in participant accounts and the participants direct the investment of their account by selecting from a list of plan mutual funds or a long-term fixed investment option. The TDCRS provides members with a choice of 20 separate investment options made up of a fixed income, balanced, large cap, mid cap, small cap, and international mutual funds, a money market fund, and a fixed annuity. The State currently does not have specific overall policies

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addressing limitations on specific risk types, such as credit risk, custodial credit risk, concentration of credit risk, interest rate risk, or foreign currency risk.

The TDCRS investments are carried at fair value (except for fully benefit-responsive investment contracts, which are reported at contract value) as determined by a third-party pricing service utilized by an investment management company. For fully benefit-responsive investment contracts, contract value is the relevant measure for the portion of investments attributable to fully benefit-responsive investment contracts because contract value is the amount participants normally would receive if they were to initiate permitted transactions under the terms of the plan. Investment income for the TDCRS is determined monthly and distributed to the individual participant accounts.

Custodial Credit Risk – Cash Deposits

The TDCRS’ cash deposits with financial institutions were approximately $278 thousand at June 30, 2021. These deposits, which had a bank balance of approximately $278 thousand, are either insured by the Federal Deposit Insurance Corporation or collateralized with securities held in TDCRS’ name by its agents.

Interest Rate Risk

As of June 30, 2021, the TDCRS had the following investments and maturities (expressed in thousands):

Investment Maturities (in Years)

Investment Type Fair Value Less than 1 1-5 6-10

Mutual Funds $703,293 $703,293 $— $—

For the year ended June 30, 2020, the approximate payroll of state employees covered by TDCRS was $133 million, and total covered payroll for both the TDCRS and TRS was approximately $1.6 billion. Both the employees and employers made the required contributions amounting to $6.0 million and $10.3 million, or approximately 4.5% and 7.2% of covered payroll, respectively.

Teachers Insurance and Annuity Association

The Teachers Insurance and Annuity Association and/or College Retirement Equities Fund (TIAA-CREF), a privately administered multiple-employer defined contribution retirement plan, provides individual retirement fund contracts for each eligible participating employee. Eligible employees consist mainly of state college/university faculty and staff. For the year ended June 30, 2021, contributions were approximately $49.9 million from the covered employees and approximately $49.8 million from the 13 participating institutions from the State of West Virginia.

Benefits to retired employees are generally based on the value of the individual contracts and the estimated life expectancy of the employee at retirement and are fully vested from the date of employment. The total annual required contribution and the amount paid is 3% or 6% of the employee’s annual salary and is established by the Board of Trustees of the University

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System of West Virginia and the Board of Directors of the State College System. The State has no further liability once annual contributions are made.

Empower Retirement

Higher education employees enrolled in the basic 401(a) retirement plan with TIAA-CREF have a one-time option to switch to the New Educators Money 401(a) basic retirement plan, administered by Empower Retirement. New hires have the choice of either plan. For the year ended June 30, 2021, contributions were approximately $181 thousand from the covered employees and $181 thousand from the 13 participating institutions from the State of West Virginia.

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NOTE 13

OTHER POSTEMPLOYMENT BENEFITS

General

In addition to the pension benefits described in Note 12, the State provides certain health care and other insurance benefits, in accordance with state statutes, for retired employees. Substantially all employees hired prior to July 1, 2001, may become eligible for these benefits if they reach normal retirement age while working for the State. State employees earn sick- leave benefits, which accumulate but do not vest. Eligible employees may convert, at the time of retirement, any unused accumulated sick leave to pay a portion of the employee’s postemployment health care insurance premium. If this option is not selected, the leave amount may be applied toward an increase in the employee’s retirement benefits, with such sick leave constituting additional credited service in the computation of such benefits. The unused portion of sick leave that is expected to be converted to additional credited service for retirement benefits is considered in the actuarial valuation used to calculate the total pension liability.

The State provides health care credits against monthly health insurance premiums of certain retirees based on various factors, including unused sick leave at the time of retirement. According to West Virginia State Code, employees hired prior to June 30, 1988, can receive health care credit against 100% of their health care coverage. Employees hired between June 30, 1988 and July 1, 2001, can receive health care credits against 50% of their health care cost. Employees hired July 1, 2001, or later, may not convert sick leave into a health care benefit.

In addition to the pension benefits allowing certain retirees to convert sick leave to health care premiums, state statutes provide that employees who retire may continue participation in the State’s health insurance plan subject to certain length of service and participation requirements. Such employees are eligible to participate in the public employees’ insurance program by making the premium contribution specified by the Public Employees Insurance Agency (PEIA) Finance Board. Approximately 43,269 retirees, 11,913 inactive plan members, and 34,319 active plan members met those eligibility requirements at June 30, 2021.

The State is a nonemployer contributing entity that provides funding through Senate Bill No. 469, which was passed granting Other Postemployment Benefits Liability relief to the State’s 55 county boards of education effective July 1, 2012. The Public School Support Plan is a basic foundation allowance program that provides funding to the local school boards for “any amount of the employer’s annual required contribution allocated and billed to the county boards of education for employees who are employed as professional employees, as service personnel, or as professional student support personnel,” within the limits authorized by this law. The special funding under the school aid formula subsidizes employer contributions of the county boards of education and contributes to the overall unfunded OPEB liability.

Plan Description

The State established the RHBT under West Virginia Code §5-16D-2, an irrevocable trust, to account and report for the other postemployment benefits (OPEB) provided under the multiemployer cost-sharing plan. While PEIA administers the plan, legislation requires the

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RHBT to determine, through an actuarial study, the contractually required contribution (CRC) which shall be sufficient to maintain the RHBT in an actuarially sound manner. The CRC, which is reviewed and approved by the PEIA Finance Board, shall be allocated to the 704 respective employers who are required by law to remit at least the minimum annual premium component of the CRC.

The RHBT provides the following basic retiree benefit coverage to all participants: hospital, surgical, group major medical, basic group life, and prescription drug coverage for retired employees of the State and various nonstate governmental agencies and their dependents. Plan benefits are established and revised by PEIA and RHBT management with the approval of their Finance Board.

Basis of Accounting

The RHBT is included in the fiduciary funds financial statements. Accordingly, the basic financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting in conformity with accounting principles generally accepted in the United States of America for governmental entities as prescribed or permitted by the GASB. Revenues are derived mainly from contributions from plan members and employers. Members’ contributions are recognized in the period in which the contributions are due. Employers’ contributions to the RHBT are recognized pursuant to a legal requirement, when there is a reasonable expectation of collection. Benefits and refunds are recognized when due and payable. RHBT cash and cash equivalents principally consists of deposits in the Board of Treasury Investments (BTI) pooled funds recorded at fair value, as more fully described in Note 4.

Funding Policy

West Virginia Code §5-16D-6 also assigns to the PEIA Finance Board the authority to establish and amend contribution requirements of the plan members and the participating employers. Participating employers are required by statute to contribute at a rate assessed each year by the RHBT. The annual contractually required rate is the same for all participating employers.

West Virginia Code §5-16-25 requires the Finance Board of PEIA to maintain a reserve of 10% of projected PEIA plan costs for general operation purposes and to provide future plan stability.

The following schedule summarizes the plan’s required contribution rates at June 30, 2021:

Statutory Contribution Rates as a Percent of Covered-Employee Payroll

System Member Employer

PERS 4.5% - 6.0% 10.0% TRS 6.0% 15.0% State

15.0% Counties

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The State’s required and actual contributions for the year ended June 30, 2021, were as follows (expressed in thousands):

System Actual

Contribution

OPEB $152,616

Special Funding

Senate Bill No. 419, effective July 1, 2012, amended West Virginia Code §11-21-96 by dedicating $30 million to be transferred annually from personal income tax previously collected for payment of the unfunded liability of the Workers’ Compensation Fund (WCF) to the RHBT. Transfers will be made until the RHBT unfunded liability has been provided for in its entirety or July 1, 2037, whichever date is later. The aforementioned $30 million transfers commenced in 2017. In addition, Senate Bill No. 1013 transferred $5 million, permitting the RHBT to offset retiree premiums. This $5 million State appropriation was no longer received after fiscal year ending June 30, 2020.

In December 2011, the PEIA Finance Board passed a finance plan that placed a 3% cap on the amount participating employers will now pay in retiree premium subsidy annual increases. By this action, the employer is no longer exposed to ever-increasing trends in health care costs, significantly reducing future retiree premium subsidy costs.

OPEB Assets, OPEB Liability, OPEB Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB

The State reported a net OPEB liability, including the county school boards, at June 30, 2021, of $356,993,000, including a special funding situation of the net OPEB liability (80.82%) for its share, which was measured as of June 30, 2020. The total OPEB liability used to calculate the net OPEB liability was determined using update procedures applied to the actuarial valuation as of June 30, 2020, and measured as of June 30, 2020. The OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense are allocated to governmental activities, including blended component units and internal service funds, business-type, and component units’ activities of the State. The State’s proportionate share of the net OPEB liability was based on the State’s share of contributions to the OPEB plan relative to the contributions of all employers participating for the year ended June 30, 2020.

The State’s proportionate share of the net OPEB liability at June 30, 2020, determined by the actuarial valuation measured as of June 30, 2019, was $1,337,704,000, including a special funding situation (80.63%). The State’s proportionate share for FY 2021 has decreased by 0.19%. There was also a significant change in actuarial assumptions that resulted in the decrease of the total OPEB liability of $(908,738,000).

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The State’s amounts for net OPEB liability, deferred outflows of resources, deferred inflows of resources, and OPEB expense were allocated to the governmental, business-type, fiduciary, and component units’ activities based on each reporting unit’s share of the State’s employer contributions to the OPEB plan. The OPEB-related amounts for primary government, fiduciary funds, and component units are as follows (expressed in thousands):

Governmental Activities

Water Pollution Infrastructure

Proportionate share of statewide amount 79.64 % 0.04 % 0.01 %

Net OPEB liability $ (284,345) $ (143) $ (12)

OPEB expense (174,817) (174) 21

Deferred outflows of resources representing contributions subsequent to the measurement date 122,696 58 7

Deferred outflows of resources representing the changes in employer proportion 142,963 3 7

Net deferred outflows of resources representing the difference between projected/actual earnings on investments 21,522 11 1

Net deferred outflows of resources representing the difference between expected and actual experience 2 — —

Deferred outflows of resources representing change in assumptions — — —

Deferred inflows of resources representing the changes in employer proportion (112,635) (38) (8)

Deferred inflows of resources representing change in assumptions (640,619) (323) (26)

Deferred inflows of resources representing the difference between expected and actual experience (183,946) (93) (7)

Total of deferred amounts subject to amortization (772,713) (440) (33)

Amortization of applicable deferred amounts in future periods:

2022 (295,754) (168) (13)

2023 (273,908) (156) (12)

2024 (200,262) (114) (8)

2025 (2,789) (2) —

Sensitivity Analysis:

Net OPEB liability at 5.65% discount rate (405,475) (204) (17)

Net OPEB liability at 6.65% discount rate (284,318) (143) (12)

Net OPEB liability at 7.65% discount rate (182,893) (92) (8)

Net OPEB liability at 1% decrease of healthcare cost trend rate (171,077) (86) (7)

Net OPEB liability at healthcare cost trend rate (284,318) (143) (12)

Net OPEB liability at 1% increase of healthcare cost trend rate (421,091) (212) (18)

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PEIA BRIM Nonmajor

Business-type Total

Business-type Fiduciary Component

Units Total

0.05 % 0.03 % 0.10 % 0.23 % 0.03 % 20.10 % 100 %

$ (186) $ (113) $ (357) $ (811) $ (100) $ (71,737) $ (356,993)

(115) 80 (349) (537) (62) (66,850) (242,266)

65 37 141 308 29 29,583 152,616

159 66 35 270 81 14,173 157,487

8 8 27 55 8 5,625 27,210

— — — — — 79 81

— — — — — 373 373

(35) (18) (233) (332) (18) (21,777) (134,762)

(420) (256) (807) (1,832) (227) (162,173) (804,851)

(121) (73) (232) (526) (65) (46,678) (231,215)

(409) (273) (1,210) (2,365) (221) (210,378) (985,677)

(157) (104) (463) (905) (85) (80,707) (377,451)

(145) (97) (429) (839) (78) (74,745) (349,570)

(106) (71) (314) (613) (57) (54,648) (255,580)

(1) (1) (4) (8) (1) (278) (3,076)

(265) (161) (509) (1,156) (143) (102,307) (509,081)

(186) (113) (357) (811) (100) (71,737) (356,966)

(120) (73) (230) (523) (64) (46,146) (229,626)

(112) (68) (215) (488) (60) (43,165) (214,790)

(186) (113) (357) (811) (100) (71,737) (356,966)

(275) (167) (529) (1,201) (148) (106,246) (528,686)

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Deferred outflows of resources and deferred inflows of resources related to the OPEB as of June 30, 2021, were from the following sources (expressed in thousands):

Deferred Outflows of Resources

Deferred Inflows of Resources

Net difference between projected and actual earnings on OPEB plan investments

$ 27,210 $ —

Changes in proportion and difference between employer contributions and proportionate share of contributions

157,487 (134,762)

Difference between expected and actual experience 81 (231,215)

Change in assumptions 373 (804,851)

Contributions made subsequent to the measurement date 152,616 —

Total deferred outflows/inflows to be amortized $ 337,767 $ (1,170,828)

Deferred outflows of resources of $152,616,000 related to OPEB are the result of contributions made subsequent to the measurement date of June 30, 2020, and will be recognized as a reduction of the net OPEB liability in the subsequent fiscal year ending June 30, 2021. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows (expressed in thousands):

Year Ending June 30: Amount

2022 (377,451)

2023 (349,570)

2024 (255,580)

2025 (3,076)

Actuarial Methods and Assumptions

The total OPEB liability for financial reporting purposes was determined by an actuarial valuation as of June 30, 2020, and measured as of June 30, 2020, using update procedures applied to the actuarial assumptions and methods. The projections of the net OPEB liability are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. Consideration is to be given to the written plan document as well as other communications between the employer and plan members and an established pattern of practice for cost sharing.

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Significant assumptions used in the actuarial valuations are as follows:

Actuarial cost method Entry age normal

Amortization method Level percentage of payroll, closed

Amortization period 20-year closed period as of June 30, 2017

Asset valuation method Market value

Actuarial assumptions:

Investment rate of return 7.15%, net of OPEB plan investment expense, including inflation

Inflation rate 2.75%

Salary increases Dependent upon pension system. Ranging from 3.00% to 6.50%, including inflation

Retirement age Experience-based table of rates that are specific to the type of eligibility condition. Last updated for the June 30, 2016, actuarial valuation.

Mortality rates Post-retirement: RP-2000 healthy annuity mortality table projected with Scale AA on a fully generational basis for PERS and TRS. RP-2014 healthy annuitant mortality table projected with Scale MP-2016 on a fully generational basis for Troopers A and B. Pre-retirement: RP-2000 non- annuitant mortality table projected with Scale AA on a fully generational basis for PERS and TRS. RP-2014 employee mortality table projected with Scale MP-2016 on a fully generational basis for Troopers A and B.

Healthcare cost trend rates Trend rate for pre-Medicare per capita costs of 8.5% for plan year end 2020, decreasing by 0.5% each year thereafter, until ultimate trend rate of 4.5% is reached in plan year end 2028. Trend rate for Medicare per capita costs of 3.1% for plan year end 2020, 9.5% for plan year-end 2021, decreasing by 0.5% each year thereafter, until ultimate trend rate of 4.5% is reached in plan year-end 2031.

Aging factors Based on the 2013 SOA Study “Health Care Costs – From Birth to Death”

Expenses Health administrative expenses are included in the development of the per capita claims costs. Operating expenses are included as a component of the annual expense.

Date range in most recent experience study

Actuarial assumptions used in the June 30, 2020, valuation were based on the results of an actuarial experience study for the period July 1, 2015 – June 30, 2020.

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Long-Term Expected Rates of Return

The long-term rates of return on OPEB plan investments were determined using the building-block method in which estimates of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) were developed for each major asset class. These ranges 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 percentages and by adding expected inflation. Best estimates of long-term geometric rates are summarized in the following tables and include the inflation component as of June 30, 2020:

Asset Class

Long-Term Expected Rate

of Return

Domestic Equity 5.5%

International Equity 7.0%

Fixed Income 2.2%

Real Estate 6.6%

Private Equity 8.5%

Hedge Funds 4.0%

Asset Class Target

Allocation

Domestic Equity 27.5%

International Equity 27.5%

Fixed Income 15.0%

Real Estate 10.0%

Private Equity 10.0%

Hedge Funds 10.0%

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Discount Rate

The single discount rate used to measure the total OPEB liability was 6.65%. The projections of cash flows used to determine the discount rates assumed that the RHBT contributions would be made at rates equal to the actuarially determined contribution rates, in accordance with pre-funding and investment policies. Future pre-funding assumptions include a $30 million annual contribution from the State through 2037. Based on those assumptions, and that the Plan is expected to be fully funded by fiscal year ended June 30, 2036, the OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability. Discount rates are subject to change between measurement dates.

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NOTE 14

RISK MANAGEMENT

The State is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; employee health and life coverage; and natural disasters. The State of West Virginia operates three significant insurance enterprise funds: Board of Risk and Insurance Management (BRIM), Public Employees Insurance Agency (PEIA), and Workers’ Compensation Fund (WCF).

On March 12, 2011, the West Virginia Legislature created the State Entities Workers’ Compensation Program Fund (SEWC) to provide a means of managing workers’ compensation coverage for persons directly employed by the State of West Virginia. The SEWC functions as an insurance-purchasing risk pool and is administered by the Office of the Insurance Commissioner (OIC). On October 1, 2011, the OIC entered into a high- deductible insurance coverage policy with Zurich. Pursuant to the policy provisions, the SEWC retains the loss exposure up to $250,000 per occurrence. The SEWC has provided for these losses by establishing a Loss Reserve Fund with Zurich. The SEWC had a total of $12.3 million in unpaid claims and claim adjustment expenses at June 30, 2021.

Based on the composition and characteristics of these funds, the SEWC and AccessWV claim liabilities are not discounted.

The Patient Injury Compensation Fund (PICF) is a custodial fund of the State, administered by BRIM. The balance of the PICF does not reflect claims until an award becomes final and all reasonable means of recovery have been exhausted. The PICF works on a “claims filed” basis and $1.9 million was paid on the 15 claims outstanding in fiscal year 2021. The remaining $2.2 million balance owed on the outstanding claims as of June 30, 2021, was paid in August 2021. The assets and liabilities as of June 30, 2021, were approximately $2.1 million and $2.2 million, respectively. The amount of settlements in the major insurance enterprise funds has not exceeded insurance coverage in the past three years.

Description of the Funds

Board of Risk and Insurance Management

BRIM provides a property and liability self-insurance program for its member agencies. BRIM has general supervision and control over the insurance of all state property, including that of the institutions of higher education and the discretely presented component units. In addition, the political subdivisions in the State and certain other charitable and public service organizations may request coverage by BRIM. Types of coverage provided by BRIM have been expanded over time to include medical malpractice, automobile liability, and coal mine subsidence reinsurance. At the end of the fiscal year, approximately 1,185 organizations participated in the BRIM risk pool.

Underwriting and rate-setting policies are established by BRIM. The cost of all coverage as determined by BRIM shall be paid by the participants. The BRIM risk pool retains a $1 million per occurrence coverage maximum on all third-party liability claims. In the normal course of business, BRIM seeks to reduce the loss that may arise from catastrophes or other

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events that cause unfavorable operating results by reinsuring levels of risk in various areas of exposure with other insurance enterprises or reinsurers. Excess coverage under this program is limited to $400 million per event, subject to limits on certain property. Reinsurance permits recovery of a portion of losses from reinsurers; however, it does not discharge the primary liability of BRIM as direct insurer of the risks insured. BRIM does not report reinsured risks as liabilities unless it is probable that those risks will not be covered by reinsurers. There have been no significant reductions in insurance coverage from the prior year.

Public Employees Insurance Agency

PEIA provides a program of health, life, and prescription insurance for its member agencies. PEIA provides coverage for all participating state employees, including those of the institutions of higher education and the discretely presented component units. In addition, the political subdivisions in the State and certain other charitable and public service organizations may request coverage by PEIA. PEIA’s general objectives are to provide a basic employee benefit insurance program, which includes hospital, surgical, major medical, prescription drug, basic life, and accidental death for all participating employers and employees. Underwriting and rate-setting policies are established by PEIA. The cost of all coverage, as determined by PEIA, shall be paid by the participants. Life insurance coverage is limited to $500,000. Premiums are established by PEIA at varying rates dependent upon, among other things, coverage required, number of dependents, state vs. nonstate employees, and active employee vs. retired employee. PEIA retains all risks for the health and prescription features of its indemnity plan. PEIA has transferred the risks for health and prescription coverage for those individuals covered by the Managed Care Organization (MCO) Plan to the plan providers. PEIA has reinsured 100% of the basic life benefits; however, PEIA remains contingently liable in the event the insurer does not honor its obligation. PEIA presently charges equivalent premiums for participants in either the indemnity plan or the MCO Plan. Altogether, PEIA insures approximately 165,000 individuals, including participants and dependents.

Workers’ Compensation Fund

The Workers’ Compensation Commission (WCC) was an agency of the State of West Virginia from 1913 until 2005, which provided for the payment of benefits to all employees sustaining personal injuries in the course of, and as a result of, their covered employment. On December 31, 2005, the West Virginia WCC ceased to exist as a separate state entity and all regulatory duties for workers’ compensation insurance transitioned to the Office of the West Virginia Insurance Commissioner (the Insurance Commissioner), as did the administrative oversight of certain assets and liabilities of the former WCC. On January 1, 2006, the former WCC became a private sector insurance company.

The “workers’ compensation old fund” (Old Fund) was created for those funds transferred to the offices of the Insurance Commissioner and those funds due and owing the workers’ compensation fund as of June 30, 2005. The Old Fund assets and liabilities are the responsibility of the State and did not novate or otherwise transfer to the private sector insurance company. Disbursements from the Old Fund are related to the liabilities and appropriate administrative expenses necessary for the administration of all claims, actual and incurred but not reported, with a date of injury on or before June 30, 2005.

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Senate Bill 1004 also created the “workers’ compensation uninsured employers’ fund,” “self- insured guaranty risk pool,” “self-insured security risk pool,” “private carrier guaranty fund,” and an “assigned risk fund” in the State’s treasury. An employer who has been granted self-insured status for workers’ compensation insurance coverage must post security with the Insurance Commissioner for an actuarially determined amount. Payments for injuries of defaulted self-insured employers incurred after July 1, 2004, will be made from the Self-Insured Guaranty Pool. Any self-insured employer who fails the analytical financial review will also be required to post security to the Guaranty Pool on any workers’ compensation liabilities incurred after July 1, 2004. The Self-Insured Guaranty Pool is funded through quarterly assessments to self-insured employers and the proceeds received from the security held. To the extent a self-insured employer cannot meet its obligations, the self-insured pools remain contingently liable for all policy benefits. The amount has not been included in the estimated liabilities for unpaid claims and claim adjustment expenses because the likelihood of future self-insured defaults cannot be estimated. For financial statement presentation purposes, these funds, as well as the “Old Fund,” are included as the Workers’ Compensation Fund (WCF) in the Proprietary Funds’ financial statements of the State.

Unpaid Claims Liabilities

The three major insurance funds establish claims liabilities based on estimates of the ultimate cost of claims (including future claims adjustment expenses) that have been reported but not settled, and of claims that have been incurred but not reported. The estimates of the claims liabilities include amounts for non-incremental claims adjustment expense. The length of time for which such costs must be estimated varies depending on the coverage involved. Estimated amounts of salvage and subrogation and reinsurance recoverable on unpaid claims are deducted from the liability for unpaid claims. Because actual claims costs depend on such complex factors as inflation, changes in doctrines of legal liability, and damage awards, the process used in computing claims liabilities does not result in an exact amount. As a result, there is at least a reasonable possibility that recorded estimates will change by material amounts in the near term. Accordingly, the actual incurred losses and loss adjustment expenses may vary significantly from the estimated amount included in the financial statements. Claims liabilities are recomputed periodically using a variety of actuarial and statistical techniques to produce current estimates that reflect recent settlements, claims frequency, and other economic and social factors. Adjustments to claims liabilities are charged or credited to expense in the periods in which they are made.

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Information concerning the changes in those aggregate liabilities for the past two fiscal years is shown in the following table (expressed in thousands):

BRIM PEIA WCF

2021 2020 2021 2020 2021 2020

Unpaid claims and claims adjustment expense liability at beginning of year $ 204,796 $ 190,978 $ 73,366 $ 64,897 $ 1,336,200 $ 1,434,700

Incurred claims and claims adjustments expense:

Provision for insured events of the current fiscal year 77,590 69,809 647,600 541,610 94 62

Increase (decrease) in provision for insured events of prior fiscal years (7,331) (4,460) (6,390) (3,750) 17,010 5,876

Amortization of discount — — — — 38,069 46,272

Total incurred claims and claims adjustment expense 70,259 65,349 641,210 537,860 55,173 52,210

Payments:

Claims and claims adjustment expense attributable to insured events of the current fiscal year 13,159 12,300 564,186 462,582 — 3

Claims and claims adjustment expense attributable to insured events of the prior fiscal years 72,300 39,231 52,303 66,809 135,473 150,707

Total payments 85,459 51,531 616,489 529,391 135,473 150,710

Total unpaid claims and claims adjustment expense liability, end of year $ 189,596 $ 204,796 $ 98,087 $ 73,366 $ 1,255,900 $ 1,336,200

The above PEIA payments are net of pharmacy rebates of $97,750 and $87,032 for the years ended June 30, 2021 and June 30, 2020, respectively.

Neither BRIM nor PEIA discount its estimated claims liability. If BRIM’s unpaid claims and claims adjustment expense liability were discounted using a 4% discount factor for 2021 to take into consideration the time value of money, the result would be a decrease in the liability and an increase in net position of approximately $17.2 million as of June 30, 2021. The overall unpaid claim liability number includes a provision for allocated and unallocated claims adjustment expense. At June 30, 2021, the total undiscounted claims liability for WCF approximated $1.613 billion. GASB standards provide that, if discounting is used, the pool should use a rate that is determined by giving consideration to such factors as the pool’s expected settlement rate for those liabilities and its expected investment yield rate. Based on the expected investment yields on WCF’s investment portfolio, the estimated liability for unpaid claims and claim adjustment expenses (claims liability) has been discounted using a rate of 3%. If discounting of the WCF claims liability was limited to anticipated investment income, the claims liability would have decreased by approximately $357 million to record approximately $1.256 billion, and the WCF would report a total deficit decrease of approximately $163 million at June 30, 2021.

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The OIC management believes the discounted liability for unpaid claims and claims adjustment expenses is adequate. However, due to the inherent variability of the assumptions used to estimate this liability, actual incurred losses and loss adjustment expenses may vary significantly from the estimated amount included in the WCF’s financial statements.

Fund Deficit and Deficit Funding Plan for Workers’ Compensation

To help reduce the WCF deficit, Senate Bill 362 was passed on April 8, 2017. This bill authorized redirection by Executive Order of 75% of the amounts collected from employer surcharges and assessments on workers’ compensation insurance policies for periods prior to June 30, 2018, and authorized redirection of 75% of the amounts collected from certain deposits of revenues derived from lottery revenue for periods prior to June 30, 2018.

On March 4, 2020, the Legislature passed Senate Bill 545, which permits the Insurance Commissioner to transfer cash from the OIC’s Operating Fund during fiscal years 2020 and 2021, provided that deficit balance existed in the Old Fund during the prior fiscal year. Due to concerns regarding the potential fiscal impact of the COVID-19 virus on the OIC’s Operating Fund and the State’s General Revenue Fund, no transfers were made during FY 2020.

Required Supplementary Information

Each of the three risk pools has issued separate, audited financial reports on its operations. Those reports include the required supplementary information concerning the reconciliation of claims liabilities by type of contract, if applicable, and ten-year claim development information.

Complete financial statements of the individual insurance enterprise funds, including additional detailed disclosures, can be obtained directly from their respective administrative offices:

Board of Risk and Insurance Management Workers’ Compensation Fund

1124 Smith Street c/o Offices of the Insurance Commissioner

Suite 4300 900 Pennsylvania Avenue

Charleston, WV 25301 Charleston, WV 25302

Public Employees Insurance Agency 601 57th St., SE

Suite 2

Charleston, WV 25304

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NOTE 15

COMMITMENTS AND CONTINGENCIES

Environmental Protection Claims

The State, through the Department of Environmental Protection (DEP), maintains several environmental protection programs, including a bonding program for coal operators for mine reclamation; an abandoned oil and gas well bonding program; a Landfill Closure Assistance Program (LCAP); and an underground storage tank program. Under such programs, the State charges various fees, premiums, and other assessments, and sets bonding amounts that operators are required to maintain to ensure that funds are available in the event that the operator is unable to fulfill its environmental protection responsibilities. Based upon the State’s estimate of the liability for incurred losses under the programs, the bonding amounts and funding structures established by the State have proven inadequate to fund the actual costs of environmental protection that the State has incurred in acceptance of the related insurance risk. As a result, the State has been required at various times to increase fees and bonding rates. Administrative changes in permitting regulations governing the industries and businesses benefiting from the State’s maintenance of such environmental protection programs are constantly under review.

Management has estimated the total cost at current dollars of remediation efforts to approximate $301 million at June 30, 2021. The estimated remediation costs are not expected to be liquidated by expendable available financial resources, so the obligation is reported as a liability in the governmental activities on the statement of net position. As such, the State has recorded in governmental activities the following liabilities related to the above programs at June 30, 2021 (expressed in thousands):

Balance June 30, 2020 Additions Reductions

Balance June 30, 2021

Amount Due

Within One Year

Mine Reclamation Program $ 217,857 $ — $ 8,894 $ 208,963 $ 21,000

Oil and Gas Well Program 336 450 — 786 786

Landfill Closure Assistance Program 99,095 — 9,606 89,489 7,557

Underground Storage Tanks 2,158 — 197 1,961 —

Total Environmental Liability $ 319,446 $ 450 $ 18,697 $ 301,199 $ 29,343

The nature of the environmental liabilities requires the use of estimates and assumptions by management. Accordingly, it is at least reasonably possible that a significant change in the estimate will occur in the near term, resulting from various factors, including inflation, deflation, technology, assumption changes, or change in applicable laws or regulations.

Mine Reclamation Program

The Special Reclamation Program was created to enable compliance with a federal mandate that allows the State to operate an alternative bonding program to ensure that mining sites are reclaimed in accordance with federal and state regulations. This program created funds

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for reclamation costs if the operator does not perform the reclamation and the respective bond is forfeited by the operator. In addition, the State also accrues for active water treatment sites under this program. The State’s estimated liability for these water treatment sites assumes a 20-year treatment period until the sites are properly reclaimed since the treatment costs beyond a 20-year period cannot be reasonably estimated. The actual length of water treatment and the actual ultimate liability could differ significantly from this estimate.

Forfeited operator bonds, as well as a tax imposed on clean mined coal, currently 27.9 cents per ton, are set aside to fund this program. The Special Reclamation Fund plans to make expenditures for reclamation and water treatment systems as more funding becomes available. The Legislature further established a Special Reclamation Fund Advisory Council (the Council). The Council’s role is to develop a financial plan that ensures long-term stability of the special reclamation program. The Legislature further requires actuarial studies of the fund’s fiscal soundness every two years.

Landfill Closure Assistance Program (LCAP)

The LCAP was established to provide landfill closure assistance to owners/permittees or landfills that were required to cease operations pursuant to certain statutory closure deadlines for non-composite-lined facilities. The program designs and constructs all closure- related activities necessary to provide sufficient leachate management, sediment and erosion control, gas management, groundwater monitoring, and final cover cap on non-composite lined landfills, as funds are available. The LCAP began with 28 landfills. Four landfills have been added to the original inventory by the legislative process and one in 2015. There are three landfills left to be closed. As of June 30, 2021, the liability is estimated at $89 million and is projected to be paid through fiscal year 2053.

Other Contingencies

In addition to the environmental protection claims, the State has recorded an obligation in the amount of $113 million, of which $17.7 million is a current obligation, for the payment of other contingencies. Such other contingencies include, but are not limited to, unclaimed property and Division of Highway claims. These claims are based on management’s evaluation of the nature of such claims and consideration of historical loss experience for the respective types of action. Certain other claims may be covered by the State’s insurance carrier under its general liability or medical malpractice coverage.

An employer who has been granted self-insured status for workers’ compensation insurance coverage must post security with the WCF for an actuarially determined amount of its liabilities incurred with dates of injury prior to July 1, 2004. Payments made for claims of employees of defaulted self-insured employers for injuries prior to July 1, 2004, will be made from the Self-insured Security Pool established by Senate Bill 1004. The assets of the Security Pool consist of the proceeds received from the security held by the WCF and any necessary assessments made to active self-insured employers for the default of a self-insured employer.

Payments for the injuries of defaulted self-insured employers incurred after July 1, 2004, will be made by the Self-insured Guaranty Pool; however, any self-insured employer who fails the analytical financial review will also be required to post security to the Guaranty Pool on any workers’ compensation liabilities incurred after July 1, 2004. The Self-insured Guaranty Pool

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is funded through quarterly assessments to self-insured employers and the proceeds received from the security held. To the extent a self-insured employer cannot meet its obligations under the Law, the two self-insured pools previously discussed remain contingently liable for all policy benefits. The only sources of revenue permitted under the Law to fund the Security Pool and the Guaranty Pool must be obtained from self-insured employers. Self-insured employers are considered joint and severally liable for the obligations of a defaulted self- insured employer. The amount has not been included in the estimated liabilities for unpaid claims and claim adjustment expense because the likelihood of future self-insurer defaults has not been estimated.

On October 1, 2019, the Department of Health and Human Resources Bureau for Children and Families became the defendant in a lawsuit related to Foster Care. The potential liability to the State is $30 million. On July 28, 2021, the district court dismissed the lawsuit. The plaintiffs have filed an appeal. The decision regarding the appeal is anticipated to occur mid to late 2022.

It is not possible to predict with certainty the ultimate outcome of all lawsuits or claims pending or threatened against the State, including those discussed above, some of which involve claims for significant amounts. Based on the current status of all legal proceedings for which accruals have not been made in the State’s financial statements, it is the opinion of management and the Attorney General that the proceedings will not have a material adverse impact on the State’s overall financial position. However, depending on the amount and timing of the resolution, some or all of these matters could materially affect the State’s change in financial position or cash flows for a particular period.

Federal Grants

Payments received under the reimbursement arrangements with agencies of the federal government are subject to retroactive audit and adjustment. Management believes that adequate provisions have been made for reasonable adjustments that may result from regulatory reviews and disallowed costs. However, laws and regulations governing these programs are extremely complex and subject to different interpretation. As a result, there is at least a reasonable possibility that recorded estimates could change by a material amount. Management believes it is in compliance with all applicable laws and regulations. Compliance with such laws and regulations can be subject to future government review and interpretation as well as significant regulatory action, including fines, penalties, and exclusions.

The State, including its institutions of higher education, receives significant financial assistance from the U.S. Government in the form of grants and other federal awards. Entitlement to those resources is generally conditioned upon compliance with the terms and conditions of the grant agreements and applicable federal regulations, including the expenditure of the resources for allowable purposes. The State provides for estimates of any material disallowance arising in connection with the operation of these federally funded programs as such amounts become reasonably estimable. Federal awards are subject to financial and compliance audits under either the federal Single Audit Act or by grantor agencies of the federal government or their designees. The ultimate obligations that may arise from cost disallowance or sanctions as a result of those audits and the related impact on the financial statements of the State or its component units are unknown. The ultimate resolution of the regulatory review process could materially impact the State’s future change in financial position or cash flows in a particular period.

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Construction and Other Commitments (Expressed in Thousands)

Amount Committed Commitment

Governmental Funds:

Transportation $ 1,470,363 Construction

Enterprise Funds:

Drinking Water Treatment Revolving Fund 15,941 Committed for loans

Water Pollution Control Revolving Fund 33,500 Committed for loans

West Virginia Infrastructure and Jobs Development Council 54,400

Funding of water and economic development projects

Discretely Presented Component Units:

West Virginia Lottery 7,536 Capital assets and construction

Economic Development Authority 92,194 Committed for loans

Housing Development Fund 60,770 Committed for loans

Parkways Authority 72,390 Turnpike improvements

Higher Education 9,519 Construction

School Building Authority 50,043 Acquisition, construction and maintenance grants to county school boards

Municipal Pensions Oversight Board 1,187 Committed for Loans

The Department of Transportation’s Inspection Program (DOT) has reviewed information on obsolete and deficient bridges. Transportation is concerned about safety and tries to prioritize bridges for repair and replacement based on engineering assessments. Transportation’s long-range plans to address this issue will be impacted by actions that may be taken by both the federal and state government, including funding levels provided for this purpose, which cannot be estimated at this time.

West Virginia University (WVU) has signed an agreement providing for the purchase of steam for a remaining period of six years. Under the agreement, WVU has an annual minimum steam purchase requirement, purchased at an operating rate calculated in accordance with the agreement. Payments in future years will be dependent on actual operating costs and other cost indices in those years.

The West Virginia Providing Real Opportunities for Maximizing In-State Student Excellence (PROMISE) scholarship program provides scholarships to students within the West Virginia secondary education system who meet the scholarship requirements. The basic scholarship requirements include maintaining a 3.0 grade average, receiving an ACT composite score of 22 with a minimum sub-score of 20 in each of the four subject areas, and enrolling in a college or university in West Virginia. The program will pay for tuition and fees, and had $4 million at June 30, 2021, to fund the program obligations. Subsequent to year-end, the program received $3 million from the Lottery and $10.1 million in general revenue.

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NOTE 16

SUBSEQUENT EVENTS

During July 2021, Fairmont issued Revenue Refunding Bonds, 2021 Series A, amounting to $26.3 million. The 2021 Series A Bonds were issued to currently refund in full the outstanding 2012A and 2012B Bonds and to pay the costs of issuance of the 2021 Series A Bonds and related costs. The issuance of the 2021 Series A Bonds resulted in a gain of $138,000 and an economic gain of $5.3 million. The 2021 Series A Bonds outstanding consist of $26.3 million serial bonds with an interest rate of 5%, which mature serially through June 1, 2032.

A Title XII Loan Advance of $125 million was made available to Workforce West Virginia beginning in May 2020. The Division began utilizing Title XII loan advance funds in July 2020, after depleting the Unemployment Insurance Trust Fund. Loan advances totaled $184.9 million on June 30, 2021. Title XII loan advances are interest free if repaid by September 4, 2021.

On March 27, 2020, the Governor’s office received funds from the federal government as part of the CARES Act legislation signed by the President. In July 2020, the Governor’s Office set aside CARES Act funding to pay off all outstanding Title XII balances. On September 2, 2021, West Virginia added $220 million to the State’s unemployment trust fund. This allowed the State to fully repay the $184.9 million Title XII loan and create s surplus in the Unemployment Insurance Trust Fund providing West Virginia businesses with a reduction of unemployment insurance costs by up to 25%.

On August 1, 2021, the Housing Development Fund redeemed various Housing Finance Bonds in advance to the scheduled maturities of $19.5 million.

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Required Supplementary Information (RSI )

Budgetary Comparison Schedule

Notes to RSI

Budget-to-GAAP Reconciliation

Pension Information

OPEB Information

Required Supplementary Information Budgetary Comparison Schedule For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

General Revenue Fund

Original Budget

Final Budget

Actual Budget

Variance With Final

Budget Revenues: Taxes:

Personal Income $ 2,155,650 $ 2,255,650 $ 2,253,788 $ (1,862) Consumer Sales 1,421,800 1,521,300 1,537,245 15,945 Severance 250,950 272,950 274,256 1,306 Corporate Income/Business Franchise 144,500 309,500 320,487 10,987 Business and Occupation 126,900 131,900 133,128 1,228 Gasoline and Motor Carrier — — — — Wholesale Motor Fuel — — — — Automobile Privilege — — — — Other 316,600 332,600 323,325 (9,275)

Excess Lottery Transfer 65,000 65,000 65,317 317 Intergovernmental — — — — Licenses, Permits, and Fees 18,250 18,250 10,625 (7,625) Departmental Collections 24,200 24,200 23,880 (320) Interest Income 14,664 14,664 9,661 (5,003) Other 36,000 36,000 35,865 (135) Industrial Access Road Transfer — — — — Total Revenues 4,574,514 4,982,014 4,987,577 5,563 Expenditures:

Legislature 25,994 25,994 22,201 3,793 Judicial 135,499 135,499 110,679 24,820 Executive 51,695 104,196 38,494 65,702 Department of Administration 105,046 105,046 75,675 29,371 Bureau of Commerce 89,774 174,774 100,423 74,351 Department of Environmental Protection 6,688 6,688 6,510 178 Education 2,470,069 2,505,370 2,446,128 59,242 Health and Human Resources 1,159,927 1,159,927 1,120,907 39,020 Department of Homeland Security 446,882 466,385 407,595 58,790 Revenue 32,472 84,472 75,636 8,836 Transportation 8,004 158,754 155,148 3,606 Veteran’s Assistance 12,012 12,012 9,706 2,306 Bureau of Senior Services 30,451 30,451 29,951 500 Miscellaneous Boards and Commissions — — 15,880 (15,880)

Total Expenditures 4,574,513 4,969,568 4,614,933 354,635

Excess (Deficiency) of Revenues Over (Under) Expenditures - Current Year 1 12,446 372,644 360,198 Expenditures from Prior Year Appropriations 813,933 813,933 145,549 668,384

Total Excess (Deficiency) of Revenues Over (Under) Expenditures - Current Year (813,932) (801,487) 227,095 1,028,582

Budgetary Fund Balance, Beginning of Year, As Adjusted 408,157 408,157 408,157 — Adjustments for Accruals, etc. — — 10,475 10,475 Budgetary Fund Balance, End of Year $ (405,775) $ (393,330) $ 645,727 $ 1,039,057

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Federal Revenue State Road

Original Budget

Final Budget

Actual Budget

Variance With Final

Budget Original Budget

Final Budget

Actual Budget

Variance With Final

Budget

$ — $ — $ — $ — $ — $ — $ — $ — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — 440,000 440,000 399,542 (40,458) — — — — — — — — — — — — 231,194 231,194 300,975 69,781 — — — — — — — — — — — — — — — — 5,708,102 6,268,484 6,100,239 (168,245) 467,400 467,400 524,420 57,020 — — — 169,357 169,357 136,484 (32,873) — — — — — — — — — — — — — — — — — — — — 30,666 30,666 74,978 44,312 — — — — 3,000 3,000 3,000 — 5,708,102 6,268,484 6,100,239 (168,245) 1,341,617 1,341,617 1,439,399 97,782

1,680 1,400 820 580 — — — — 4,000 4,000 2,213 1,787 — — — — 29,021 40,582 16,828 23,754 — — — — — — — — — — — — 433,089 464,869 134,334 330,535 — — — — 191,890 191,890 77,420 114,470 — — — — 538,357 1,793,382 492,943 1,300,439 — — — — 4,403,083 4,962,608 4,573,495 389,113 — — — — 159,590 78,863 35,948 42,915 — — — — 3,000 3,000 90 2,910 — — — — 20,140 43,140 22,837 20,303 1,360,571 1,447,538 1,301,508 146,030 7,839 7,839 6,650 1,189 — — — — 14,582 30,582 14,623 15,959 — — — — 4,256 106,683 41,986 64,697 — — — — 5,810,527 7,728,838 5,420,187 2,308,651 1,360,571 1,447,538 1,301,508 146,030

(102,425) (1,460,354) 680,052 2,140,406 (18,954) (105,921) 137,891 243,812 — — — — — — — —

(102,425) (1,460,354) 680,052 2,140,406 (18,954) (105,921) 137,891 243,812

77,729 77,729 77,729 — 48,464 50,104 177,088 126,984 — — (12,755) (12,755) — — — — $ (24,696) $ (1,382,625) $ 745,026 $ 2,127,651 $ 29,510 $ (55,817) $ 314,979 $ 370,796

Continued

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Required Supplementary Information Budgetary Comparison Schedule For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands) (Continued)

Special Revenue Fund

Original Budget

Final Budget

Actual Budget

Variance With Final

Budget Revenues

Taxes Personal Income — — — — Consumer Sales — — — — Severance — — — — Corporate Income/Business Franchise — — — — Business and Occupation — — — — Gasoline and Motor Carrier — — — — Wholesale Motor Fuel — — — — Automobile Privilege — — — — Other — — — —

Excess Lottery Transfer — — — — Intergovernmental — — — — Licenses, Permits, and Fees — — — Departmental Collections 1,805,189 1,825,181 1,954,222 129,041 Interest Income — — — — Other — — — — Industrial Access Road Transfer — — — — Total Revenues 1,805,189 1,825,181 1,954,222 129,041 Expenditures:

Legislature 2,643 2,637 744 1,893 Judicial 1,450 1,450 867 583 Executive 62,599 65,972 35,651 30,321 Department of Administration 184,949 188,449 120,788 67,661 Bureau of Commerce 52,311 54,352 29,669 24,683 Department of Environmental Protection 65,747 66,337 27,902 38,435 Education 218,109 225,881 190,970 34,911 Health and Human Resources 523,606 611,075 502,078 108,997 Department of Homeland Security 44,778 42,813 26,955 15,858 Revenue 626,154 719,965 454,727 265,238 Transportation 13,771 13,771 6,440 7,331 Veteran’s Assistance 1,964 1,964 1,776 188 Bureau of Senior Services 53,366 68,465 64,216 4,249 Miscellaneous Boards and Commissions 130,028 134,066 112,253 21,813

Total Expenditures 1,981,475 2,197,197 1,575,036 611,453 622,161

Excess (Deficiency) of Revenues Over (Under) Expenditures - Current Year (176,286) (372,016) 379,186 751,202 Expenditures from Prior Year Appropriations 5,484 5,484 57,708 (52,224)

Total Excess (Deficiency) of Revenues Over (Under) Expenditures - Current Year (181,770) (377,500) 321,478 698,978

Budgetary Fund Balance, Beginning of Year 2,651,570 2,651,570 2,651,570 — Adjustments for Accruals, etc. — — (447) (447) Budgetary Fund Balance, End of Year 2,469,800 2,274,070 2,972,601 698,531

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REQUIRED SUPPLEMENTARY INFORMATION Notes to Required Supplementary Information Budgetary Reporting

The State’s annual budget is prepared on a cash basis, modified only at year-end to allow for a 31-day period for the payment of vendor invoices for goods and services previously encumbered. Appropriations expire or lapse at the end of this period.

Budgetary Process

Appropriation requests for the upcoming fiscal year are submitted to the State Budget Office (Budget) by September 1. Budget conducts budget hearings and reviews revenue estimates for recommendation and preparation of the proposed budget. The Governor presents the proposed budget to the State Legislature in January. Included in that budget proposal is the Governor’s official revenue estimate for the upcoming fiscal year. To maintain a balanced budget, the Legislature can appropriate expenditures only to the level of the Governor’s official revenue estimate and prior year fund balance.

The Legislature also holds budget hearings, considers the effect of other proposed legislation, and gathers other information during its 60-day session, which occurs January through March of each calendar year. During the last days of the legislative session, the Legislature passes the budget and the Governor approves, vetoes, or allows the budget to become law without signing.

In the event that there is a shortfall of General Revenue Fund collections during the year, the Governor may impose a spending reduction. In 1994, the Legislature created a Revenue Shortfall Reserve Fund (Rainy Day Fund) designed to prevent a spending reduction. By law, the first 50% of the General Revenue Fund surplus for a fiscal year is set aside in a reserve or Rainy Day Fund not to exceed 13% of the total appropriations from General Revenue for that year. This fund may be used to offset a shortfall of revenues which would otherwise require the Governor to impose expenditure reductions.

In the event of higher than estimated revenue collections throughout the year, supplemental appropriation requests may be made to the Legislature. In FY 2020, Appropriated Special Revenue and Federal Funds were increased by total supplemental appropriations of $1.7 billion. During the budget process, the Legislature may also decide to reappropriate certain unexpended budgetary appropriations for expenditure in the next year. Accounts reappropriated generally relate to special activities or projects that may require several years to complete. Reappropriated prior year general revenue appropriations of $370 million are reported as “Expenditures From Prior Year Appropriations.”

In addition to the above, in the event of a General Revenue budget surplus from the previous fiscal year, additional appropriation requests may be made to the Legislature. Appropriations from 2020 General Revenue were increased by approximately $6 million for surplus appropriations. The $6 million surplus appropriations are also reported as “Expenditures From Prior Year Appropriations”.

After the budget is legally enacted, certain appropriations from General Revenue may be altered or transferred within each Cabinet Secretariat. The transfers may not exceed more

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than 5% of the funds appropriated to any one agency or board, and are altered at the budgetary activity level. Other specific transfers are allowed in all the budgetary funds from the object classes of personal services and unclassified budget object classes to employee benefits or from personal services and employee benefits to other budget object classes, and are not limited to Secretariat authority.

The budget laws provide for the ability of the Governor to increase the appropriations of the budgetary Appropriated Special Revenue Funds and the Federal Funds when the Legislature is not in session. Detailed spending plans, identification of new revenue sources, and justifications are required for review and approval.

Budgetary Control

The State Legislature annually appropriates those general government activities determined to be important to controlling the financial operations of the State. The Legislature appropriates expenditures for those defined budgetary activities of personal services, current expenses, repairs, and other assets, often further defined by the object classes of personal services, employee benefits, equipment repairs and alterations, or unclassified.

The State’s accounting system controls expenditures for appropriated accounts at the budgetary activity level on a predefined quarterly basis. The State Auditor exercises control over spending at the budgetary activity level on an annual appropriation basis.

Budget further monitors the rate and nature of spending for all budgetary accounts by requiring the organization responsible for the budgeted activities to submit annual spending plans reflecting further details on their expected quarterly spending patterns and the types of expenditures for the budgeted accounts. From these spending plans, Budget monitors and limits expenditures within predefined quarterly allotments. Expenditures during a quarter may not exceed the amount of the approved allotment, unless the Governor approves the expenditure of a larger amount. Any amounts remaining unexpended at the close of a quarter are available for reallocation and expenditure during any succeeding quarter of the same fiscal year.

Budget also utilizes encumbrance accounting to control purchase orders and other commitments. Under the budgetary process, unexpended appropriations and encumbrances expire at the end of the 31-day period following each fiscal year-end. All unpaid invoices and claims after that date must be submitted by the vendor to the State Court of Claims, unless the related activity has been reappropriated by the Legislature.

Budgetary Funds

The State uses four budgetary fund groups to summarize accounts or activities which have been legally appropriated. The budgetary fund groups are described as follows:

General Revenue Fund – consists primarily of the major tax revenues of the State, such as Consumer Sales Tax, Personal Income Tax, Business and Occupation Tax, Corporate Net Income Tax, and Severance Tax. The General Revenue Fund supports the operation of certain primary government activities and certain other agencies.

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Federal Fund – consists of any financial awards made to any state agency by the U.S. Government, whether a loan, grant, subsidy, augmentation, reimbursement or any other form of such awards, including state funds used for federal matching purposes.

Road Fund – consists of revenues from gasoline and other motor fuel excise and license taxes, motor vehicle registration and license fees, and all other revenue derived from motor vehicles or motor fuel. The Road Fund is appropriated by the Legislature and used solely for construction, repair, and maintenance of public highways, and also for the payment of interest and principal on all road bonds.

Appropriated Special Revenue Fund – consists of individual accounts created for special purposes. These accounts generate revenue derived from established rates or fees. The spending within these accounts is limited to the amount collected or the amount appropriated by the Legislature, whichever is less.

The State has other special revenue accounts which are not appropriated. These accounts are special accounts which derive revenues from special fees or charges, or exist for internal agency purposes, such as payroll clearing accounts, cost allocations, etc., but are not subject to specific legislative appropriation. Accordingly, these accounts have not been reported in the State’s budgetary comparison schedule.

2021 Budgetary Reporting

In FY 2021, $15.4 million was transferred to the Rainy Day Fund.

The State's budgetary General Revenue Fund balance at July 1, 2020, has been adjusted as follows (expressed in thousands):

General Revenue Fund:

Beginning Fund Balance $ 440,127

Prior Year Refunds 171

Transfer from Expired Funds 23,515

Adjustment (55,656)

Adjusted Beginning Fund Balance $ 408,157

Budgetary Reporting and GAAP

Because the budgetary basis differs from accounting principles generally accepted in the United States, budget and actual amounts in the accompanying Budgetary Comparison Schedule are presented on the budgetary basis. A more detailed budgetary basis report, Supplementary Information to the State of West Virginia Comprehensive Annual Financial Report, is produced for internal purposes to demonstrate budgetary compliance and is available at the Financial Accounting and Reporting Section for public inspection. A reconciliation that compares the excess of revenues over expenditures on a budgetary basis for the year ended June 30, 2021, to the excess of revenues and other financing sources over expenditures and other financing uses presented in conformity with accounting principles generally accepted in the United States is set forth in the following schedule.

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Required Supplementary Information Budgetary Comparison Schedule Budget-to-GAAP Reconciliation For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Budgetary Funds

General Revenue

Fund Federal

Fund

State Road Fund

Appropriated Special

Revenue Fund

Sources/inflows of resources Actual amounts (budgetary basis) "available for appropriation" from the budgetary comparison schedule $ 4,987,577 $ 6,100,239 $ 1,439,399 $ 1,954,222

Differences – Budget to GAAP:

Intrafund transactions not included in GAAP revenues (5,934,344) — — —

Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes 55,713 — 149,807 —

Basis of Accounting Difference 310,937 — (33,936) — Reclassifications:

Nonappropriated Budgetary Fund’s Revenue included as revenue/transfers in the GAAP General, Transportation, and Other Funds 6,708,150 — 276,795 —

Budgetary special revenue funds transferred to GAAP General, Transportation, Tobacco Settlement Finance Authority and Other Funds 1,053,721 — 8,702 (1,954,222) Budgetary federal funds transferred to GAAP General, Transportation, Tobacco Settlement Finance Authority and Other Funds 5,968,912 (6,100,239) 23,669 —

Total revenues as reported on the statement of revenues, expenditures, and changes in fund balances – governmental funds $ 13,150,666 $ — $ 1,864,436 $ —

Uses/Outflows of resources Actual amounts (budgetary basis) “total charges to appropriations” from the budgetary comparison schedule $ 4,614,933 $ 5,420,187 $ 1,301,508 $ 1,575,036

Differences – Budget to GAAP:

Intrafund transactions not included in GAAP expenditures (5,934,344) — — —

Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes (287,260) — — —

Basis of Accounting Difference 970,029 — (471,658) — Reclassifications:

Nonappropriated Budgetary Fund’s exp./transfers out included as exp. in the GAAP General, Transportation, WV Infrastructure, and Other Funds 7,106,703 — 393,358 — Budgetary general revenue funds transferred to GAAP General, Transportation, Tobacco Settlement Finance Authority, and Other Funds (208,985) — 151,376 — Budgetary special revenue funds transferred to GAAP General, Transportation, Tobacco Settlement Finance Authority, and Other Funds 854,934 — 5,610 (1,575,036)

Budgetary federal revenue funds transferred to GAAP General, Transportation, Tobacco Settlement Finance Authority, and Other Funds 5,303,490 (5,420,187) 24,170 —

Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balances – governmental funds $ 12,419,500 $ — $ 1,404,364 $ —

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Schedule of the State’s Proportionate Share of the Net Pension Liability

Multiple-Employer Cost Sharing Plans June 30, 2021 (Expressed in Thousands)

PERS 2021 2020 2019 2018

State’s proportion of the net pension liability 68.25 % 67.49 % 66.37 % 66.88 %

State’s proportionate share of the net pension liability $ 360,808 $ 145,121 $ 171,404 $ 288,670

State’s covered payroll $ 1,056,970 $ 985,020 $ 923,191 $ 921,592

State’s proportionate share of the net pension liability as a percentage of its covered payroll 34.14 % 14.73 % 18.57 % 31.32 %

Plan fiduciary net position as a percentage of the total pension liability 92.89 % 96.99 % 96.33 % 93.67 %

Note: The schedule is intended to show ten years. Additional years will be added as they become available.

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2017 2016 2015

67.57 % 67.99 % 68.33 %

$ 621,010 $ 379,669 $ 252,194

$ 937,259 $ 923,143 $ 915,586

66.26 % 41.13 % 27.54 %

86.11 % 91.29 % 93.98 %

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Schedule of the State’s Proportionate Share of the Net Pension Liability

Multiple-Employer Cost Sharing Plans June 30, 2021 (Expressed in Thousands)

TRS 2021 2020 2019 2018

State’s proportion of the net pension liability 1.09 % 1.07 % 1.06 % 1.28 %

State’s proportionate share of the net pension liability $ 35,091 $ 31,747 $ 33,154 $ 44,163

State’s covered payroll $ 330,830 $ 307,841 $ 319,360 $ 282,077

State’s proportionate share of the net pension liability as a percentage of its covered payroll 10.61 % 10.31 % 6.08 % 15.66 %

Plan fiduciary net position as a percentage of the total pension 70.89 % 72.64 % 71.20 % 67.85 %

TRS - Special Funding Situation 2021 2020 2019 2018

Proportion of the net 94.43 % 94.34 % 93.83 % 92.86 %

Proportionate share of the net pension liability $ 3,006,052 $ 2,775,073 $ 2,929,645 $ 3,208,171

Note: This schedule is intended to show ten years. Additional years will be added as they become available.

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2017 2016 2015

1.46 % 1.35 % 1.35 %

$ 60,156 $ 46,931 $ 46,438

$ 312,801 $ 306,699 $ 343,570

19.23 % 15.30 % 13.52 %

61.42 % 66.25 % 65.95 %

2017 2016 2015

92.09 % 93.44 % 94.15 %

$ 3,784,772 $ 3,237,919 $ 3,248,227

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Required Supplementary Information Schedule of State Contributions – PERS Last Eight Fiscal Years (Expressed in Thousands)

PERS 2021 2020 2019 2018 2017

Contractually required contribution $ 107,612 $ 105,517 $ 98,502 $ 101,551 $ 110,591

Contributions in relation to the contractually required contribution 107,612 105,517 98,502 101,551 110,591

Contribution deficiency (excess) $ — $ — $ — $ — $ —

State’s covered payroll $ 1,076,120 $ 1,055,170 $ 985,020 $ 923,191 $ 921,592

Contributions as a percentage of covered payroll 10.00 % 10.00 % 10.00 % 11.00 % 12.00 %

Note: This schedule is intended to show ten years. Additional years will be added as they become available.

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2016 2015 2014

$ 126,530 $ 129,240 $ 132,760

126,530 129,240 132,760

$ — $ — $ —

$ 37,259 $ 923,143 $ 915,586

13.50 % 14.00 % 14.50 %

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Required Supplementary Information Schedule of State Contributions – TRS Last Eight Fiscal Years (Expressed in Thousands)

TRS – State 2021 2020 2019 2018 2017

Contractually required contribution $ 4,361 $ 4,980 $ 5,104 $ 5,118 $ 5,780

Contributions in relation to the contractually required contribution 4,361 4,980 5,104 5,118 5,780

Contribution deficiency (excess) $ — $ — $ — $ — $ —

Covered payroll $ 351,673 $ 330,830 $ 307,841 $ 319,360 $ 282,077

Contributions as a percentage of covered payroll 1.24 % 1.51 % 1.66 % 1.60 % 2.05 %

TRS – Special Funding Situation 2021 2020 2019 2018 2017

Statutorily required contribution $ 389,692 $ 436,598 $ 442,726 $ 458,163 $ 420,605

Contributions in relation to the statutorily required contribution 389,692 436,598 442,726 458,163 420,605

Contribution deficiency (excess) $ — $ — $ — $ — $ —

Note: This schedule is intended to show ten years. Additional years will be added as they become available.

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2016 2015 2014

$ 6,043 $ 6,662 $ 6,922

6,043 6,662 6,922

$ — $ — $ —

$ 312,801 $ 306,699 $ 343,570

1.93 % 2.17 % 2.01 %

2016 2015 2014

$ 392,714 $ 458,452 $ 484,159

392,714 458,452 484,159

$ — $ — $ —

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Required Supplementary Information Schedule of State Contributions – Single Employer Plans Last Ten Fiscal Years (Expressed in Thousands)

Year Ended June 30

Actuarially Determined

Contribution Actual

Contribution

Contribution Deficiency

(Excess) Covered Payroll

Actual Contribution as

a % of Covered

Payroll

SPDDRS 2021 $ 16,648 $ 16,699 $ (51) $ 349 4,784.81 %

2020 13,187 13,246 (59) 514 2,577.04 %

2019 15,162 15,595 (433) 1,527 1,021.28 %

2018 24,675 24,829 (154) 2,963 837.97 %

2017 16,875 17,155 (280) 3,181 528.30 %

2016 13,209 13,977 (768) 3,713 376.43 %

2015 20,860 21,668 (808) 5,120 423.20 %

2014 25,146 26,218 (1,072) 5,988 437.84 %

2013 15,162 16,210 (1,048) 6,779 239.12 %

2012 22,051 23,297 (1,246) 8,001 291.18 %

SPRS 2021 $ 9,778 $ 7,928 $ 1,850 $ 34,946 22.69 %

2020 7,716 4,850 2,866 33,904 14.31 %

2019 4,180 4,556 (376) 30,938 14.73 %

2018 4,726 4,205 521 32,291 13.02 %

2017 4,427 3,657 770 31,582 11.58 %

2016 3,402 3,887 (485) 31,792 12.23 %

2015 3,183 4,060 (877) 29,574 13.73 %

2014 3,363 4,049 (686) 27,701 14.62 %

2013 3,802 4,193 (391) 27,670 15.15 %

2012 3,837 4,544 (707) 24,725 18.58 %

JRS 2021 $ 838 $ 886 $ (48) $ 9,752 9.09 %

2020 791 791 — 9,752 8.11 %

2019 779 779 — 9,374 8.31 %

2018 735 735 — 9,500 7.74 %

2017 709 739 (30) 9,122 8.10 %

2016 739 739 — 8,870 8.33 %

2015 2,845 2,845 — 9,248 30.76 %

2014 2,456 2,456 — 8,870 27.69 %

2013 2,422 2,422 — 8,860 27.34 %

2012 2,740 3,997 (1,257) 8,860 45.11 %

Notes: (1) Contributions for SPDDRS include employer contributions and other payments designated by WV State Code Section 15-2-26 - Payments to members for court attendance and mileage; rewards for apprehending wanted persons; fees for traffic accident reports and photographs; fees for criminal investigation reports and photographs; fees for criminal history record checks; and fees for criminal history record reviews and challenges or from any other sources designated by the superintendent.

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Required Supplementary Information Schedule of Changes in the State’s

Net Pension Liability and Related Ratios Fiscal Years Ended June 30 (Expressed in Thousands)

SPDDRS

Total pension liability: 2021 2020 2019 2018 2017

Service cost $ 153 $ 540 $ 931 $ 1,071 $ 1,263

Interest 55,378 54,438 54,004 53,131 51,913

Difference between actual and expected experience 4,601 6,331 (2,218) 47 6,283

Assumption changes — — — 1,961 —

Benefit payments (49,225) (47,551) (45,529) (43,325) (41,969)

Net change in total pension liability 10,907 13,758 7,188 12,885 17,490

Total pension liability – beginning 762,838 749,080 741,892 729,007 711,517

Total pension liability – ending (a) 773,745 762,838 749,080 741,892 729,007

Plan fiduciary net position:

Contributions – employer 13,246 15,595 24,829 17,155 13,977

Contributions – member 35 110 186 362 320

Net investment income 21,252 38,174 60,939 87,793 (1,230)

Benefit payments (49,225) (47,551) (45,529) (43,325) (41,969)

Administrative expense (54) (63) (61) (45) (48)

Other 530 752 691 847 590

Net change in plan fiduciary net position (14,216) 7,017 41,055 62,787 (28,360)

Plan fiduciary net position – beginning 689,820 682,803 641,748 578,798 607,158

Plan fiduciary net position – ending (b) 675,604 689,820 682,803 641,585 578,798

State’s net pension liability (asset) – ending (a) - (b) $ 98,141 $ 73,018 $ 66,277 $ 100,307 $ 150,209

Plan fiduciary net position as a percentage of total pension liability 87.32 % 90.43 % 91.15 % 86.48 % 79.40 %

Covered payroll $ 514 $ 1,527 $ 2,963 $ 3,181 $ 3,713

State’s net pension liability (asset) as a percentage of covered payroll 19093.58 % 4781.79 % 2236.82 % 3153.32 % 4045.49 %

Information presented based upon measurement date of: 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016

Note: This schedule is intended to show ten years. Additional years will be added as they become available.

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2016 2015

$ 1,774 $ 2,215

50,748 49,778

4,344 —

— —

(39,708) (37,565)

— 14,428

694,359 679,931

— —

21,668 26,955

445 545

22,866 90,872

(39,708) (37,565)

(51) (52)

861 —

— —

601,077 520,322

607,158 601,077

$ — $ —

85.33 % 86.57 %

$ 5,120 $ 5,988

2038.28 % 1557.82 %

6/30/2015 6/30/2014

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Required Supplementary Information Schedule of Changes in the State’s

Net Pension Liability and Related Ratios Fiscal Years Ended June 30 (Expressed in Thousands)

SPRS

2021 2020 2019 2018 2017

Total pension liability:

Service cost $ 8,533 $ 7,456 $ 7,617 $ 6,827 $ 6,750

Interest 16,918 14,654 13,496 11,410 10,113

Change of benefit terms — 12,731 — — —

Difference between actual and expected 7,888 (3,513) (3,610) (765) 1,636

Assumption changes — — — 11,192 —

Benefit payments (2,498) (1,944) (1,842) (1,454) (1,071)

Net change in total pension liability 30,841 29,384 15,661 27,210 17,428

Total pension liability – beginning 218,293 188,909 173,248 146,038 128,610

Total pension liability – ending (a) 249,134 218,293 188,909 173,248 146,038

Plan fiduciary net position:

Contributions – employer 4,850 4,556 4,205 3,657 3,887

Contributions – member 4,168 3,905 3,621 3,634 3,755

Net investment income 7,010 11,730 16,303 22,346 91

Benefit payments (2,498) (1,944) (1,842) (1,454) (1,071)

Administrative expense (67) (60) (60) (64) (47)

Other — — — — (163)

Net change in plan fiduciary net position 13,463 18,187 22,227 28,119 6,452

Plan fiduciary net position – beginning 207,102 188,915 166,688 138,569 132,117

Plan fiduciary net position – ending (b) 220,565 207,102 188,915 166,688 138,569

State’s net pension liability (asset) – ending (a) - (b) $ 28,569 $ 11,191 $ (6) $ 6,560 $ 7,469

Plan fiduciary net position as a percentage of total pension liability 88.53 % 94.87 % 100.00 % 96.21 % 94.89 %$ 33,904

Covered payroll $ 30,938 $ 30,938 $ 32,291 $ 31,582 $ 31,792

State’s net position liability (asset) as a percentage of covered payroll 84.25 % 36.17 % (0.02) % 20.77 % 23.49 %

Information presented based upon measurement date of: 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016

Note: This schedule is intended to show ten years. Additional years will be added as they become available.

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2016 2015

$ 6,337 $ 5,890

9,024 8,021

— —

(201) —

— —

(1,051) (913)

— —

114,501 101,503

— —

4,060 4,049

3,609 3,630

4,972 17,756

(1,051) (913)

(45) (42)

— —

120,572 96,092

132,117 120,572

$ — $ —

102.73 % 105.30 %

$ 29,574 $ 27,701

(11.86) % (21.92) %

6/30/2015 6/30/2014

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Required Supplementary Information Schedule of Changes in the State’s

Net Pension Liability and Related Ratios Fiscal Years Ended June 30 (Expressed in Thousands)

JRS

Total pension liability: 2021 2020 2019 2018 2017

Service cost $ 2,640 $ 2,406 $ 2,587 $ 2,466 $ 2,681

Interest 8,711 8,608 8,539 8,521 8,478

Difference between actual and expected experience (5,885) (4,959) (6,054) (6,101) (5,813)

Assumption changes — — 962

Benefit payments (4,897) (4,933) (4,932) (4,609) (4,429)

Net change in total pension liability 569 1,122 1,102 277 917

Total pension liability – beginning 115,950 114,828 113,726 113,449 112,532

Total pension liability – ending (a) 116,519 115,950 114,828 113,726 113,449

Plan fiduciary net position:

Contributions – employer 791 779 735 739 739

Contributions – member 301 331 364 372 401

Net investment income 6,850 12,085 18,373 26,270 (175)

Benefit payments (4,897) (4,933) (4,932) (4,609) (4,429)

Administrative expense (10) (11) (8) (6) (6)

Other — (86) — (4) (39)

Net change in plan fiduciary net position 3,035 8,165 14,532 22,762 (3,509)

Plan fiduciary net position – beginning 212,653 204,488 189,956 167,194 170,703

Plan fiduciary net position – ending (b) 215,688 212,653 204,488 189,956 167,194

State’s net pension liability (asset) – ending (a) - (b) $ (99,169) $ (96,703) $ (89,660) $ (76,230) $ (53,745)

Plan fiduciary net position as a

percentage of total pension liability 185.11 % 183.40 % 178.08 % 167.03 % 147.37 %

Covered payroll $ 9,752 $ 9,374 $ 9,500 $ 9,122 $ 8,870

State’s net pension liability (asset) as a percentage of covered payroll (1016.91) % (1031.61) % (943.78) % (835.67) % (605.92) %

Information presented based upon measurement date of: 6/30/2020 6/30/2019 6/30/2018 6/30/2017 6/30/2016

Note: This schedule is intended to show ten years. Additional years will be added as they become available.

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2016 2015

$ 2,812 $ 2,819

8,458 7,978

(6,506) —

(4,313) (4,455)

— —

112,081 105,739

— —

2,845 2,456

413 426

6,525 25,263

(4,313) (4,455)

(6) (7)

— 80

— —

165,239 141,476

170,703 165,239

$ — $ —

151.69 % 147.43 %

$ 9,248 $ 8,870

(629.01) % (599.30) %

6/30/2015 6/30/2014

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Notes to Required Supplementary Information

Changes in Assumptions

An experience study, which was based on the years 2013 through 2018, was approved by the Consolidated Public Retirement Board. As a result, valuation assumptions were changed as of June 30, 2020, to reflect the most recent experience study:

2020 2019 2018 2017 2016

Projected salary

Increases:

State 3.1% - 5.3% 3.1% - 5.3% 3.00% – 4.6% 3.00% – 4.6% 3.00% – 4.6%

Nonstate 3.35% – 6.5% 3.35% – 6.5% 3.35% – 6.0% 3.35% – 6.0% 3.35% – 6.0%

Inflation rate 3.0% 3.0% 3.0% 3.0% 3.0%

Mortality rates Active – Pub-2010 general employees table, below-median, headcount-weighted, projected which scale MP-2018; Retired Healthy males – 108% Pub-2010 general retiree male table, below median, headcount-weighted, projected with Scale MP-2018; Retired Healthy females – 122% Pub-2010 general retiree female table, below median, headcount- weighted, projected with Scale 2018; Retired Disabled males – 118% Pub-2010 general/ teachers disabled male table, headcount-weighted, projected generationally with Scale MP-2018; Retired Disabled females – 117% Pub-2010 general/ teachers disabled female table, headcount-weighted, projected generationally with scale MP-2018.

Active – RP-2000 Non-Annuitant table, projected with Scale AA on a fully generational basis; Retired Healthy males – 97% RP-2000 Healthy Annuitant table, projected with Scale AA on a fully generational basis; Retired Healthy females – 94% RP-2000 Healthy Annuitant table, projected with Scale AA on a fully generational basis; Retired Disabled males – 96% of RP-2000 Disabled Annuitant table, projected with Scale AA on a fully generational basis; Retired Disabled females – 101% of RP-2000 Disabled Annuitant table, projected with Scale AA on a fully generational basis.

Active – RP-2000 Non-Annuitant tables, projected with Scale AA on a fully generational basis; Retired Healthy males – 110% RP-2000 Healthy Annuitant table, projected with Scale AA on a fully generational basis; Retired Healthy females – 101% RP-2000 Healthy Annuitant table, projected with Scale AA on a fully generational basis; Retired Disabled males – 96% of RP-2000 Disabled Annuitant table, projected with Scale AA on a fully generational basis; Retired Disabled females – 107% of RP-200 Disabled Annuitant table, projected with

Healthy males – RP-2000 healthy annuitant table, projected Scale AA; Healthy females – RP- 2000 healthy annuitant table, projected with Scale AA; Disabled male 96% of RP- 2000 disabled annuitant table, projected with Scale AA; Disabled females – 107% of RP- 2000 disabled annuitant table, projected with Scale AA.

Withdrawal rates

State 2.28 - 45% 2.28 - 45% 1.75 – 35% 1.75 – 26% 1.75 – 35.1%

Nonstate 2.5 - 35.9% 2.5 - 35.9% 2 – 35.9% 2 – 31.2% 2 – 35.8%

Disability rates 0 – 0.5% 0 – 0.7% 0 – 0.7% 0 – 0.7% 0 – .675%

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2015 2014

Projected salary

Increases:

State 3.00% – 4.6% 4.25% – 6.0%

Nonstate 3.35% – 6.0% 4.25% – 6.0%

Inflation rate 1.9% 2.2%

Mortality rates Healthy males – 110% of RP- 2000 healthy annuitant table, projected Scale AA; Healthy females –101% of RP-200 healthy annuitant table, projected Scale AA; Disabled male 96% of RP 2000 disabled annuitant table, projected with Scale AA; Disabled females – 107% of RP- 2000 disabled annuitant table, projected with Scale AA.

Healthy males – 1983 GAM, Healthy females – 1971 set back 1 yr, Disabled GAM males – 1971 GA set forward 8 yrs, Disabled females – Revenue ruling 96-

Withdrawal rates

State 1.75 – 35.1% 1 – 26%

Nonstate 2 – 35.8% 2 – 31.2%

Disability rates 0 – .675% 0 – .8%

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Schedule of the State’s Proportionate Share of the Net OPEB Liability

Multiple-Employer Cost Sharing Plan June 30, 2021 (Expressed in Thousands)

2021 2020 2019 2018 2017

State’s proportion of the net OPEB liability 80.82 % 80.63 % 76.65 % 78.90 % 74.47 %

State’s proportionate share of the net OPEB liability $ 356,966 $ 1,337,704 $ 1,644,412 $ 1,940,146 $ 1,849,369

State’s covered-employee payroll $ 1,662,544 $ 1,768,975 $ 2,286,999 $ 2,199,037 $ 2,114,459

State’s proportionate share of the net OPEB’s liability as a percentage of its covered-employee payroll 21.47 % 75.62 % 71.90 % 88.23 % 87.46 %

Plan fiduciary net position as a percentage of the total OPEB liability 73.49 % 39.69 % 30.98 % 25.10 % 21.64 %

Note: This schedule is intended to show ten years. Additional years will be added as they become available. Data is presented one year in arrears.

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Required Supplementary Information Schedule of State Contributions – OPEB June 30, 2021 (Expressed in Thousands)

2021 2020 2019 2018 2017 2016

Contractually required contribution $ 151,000 $ 158,000 $ 171,000 $ 169,000 $ 185,000 $ 128,000

Contributions in relation to the contractually required contribution 153,000 156,000 5,000 156,000 128,000 109,000

Contribution deficiency (excess) $ (2,000) $ 2,000 $ 166,000 $ 13,000 $ 57,000 $ 19,000

State’s covered-employee payroll $ 1,662,544 $ 1,768,975 $ 1,892,941 $ 2,286,999 $ 2,199,037 $ 2,114,459

Contributions as a percentage of covered- employee payroll 9.20 % 8.82 % 8.77 % 6.82 % 5.82 % 5.15 %

Note: This schedule is intended to show ten years. Additional years will be added as they become available.

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Required Supplementary Information Schedule of State Contributions – OPEB Special Funding Situation June 30, 2021 (Expressed in Thousands)

2021 2020 2019 2018

Statutorily required contribution $ 30,000 $ 35,000 $ 35,000 $ 35,000

Contributions in relation to the statutorily required contribution 30,000 35,000 35,000 35,000

Contribution deficiency (excess) $ — $ — $ — $ —

Note: This schedule is intended to show ten years. Additional years will be added as they become available.

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Notes to Required Supplementary Information

Changes in Assumptions for OPEB

Significant assumptions used in the actuarial valuations are as follows: Actuarial cost method Entry age normal

Amortization method Level percentage of payroll, closed

Amortization period 20-year closed period as of June 30, 2017

Asset valuation method Market value

Actuarial assumptions:

Investment rate of return 7.15%, net of OPEB plan investment expense, including inflation

Inflation rate 2.75%

Salary Increases Dependent upon pension system. Ranging from 3.00% to 6.5%, including inflation

Retirement Age Experience-based table of rates that are specific to the type of eligibility condition. Last updated for the June 30, 2016, actuarial valuation.

Mortality rates Post-retirement: RP-2000 healthy annuity mortality table projected with Scale AA on a fully generational basis for PERS and TRS. RP-2014 healthy annuitant mortality table projected with Scale MP-2016 on a fully generational basis for Troopers A and B. Pre- retirement: RP-2000 non-annuitant mortality table projected with Scale AA on a fully generational basis for PERS and TRS. RP-2014 employee mortality table projected with Scale MP-2016 on a fully generational basis for Troopers A and B.

Healthcare cost trend rates Trend rate for pre-Medicare per capita costs of 8.5% for plan year end 2020, decreasing by 0.5% each year thereafter, until ultimate trend rate of 4.5% is reached in plan year end 2028. Trend rate for Medicare per capita costs of 3.1% for plan year end 2020, 9.5% for plan year end 2021, decreasing by 0.5% each year thereafter, until ultimate trend rate of 4.5% is reached in plan year end 2031.

Aging Factors Based on the 2013 SOA Study “Health Care Costs – From Birth to Death”

Expenses Health administrative expenses are included in the development of the per capita claims costs. Operating expenses are included as a component of the annual expense.

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GOVERNMENTAL FUND TYPES – NONMAJOR Special Revenue:

Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted, committed, or assigned to expenditures for specified purposes.

Debt Service:

Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest.

Capital Projects:

Education, Arts, Sciences, and Tourism Fund: This Fund is established to provide public financial support for constructing, equipping, improving, and maintaining capital improvement projects which promote education and tourism in the State.

Lease Purchase Account: This Account is established to ensure that revenues and expenditures for the acquisition of capital assets through lease-purchase agreements are properly recorded.

Cacapon Project Fund: This Fund is established to provide public financial support for constructing, equipping, improving, and maintaining capital improvement projects at Cacapon Resort State Park.

State Parks Projects: This Fund is established to provide public financial support for certain capital improvement and deferred maintenance projects throughout the State Parks System, including, but not limited to, maintenance, repair, construction, upgrades, and improvements.

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Permanent Funds:

Permanent Funds are used to account for and report resources that are restricted to the extent that only earnings, not principal, may be used for purposes that support the State’s programs, for the benefit of the government or its citizenry.

The Irreducible School Fund: The Fund, which was constitutionally established, is required to maintain a minimum level of investments. All earnings from these investments are transferred to the General Fund for educational expenditures.

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Combining Balance Sheet Nonmajor Governmental Funds June 30, 2021 (Expressed in Thousands)

Assets: Special

Revenue Debt Service

Cash and Cash Equivalents $ 417,472 $ 59,979

Investments 173,007 —

Receivables, Net 15,456 —

Due from Other Governments 7,905 —

Due from Other Funds 60 —

Due from Component Units — 1,055

Inventories 7 —

Restricted Assets:

Cash and Cash Equivalents 1,694 —

Total Assets $ 615,601 $ 61,034

Liabilities:

Accounts Payable $ 32,583 $ —

Accrued and Other Liabilities 20,525 —

Due to Other Governments 18,655 —

Due to Other Funds 641 —

Due to Component Units 14 —

Total Liabilities 72,418 —

Fund Balances:

Nonspendable:

Inventories 7 —

Permanent Fund — —

Restricted for:

Capital Projects — —

Debt Service — 61,034

Development, Tourism, and Recreation 78,281 —

Education — —

Public Protection 118,315 —

Committed to:

General Government Operations 6,508 —

Public Protection 330,075 —

Assigned to:

Health and Social Services 3,904 —

Public Protection 6,093 —

Total Fund Balances 543,183 61,034

Total Liabilities and Fund Balances $ 615,601 $ 61,034

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Capital Projects Permanent

Fund

Education, Arts,

Sciences, and Tourism Fund

Cacapon Project Fund

State Park Projects

Fund Lease Purchase Account

Irreducible School Total

$ 2,325 $ 2,084 $ 21,106 $ 10,740 $ 1,502 $ 515,208

— — — — — 173,007

— — — — — 15,456

— — — — — 7,905

— — — — — 60

— — — — — 1,055

— — — — — 7

— — — — — 1,694

$ 2,325 $ 2,084 $ 21,106 $ 10,740 $ 1,502 $ 714,392

50 — 2,808 — — 35,441

— — — — — 20,525

— — — — — 18,655

— — — — — 641

— — — — — 14

50 — 2,808 — — 75,276

— — — — — 7

— — — — 1,000 1,000

2,275 2,084 18,298 10,740 — 33,397

— — — — — 61,034

— — — — — 78,281

— — — — 502 502

— — — — — 118,315

— — — — — 6,508

— — — — — 330,075

— — — — — 3,904

— — — — — 6,093

2,275 2,084 18,298 10,740 1,502 639,116

$ 2,325 $ 2,084 $ 21,106 $ 10,740 $ 1,502 $ 714,392

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233

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

Nonmajor Governmental Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Special Revenue

Debt Service

Revenues:

Intergovernmental $ 283,834 $ —

Licenses, Permits, and Fees 119,606 —

Lottery Revenue — 10,656

Investment Earnings 65,327 17

Other 7,783 —

Total Revenues 476,550 10,673

Expenditures:

Legislative 1,463 —

Administration — 4

Environmental Protection 126,859 —

Employment Programs 201,250 —

Education — —

Revenue 23,519 —

Veterans Assistance — 1

Regulatory Boards and Commissions 22,735 —

Capital Outlay — —

Debt Service:

Principal — 55,565

Interest — 25,752

Total Expenditures 375,826 81,322

Excess (Deficiency) of Revenues Over

(Under) Expenditures 100,724 (70,649)

Other Financing Sources (Uses):

Transfers In 806 71,868

Transfers Out (51,391) (14)

Total Other Financing Sources (Uses) (50,585) 71,854

Net Changes in Fund Balances 50,139 1,205

Fund Balances, Beginning of Year 493,044 59,829

Fund Balances, End of Year $ 543,183 $ 61,034

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Capital Projects Permanent

Fund

Education, Arts, Sciences, and Tourism

Fund Cacapon

Project Fund State Park

Project

Fund Lease Purchase Account

Irreducible School Total

$ — $ — $ — $ — $ — $ 283,834

— — — — — 119,606

— — — — — 10,656

1 — 3 1 — 65,349

— — — — (65) 7,718

1 — 3 1 (65) 487,163

— — — — — 1,463

— — — — — 4

— — — — — 126,859

— — — — — 201,250

1,969 — — — — 1,969

— — — — — 23,519

— — — — — 1

— — — — — 22,735

— 5,928 23,510 — — 29,438

— — — — — 55,565

— — — — — 25,752

1,969 5,928 23,510 — — 488,555

(1,968) (5,928) (23,507) 1 (65) (1,392)

— — — — 567 73,241

— — — — (535) (51,940)

— — — — 32 21,301

(1,968) (5,928) (23,507) 1 (33) 19,909

4,243 8,012 41,805 10,739 1,535 619,207

$ 2,275 $ 2,084 $ 18,298 $ 10,740 $ 1,502 $ 639,116

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SPECIAL REVENUE FUNDS Nonmajor Funds

Environmental Protection: The Fund consists of various programs intended to maintain and improve the environmental quality of the State and its natural resources. Included in this Fund are programs addressing the following: Underground Storage Tanks, Groundwater, Solid Waste Environmental Response and Enforcement, Special Reclamation, Mines and Minerals, Dam Safety, Hazardous Waste Emergency Response, Oil and Gas Reclamation, and Oil and Gas Operating Permit and Processing, as well as other miscellaneous programs.

Public Service Commission: The Commission is responsible for appraising and balancing the interests of current and future utility service customers, the State’s economy, and the utilities subject to its jurisdiction. It is directed to identify, explore, and consider the potential benefits and risks associated with emerging and state-of the-art concepts in utility management, rate design, and conservation.

Crime Victims’ Compensation: The intent of the Fund is to provide partial relief to the innocent victims of crime, including claimant’s attorneys and witnesses, for the failure of the State to fully provide for the safety of its citizens and the inviolability of their property. To fund this program, individuals convicted of any felony or misdemeanor, excluding nonmoving traffic violations, must pay an additional amount over and above ordinary court costs.

Insurance Commission: The Commission is responsible for promoting a competitive and solvent insurance market of domestic, foreign, and alien insurers. Additionally, the Fund is authorized to promulgate and adopt and enforce such rules and regulations relating to insurance as are deemed necessary to protect and safeguard the interests of policyholders and the public.

WORKFORCE West Virginia: The Bureau of Employment Programs doing business as WORKFORCE West Virginia includes the Employment Service Division (ES) and the administrative activities of the Unemployment Compensation Division (UC). Local offices are operated throughout the State to serve those seeking and providing employment.

Wildlife Resources Fund: The Fund is responsible for recognizing the inestimable importance of conserving the wildlife resources of West Virginia. In addition, the Fund provides the opportunity for citizens and residents of the State to invest in the future of its wildlife resources. The Fund is financed from the proceeds of the sale of lifetime hunting and fishing licenses, as well as proceeds from gifts, grants, and contributions. The interest on this Fund shall be used only for the purpose of supporting wildlife conservation programs of the State.

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Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2021 (Expressed in Thousands)

Environmental Protection

Public Service

Commission Crime Victims' Compensation

Assets: Cash and Cash Equivalents $ 343,035 $ 38,159 $ 6,530 Investments 97,047 — — Receivables, Net 9,948 72 — Due from Other Governments — 3,569 — Due from Other Funds — 49 — Inventories — — — Restricted Assets:

Cash and Cash Equivalents 251 1,443 —

Total Assets $ 450,281 $ 43,292 $ 6,530

Liabilities: Accounts Payable $ 15,009 $ 12,451 $ 22 Accrued and Other Liabilities 16,451 2,083 — Due to Other Governments 3,947 10,122 — Due to Other Funds 132 105 — Due to Component Units — — —

Total Liabilities 35,539 24,761 22

Fund Balances (Deficits): Nonspendable:

Inventories — — — Restricted for:

Development, Tourism, and Recreation — — — Public Protection 108,275 10,040 —

Committed to: General Government Operations — — 6,508 Public Protection 300,408 8,457 —

Assigned to: Health and Social Services — — — Public Protection 6,059 34 —

Total Fund Balances 414,742 18,531 6,508

Total Liabilities and Fund Balances $ 450,281 $ — $ 43,292 $ — $ 6,530

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Insurance Commission

WORKFORCE West Virginia

Wildlife Resources

Fund Total

$ 20,086 $ 9,662 $ — $ 417,472 — — 75,960 173,007 3,104 11 2,321 15,456 — 4,336 — 7,905 11 — — 60 — 7 — 7

— — — 1,694 $ 23,201 $ 14,016 $ 78,281 $ 615,601

$ — $ 5,101 $ — $ 32,583 1,991 — — 20,525 — 4,586 — 18,655 — 404 — 641 — 14 — 14

1,991 10,105 — 72,418

— 7 — 7

— — 78,281 78,281 — — — 118,315

— — — 6,508 21,210 — — 330,075

— 3,904 — 3,904 — — — 6,093 21,210 3,911 78,281 543,183

$ 23,201 $ 14,016 $ 78,281 $ 615,601

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239

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

Nonmajor Special Revenue Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Environmental Protection

Public Service Commission

Crime Victims' Compensation

Revenues: Intergovernmental $ 77,966 $ 3,654 $ 820 Licenses, Permits, and Fees 64,576 16,033 1,060 Investment Earnings and Losses 46,144 — 87 Other 7,669 — 20 Total Revenues 196,355 19,687 1,987

Expenditures: Legislative — — 1,463 Environmental Protection 126,859 — — Employment Programs — — — Revenue — — — Regulatory Boards and Commissions — 22,735 — Total Expenditures 126,859 22,735 1,463

Excess (Deficiency) of Revenues Over (Under) Expenditures 69,496 (3,048) 524

Other Financing Sources (Uses): Transfers In 806 — — Transfers Out (27,929) (113) (2) Total Other Financing Sources (Uses) (27,123) (113) (2) Net Change in Fund Balances 42,373 (3,161) 522 Fund Balances, Beginning of Year 372,369 21,692 5,986

Fund Balances, End of Year $ 414,742 $ 18,531 $ 6,508

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Insurance Commission

WORKFORCE West Virginia

Wildlife Resources

Fund Total

$ — $ 201,394 $ — $ 283,834 37,107 — 830 119,606 1 — 19,095 65,327 94 — — 7,783 37,202 201,394 19,925 476,550

— — — 1,463 — — — 126,859 — 201,250 — 201,250 23,519 — — 23,519 — — — 22,735 23,519 201,250 — 375,826

13,683 144 19,925 100,724

— — — 806 (19,000) — (4,347) (51,391) (19,000) — (4,347) (50,585) (5,317) 144 15,578 50,139 26,527 3,767 62,703 493,044

$ 21,210 $ 3,911 $ 78,281 $ 543,183

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DEBT SERVICE FUNDS Nonmajor Funds

Lease Purchase Account: This Account is established to ensure that revenues and expenditures for the debt service of the lease-purchase agreements are properly recorded.

West Virginia Infrastructure and Jobs Development Council: The Council coordinates the review and funding of water, wastewater, and economic development projects in the State. This Fund is used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest for the Council’s general obligation debt.

Education, Arts, Sciences, and Tourism Fund: This Fund is used to account for and report the financial resources that are restricted, committed, or assigned to expenditure for principal and interest on the bonds issued to provide public financial support for constructing, equipping, improving, and maintaining capital improvement projects which promote education, arts, sciences, and tourism in the State.

Economic Development Project Fund: This Fund is used to account for and report the financial resources that are restricted, committed, or assigned to expenditure for principal and interest on the bonds issued to provide funds to finance a portion of the costs of construction, equipping, improving, or maintaining economic development projects, capital improvement projects, and infrastructure projects which promote economic development in the State.

Cacapon Project Fund: This Fund is used to account for and report the financial resources that are restricted, committed, or assigned to expenditure for principal and interest on the bonds issued to provide funds to finance a portion of the costs of constructing, equipping, improving or maintaining capital improvements projects at Cacapon Resort State Park.

State Parks Projects: This Fund is used to account for and report the financial resources that are restricted, committed, or assigned to expenditure for principal and interest on the bonds issued to provide funds for certain capital improvement and deferred maintenance projects throughout the State Parks System, including but not limited to, maintenance, repair, construction, upgrades, and improvements.

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Combining Balance Sheet Nonmajor Debt Revenue Funds June 30, 2021 (Expressed in Thousands)

Lease Purchase Accounts

Education, Arts,

Sciences, and Tourism

Fund

Economic Development Project Fund

Cacapon Project Fund

State Parks

Projects Total

Assets:

Cash and Cash Equivalents $ 6,236 $ 12 $ 49,125 $ 1,483 $ 3,123 $ 59,979

Due from Component Units 55 1,000 — — — 1,055

Total Assets $ 6,291 $ 1,012 $ 49,125 $ 1,483 $ 3,123 $ 61,034

Fund Balances:

Restricted for Debt Service 6,291 1,012 49,125 1,483 3,123 61,034

Total Liabilities and Fund Balances $ 6,291 $ 1,012 $ 49,125 $ 1,483 $ 3,123 $ 61,034

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244

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

Nonmajor Debt Service Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Lease Purchase Accounts

West Virginia Infrastructure

and Jobs Development

Council

Education, Arts,

Sciences, and

Tourism Fund

Economic Development Project Fund

Cacapon Project Fund

State Park Projects Total

Revenues:

Lottery Revenues $ 662 $ — $ 9,994 $ — $ — $ — $ 10,656

Investment Earnings — 14 — 3 — — 17

Total Revenues 662 14 9,994 3 — — 10,673

Expenditures:

Administration 3 — 1 — — — 4

Veterans Administration 1 — — — — — 1

Debt Service:

Principal 17,050 18,645 4,185 13,130 870 1,685 55,565

Interest 7,332 3,291 5,809 5,503 1,153 2,664 25,752

Total Expenditures 24,386 21,936 9,995 18,633 2,023 4,349 81,322

Excess (Deficiency) of Revenues Over (Under) Expenditures (23,724) (21,922) (1) (18,630) (2,023) (4,349) (70,649)

Other Financing Sources (Uses):

Transfers In 24,524 21,936 — 18,987 2,029 4,392 71,868

Transfers Out — (14) — — — — (14)

Total Other Financing Sources (Uses) 24,524 21,922 — 18,987 2,029 4,392 71,854

Net Change in Fund Balances 800 — (1) 357 6 43 1,205

Fund Balances, Beginning of Year 5,491 — 1,013 48,768 1,477 3,080 59,829

Fund Balances, End of Year $ 6,291 $ — $ 1,012 $ 49,125 $ 1,483 $ 3,123 $ 61,034

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INTERNAL SERVICE FUNDS Internal Service Funds account for the operations of those state agencies that provide goods and services to other state agencies and governmental units on a cost- reimbursement basis. The Internal Service Funds consist of the following:

State Building Fund: The Fund operates and maintains the primary state government office building complex and related facilities. These facilities are leased to the state agencies that occupy the facilities.

Information Services and Communications: The Fund is responsible for establishing, developing, and improving data-processing functions, for promulgating standards for the utilization of data-processing equipment; and for promoting the effective and efficient operation of the legislative, executive, and judicial branches of State Government. Costs are recovered through service charges to user agencies.

Travel Management: The Fund, a central motor pool responsible for the storage, maintenance, and repairs of state-owned vehicles and aircraft, is maintained by the Department of Administration. User agencies are billed for leasing such vehicles and for use of aircraft.

Enterprise Readiness Planning Board: The Board is responsible for the oversight of how the State manages its financial, human resources, procurement, and other administrative business processes through its Enterprise Readiness Planning (ERP) system. Costs are recovered through service charges to user agencies.

Investment Management Board: The Board serves as the Trustee to provide prudent fiscal administration, investment, and management of the State’s pension funds, workers’ compensation, pneumoconiosis, and other long-term funds.

Board of Treasury Investments: The BTI serves as the investment vehicle for the operating cash of state agencies and authorities, local governments, and other political subdivisions.

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Combining Statement of Fund Net Position Internal Service Funds June 30, 2021 (Expressed in Thousands)

State Building

Fund

Information Services and

Communications Travel

Management

Enterprise Readiness Planning

Board

Investment Management

Board

Board of Treasury

Investments Total

Assets:

Current Assets:

Cash and Cash Equivalents $ 2,699 $ 6,279 $ 2,523 $ 12,421 $ 4,451 $ 1,358 $ 29,731

Receivables, Net — 131 2 — 8,856 1,013 10,002

Due from Other Funds 1,944 10,256 92 1,327 — — 13,619

Due from Component Units 23 — 42 — — — 65

Inventories 624 218 — — — — 842

Other Assets — — — — 107 — 107

Restricted Assets:

Cash and Cash Equivalents — — 7,091 — — — 7,091

Total Current Assets 5,290 16,884 9,750 13,748 13,414 2,371 61,457

Noncurrent Assets:

Restricted Assets:

Cash and Cash Equivalents 16,186 — — — — — 16,186

Capital Assets, Net 216,109 899 15,760 67,039 112 3 299,922

Total Noncurrent Assets 232,295 899 15,760 67,039 112 3 316,108

Total Assets 237,585 17,783 25,510 80,787 13,526 2,374 377,565

Deferred Outflows of Resources:

Related to Pensions 1,230 2,841 201 519 — — 4,791 Related to Other Post-Employment

Benefits 1,752 408 201 72 — — 2,433

Total Deferred Outflows of Resources 2,982 3,249 402 591 — — 7,224

Liabilities:

Current Liabilities:

Accounts Payable 4,290 6,987 222 1,227 8,810 777 22,313

Accrued and Other Liabilities 252 551 36 89 — — 928

Due to Other Governments 94 242 15 43 — — 394

Due to Other Funds 175 322 30 52 — — 579

Due to Component Units — — — — — — — Capital Leases and Other Debt 131 — 8,002 — — — 8,133 Capital Leases Payable to Component

Units 1,865 — — — — — 1,865

Total Current Liabilities 6,807 8,102 8,305 1,411 8,810 777 34,212

Noncurrent Liabilities:

Capital Leases and Other Debt 2,022 — 10,956 — — — 12,978 Capital Leases Payable to Component

Units 49,570 — — — — — 49,570

Net Pension Liability 1,516 3,687 261 667 — — 6,131

Net OPEB Liability 827 700 53 124 — — 1,704

Compensated Absences 479 1,342 85 266 — — 2,172

Total Noncurrent Liabilities 54,414 5,729 11,355 1,057 — — 72,555

Total Liabilities 61,221 13,831 19,660 2,468 8,810 777 106,767

Deferred Inflows of Resources:

Related to Pensions 124 450 62 77 — — 713 Related to Other Post-Employment

Benefits 2,521 3,466 324 399 — — 6,710

Total Deferred Inflows of Resources 2,645 3,916 386 476 — — 7,423

Net Position:

Net Investment in Capital Assets 160,843 962 3,893 67,039 112 3 232,852

Restricted for Capital Projects 14,508 — — — — — 14,508

Restricted for Specific Fund Purposes — — 7,091 — — — 7,091

Unrestricted 1,350 2,323 (5,118) 11,395 4,604 1,594 16,148

Total Net Position $ 176,701 $ 3,285 $ 5,866 $ 78,434 $ 4,716 $ 1,597 $ 270,599

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248

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

Internal Service Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

State Building

Fund

Information Services and

Communications Travel

Management

Enterprise Readiness Planning

Board

Investment Management

Board

Board of Treasury

Investments Total

Operating Revenues:

Charges for Services $ 20,502 $ 51,451 $ 10,677 $ 14,605 $ 44,163 $ 3,791 $ 145,189

Other — — — — 34 — 34

Total Operating Revenues 20,502 51,451 10,677 14,605 44,197 3,791 145,223

Operating Expenses:

Cost of Sales and Services 21,590 48,699 1,931 7,299 39,040 3,265 121,824

General and Administration 1,566 6,510 765 681 5,054 225 14,801

Pension Expense 367 778 75 129 — — 1,349

OPEB Expense (322) (1,032) 79 (111) — — (1,386)

Depreciation and Amortization 6,723 414 8,358 5,343 70 3 20,911

Total Operating Expenses 29,924 55,369 11,208 13,341 44,164 3,493 157,499

Operating Income (Loss) (9,422) (3,918) (531) 1,264 33 298 (12,276)

Nonoperating Revenues (Expenses):

Gain (Loss) on Sale of Equipment (7) — (85) — — — (92)

Investment Income — — — — 1 — 1

Interest Expense (2,168) — — — — — (2,168)

Lottery Revenues 4,894 — — — — — 4,894

Other Nonoperating Revenues 79 67 223 12 — — 381

Total Nonoperating Revenues (Expenses), Net 2,798 67 138 12 1 — 3,016

Income (Loss) Before Capital Contributions and Transfers (6,624) (3,851) (393) 1,276 34 298 (9,260)

Capital Contributions and Transfers:

Capital Contribution 239 — — — — — 239

Transfers In 36,781 — 1,063 — — — 37,844

Transfers Out (5,500) — — — — — (5,500)

Total Capital Contributions and Transfers 31,520 — 1,063 — — — 32,583

Change in Net Position 24,896 (3,851) 670 1,276 34 298 23,323

Net Position, Beginning of Year 151,805 7,136 5,196 77,158 4,682 1,299 247,276

Net Position, End of Year $ 176,701 $ 3,285 $ 5,866 $ 78,434 $ 4,716 $ 1,597 $ 270,599

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249

Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

State Building

Fund

Information Services and

Communications Travel

Management

Enterprise Readiness Planning

Board

Investment Management

Board

Board of Treasury

Investments Total

Cash Flows from Operating Activities:

Receipts from State Agencies $ 20,312 $ 53,698 $ 10,974 $ 13,809 $ 43,021 $ 3,643 $ 145,457

Payments to Suppliers (17,275) (39,505) (1,900) (6,188) (39,352) (3,378) (107,598)

Payments to Employees (5,882) (13,649) (1,106) (2,656) (4,091) — (27,384)

Net Cash Provided by (Used for) Operating Activities (2,845) 544 7,968 4,965 (422) 265 10,475

Cash Flows from Noncapital Financing Activities:

Transfers In 36,781 — 1,063 — — — 37,844

Transfers Out (5,500) — — — — — (5,500)

Distributions or Subsidies from (to) Other Organizations 4,894 — — — — — 4,894

Net Cash Provided by (Used for) Noncapital Financing Activities 36,175 — 1,063 — — — 37,238

Cash Flows from Capital and Related Financing Activities:

Proceeds from Sale of Capital Bonds and Other Debts — — 6,498 — — — 6,498

Repayment of Capital Debt (1,975) (162) (8,851) — — — (10,988)

Interest Paid on Capital Debt (2,168) 1 — — — — (2,167)

Acquisition and Construction of Capital Assets (27,124) (358) (6,674) (2,356) (21) — (36,533)

Net Cash Provided by (Used for) Capital and Related Financing Activities (31,267) (519) (9,027) (2,356) (21) — (43,190)

Cash Flows from Investing Activities :

Investment Earnings — — — — 1 — 1

Net Cash Provided by (Used for) Investing Activities — — — — 1 — 1

Net Increase (Decrease) in Cash and Cash Equivalents 2,063 25 4 2,609 (442) 265 4,524

Cash and Cash Equivalents, Beginning of Year 16,822 6,254 9,610 9,812 4,893 1,093 48,484

Cash and Cash Equivalents, End of Year $ 18,885 $ 6,279 $ 9,614 $ 12,421 $ 4,451 $ 1,358 $ 53,008

West Virginia

250

Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands) (Continued)

State Building

Fund

Information Services and

Communications Travel

Management

Enterprise Readiness Planning

Board

Investment Management

Board

Board of Treasury

Investments Total

Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities:

Operating Income (Loss) $ (9,422) $ (3,918) $ (531) $ 1,264 $ 33 $ 298 $ (12,276)

Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities:

Depreciation and Amortization 6,723 414 8,358 5,343 70 3 20,911

Bad Debt Expense — 2,891 — — — — 2,891

Pension Expense 367 778 75 129 — — 1,349

OPEB Expense (322) (1,032) 79 (111) — — (1,386)

Changes in Assets, Liabilities, and Deferred Outflows of Resources:

Receivables (190) 2,247 296 (796) (1,176) (148) 233

Inventories (139) 191 — — — — 52

Other Assets — — (48) — (25) — (73)

Accounts Payable and Accrued Liabilities 685 292 (205) (583) 676 112 977

Other Liabilities 104 163 (6) (13) — — 248

Deferred Outflows of Resources (651) (1,482) (50) (268) — — (2,451)

Net Cash Provided by (Used for) Operating Activities $ (2,845) $ 544 $ 7,968 $ 4,965 $ (422) $ 265 $ 10,475

Schedule of Noncash Capital and Financing Activities:

On Behalf OPEB Payments $ 79 $ 67 $ 5 $ 12 $ — $ — $ 163

West Virginia

251

PROPRIETARY FUNDS – NONMAJOR Drinking Water Treatment Revolving Fund: Low-interest loans are made to communities to assist in financing drinking water infrastructure projects, including, but not limited to, treatment, distribution, transmission, and storage. The Fund is to remain in perpetuity by recirculating the principal and interest earned from the loans.

Alcohol Beverage Control Administration: The Administration is responsible for the regulation and control of the manufacture, sale, distribution, transportation, storage, and consumption of alcoholic beverages. The Administration shall establish stores and agencies and shall fix uniform prices for the sale of alcoholic beverages.

West Virginia College Prepaid Tuition and Savings Program

The Program, which is comprised of the Prepaid Tuition Trust Fund and the College Prepaid Tuition and Savings Program Administrative Account, is responsible for providing individuals and organizations the opportunity to prepay future college tuition and mandatory fees at West Virginia public and private colleges and universities and to offer a comprehensive state-sponsored college savings plan. Prices for contracts are based on weighted-average tuition and mandatory fees as determined annually by the Program’s consulting actuaries and its Board. In March 2003, the West Virginia Legislature closed the Prepaid Tuition Program to new contracts until the Legislature authorizes the Program to reopen. All contract holders will continue to pay any amounts due, including monthly installments, penalties and fees, and the Prepaid Tuition Program will continue to pay all benefits due. During fiscal year 2015, the Board voted to close the Prepaid Tuition Program on June 30, 2022. Any funds not distributed to account holders or beneficiaries who cannot be located at the time will be transferred to the West Virginia unclaimed property division where the rightful owner can claim the funds at any time.

State Entities Workers’ Compensation (SEWC): The Fund is responsible for providing a means of managing workers’ compensation coverage for persons directly employed by the State of West Virginia. The West Virginia Offices of the Insurance Commissioner was given the responsibility of administering the SEWC. The SEWC is a public entity risk pool functioning as an insurance purchasing pool.

West Virginia

252

Combining Statement of Net Position Nonmajor Proprietary Funds June 30, 2021 (Expressed in Thousands):

Business-type Activities – Enterprise Funds

Drinking Water Treatment

Revolving Fund

Alcohol Beverage Control

Administration

West Virginia Prepaid College

Plan

State Entities Workers’

Compensation Total Assets: Current Assets:

Cash and Cash Equivalents $ 50,018 $ 22,799 $ 4,367 $ 13,324 $ 90,508

Investments — — 2,242 — 2,242

Receivables, Net 8,759 227 416 1 9,403

Inventories — 53 — — 53 Other Assets — — — 12,780 12,780 Restricted Assets: —

Receivables, Net — 766 — — 766

Total Current Assets 58,777 23,845 7,025 26,105 115,752 Noncurrent Assets:

Receivables, Net 134,488 — — — 134,488 Restricted Assets: —

Receivables, Net — 2,399 — — 2,399 Capital Assets, Net — 1,899 — — 1,899 Total Noncurrent Assets 134,488 4,298 — — 138,786

Total Assets 193,265 28,143 7,025 26,105 254,538 Deferred Outflows of Resources:

Related to Pensions — 762 104 — 866 Related to OPEB — 157 46 — 203

Total Deferred Outflows of Resources — 919 150 — 1,069 Liabilities: Current Liabilities:

Accounts Payable — 4,858 173 — 5,031 Accrued Tuition Contract Benefits — — 10,828 — 10,828

Accrued and Other Liabilities — 284 — — 284

Due to Other Funds — 2 — — 2

Due to Component Units 43 — — — 43

Insurance and Compensation Benefits Obligations — — — 5,200 5,200

Compensated Absences — — 40 — 40

Total Current Liabilities 43 5,144 11,041 5,200 21,428 Noncurrent Liabilities:

Insurance and Compensation Benefits Obligations — — — 7,100 7,100

Net Pension Liability — 967 118 — 1,085

Net OPEB Liability — 331 26 — 357

Compensated Absences — 286 15 — 301

Total Noncurrent Liabilities — 1,584 159 7,100 8,843

Total Liabilities 43 6,728 11,200 12,300 30,271 Deferred Inflows of Resources:

Related to Pensions — 76 22 — 98 Related to OPEB — 1,162 110 — 1,272

Total Deferred Inflows of Resources — 1,238 132 — 1,370

Net Position (Deficit): Net Investment in Capital Assets — 1,899 — — 1,899 Restricted for:

General Government Operations — — 3,149 — 3,149 Lending Activities 193,222 3,167 — — 196,389

Insurance Activities — — — 13,805 13,805

Unrestricted (Deficit) — 16,030 (7,306) — 8,724

Total Net Position (Deficit) 193,222 21,096 (4,157) $ 13,805 $ 223,966

West Virginia

253

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

Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Business-type Activities – Enterprise

Drinking Water

Treatment Revolving

Fund

Alcohol Beverage Control

Administration

West Virginia College Prepaid

Tuition and Savings Program

State Entities Workers’

Compensation Total

Operating Revenues:

Charges for Services and Sales $ 1,636 $ 127,796 $ — $ — $ 129,432

Insurance Premiums — — — 8,930 8,930

Licenses, Permits, and Fees — 4,443 1,647 — 6,090

Other — 86 25 — 111

Total Operating Revenues 1,636 132,325 1,672 8,930 144,563

Operating Expenses:

Cost of Sales and Services — 97,083 — — 97,083

Insurance Claims and Claims Adjustment Provisions — — — 8,330 8,330

Tuition Contract Benefits and Expenses — — 1,640 — 1,640

General and Administration — 5,063 1,218 498 6,779

Pension Expense — 253 27 — 280

OPEB Expense — (330) (19) — (349)

Depreciation and Amortization — 176 — — 176

Other 2,212 — — — 2,212

Total Operating Expenses 2,212 102,245 2,866 8,828 116,151

Operating Income (Loss) (576) 30,080 (1,194) 102 28,412

Nonoperating Revenues (Expenses):

Interest and Other Investment Income 73 — 7 (30) 50

Other Nonoperating Revenues — 1,267 2 — 1,269

Other Nonoperating Expenses (344) — (344)

Total Nonoperating Revenues (Expenses), Net (271) 1,267 9 (30) 975

Income (Loss) Before Transfers (847) 31,347 (1,185) 72 29,387

Transfers:

Transfers In 8,115 — — — 8,115

Transfers Out — (27,537) — (1,000) (28,537)

Total Transfers 8,115 (27,537) — (1,000) (20,422)

Change in Net Position 7,268 3,810 (1,185) (928) 8,965

Net Position (Deficit), Beginning of Year 185,954 17,286 (2,972) 14,733 215,001

Net Position (Deficit), End of Year $ 193,222 $ 21,096 $ (4,157) $ 13,805 $ 223,966

West Virginia

254

Combining Statement of Cash Flows Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Business-type Activities – Enterprise

Drinking Water

Treatment Revolving

Fund

Alcohol Beverage Control

Administration

West Virginia College Prepaid

Tuition and Savings Program

State Entities Workers’

Compensation Total

Cash Flows From Operating Activities:

Receipts from Customers $ 9,589 $ 132,805 $ — $ 16,641 $ 159,035

Payments to Suppliers — (98,399) (529) (101) (99,029) Payments to Employees — (4,306) (683) — (4,989) Payments to Beneficiaries — — (5,230) — (5,230) Payments for Loans Originated (10,149) — — — (10,149)

Payments for Premiums — — — (8,267) (8,267) Payments to Claimants — — — (8,188) (8,188) Other Operating Cash Receipts — — 1,622 — 1,622 Other Operating Cash Payments (147) — — (141) (288)

Net Cash Provided by (Used for) Operating Activities (707) 30,100 (4,820) (56) 24,517

Cash Flows from Noncapital Financing Activities:

Transfers In 7,772 — — — 7,772

Transfers Out — (27,537) — (1,000) (28,537)

Provided from Issuing Liquor Licenses — 1,165 — — 1,165

Receipts from Notes Receivable — 715 — — 715

Entitlements and Grants — 71 — — 71

Net Cash Provided by (Used for) Noncapital Financing Activities 7,772 (25,586) — (1,000) (18,814)

Cash Flows from Capital and Related Financing Activities:

Acquisition and Construction of Capital Assets — (175) — — (175)

Net Cash Used for Capital and Related Financing Activities — (175) — — (175)

Cash Flows from Investing Activities:

Purchase of Investments — — (7) — (7)

Proceeds from Sale of Investments — — 3,742 — 3,742

Investment Earnings 73 — 7 17 97

Net Cash Provided by Investing Activities 73 — 3,742 17 3,832

Net Increase (Decrease) in Cash and Cash Equivalents 7,138 4,339 (1,078) (1,039) 9,360

Cash and Cash Equivalents, Beginning of Year 42,880 18,460 5,445 14,363 81,148

Cash and Cash Equivalents, End of Year $ 50,018 $ 22,799 $ 4,367 $ 13,324 $ 90,508

West Virginia

255

Combining Statement of Cash Flows Nonmajor Proprietary Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands) (Continued)

Business-type Activities – Enterprise Funds

Drinking Water

Treatment Revolving

Fund

Alcohol Beverage Control

Administration

West Virginia College Prepaid

Tuition and Savings Program

State Entities Workers’

Compensation Total

Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities:

Operating Income (Loss) $ (576) $ 30,080 $ (1,194) $ 102 $ 28,412

Adjustments to Reconcile Operating Income (Loss) to Cash Provided by (Used for) Operating Activities:

Depreciation and Amortization — 176 — — 176

Pension Expense — 253 27 — 280

OPEB Expense — (330) (19) — (349)

Changes in Assets, Liabilities, and Deferred Outflows and Inflows of Resources:

Receivables (131) 480 (293) 1,002 1,058

Inventories — (10) — — (10)

Accounts Payable and Accrued Liabilities — (91) 57 (1,000) (1,034)

Tuition Contracts Benefits and Expenses — — (3,346) — (3,346)

Other Liabilities — — — (160) (160)

Compensated Absences — 4 2 — 6

Deferred Outflows Related to Pensions/OPEB — (327) (54) — (381)

Pension/OPEB — (453) — — (453)

Deferred Inflows related to Pensions/OPEB — 318 — — 318

Net Cash Provided by (Used for) Operating Activities $ (707) $ 30,100 1 $ (4,820) $ (56) $ 24,517

Schedule of Noncash Capital and Financing Activities:

Loans Originated with Principal Forgiveness Features $ 2,051 $ — $ — $ — $ 2,051

On-Behalf OPEB Payments — 31 2 — 33

West Virginia

256

West Virginia

257

PENSION TRUST AND OTHER EMPLOYEE BENEFIT TRUST FUNDS Pension Trust These Funds are accounted for in essentially the same manner as proprietary funds and are described below:

Consolidated Public Retirement Board The Consolidated Public Retirement Board consists of nine plans. There are nine defined benefit plans as follows: The Public Employees Retirement System (PERS) plan is a multiple- employer defined benefit, cost-sharing public employee retirement system. This plan covers substantially all employees of the State and its component units, as well as employees of participating nonstate governmental entities who are not participants of another State or municipal retirement system. The Deputy Sheriffs’ Retirement System (DSRS) plan is a multiple-employer defined benefit, cost-sharing public employee retirement system. This plan covers all deputy sheriffs hired on or after July 1, 1998, as well as eligible transferees from PERS. The Emergency Medical Services Retirement System (EMSRS) is a multiple-employer, cost-sharing public employee retirement system, which was established for eligible emergency medical service officers. Participation is voluntary. The Teachers’ Retirement System (TRS) plan is a multiple-employer defined benefit, cost-sharing public employee retirement system. This plan covers all full-time employees of the public school systems in the State, as well as certain personnel of the State-supported institutions of higher education, State Department of Education, and boards of higher education. The Public Safety Death, Disability and Retirement Fund (PSDDRF) plan is a single- employer defined benefit public employee retirement system. This plan covers all West Virginia State Police hired before July 1, 1994. The State Police Retirement System (SPRS) was implemented to cover all State Police employees hired on or after July 1, 1994. The Judges Retirement System (JRS) plan is a single-employer defined benefit public employee retirement system. This plan covers the State’s judges who elect to participate. The Teachers’ Defined Contribution Retirement System (TDCRS) plan is a multiple-employer defined contribution retirement system. This plan primarily covers full-time employees of the State’s county public school systems. The Municipal Police Officers and Firefighters Retirement System (MPFRS) plan is a multiple- employer defined benefit retirement system. This plan provides for any municipality or municipal subdivision employing municipal police officers or firefighters. The Natural Resources Police Officers Retirement System (NRPORS) is a single-employer defined benefit public employee retirement system. This plan covers all natural resources police officers hired January 2, 2021, and any transferees from PERS.

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258

Employee Benefit Trust Fund This fund is used to report a trust arrangement and is accounted for in essentially the same manner as proprietary funds.

The West Virginia Retiree Health Benefit Trust Fund The West Virginia Retiree Health Benefit Trust Fund (RHBT), an irrevocable trust, was established under West Virginia Code 5-16D and is administered by the West Virginia Public Employees Insurance Agency (PEIA) and the PEIA Finance Board. The RHBT is a cost-sharing, multiple-employer, defined benefit other postemployment benefit (OPEB) plan. It provides the following basic retiree benefit coverage to all participants: hospital, surgical, group major medical, basic group life, accidental death, dental, and prescription drug coverage for retired employees of the State of West Virginia and various nonstate agencies and their dependents. All premium rates for plan members and employers are established based upon actuarially determined projected coverage costs as reviewed and approved by the Finance Board of PEIA.

West Virginia

259

Combining Statement of Fiduciary Net Position Pension Trust and Other Employee

Benefit Trust Funds June 30, 2021 (Expressed in Thousands)

Public Employees' Retirement

System

Teachers' Retirement

System

Public Safety Death,

Disability, and

Retirement Fund

State Police Retirement

System

Judges' Retirement

System

Teachers' Defined

Contribution Retirement

System

Assets:

Cash and Cash Equivalents $ 744 $ 2,457 $ 12 $ 11 $ 3 $ 15,698

Investments:

Equity in Pooled Investments 8,807,095 9,886,657 851,521 301,155 280,669 —

Mutual Funds — — — — — 703,293

Receivables, Net:

Contributions 2,996 23,428 — — — 938

Participant Loans 33 1,011 3 — — 552

Accounts — — — — — —

Due from Other Funds 6 1,269 — — — —

Due from Component Units 1,191 — — — — —

Total Assets 8,812,065 9,914,822 851,536 301,166 280,672 720,481

Deferred Outflows of Resources:

Related to Pensions — — — — — —

Related to OPEB — — — — — —

Total Deferred Outflows of Resources — — — — — —

Liabilities:

Accounts Payable 29 — — — — —

Accrued and Other Liabilities 6,146 35 3 8 12 15,395

Due to Other Funds 6 — — — — —

Insurance Claims Payable — — — — — —

Net Pension Liability — — — — — —

Net OPEB Liability — — — — — —

Total Liabilities 6,181 35 3 8 12 15,395

Deferred Inflows of Resources:

Related to Pensions — — — — — —

Related to OPEB — — — — — —

Total Deferred Inflows of Resources — — — — — —

Net Position Held in Trust for:

Restricted for:

Pensions 8,805,884 9,914,787 851,533 301,158 280,660 705,086

Other Postemployment Benefits — — — — — —

Total Net Position $ 8,805,884 $ 9,914,787 $ 851,533 $ 301,158 $ 280,660 $ 705,086

West Virginia

260

Deputy Sheriff Retirement

System

Emergency Medical Services

Retirement System

Municipal Police Officers

and Firefighters

Natural Resources

Police Officers Retirement

System Total Pension Trust Funds

Other Employee

Benefit Trust Fund

Total Pension and Other Employee

Benefit Trust Funds

$ 56 $ 10 $ 8 $ 4 $ 19,003 $ 65,660 $ 84,663

314,634 118,768 23,817 25,063 20,609,379 1,611,764 22,221,143

— — — 703,293 — 703,293

611 443 269 — 28,685 6,875 35,560

263 — 4 — 1,866 — 1,866

— — — — — 7,097 7,097

104 — — — 1,379 729 2,108

— — — — 1,191 2,636 3,827—

315,668 119,221 24,098 25,067 21,364,796 1,694,761 23,059,557 — 2,636

— — — — — 249 249

— — — — — 118 118

— — — — — 367 367

— — — — 29 81 110

— — — 54 21,653 10,258 31,911

— — — 6 2,416 2,422

— — — — — 8,613 8,613

— — — — — 305 305

— — — — — 100 100

— — — 54 21,688 21,773 43,461

— — — — — 21 21

— — — — — 310 310

— — — — — 331 331

315,668 119,221 24,098 25,013 21,343,108 — 21,343,108

— — — — — 1,673,024 1,673,024

$ 315,668 $ 119,221 $ 24,098 $ 25,013 $ 21,343,108 $ 1,673,024 $ 23,016,132

West Virginia

261

Combining Statement of Changes in Fiduciary Net Position Pension Trust and Other Employee

Benefit Trust Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Public Employees' Retirement

System

Teachers' Retirement

System

Public Safety Death,

Disability, and

Retirement Fund

State Police Retirement

System

Judges' Retirement

System

Teachers' Defined

Contribution Retirement

System

Additions:

Contributions:

Members $ 78,762 $ 97,258 $ 34 $ 4,185 $ 295 $ 5,980

Employers 159,259 129,803 51 7,928 886 10,307

Other — 287,531 16,648 — — —

Total Contributions 238,021 514,592 16,733 12,113 1,181 16,287

Investment Income (Loss):

Net Appreciation (Depreciation) in Fair Value of Investments 2,170,289 2,429,803 208,655 72,138 68,611 17,455

Interest 4 8 1 — — 124,284

Net Investment Income (Loss) 2,170,293 2,429,811 208,656 72,138 68,611 141,739

Other Income 1,154 2,773 822 — — 12

Total Additions 2,409,468 2,947,176 226,211 84,251 69,792 158,038

Deductions:

Benefits Expense 490,592 863,112 50,228 3,302 4,810 —

Forfeitures — — — — — 766

Refunds of Contributions 9,934 8,384 — 297 — 22,072

Administrative Expenses 6,311 5,221 54 59 10 480

Pension Expense — — — — — —

OPEB Expense — — — — — —

Total Deductions 506,837 876,717 50,282 3,658 4,820 23,318

Change in Net Position:

Restricted for Pension Benefits 1,902,631 2,070,459 175,929 80,593 64,972 134,720

Held in Trust for Other

Postemployment Benefits — — — — — —

Net Position, Beginning of Year, As Restated 6,903,253 7,844,328 675,604 220,565 215,688 570,366

Net Position, End of Year $ 8,805,884 $ 9,914,787 $ 851,533 $ 301,158 $ 280,660 $ 705,086

West Virginia

262

Deputy Sheriff Retirement

System

Emergency Medical Services

Retirement System

Municipal Police Officers

and Firefighters

Natural Resources

Police Officers Retirement

System Total Pension Trust Funds

Other Employee

Benefit Trust Fund

Total Pension and Other Employee

Benefit Trust Funds

$ 5,177 $ 2,842 $ 2,158 $ 263 $ 196,954 $ — $ 196,954

7,213 3,523 2,136 332 321,438 104,503 425,941

— — — — 304,179 77,639 381,818

12,390 6,365 4,294 595 822,571 182,142 1,004,713

76,547 28,643 5,202 2,996 5,080,339 381,533 5,461,872

— — — — 124,297 98 124,395

76,547 28,643 5,202 2,996 5,204,636 381,631 5,586,267

392 — 68 — 5,221 834 6,055

89,329 35,008 9,564 3,591 6,032,428 564,607 6,597,035

13,198 3,752 41 (21,432) 1,407,603 111,627 1,519,230

— — — — 766 — 766

530 962 273 10 42,462 — 42,462

136 78 41 — 12,390 4,445 16,835

— — — — — 76 76

— — — — — 77 77

13,864 4,792 355 (21,422) 1,463,221 116,225 1,579,446

75,465 30,216 9,209 25,013 4,569,207 — 4,569,207

— — — — 448,382 448,382

240,203 89,005 14,889 — 16,773,901 1,224,642 17,998,543

$ 315,668 $ 119,221 $ 24,098 $ 25,013 $ 21,343,108 $ 1,673,024 $ 23,016,132

West Virginia

263

West Virginia

264

INVESTMENT TRUST FUNDS Investment Trust Funds: The investment trust funds account for the external portion of the State’s external investment pools. The State maintains two external investment pools, the West Virginia Money Market and West Virginia Government Money Market pools. The external portion belongs to local governments and municipalities. These Funds are accounted for in essentially the same manner as proprietary funds.

West Virginia

265

Combining Statement of Fiduciary Net Position Investment Trust Funds June 30, 2021 (Expressed in Thousands)

West Virginia Money Market

West Virginia Government

Money Market Total

Assets:

Cash and Cash Equivalents $ 419,489 $ 212,312 $ 631,801

Total Assets $ 419,489 $ 212,312 $ 631,801

Net Position:

Held in Trust for External Investment Pool Participants $ 419,489 $ 212,312 $ 631,801

Total Net Position $ 419,489 $ 212,312 $ 631,801

Combining Statement of Changes in Fiduciary Net Position Investment Trust Funds For the Year Ended June 30, 2021 (Expressed in Thousands)

West Virginia Money Market

West Virginia Government

Money Market Total

Additions:

Deposits, Pool Participants $ 580,197 $ 372,075 $ 952,272

Investment Income:

Net Appreciation in Fair Value of Investments 439 147 586

Total Additions 580,636 372,222 952,858

Deductions:

Withdrawals 406,078 377,389 783,467

Change in Net Position Held in Trust for External Investment Pool Participants 174,558 (5,167) 169,391

Net Position, Beginning of Year 244,931 217,479 462,410

Net Position, End of Year $ 419,489 $ 212,312 $ 631,801

West Virginia

266

West Virginia

267

CUSTODIAL FUNDS Custodial Funds: These funds are custodial in nature and report fiduciary activities that are not required to be reported in pension (and other employee benefit) trust funds, investment trust funds, or private-purpose trust funds. They include the following:

Local Government: This fund accounts for funds received by the State, from local governments to be invested with the West Virginia Board of Treasury Investments.

Municipal Bond Commission: This fund includes funds received by the State, who acts as an escrow agent for local governments and assures payments are made to bondholders.

Consolidated Escrow Fund: This fund includes amounts collected on behalf of third parties, performance bonds required by the Department of Energy and Labor, the Department of Environmental Protection, and other restricted assets held by the Governor’s Office of Community and Industrial Development.

Patient Injury Compensation Fund: This fund was created for the purpose of providing fair and reasonable compensation in medical malpractice actions for any portion of economic damages awarded that is uncollectible as a result of limitations on economic damage awards for trauma care, or as a result of the operation of the joint and several liability principles and standards set forth in the West Virginia State Code.

Other Custodial Funds: These funds include the Coronavirus State Fiscal Recovery Pass Through Fund, and other small custodial funds.

West Virginia

268

Combining Statement of Fiduciary Net Position Custodial Funds June 30, 2021 (Expressed in Thousands)

Local Government

Municipal Bond

Commission Consolidated Escrow Fund

Patient Injury Compensation

Fund

Other Custodial

Funds Total

Assets:

Current Assets:

Cash and Cash Equivalents $ 10,028 $ 2,603 $ 50,397 $ 1,898 $ 97,126 $ 162,052

Investments — — 11,769 — — 11,769

Receivables, Net — — 72 — — 72

Due from Other Funds 391 — — — — 391

Total Assets 10,419 2,603 62,238 1,898 97,126 174,284

Liabilities:

Current Liabilities:

Accounts Payable — — — — — —

Due to Other Governments 10,419 2,603 — — 83,733 96,755

Custodial Liabilities — — 72 1,898 13,393 15,363

Total Liabilities 10,419 2,603 72 1,898 97,126 112,118

Net Position:

Restricted For:

Individuals and Organizations — — 62,166 — — 62,166

Total Net Position $ — $ — $ 62,166 $ — $ — $ 62,166

• American Rescue Plan Act is included in Other Custodial Funds that will be distributed to local governments.

West Virginia

269

Combining Statement of Changes in Fiduciary Net Position Custodial Funds For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Local Government

Municipal Bond

Commission Consolidated Escrow Fund

Patient Injury Compensation

Fund

Other Custodial

Funds Total

Additions:

Funds Received for Local Government $ 1,336,234 $ — $ — $ — $ — $ 1,336,234

Grants Received for Local Governments — — — — 76,855 76,855

Funds Received for Individuals and Organizations — — — 5,356 208,700 214,056

Collateral Received and Related Additions — — 169,478 — — — 169,478

Funds Received from Local Governments for Bond Payments — 779,034 — — — — 779,034

Total Additions 1,336,234 779,034 169,478 5,356 285,555 2,575,657

Deductions:

Funds Disbursed to Local Governments 1,336,234 — — — — 1,336,234

Grants Disbursed to Local Governments — — — — 76,855 76,855

Funds Disbursed to Individuals and Organizations — — — 5,356 208,700 214,056

Collateral Disbursed and Related Deductions — — 167,698 — — 167,698

Funds Disbursed to Bond Escrow Agents — 779,034 — — — 779,034

Total Deductions 1,336,234 779,034 167,698 5,356 285,555 2,573,877

Change in Net Position:

Restricted for Individuals and Organizations — — 1,780 — — 1,780

Net Position, Beginning of Year, as Restated — — 60,386 — — 60,386

Net Position, End of Year $ — $ — $ 62,166 $ — $ — 62,166

West Virginia

270

West Virginia

271

DISCRETELY PRESENTED COMPONENT UNITS Nonmajor Component Units

Educational Broadcasting Authority: The Authority is responsible for extending educational, cultural, and informational experiences to all citizens of the State through the construction and operation of noncommercial, educational television and radio stations, and related facilities. Revenues for operations are derived primarily through private donations, with additional supplements from federal and state grants.

Jobs Investment Trust: The Board is responsible for improving and promoting economic development in the State. It can issue loans to businesses that will stimulate economic growth and provide or retain jobs in the State.

West Virginia State Rail Authority: The Authority is responsible for the rehabilitation, improvement, and restoration of the financial stability of the railway system in the State, enabling it to remain a viable mode of transportation for the public sector. The Authority, empowered to issue bonds and set rates for the rail system, additionally receives federal and state grants to supplement the cost of operations.

Solid Waste Management Board: The Board is responsible for the improved collection and disposal of solid wastes, and for encouraging recycling, reuse, or recovery of resources from wastes. The intent of the Board is to become a viable financing mechanism for solid waste projects in West Virginia, and it is empowered to issue bonds and set rate structures at its discretion.

West Virginia

272

Racing Commission: The Commission has full jurisdiction and supervision over all horse- and dog-race meetings, and all persons involved in the holding or conducting of horse- or dog-race meetings. It can fix the annual fee for permits and registrations. Other racing taxes and fees are set by West Virginia State Code, Chapter 19, Article 23.

Public Defender Corporation: The Corporation is responsible for fulfilling the State’s obligation to provide legal representation to eligible clients. Funding of the individual public defender corporations is by appropriation determined by the executive director of the Public Defender Services.

Municipal Pensions Oversight Board: The Board’s purpose is to monitor and improve the performance of municipal policemen’s and firemen’s pension and relief funds assuring prudent administration, investment, and management of the funds. The board also assists municipal boards of trustees in performing their duties related to pensions, ensures the funds’ compliance with applicable laws, and distributes insurance premium tax revenues to the individual pension funds.

West Virginia

273

Combining Statement of Net Position Nonmajor Discretely Presented Component Units June 30, 2021 (Expressed in Thousands)

Educational Broadcasting

Authority Job Investment

Trust WV State Rail

Authority Assets:

Current Assets: Cash and Cash Equivalents $ 5,773 $ 7,901 $ 9,212 Investments 3,572 — — Receivables, Net 343 256 25 Due from Primary Government 4,911 — 1,062 Due from Primary Government — — 16 Other Assets — — —

Restricted Assets: Cash and Cash Equivalents 301 — — Receivables, Net — — —

Total Current Assets 14,900 8,157 10,315

Noncurrent Assets: Investments — 2,411 — Receivables, Net — 2,431 — Other Assets — 7 —

Restricted Assets: Cash and Cash Equivalents 750 — — Receivables, Net — — — Other Restricted Assets 374 — —

Capital Assets, Net 5,835 40 38,718

Total Noncurrent Assets 6,959 4,889 38,718

Total Assets 21,859 13,046 49,033

Deferred Outflows of Resources: Related to Pensions 726 85 120 Related to OPEB 143 8 30

Total Deferred Outflows of Resources 869 93 150

Liabilities: Current Liabilities: Accounts Payable 618 5 2,680 Accrued and Other Liabilities — 65 45 Due to Primary Government 6 — 785 Unearned Revenue 487 — 3 Compensated Absences 304 — 86

Total Current Liabilities 1,415 70 3,599

Noncurrent Liabilities: Accrued and Other Liabilities — — — Unearned Revenue — — 39 Liabilities Payable from Restricted Assets — — — Net Pension Liability 955 105 151 Net OPEB Liability 291 14 58

Compensated Absences — — —

Total Noncurrent Liabilities 1,246 1,246 119 248

Total Liabilities 2,661 189 3,847

Deferred Inflows of Resources: Related to Pensions 103 11 15 Related to Other Post-Employment Benefits 1,104 68 190

Total Deferred Inflows of Resources 1,207 79 205

Net Position: Net Investment in Capital Assets 5,835 39 38,718

Restricted for: Nonexpendable 374 — —

Specific Component Unit Purposes — — — Unrestricted 12,651 12,832 6,413

Total Net Position $ 18,860 $ 12,871 $ 45,131

West Virginia

274

Solid Waste Management

Board Racing

Commission Public Defender

Corporation

Municipal Pensions

Oversight Board Total

$ 3,277 $ 647 $ 8,611 $ 29,720 $ 65,141 — — — — 3,572 250 56 31 1 962 — — — — 5,973 — — — — 16 1 — 57 — 58

3,701 15,777 — — 19,779 138 473 — — 611

7,367 16,953 8,699 29,721 96,112

— — — — 2,411 — — — — 2,431 — — — — 7

— — — — 750 938 — — — 938 — — — — 374 3 6 635 9 45,246

941 6 635 9 52,157

8,308 16,959 9,334 29,730 148,269

132 405 3,019 60 4,547 23 53 822 7 1,086

155 458 3,841 67 5,633

108 491 — 2 3,904 — 127 397 35 669 — 27 — — 818 — — — — 490 — — — — 390

108 645 397 37 6,271

200 — — — 200 — — — — 39 — 15,777 — — 15,777 170 529 3,959 79 5,948 29 112 877 5 1,386 67 184 1,060 — 1,311

466 16,602 5,896 84 24,661

574 17,247 6,293 121 30,932

16 74 500 6 725 113 449 2,957 15 4,896

129 523 3,457 21 5,621

3 — 635 9 45,239

— — — — 374 4,577 — — 29,646 34,223 3,180 (353) 2,790 — 37,513

$ 7,760 $ (353) $ 3,425 $ 29,655 $ 117,349

West Virginia

275

Combining Statement of Activities Nonmajor Discretely Presented Component Units For the Fiscal Year Ended June 30, 2021 (Expressed in Thousands)

Program Revenues

Expenses Charges for

Services

Operating Grants and

Contributions

Net (Expense) Revenue

Component Units:

Educational Broadcasting Authority $ 10,386 $ 3,587 $ 4,192 $ (2,607)

Jobs Investment Trust 726 462 — (264)

WV State Rail Authority 10,794 1,580 — (9,214)

Solid Waste Management Board 2,320 2,451 — 131

Racing Commission 2,692 2,542 — (150)

Public Defender Corporation 17,062 — 29 (17,033)

Municipal Pensions Oversight Board 21,036 — — (21,036)

Total Component Units $ 65,016 $ 10,622 $ 4,221 $ (50,173)

West Virginia

276

General Revenue

Unrestricted Investment Earnings

Grants and Contributions Not Restricted

for Specific Programs Miscellaneous

Payments from the State of

West Virginia

Total General

Revenues and Special

Item

Change in Net

Position

Net Position,

Beginning of Year

Net Position,

End of Year

$ 762 $ 3,913 $ 471 $ — $ 5,146 $ 2,539 $ 16,321 $ 18,860

18 — 1 — 19 (245) 13,116 12,871

52 — (4) 11,695 11,743 2,529 42,602 45,131

— — 5 — 5 136 7,624 7,760

— — 11 — 11 (139) (214) (353)

4 — 143 18,826 18,973 1,940 1,485 3,425

61 — — 18,285 18,346 (2,690) 32,345 29,655

$ 897 $ 3,913 $ 627 $ 48,806 $ 54,243 $ 4,070 $ 113,279 $ 117,349

West Virginia

277

West Virginia

278

West Virginia

280

Statistical Section Index

Financial Trends – These schedules contain trend information to help the reader understand how the State’s financial performance and well-being have changed over time.

Schedule 1 – Net Position by Component ............................................................... 282 Schedule 2 – Changes in Net Position .................................................................................. 284 Schedule 3 – Fund Balances – Governmental Funds ........................................................ 288 Schedule 4 – Changes in Fund Balances – Governmental Funds ................................... 290

Revenue Capacity Information – These schedules contain trend information to help the reader understand the State’s capacity to raise revenues and the sources of those revenues.

Schedule 5 – Revenue Base .................................................................................................... 292 Schedule 6 – Revenue Rates ................................................................................................... 294 Schedule 7 – Revenue Payers by Industry/Category ......................................................... 296

Debt Capacity Information – These schedules contain trend information to help the reader understand the State’s outstanding debt, the capacity to repay that debt, and the ability to issue additional debt in the future.

Schedule 8 – Ratios of Outstanding Debt ............................................................................ 298 Schedule 9 – Pledged Revenue Coverage ............................................................................. 300

Demographic and Economic Information – These schedules offer indicators to help the reader understand the environment within which the government’s financial activities take place.

Schedule 10 – Demographic and Economic Indicators ..................................................... 308 Schedule 11 – Principal Employers ...................................................................................... 310 Schedule 12 – Education Enrollment ................................................................................... 311

Operating Information – These schedules assist the reader in evaluating the size, efficiency, and effectiveness of the State’s government.

Schedule 13 – State Employees by Function ...................................................................... 312 Schedule 14 – Operating Indicators by Function .............................................................. 314 Schedule 15 – Capital Assets Statistics by Function ......................................................... 316

Miscellaneous Statistics – This information may provide the reader with more insight into the State’s financial and demographic status.

Schedule 16 – Miscellaneous Statistics ................................................................................ 318

Note: GASB 63 was implemented in fiscal year 2013, which changed net assets to net position.

Sources: Unless otherwise noted, the information in the following schedules is derived from the State’s Comprehensive Annual Financial Reports.

West Virginia

281

Schedule 1 Net Position by Component Last Ten Fiscal Years (Expressed in Thousands)

2021 2020 2019 2018 Governmental Activities

Net Investment in Capital Assets $ 9,139,616 $ 9,192,701 $ 9,005,297 $ 8,875,443

Restricted 1,430,320 1,188,896 1,251,729 953,572

Unrestricted Net Position (Deficit) (1,991,434) (3,423,609) (3,337,234) (4,119,293)

Total Governmental Activities

Net Position $ 8,578,502 $ 6,957,988 $ 6,919,792 $ 5,709,722

Business-type Activities

Net Investment in Capital Assets $ 1,965 $ 2,001 $ 1,821 $ 2,676

Restricted 2,110,728 1,777,494 1,972,374 1,895,646

Unrestricted Net Position (Deficit) 405,599 389,829 354,405 333,239

Total Business-type Activities

Net Position (Deficit) $ 2,518,292 $ 2,169,324 $ 2,328,600 $ 2,231,561

Primary Government

Net Investment in Capital Assets $ 9,141,581 $ 9,194,702 $ 9,007,118 $ 8,878,119

Restricted 3,541,048 2,966,390 3,224,103 2,849,218

Unrestricted Net Position (Deficit) (1,585,835) (3,033,780) (2,982,829) (3,786,054)

Total Primary Government

Net Position $ 11,096,794 $ 9,127,312 $ 9,248,392 $ 7,941,283

Note: In FY 2019, Regional Jail Authority merged with Division of Corrections, Division of Juvenile Services, and Correctional Industries to create the Division of Corrections and Rehabilitation.

West Virginia

282

2017 2016 2015 2014 2013 2012

$ 8,996,053 $ 8,986,789 $ 8,890,142 $ 8,791,243 $ 8,620,814 $ 8,404,751

402,490 422,147 439,118 367,636 407,011 504,680

(4,455,964) (4,563,114) (4,718,599) (17,631) 78,335 298,279

$ 4,942,579 $ 4,845,822 $ 4,610,661 $ 9,141,248 $ 9,106,160 $ 9,207,710

$ 2,863 $ 2,940 $ 2,963 $ 3,175 $ 3,392 $ 4,555

1,809,614 1,741,004 1,813,975 1,812,958 1,792,845 1,721,727

282,812 201,954 201,022 41,180 (222,728) (450,488)

$ 2,095,289 $ 1,945,898 $ 2,017,960 $ 1,857,313 $ 1,573,509 $ 1,275,794

$ 8,998,916 $ 8,989,729 $ 8,893,105 $ 8,794,418 $ 8,624,206 $ 8,409,306

2,212,104 2,163,151 2,253,093 2,180,594 2,199,856 2,226,407

(4,173,152) (4,361,160) (4,517,577) 23,549 (144,393) (152,209)

$ 7,037,868 $ 6,791,720 $ 6,628,621 $ 10,998,561 $ 10,679,669 $ 10,483,504

West Virginia

283

Schedule 2 Changes in Net Position by Component Last Ten Fiscal Years (Expressed in Thousands)

2021 2020 2019 2018 Governmental Activities

Expenses:

Legislative $ 21,755 $ 22,565 $ 21,399 $ 24,352

Judicial 111,998 136,383 122,394 136,825

Executive 714,308 368,025 279,266 213,285

Administration 241,868 279,823 203,481 235,485

Commerce 233,403 194,690 163,112 196,759

Environmental Protection 88,978 103,259 115,131 112,962

Employment Programs 211,110 50,785 47,779 43,287

Education 3,064,713 2,991,209 2,704,721 2,669,868

Health and Human Resources 6,880,969 5,934,351 5,500,238 5,483,893

Homeland Security 515,711 559,734 461,957 479,783

Revenue 126,387 63,132 122,114 93,815

Transportation 1,325,447 1,386,393 1,341,573 1,150,909

Veterans Assistance 17,407 20,152 25,178 24,369

Senior Services 53,919 48,307 45,485 44,825

Regulatory Boards and Commissions 141,343 50,519 44,027 55,422

Interest on Long-Term Debt 143,228 172,922 157,642 118,156

Total Expenses 13,892,544 12,382,249 1 2

11,355,497 11,083,995

Program Revenues:

Charges for Services:

Legislative 1,078 1,286 1,064 1,286 1,286 1,277

Judicial 1,067 1,026 907 1,026 1,026 ─ Executive 33,892 25,710 23,619 25,710 25,710 19,326

Administration 61,505 50,744 56,118 50,744 50,744 46,708

Commerce 48,742 45,103 40,634 45,103 45,103 46,986

Environmental Protection 63,051 65,371 58,935 65,371 65,371 68,595

Employment Programs — — ─ — ─ ─ Education — 554 1,394 554 554 ─ Health and Human Resources 61,783 64,862 84,834 64,862 64,862 56,589

Military Affairs and Public Safety — 15,877 16,234 15,877 15,877 18,449

Revenue 45,958 45,962 42,173 45,962 45,962 44,703

Transportation 170,990 181,181 130,505 181,181 181,181 169,142

Veterans Assistance 183 393 324 393 393 3

Senior Services 2 (2) 2 (2) (2) ─ Regulatory Boards and Commissions 19,667 37,712 36,806 37,712 37,712 41,508

Total Charges for Services 507,918 493,549 535,779 535,779 513,286

Operating Grants and Contributions:

Legislative 840 1,095 48 3,786

Judicial 2,170 2,102 3,543 2,472

Executive 668,297 108,510 40,152 29,404

Administration — — (1,547) ─ Commerce 94,631 71,738 65,568 60,551

Environmental Protection 84,963 87,493 106,230 99,742

Employment Programs 149,770 53,462 48,391 49,969

Education 582,884 508,378 453,950 435,775

Health and Human Resources 5,531,583 4,509,174 4,044,403 4,005,927

Homeland Security 91,125 132,731 78,481 85,058

Revenue 2,740 3,040 1,833 1,316

Transportation 50,000 — — —

Veterans Assistance 7,050 6,761 5,947 11,805

Senior Services 26,193 25,427 23,452 22,005

Regulatory Boards and Commissions 55,435 3,262 3,180 3,134

Total Operating Grants and Contributions 7,347,681 5,511,368 4,873,631 4,810,944

Capital Grants and Contributions:

Executive — ─ ─ ─ Administration 239 ─ ─ ─ Military Affairs and Public Safety — 794 38 2,364

Transportation 505,348 340,627 492,389 369,711

Veterans Assistance 2,634 2,261 2,311 ─ Total Capital Grants and Contributions 508,221 343,682 494,738 372,075

Total Program Revenues 8,363,820 6,348,599 5,904,148 5,696,305

Total Governmental Activities Net Program Expenses (5,528,724) (6,033,650) (5,451,349) (5,387,690)

West Virginia

284

2017 2016 2015 2014 2013 2012

$ 24,189 $ 25,766 $ 26,762 $ 30,147 $ 34,693 $ 36,722

134,351 133,702 126,904 143,929 129,667 140,515

176,485 139,580 124,455 154,212 117,706 216,356

262,684 234,542 280,007 308,685 309,009 320,377

166,225 166,129 141,566 182,198 233,474 231,178

173,689 84,533 109,036 150,859 168,322 204,158

55,231 48,173 43,876 50,406 47,369 51,595

2,777,727 2,708,236 2,762,735 2,924,767 3,059,791 3,757,725

5,810,783 5,352,930 5,241,337 4,759,982 4,660,450 4,402,259

502,408 417,604 412,894 424,232 446,954 491,717

89,178 78,504 86,654 131,627 62,615 91,344

1,153,708 1,183,397 1,121,182 1,148,566 1,028,742 1,299,400

20,572 20,588 19,264 23,551 19,212 27,019

41,934 44,037 49,205 45,846 47,608 47,561

53,909 47,680 74,255 44,847 62,883 92,662

110,722 112,273 123,064 119,268 125,559 125,105

11,553,795 10,797,674 10,743,196 10,643,122 10,554,054 11,535,693

1,268 1,431 1,436 1,440 1,550 1,591

1,768 1,730 944 972 969 1,024

18,002 14,407 22,440 24,539 21,110 22,093

42,766 45,767 51,167 15,608 31,569 33,180

41,017 43,541 46,972 48,312 43,882 48,928

53,209 74,621 71,302 85,487 84,358 61,188

─ ─ ─ ─ ─ ─ ─ 2,580 3,970 3,982 3,563 4,362

70,812 72,849 84,731 83,974 90,383 90,604

16,018 10,868 8,751 9,847 10,308 11,146

42,421 42,754 50,547 33,231 30,888 31,729

101,562 92,171 97,716 92,772 100,966 100,700

─ ─ ─ ─ ─ ─ 3 ─ ─ ─ ─ 1 42,259 26,158 31,317 31,403 25,090 31,254

431,105 428,877 471,293 431,567 444,636 437,800

309 136 784 1,523 984 1,977

2,899 1,978 2,296 1,453 491 640

24,812 33,725 14,076 64,345 62,496 136,752

─ 3,006 50,731 43,532 48,938 45,498 60,378 41,846 39,802 54,672 70,260 70,004

87,674 98,312 102,018 103,557 104,386 142,590

49,288 48,050 45,306 49,686 50,537 51,845

440,701 451,719 443,295 405,576 420,116 446,297

4,319,051 3,940,757 3,811,046 3,385,470 3,222,601 3,045,355

130,128 118,282 65,630 59,304 76,807 82,240

2,645 1,917 144 35 23 9

— — — — — —

8,208 8,008 9,604 7,814 2,298 —

22,318 23,489 22,728 22,588 22,025 23,351

2,910 3,049 3,058 2,782 3,033 2,747

5,151,321 4,774,274 4,610,518 4,202,337 4,084,995 4,049,305

— — — — — —

1,563 2,552 — 3,180 — 2,005

2,128 1,235 17,241 24,395 46,326 49,854

526,571 452,435 373,708 ─ 493,949 519,768 1,564 ─ ─ 476,631 3,005 5,321 531,826 456,222 390,949 504,206 543,280 576,948

6,114,252 5,659,373 5,472,760 5,138,110 5,072,911 5,064,053

(5,439,543) (5,138,301) (5,270,436) (5,505,012) (5,481,143) (6,471,640)

(Continued)

West Virginia

285

Schedule 2 Changes in Net Position by Component Last Ten Fiscal Years (Expressed in Thousands) (Continued)

2021 2020 2019 2018

General Revenues and Other Changes in Net Position:

Taxes:

Personal Income $ 2,194,829 $ 2,023,079 $ 2,090,596 $ 1,939,977

Consumer Sales 1,668,378 1,514,838 1,481,344 1,355,135

Business 777,371 550,918 793,067 626,743

Medicaid 266,706 235,758 239,201 222,859

Transportation 701,541 680,902 682,331 674,795

Other 379,286 384,882 393,244 390,773

Entitlements and Grants — ─ — — Unrestricted Investment Earnings 130,414 123,951 144,963 56,933

Tobacco Settlement Revenues 61,812 106,093 59,764 62,930

Lottery Revenue 389,012 266,124 348,250 322,845

Miscellaneous 628,007 176,399 395,866 152,806

Transfers (48,118) 7,147 (30,315) 9,667

Total General Revenues, Special Items, and Transfers 7,149,238 6,070,091 6,598,311 5,815,463

Total Governmental Activities Changes in Net Position $ 1,620,514 $ 36,441 $ 1,146,962 $ 427,773

Business-type Activities

Expenses:

West Virginia Lottery — — — —

Water Pollution Control Revolving Fund 11,291 10,739 5,316 4,067

Workers’ Compensation Fund 62,049 59,151 139,992 117,132

Unemployment Compensation 1,063,978 1,415,646 164,478 142,103

WV Infrastructure and Jobs Development Council 31,795 22,325 18,512 35,937

Public Employees Insurance Agency 701,087 597,217 561,807 537,044

Board of Risk and Insurance Management 88,562 70,377 84,683 61,797

Other Business-type Activities 116,405 110,335 96,947 98,697

Total Expenses 2,075,167 2,075 2,285,790 1,071,735 996,777

Program Revenues:

Charges for Services:

West Virginia Lottery — — — —

Water Pollution Control Revolving Fund 5,763 5,779 5,879 6,061

Workers’ Compensation Fund 2,604 1,679 18,194 35,905

Unemployment Compensation 200,836 202,465 204,789 188,153

WV Infrastructure and Jobs Development Council 4,749 3,810 3,310 3,344

Public Employees Insurance Agency 571,567 555,480 545,646 560,051

Board of Risk and Insurance Management 78,692 75,539 76,541 72,270

Other Business-type Activities 144,406 130,781 120,187 121,484

Total Charges for Services 1,008,617 975,533 974,546 987,268

Capital Grants and Contributions:

Water Pollution Control Revolving Fund — — — —

Total Capital Grants and Contributions — — — —

Total Revenues 1,008,617 975,533 974,546 976

Total Business-type Activities Net Program Expenses (1,066,550) (1,310,257) (97,189) (9,509)

General Revenues and Other Changes in Net Position:

Unrestricted Investment Earnings 301,195 96,412 116,396 99,883

Lottery Revenue 46,000 38,198 46,000 48,750

Miscellaneous 1,020,205 984,648 7,791 6,708

Transfers 48,118 (7,147) 30,315 (9,667) Total General Revenues and Other Changes in Net Position 1,415,518 1,112,111 200,502 145,674

Total Business-type Activities Changes in Net Position $ 348,968 $ (198,146) $ 103,313 $ 136,165

Total Primary Government Changes in Net Position $ 1,969,482 $ (161,705) $ 1,250 $ 563,938

Note: In FY 2019, Regional Jail Authority merged with Division of Corrections, Division of Juvenile Services, and Correctional Industries to create the Division of Corrections and Rehabilitation.

West Virginia

286

2017 2016 2015 2014 2013 2012

$ 1,830,106 $ 1,849,056 $ 1,921,597 $ 1,771,473 $ 1,771,481 $ 1,790,146

1,312,353 1,291,813 1,265,957 1,216,812 1,198,983 1,216,561

581,896 640,081 907,362 937,751 923,575 905,515

217,665 222,578 197,692 189,111 203,421 190,419

593,158 605,403 640,135 628,989 605,768 594,871

409,426 303,770 249,102 303,889 304,693 318,938

— — — 31,078 15,896 5,056

73,552 34,380 12,259 71,178 23,287 54,699

61,426 62,697 62,105 61,337 88,327 63,270

— — — — — —

336,294 342,702 356,401 343,220 388,888 497,874

106,526 129,760 131,023 125,770 94,150 112,324

15,204 (108,778) (230,208) (217,282) (220,028) (258,248)

5,537,606 5,373,462 5,513,425 5,463,326 5,398,441 5,491,425

$ 98,063 $ 235,161 $ 242,989 $ (41,686) $ (82,702) $ (980,215)

— — — — — —

3,467 4,745 6,358 9,991 10,645 5,740

134,443 202,406 44,488 129,087 105,430 147,230

169,197 509,796 225,940 274,215 380,239 365,323

23,941 60,622 71,587 29,752 17,669 18,503

552,882 542,825 577,433 573,008 490,841 524,789

66,152 67,650 72,436 67,524 57,293 57,288

98,901 103,294 108,868 110,133 114,918 108,221

1,048,983 1,491,338 1,107,110 1,193,710 1,177,035 1,227,094

— — — — — —

5,995 5,850 5,725 5,611 5,011 4,631

35,738 105,897 46,272 45,099 54,817 54,361

204,496 431,717 223,836 270,784 356,531 400,238

3,095 1,940 2,591 3,076 2,771 4,381

576,153 507,419 516,689 515,987 513,982 499,236

64,587 58,303 51,940 45,959 41,243 45,587

118,471 118,985 120,634 123,772 123,710 117,206

1,008,535 1,230,111 967,687 1,010,288 1,098,065 1,125,640

— — — — — —

1,008,535 1,230,111 967,687 1,010,288 1,098,065 1,125,640

(40,448) (261,227) (139,423) (183,422) (78,970) (101,454)

167,076 31,098 29,282 175,662 94,612 66,690

31,500 42,735 37,000 57,000 57,000 57,000

6,467 6,554 7,271 17,282 6,473 6,309

(15,204) 108,778 230,208 217,282 220,028 258,248

189,839 189,165 303,761 467,226 378,113 388,247

$ 149,391 $ (72,062) $ 164,338 $ 283,804 $ 299,143 $ 286,793

$ 247,454 $ 163,099 $ 407,327 $ 242,118 $ 216,441 $ (693,422)

West Virginia

287

Schedule 3 Fund Balances Governmental Funds Last Ten Fiscal Years (Expressed in Thousands)

2021 2020 2019 2018 General Fund

Nonspendable: Inventories $ 11,425 $ 8,954 $ — $ 11,888 Receivables 125,259 122,435 — 112,120

Restricted for: Government Operations 21,896 109,500 — 818 Development, Tourism, and Recreation 2,769 7,766 109,500 2,409 Education 128 244 7,766 95 Health and Social Services 701 1,449 244 372 Public Protection 357 890 1,449 402

Committed for: General Government Operations 11,182 21,434 — 6,483 Rainy Day Funds 996,893 862,766 763,388 720,323 Development, Tourism, and Recreation 4,106 8,084 8,084 2,755 Education 11,458 14,336 12,792 25,038 Health and Social Services 13,652 22,521 22,521 9,219 Public Protection 1,890 4,937 4,937 2,115

Assigned for: General Government Operations 5,545 8,491 7,967 1,978 Development, Tourism, and Recreation 811 1,835 1,835 615 Education 362 751 751 267 Health and Social Services 907 2,591 2,591 860 Public Protection 325 1,600 1,600 420

Unassigned 932,900 442,363 673,649 305,331

Total General Fund $ 2,142,566 $ 1,642,947 $ 1,648,385 $ 1,203,508

All Other Governmental Funds Nonspendable:

Inventories $ 57,742 $ 60,253 $ 54,997 $ 49,163 Permanent Fund 1,000 1,000 1,000 1,000 Receivables — — — —

Restricted for: Capital Projects 1,325,879 1,444,819 1,002,883 967,400 Debt Services 578,301 636,745 658,493 677,347 Development, Tourism, and Recreation 78,281 62,703 65,000 65,482 Education 502 535 427 360 Public Protection 118,315 102,368 94,395 87,049 Transportation 504,595 142,157 312,280 17,550

Committed for: General Government Operations 6,508 5,986 5,258 5,144 Public Protection 330,075 314,622 322,358 287,855

Assigned for: Health and Social Services 3,904 3,762 — — Public Protection 6,093 3,598 3,877 5,738 Transportation 278,485 13,586 280,637 220,966

Unassigned — — 1,917 210,794

Total All Other Governmental Funds 3,289,680 2,792,134 2,803,522 2,595,848

Total Fund Balances, Governmental Funds $ 5,432,246 $ 4,435,081 $ 4,451,907 $ 3,799,356

Notes: In FY 2020, Rainy Day Fund was determined to be Unassigned Fund Balance rather than Committed.

In FY 2019, Regional Jail Authority merged with Division of Corrections, Division of Juvenile Services, and Correctional Industries to create the Division of Corrections and Rehabilitation.

West Virginia

288

2017 2016 2015 2014 2013 2012

$ 11,113 $ 9,936 $ 10,288 $ 11,485 $ 13,268 $ 11,143 128,761 128,116 129,150 132,830 122,135 111,340

500 132 846 5,600 9,821 17,065 1,768 511 2,376 9,318 14,748 16,162 180 65 268 1,508 2,625 2,207 527 160 780 3,644 7,300 17,399 314 81 402 3,411 6,682 7,217

4,771 1,213 5,430 960,077 1,044,948 946,290 663,061 789,352 879,749 — — — 2,246 695 3,160 16,972 33,168 8,745 24,126 24,031 17,590 18,189 23,804 14,123 5,020 871 5,268 25,700 81,720 27,501 1,720 479 2,308 10,801 20,940 —

— 6,183 — 26,692 32,261 14,117 — — — 1,219 1,723 — — — — 2,257 3,341 — — — — 3,883 5,894 — — — — 1,683 3,801 — (1,231,719) (1,324,232) (1,284,506) (1,284,401) (1,102,111) (640,981)

$ (387,612) $ (362,407) $ (226,891) $ (49,132) $ 326,068 $ 552,328

$ 52,860 $ 49,814 $ 48,686 $ 37,980 $ 44,798 $ 47,371 1,000 1,000 1,000 1,000 1,000 1,000 543,598 564,488 585,811 606,938 627,800 645,301

10,658 12,333 13,270 13,750 32,953 96,637 153,621 153,646 154,491 153,707 152,824 151,727 63,888 54,591 54,668 52,493 45,840 40,050 889 584 1,174 357 327 555 57,160 51,334 53,233 44,940 41,908 43,114 12,737 12,031 12,968 14,224 11,077 17,350

1,642 1,796 2,268 2,345 3,772 5,504 265,899 299,757 311,564 290,746 245,947 233,177

— — — — 28 — 6,226 4,506 7,265 9,596 5,741 1,357 67,439 6,309 61,181 92,946 29,666 — (13,610) (9,953) (9,072) (8,797) (6,430) (8,425)

1,224,007 1,202,236 1,298,507 1,312,225 1,237,251 1,274,718

$ 836,395 $ 839,829 $ 1,071,616 $ 1,263,093 $ 1,563,319 $ 1,827,046

West Virginia

289

Schedule 4 Changes in Fund Balances Governmental Funds Last Ten Fiscal Years (Expressed in Thousands)

2021 2020 2019 2018

Revenues: Taxes:

Personal Income $ 2,196,298 $ 2,021,193 $ 2,084,820 $ 1,936,836 Consumer Sales and Use 1,668,804 1,516,325 1,477,711 1,355,092 Severance 326,363 268,513 452,680 393,278 Corporate Net Income 317,670 155,406 205,481 109,113 Business and Occupation 131,541 134,173 129,105 115,772 Medicaid 267,979 236,292 238,773 226,212 Gasoline and Motor Carrier 404,425 410,901 444,575 443,273 Automobile Privilege 297,116 270,001 237,756 231,522 Other 379,294 384,873 393,326 390,691

Intergovernmental 6,853,416 5,273,610 4,871,752 4,696,456 Licenses, Permits, and Fees 243,371 241,191 249,476 245,434 Motor Vehicle Registration 146,836 122,972 175,565 156,931 Charges for Services 173,157 136,500 131,956 122,975 Lottery Revenue 384,118 262,156 343,356 317,140 Investment Earnings 155,659 137,340 159,033 66,522 Food Stamp Revenue 872,884 533,130 405,622 451,228 Other 748,925 253,175 468,351 212,216

Total Revenues $ 15,567,856 $ 12,357,751 $ 12,469,338 $ 11,470,691

Expenditures: Current:

Legislative 25,903 23,414 23,606 23,439 Judicial 135,586 137,777 133,023 130,832 Executive 843,107 374,699 279,425 202,686 Administration 105,099 147,210 77,139 111,703 Commerce 289,378 220,882 224,908 206,481 Environmental Protection 127,164 135,242 140,328 127,757 Employment Programs 213,160 53,426 49,383 48,895 Education 3,111,098 3,092,021 2,873,944 2,796,313 Health and Human Resources 7,018,893 6,018,370 5,589,099 5,484,857 Homeland Security 568,532 566,560 488,369 478,052 Revenue 141,218 73,121 137,263 86,650 Transportation 739,916 877,712 1,042,123 873,276 Veterans Assistance 21,025 21,517 24,811 23,104 Senior Services 54,576 48,651 45,002 44,295 Regulatory Boards and Commissions 134,791 38,763 35,534 39,337

Capital Outlay 903,605 972,659 542,106 365,949 Debt Service:

Principal 166,750 167,020 111,090 130,901 Interest 124,227 149,247 135,867 92,461

Total Expenditures 14,724,028 13,118,291 11,953,020 11,266,988 Excess of Revenues Over (Under) Expenditures 843,828 (760,540) 203,703 203,703 Other Financing Sources (Uses):

Face Value of Long-Term Debt Issued 907,600 600,000 1,186,099 81,595 Premiums on Bonds Issued 63,371 146,576 172,216 8,640 Capital Lease Acquisition — — 11,737 13,568 Payments to Refunded Bonds Escrow Agents (737,172) — (142,788) (32,022) Transfers In 278,761 192,909 163,393 204,252 Transfers In (359,223) (197,526) (155,288) (191,070)

Total Other Financing Sources (Uses) 153,337 741,959 1,235,369 84,963 Net Changes in Fund Balances $ 997,165 $ (18,581) $ 1,439,072 $ 288,666

Debt service as a percentage of noncapital expenditures 2.01 % 2.48 % 2.10 % 1.99 %

Note: In FY 2019, Regional Jail Authority merged with Division of Corrections, Division of Juvenile Services, and Correctional Industries to create the Division of Corrections and Rehabilitation.

West Virginia

290

2017 2016 2015 2014 2013 2012

$ 1,846,638 $ 1,853,422 $ 1,915,382 $ 1,768,069 $ 1,767,626 $ 1,790,299 1,317,452 1,293,535 1,264,716 1,211,057 1,197,317 1,216,286 360,801 373,801 589,883 612,283 547,453 564,327 120,728 152,873 189,473 202,444 230,131 232,266 110,240 119,594 120,426 121,401 125,692 123,137 215,558 221,717 200,408 184,666 219,568 176,661 389,753 404,321 435,142 433,252 417,571 408,571 203,405 201,082 204,993 195,737 188,197 186,300 409,636 303,544 249,071 303,923 304,687 318,999 5,130,386 4,702,423 4,452,997 4,160,993 4,073,257 4,077,933 230,571 239,007 242,406 262,481 245,631 234,984 109,047 94,277 103,092 99,430 93,363 92,951 123,512 118,233 124,305 123,767 128,257 127,806 330,589 336,938 349,853 335,075 380,052 487,122 83,917 34,300 14,298 78,537 28,696 55,931 490,483 496,107 494,131 479,215 513,960 491,416 177,335 202,768 224,883 224,015 199,087 209,490 $ 11,650,051 11,147,942 11,175,459 10,796,345 10,660,545 10,794,479

24,461 26,907 28,840 30,224 34,742 36,731 139,774 144,091 140,847 142,859 127,804 139,941 176,493 142,313 126,313 182,887 149,602 216,268 148,133 126,668 155,998 159,680 155,163 190,164 196,657 180,018 163,777 185,011 214,172 226,194 148,139 151,537 131,371 151,742 133,541 152,634 51,546 48,968 45,743 53,540 50,210 55,969 2,831,189 2,869,977 2,997,533 2,968,967 3,024,480 3,760,480 5,869,748 5,430,561 5,285,201 4,895,617 4,684,841 4,425,591 525,010 495,656 461,599 466,444 490,711 526,654 95,166 91,050 92,758 150,556 67,760 91,349 894,409 914,909 801,658 845,679 743,613 1,009,032 21,036 21,546 20,261 23,464 19,114 26,600 42,029 44,253 49,439 45,919 47,669 47,656 42,181 36,877 54,965 68,545 64,130 93,643 364,318 359,889 335,493 302,040 465,399 334,046

75,615 85,180 105,800 101,350 122,855 341,673 91,238 95,180 100,348 106,307 113,136 113,204 11,737,142 11,265,580 11,097,944 10,880,831 10,708,942 11,761,229 (87,091) (117,638) (84,486) (48,397) (48,397) (966,750)

81,595 205,365 — — 18,615 190,755 8,640 39,273 — — 1,025 10,292 2,019 580 955 495 234,765 805 — (244,030) — — (20,935) (37,730) 188,770 149,515 134,350 154,945 170,321 134,473 (304,938) (388,051) (351,045) (370,770) (434,125) (378,508) (114,149) (237,348) (215,740) (215,330) (30,334) (79,913) $ (201,240) $ (354,986) $ (354,986) $ (263,727) $ (78,731) $ (1,046,663)

1.43 % 1.61 % 1.86 % 1.91 % 2.23 % 3.87 %

West Virginia

291

Schedule 5 Revenue Base Last Ten Years (Expressed in Thousands)

Personal Income by Industry (Calendar Year) 2020 2019 2018 2017

Farm Earnings $ 28,083 $ (27,935) $ (63,393) $ (87,698)

Agricultural/Forestry, Fishing, and Other 131,019 157,191 161,474 158,024

Mining 2,164,045 2,671,305 2,471,086 2,139,297

Construction 2,811,942 3,311,109 4,101,799 3,008,747

Manufacturing 3,831,022 3,936,598 3,800,160 3,446,282

Transportation, Warehousing, and Public Utilities 2,343,504 2,433,754 2,341,273 2,208,615

Wholesale Trade 1,563,243 1,586,278 1,542,010 1,491,856

Retail Trade 3,073,387 3,022,118 2,964,421 2,938,849

Finance, Insurance, and Real Estate 2,280,263 2,209,851 2,094,476 1,916,253

Service Industries 17,650,527 18,092,541 17,462,559 16,079,925

Federal, Civilian 2,965,165 2,770,566 2,713,339 2,602,306

Military 322,107 319,932 300,274 285,857

State and Local Government 6,721,741 6,616,465 6,301,709 6,357,743

Tax Revenue (Fiscal Year)

Consumer Sales 1,387,000 1,370,000 1,247,000 1,222,000

Personal Income 1,948,000 2,097,000 1,920,000 1,814,000

Severance 267,000 463,000 346,000 321,000

Corporate Income and Business Franchise 152,000 198,000 110,000 116,000

Motor Fuel 427,000 443,000 420,000 381,000

Automobile Privilege 270,000 238,000 232,000 203,000

Note: Due to confidentiality issues, the names of the ten largest revenue payers are not provided. The categories presented are intended to provide alternative information regarding the sources of the State's revenue. The most current period available is 2020.

Source: Bureau of Economic Analysis, State of West Virginia Executive Budget, and the Department of Highways.

West Virginia

292

2016 2015 2014 2013 2012 2011

$ (99,972) $ (30,770) $ 19,745 $ (15,408) $ (23,990) $ (40,920)

158,604 160,316 102,143 97,594 90,077 97,810

1,897,087 2,725,768 3,423,411 3,749,493 3,947,662 3,440,574

2,689,538 2,896,798 2,857,279 2,894,652 2,857,741 2,513,975

3,408,226 3,421,537 3,601,454 3,753,280 3,666,492 3,565,688

2,151,786 2,159,353 2,127,148 2,134,739 2,097,404 2,034,076

1,467,931 1,557,478 1,539,380 1,519,306 1,537,622 1,477,230

2,972,989 2,935,939 2,941,483 3,039,500 2,948,321 2,867,136

1,865,942 1,885,393 1,956,188 2,043,981 1,894,862 1,769,826

15,551,002 15,611,983 15,033,408 14,871,664 14,559,593 13,908,974

2,498,151 2,424,565 2,349,128 2,296,812 2,281,687 2,469,552

277,818 272,963 299,618 327,312 344,553 466,154

6,351,203 6,221,514 6,210,344 6,203,760 6,055,436 6,376,291

1,231,000 1,228,000 1,173,000 1,193,000 1,216,000 1,148,000

1,803,000 1,840,000 1,664,000 1,701,000 1,689,000 1,593,000

276,000 414,000 489,000 410,000 468,000 441,000

144,000 186,000 204,000 238,000 188,000 303,000

396,000 435,000 441,000 409,000 387,000 398,000

201,000 205,000 196,000 188,000 186,000 169,000

West Virginia

293

Schedule 6 Revenue Rates Last Ten Calendar Years

Personal Income Tax

Single, Head of Household, Widow(er) with Dependent Child and Married Filing Jointly (Unchanged Over Last Ten Years)

Less than $10,000........................................................... 3% of the taxable income

At least — But less than —

$10,000 $25,000……… $ 300.00 plus 4.0% of excess over $10,000

$25,000 $40,000……… $ 900.00 plus 4.5% of excess over $25,000

$40,000 $60,000……… $ 1,575.00 plus 6.0% of excess over $40,000

$60,000 …………………….. $ 2,775.00 plus 6.5% of excess over $60,000

Business 2021 2020 2019 2018

Corporate Net Income (applies to C corporations) 6.50% 6.50% 6.50% 6.50%

Severance Tax:

Timber 0% 0% 1.50% 1.50%

Oil/Gas 5% 5% 5% 5%

Coal various various various various

Consumer Sales Tax 6% 6% 6% 6%

Food Tax * 0% 0% 0% 0%

Motor Fuel Excise and Sales Tax** (cents per gallon) 35.7 35.7 35.7 35.7

Automobile Privilege Tax 6% 6% 6% 6%

*On July 1, 2012, the tax rate on food declined from 2% to 1%. On July 1 , 2013, the food tax was eliminated except when sold prepared or via vending machine.

**As of January 1, 2012, the variable sales and use rate of 11.7 cents per invoiced gallon increased to 12.9 cents per invoiced gallon.

All rates are set by the Legislature.

Source: State Tax Department and the Division of Motor Vehicles.

West Virginia

294

Married Filing Separately (Unchanged Over Last Ten)

Less than $5,000............................................................................ 3% of the taxable income

At least — But less than —

$5,000 $12,500…………………. $ 150.00 plus 4.0% of excess over $5,000

$12,500 $20,000………… $ 450.00 plus 4.5% of excess over $12,500

$20,000 $30,000…………… $ 787.50 plus 6.0% of excess over $20,000

$30,000 ……..…………………….. $ 1,387.50 plus 6.5% of excess over $30,000

2017 2016 2015 2014 2013 2012

6.50% 6.50% 6.50% 7.00% 8.50% 8.50%

2% 0% 0% Discontinued 1% 1%

5% 5% 5% 5% 5% 5%

various various various various various various

6% 6% 6% 6% 6% 6%

0% 0% 0% 0% 1% 3% / 2%

35.7 34.6 34.6 34.7 33.4 32.2 / 33.4

6% 5% 5% 5% 5% 5%

West Virginia

295

Schedule 7 Revenue Payers by Industry/Category Most Current Available Year and Historical Comparison (Dollars Expressed in Thousands)

Consumers Sales and Service Tax and Use Tax

Tax Year 2015

Industry Remittance Percent of Total Accounts

Percent of Total

Agriculture, Forestry, Fishing, and Hunting $ 2,562,463 0.21 % 649 1.56 %

Mining, Quarrying, and Oil and Gas Extraction 14,747,163 1.19 % 295 0.71 %

Construction 39,145,299 3.15 % 3,716 8.92 %

Manufacturing 73,281,413 5.90 % 3,083 7.40 %

Wholesale Trade 109,243,636 8.80 % 2,838 6.81 %

Retail Trade 565,962,381 45.61 % 9,406 22.58 %

Finance and Insurance 11,623,578 0.94 % 471 1.13 %

Services 348,897,658 28.11 % 18,783 45.10 %

Other 75,533,745 6.09 % 2,411 5.79 %

Total $ 1,240,997,336 100.00 % 41,652 100.00 %

Tax Year 2006

Industry Remittance Percent of Total Accounts

Percent of Total

Agriculture, Forestry, Fishing, and Hunting $ 4,263,248 0.40 % 1,520 2.16 %

Mining, Quarrying, and Oil and Gas Extraction 5,715,604 0.53 % 1,502 2.13 %

Construction 32,432,170 3.00 % 11,977 17.02 %

Manufacturing 53,336,059 4.94 % 4,062 5.77 %

Wholesale Trade 90,177,184 8.35 % 3,164 4.50 %

Retail Trade 582,626,343 53.95 % 16,075 22.84 %

Finance and Insurance 3,115,399 0.29 % 579 0.82 %

Services 244,810,238 22.67 % 26,800 38.08 %

Other 63,413,908 5.87 % 4,698 6.68 %

Total $ 1,079,890,153 100.00 % $ 70,377 100.00 %

Note: Due to confidentiality issues, the names of revenue payers are not provided. This information is an alternative regarding the sources of the State’s revenue.

Source: West Virginia State Tax Department

West Virginia

296

Personal Income Tax

Tax Year 2015

Income Level Tax

Liability Percent of

Total Returns Percent of Total

$0 - $10,000 $ 5,272,893 0.30 % 236,651 27.90 %

$10,000 - $20,000 47,459,937 2.66 % 123,579 14.57 %

$20,000 - $40,000 170,695,066 9.56 % 162,763 19.20 %

$40,000 - $60,000 213,223,266 11.93 % 104,607 12.33 %

Over $60,000 1,349,611,684 75.55 % 220,536 26.00 %

Total $ 1,786,262,846 100.00 % 848,136 100.00 %

Tax Year 2006

Income Level Tax

Liability Percent of

Total Returns Percent of

Total $0 - $10,000 $ 18,619,641 1.39 % 251,245 32.97 %

$10,000 - $20,000 61,443,632 4.60 % 123,103 16.15 %

$20,000 - $40,000 173,037,512 12.95 % 156,696 20.56 %

$40,000 - $60,000 214,708,216 16.07 % 99,970 13.12 %

Over $60,000 868,594,173 64.99 % 131,030 17.20 %

Total $ 1,336,403,174 100.00 % $ 762,044 100.00 %

West Virginia

297

Schedule 8 Ratios of Outstanding Debt Last Ten Fiscal Years (Dollars Expressed in Thousands)

Primary Government Debt 2021 2020 2019 2018

Governmental Activities: General Obligation bonds $ 2,057,062 $ 1,865,314 $ 1,182,881 $ 1,240,350 Revenue Bonds 1,380,364 1,445,649 1,532,497 1,415,049 Capital Leases and Notes Payable 27,210 32,368 32,972 45,563 Capital Leases Payable to Component Units 191,185 209,730 227,660 244,995

Total Governmental Activities 3,655,821 3,553,061 2,976,010 2,945,957

Enterprise Activities: Revenue Bonds 158,655 165,475 172,045 178,395

Total Primary Government Debt $ 3,814,476 $ 3,718,536 $ 3,148,055 $ 3,124,352

Governmental Activities Tax Income

Year Personal Income

Consumer Sales and

Use Business Transportation Other Total 2021 $ 2,194,829 $ 1,668,378 $ 777,371 $ 701,541 $ 645,992 $ 5,988,111 2020 2,023,079 1,514,838 550,918 680,902 620,640 5,390,377 2019 2,090,596 1,368,741 793,067 682,331 632,445 5,567,180 2018 1,939,977 1,355,135 626,743 674,795 613,632 5,210,282 2017 1,830,106 1,312,353 581,896 593,158 627,091 4,944,604 2016 1,849,056 1,291,813 640,081 605,403 526,348 4,912,701 2015 1,921,597 1,265,957 907,362 640,135 446,794 5,181,845 2014 1,771,473 1,216,812 937,751 628,989 493,000 5,048,025 2013 1,771,481 1,198,983 923,575 605,768 508,114 5,007,921 2012 1,790,146 1,216,561 905,515 594,871 509,357 5,016,450

General Obligation Bond Debt Ratios

Year

General Obligation Bond Debt

Percent of Tax Income

Percent of Personal Income

Amount of Debt Per Capita*

2021 $ 2,057,062 34.35 % 2.56 % $ 1.16 2020 1,865,314 34.60 % 2.46 % 1.04 2019 1,182,881 21.25 % 1.60 % 0.66 2018 1,240,350 23.81 % 1.80 % 0.68 2017 359,261 7.27 % 0.54 % 0.20 2016 393,089 8.00 % 0.58 % 0.21 2015 412,368 7.96 % 0.62 % 0.22 2014 460,428 9.13 % 0.70 % 0.25 2013 498,776 9.96 % 0.78 % 0.27 2012 533,304 10.63 % 0.86 % 0.29

West Virginia

298

Primary Government Debt 2017 2016 2015 2014 2013 2012

$ 359,261 393,089 412,368 460,428 498,776 533,304 1,182,921 1,142,347 1,185,022 1,226,587 1,266,848 1,330,795 28,168 28,153 28,813 27,405 34,104 34,025 260,955 275,765 260,995 243,790 256,155 275,530

1,831,305 1,839,354 1,887,198 1,958,210 2,055,883 2,173,654

185,290 191,049 197,762 112,735 115,497 113,950

$ 2,016,595 $ 2,030,403 $ 2,084,960 $ 2,070,945 $ 2,171,380 $ 2,287,604

Total Debt Ratios

Year Total Debt Percent of

Tax Income

Percent of Personal Income

Amount of Debt Per Capita*

2021 $ 3,814,476 63.70 % 4.75 % $ 2.16 2020 3,718,536 68.98 % 4.90 % 2.07 2019 3,148,055 56.55 % 4.27 % 1.74 2018 3,124,352 59.97 % 4.54 % 1.72 2017 2,016,595 40.78 % 3.01 % 1.10 2016 2,030,403 41.33 % 3.00 % 1.10 2015 2,084,960 40.24 % 3.12 % 1.13 2014 2,171,380 43.01 % 3.30 % 1.17 2013 2,171,380 43.36 % 3.39 % 1.17 2012 2,287,604 45.60 % 3.68 % 1.23

All General Obligation Bonds carry a pledge of the State to levy taxes if funds are insufficient to meet debt service.

Infrastructure bonds are paid from the dedication of the first $24 million in severance tax collections.

Safe Roads bonds are paid from a debt service fund which is administered by the West Virginia State Treasurer's Office. The Division of Highways makes a monthly transfer to this fund from the Road Fund. The monthly transfer amount is equal to 10% of the annual debt service requirement on all Safe Roads Bonds.

*These ratios are calculated using the current fiscal year debt total divided by personal income and population for the prior calendar year. See Schedule 10 for personal income tax and population data.

West Virginia

299

Schedule 9 Pledged Revenue Coverage Last Ten Fiscal Years (Dollars Expressed in Thousands)

Department of Transportation West Virginia Code Chapter 17, Article 17A provides for the issuance of Surface Transportation Improvement Special Obligation Notes (GARVEE bonds) to facilitate the construction of highways, secondary roads, and bridges to be funded wholly or in part by federal dollars and in anticipation of reimbursement from such sources. Title 23, Section 122 federal legislation allows this reimbursement. There is Memorandum of Agreement between the Federal Highway Administration and the Division of Highways that documents the procedures for managing the stewardship and oversight of highway projects that are financed with the proceeds of these notes first issued in fiscal year 2007.

Fiscal Year Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 $ 32,769 $ — $ 32,769 $ 19,930 $ 12,839 $ 32,769 1.00

2020 31,787 — 31,787 18,975 12,812 31,787 1.00

2019 31,495 — 31,495 17,765 13,730 31,495 1.00

2018 25,926 — 25,926 15,310 10,616 25,926 1.00

2017 10,971 — 10,971 8,515 2,456 10,971 1.00

2016 — — — — — — —

2015 27,504 — 27,504 25,650 1,854 27,504 1.00

2014 27,519 — 27,519 24,475 3,044 27,519 1.00

2013 27,547 — 27,547 23,370 4,177 27,547 1.00

2012 27,588 — 27,588 22,425 5,163 27,588 1.00

WV Infrastructure and Jobs Development Council The primary source of repayment for the revenue and refunding bonds is the receipt of payments of principal and interest on a set of loans, known as defined loans, previously made to projects from revenue bond proceeds. New bonds were issued in 2018 to refund earlier bond issues.

Fiscal Year Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 51,009 27,977 23,032 3,100 3,834 6,934 3.32

2020 46,205 18,245 27,960 2,985 3,953 6,938 4.03

2019 54,612 19,158 35,454 2,900 4,055 6,955 5.10

2018 51,948 30,841 21,107 3,570 4,137 7,707 2.74

2017 29,097 17,264 11,883 83,805 3,634 87,439 0.14

2016 38,048 58,856 (20,808) 2,720 4,640 7,360 (2.83)

2015 28,840 70,089 (41,249) 2,620 4,746 7,366 (5.60)

2014 49,441 30,909 18,533 2,710 4,845 7,555 2.45

2013 49,211 18,762 30,449 29,230 4,410 33,640 0.91

2012 50,861 26,532 24,329 2,465 5,476 7,941 3.06

West Virginia

300

Tobacco Settlement Finance Authority Pursuant to the Code, and a Purchase and Sale Agreement, dated June 1, 2007, by and between the Authority and the State, the State sold to the Authority its right, title, and interest in and to all tobacco settlement revenue that is received by the State, under the terms of the Master Settlement Agreement entered into by participating tobacco product manufacturers, West Virginia, 45 other states, and six other U.S. jurisdictions in November 1998. The Series 2007 Bonds are secured by and are payable solely from the right, title, and interest of the Authority of 100% of the tobacco receipts, and investment earnings on the accounts with the trustee under the Indenture.

Fiscal Year

Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 $ 63,577 $ 63,577,000 $ (30) $ 63,607 $ 40,290 $ 14,024 $ 54,314 1.17

2020 108,271 361 107,910 61,825 50,263 112,088 0.96

2019 63,711 109 63,602 12,910 51,226 64,136 0.99

2018 65,304 127 65,177 13,410 52,228 65,638 0.99

2017 68,009 116 67,893 15,090 53,355 68,445 1.00

2016 66,356 130 66,226 12,405 54,281 66,686 0.99

2015 67,029 17 67,012 12,205 55,192 67,397 0.99

2014 67,499 149 67,350 11,815 56,068 67,883 0.99

2013 93,889 24 93,865 36,360 58,790 95,150 0.99

2012 67,599 34 67,565 8,515 59,425 67,940 0.99

Economic Development Project Fund West Virginia State Code Chapter 29, Article 22, Section 18a designates $19 million annually from the "excess lottery revenue fund" to be paid into the Economic Development Project Fund created in subsection (d) for payment of revenue bonds issued pursuant to the same subsection. Interest on the account and any other amounts paid into the Economic Development Project Fund are also to be used for the repayment of the bonds, which were issued in 2004.

Fiscal Year

Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 18,990 — 18,990 13,130 5,503 18,633 1.02

2020 19,438 — 19,438 12,460 6,194 18,654 1.04

2019 19,801 — 19,801 11,825 6,846 18,671 1.06

2018 19,419 — 19,419 11,220 7,465 18,685 1.04

2017 19,114 — 19,114 10,650 8,052 18,702 1.03

2016 19,051 — 19,051 10,105 8,610 18,715 1.02

2015 19,206 — 19,206 9,660 9,104 18,764 1.02

2014 19,852 — 19,852 9,240 9,538 18,778 1.06

2013 20,210 — 20,210 8,850 9,944 18,794 1.08

2012 19,290 — 19,290 8,495 10,317 18,812 1.02

West Virginia

301

Schedule 9 Pledged Revenue Coverage Last Ten Fiscal Years (Dollars Expressed in Thousands) (Continued)

Education, Arts, Sciences, and Tourism Certain net profits of the Lottery as set forth in Chapter 29, Article 22 of the Code of West Virginia, are transferred to the Trustee under the bond indenture. These bonds are subordinate as to lien and source of payment only to those certain School Building Authority Capital Improvement Bonds, Series 2004 and 2012.

Fiscal Year

Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 $ 9,994 $ — $ 9,994 $ 4,185 $ 5,809 $ 9,994 1.00

2020 9,994 — 9,994 3,985 6,009 9,994 1.00

2019 9,994 — 9,994 3,795 6,198 9,993 1.00

2018 10,240 2,691 7,549 1,095 6,206 7,301 1.03

2017 10,010 — 10,010 3,290 6,709 9,999 1.00

2016 9,996 — 9,996 3,130 6,865 9,995 1.00

2015 9,996 — 9,996 3,010 6,985 9,995 1.00

2014 9,999 — 9,999 2,880 7,119 9,999 1.00

2013 10,000 — 10,000 2,770 7,230 10,000 1.00

2012 10,012 3 10,009 2,685 7,310 9,995 1.00

Cacapon Project Fund Pledeged revenues under the Indenture include all money depostied into the Cacapon State Parks Lottery Revenue Debt Service Fund pursuant to Section 18e of the Lottery Act and transferred to the Trustee for deposit in the Revenue Fund established under the Indenture, and all income and receipts on the funds and accounts held by the Trustee under the Indenture.

Fiscal Year

Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 $ 2,029 $ — $ 2,029 $ 870 $ 1,153 $ 2,023 1.00

2020 2,038 — 2,038 855 1,169 2,024 1.01

2019 2,045 — 2,045 400 1,179 1,579 1.30

West Virginia

302

Economic Development Authority The Economic Development Authority (EDA) has issued Revenue Bonds to provide financial assistance to State governmental entities for the acquisition and construction of facilities deemed to be in the public interest. The EDA has lease-purchase agreements with the State, and the State makes the payments to the trustee. Upon repayment of the bonds, ownership of the acquired facilities transfers to the governmental entity served by the bond issuance.

Fiscal Year

Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 $ — $ — $ 27,656 $ 18,545 $ 9,111 $ 27,656 1.00

2020 — — 27,802 17,930 9,872 27,802 1.00

2019 — — 27,846 17,330 10,516 27,846 1.00

2018 — — 27,273 16,093 11,180 27,273 1.00

2017 — — 26,455 14,810 11,645 26,455 1.00

2016 — — 25,780 13,775 12,005 25,780 1.00

2015 — — 23,478 13,065 10,413 23,478 1.00

2014 — — 23,290 12,365 10,925 23,290 1.00

2013 — — 22,681 10,885 11,796 22,681 1.00

Housing Development Fund Operating revenue includes revenues and principal loan repayments. Both are used for bond repayment. The Fund is authorized by West Virginia State Code to issue bonds and notes for its various programs in an aggregate principal amount not to exceed $1.25 billion outstanding at any one time, exclusive of refunded obligations. Bonds and notes issued by the Fund are considered obligations of the Fund and are not deemed to constitute a debt or liability of the State. All bonds are secured by a pledge of all mortgage loan repayments, all proceeds of federal or private mortgage insurance, interest received on any monies or securities held pursuant to the resolution, and the rights and interest of the Fund in and to the mortgage loans.

Fiscal Year

Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 119,954 7,962 111,992 26,785 9,862 36,647 3.06

2020 95,207 9,323 85,884 24,575 10,013 34,588 2.48

2019 84,319 8,351 75,968 23,385 9,101 32,486 2.34

2018 86,072 6,441 79,631 28,095 9,904 37,999 2.10

2017 93,181 7,022 86,159 27,075 10,967 38,042 2.26

2016 97,344 6,980 90,364 24,240 12,690 36,930 2.44

2015 94,554 7,435 87,119 23,345 14,769 38,114 2.28

2014 102,230 7,334 94,896 22,970 16,139 39,109 2.42

2013 130,658 7,393 123,625 25,065 20,168 45,233 2.73

2012 144,583 9,462 135,121 20,651 25,694 46,345 2.92

West Virginia

303

Schedule 9 Pledged Revenue Coverage Last Ten Fiscal Years (Dollars Expressed in Thousands) (Continued)

Water Development Authority The Authority maintains a variety of programs to provide long-term, short-term, and private-activity financing at favorable interest rates for design, construction, and/or acquisition of wastewater and/or water systems. Monies are loaned to municipalities, public service districts, and other political subdivisions through purchase of revenue bonds or notes issued by these local governmental agencies. The loans are repaid from the revenues of the systems or other permanent financing. The aggregate principal amount of bonds and/or notes issued by the Authority may not exceed $500 million outstanding at any time; provided that before the Authority issues bonds or notes in excess of $440 million, the Legislature must pass a resolution authorizing this action. An additional aggregate principal amount of $180 million may be issued for the limited purpose of providing grants for capital improvements for designated projects in the Chesapeake Bay and Greenbrier Watershed areas. The Authority's long-term planning is accomplished within the confines of its authorized borrowing limit. Operating revenue includes revenues and principal loan repayments. Both are used for bond repayment. Fiscal year 2013 include retirement of revenue bonds.

Fiscal Year

Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 $ 10,946 $ 1,052 $ 9,894 $ 8,544 $ 6,193 $ 14,737 0.67

2020 11,136 1,292 9,844 8,238 6,418 14,656 0.67

2019 11,449 1,207 10,242 8,969 6,677 15,646 0.65

2018 12,034 1,398 10,636 49,195 7,382 56,577 0.19

2017 12,681 1,633 11,048 54,880 63,040 117,920 0.09

2016 13,294 1,685 11,610 8,034 8,251 16,285 0.71

2015 14,060 1,624 12,436 7,875 8,494 16,369 0.76

2014 14,134 2,347 11,787 50,610 9,537 60,147 0.20

2013 14,538 2,723 11,815 75,830 6,886 82,716 0.14

2012 14,715 2,166 12,549 6,930 11,334 18,264 0.69

West Virginia

304

Higher Education Fund Various individual institutions, as well as the Fund, have issued bonds which are generally payable from tuition and registration fees. Several bond issues, including the 2009 Series A, 2010 Series A, B, and C, and a 2012 Series A and B are to be repaid using certain Lottery funds. During fiscal years 2011 and 2012, Higher Education had a series of revenue bond refinancings that resulted in an increase in principal and interest payments.

Fiscal Year

Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 $ 1,734,046 $ 1,741,493 $ (7,447) $ 64,063 $ 56,577 $ 120,640 (0.06)

2020 1,719,799 1,793,882 (74,083) 95,782 53,321 149,103 (0.50)

2019 1,706,699 1,735,783 (29,084) 46,830 59,354 106,184 (0.27)

2018 1,690,514 1,699,547 (9,033) 81,181 58,879 140,060 (0.06)

2017 1,687,251 1,717,659 (30,408) 93,417 59,644 153,061 (0.20)

2016 1,661,924 1,712,074 (51,150) 40,620 58,309 98,929 (0.52)

2015 1,632,186 1,669,579 (37,393) 89,575 54,237 143,812 (0.26)

2014 1,625,089 1,620,246 4,843 45,900 53,211 99,111 0.05

2013 1,640,124 1,613,438 26,686 229,125 20,349 249,474 0.11

2012 1,596,324 1,664,940 (68,616) 226,945 57,079 284,024 (0.24)

West Virginia Divison of Corrections and Rehabilitation Revenue Bonds are secured by the regional jails and correctional facilities and an irrevocable pledge of the lease payments, which are generated by court fees, and are required to be in sufficient amount to pay principal and interest on the bonds when due.

Fiscal Year

Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 $ 414,454 $ 392,725 $ 21,729 $ 9,440 $ 527 $ 9,967 2.18

2020 388,022 379,661 8,361 9,004 990 9,994 0.84

2019 356,488 336,744 19,744 8,557 1,564 10,121 1.95

2018 104,704 86,365 18,339 7,294 1,493 8,787 2.09

2017 93,493 82,258 11,235 6,936 1,854 8,790 1.28

2016 89,639 76,579 13,060 6,537 1,653 8,190 1.60

2015 86,862 72,677 14,185 6,150 2,716 8,866 1.60

2014 89,254 72,944 16,310 5,840 3,030 8,870 1.83

2013 98,547 74,860 23,687 5,550 3,321 8,871 2.67

2012 102,043 77,064 24,979 5,270 3,592 8,862 2.82

West Virginia

305

Schedule 9 Pledged Revenue Coverage Last Ten Fiscal Years (Dollars Expressed in Thousands) (Continued)

School Building Authority The Authority provides funds for modern efficient public school facilities throughout the State by promoting the consolidation of elementary and secondary public schools. The bonds are paid by certain net profits of the West Virginia Lottery.

Fiscal Year

Operating Revenue

Direct Operating Expense

Net Revenue Available for Debt Service

Current Year Debt Service Requirements

Principal Interest Total Coverage

2021 37,023 14,751 22,272 15,100 9,563 24,663 0.90

2020 38,856 7,953 30,903 36,765 10,784 47,549 0.65

2019 66,767 104 66,663 28,285 11,732 40,017 1.67

2018 60,409 2,025 58,384 29,620 12,146 41,766 1.40

2017 60,010 8,069 51,940 27,235 14,169 41,404 1.26

2016 64,044 10,180 53,864 25,900 12,457 39,644 1.36

2015 62,533 10,525 52,008 29,555 14,812 44,367 1.17

2014 64,779 — 64,779 36,930 15,564 52,494 1.23

2013 58,758 — 58,758 35,275 16,047 51,322 1.14

2012 62,068 — 62,068 33,980 17,077 51,057 1.22

Parkways Authority Revenue Bonds are secured by a pledge of substantially all Parkways Authority operating revenues and all monies deposited into accounts created by the Trust Indentures. Only total debt service is available.

Fiscal Year

Operating Revenue

Direct Operating Expense

Revenue Available for Debt Service

Debt Service Coverage

2021 $ 157,853 $ 45,124 $ 112,729 $ 10,282 10.96

2020 156,655 44,028 112,627 10,280 10.96

2019 132,815 43,949 88,866 9,025 9.85

2018 95,215 37,449 57,766 10,140 5.70

2017 92,436 41,621 50,815 10,760 4.72

2016 93,223 39,223 54,100 10,755 5.03

2015 88,625 40,904 47,721 10,577 4.51

2014 84,730 39,070 45,660 10,529 4.34

2013 83,438 35,772 47,666 11,186 4.26

2012 83,574 35,043 48,531 10,541 4.60

Notes: Details regarding the State's debt can be found in Note 10 to the basic financial statements.

Source: Department of Transportation; School Building Authorty; West Virginia Infrastructure and Jobs Development Council; Housing Development Fund; Water Development Authority; Higher Education Fund; West Virginia Division of Corrections and Rehabilitation; Parkways Authority; Tobacco Settlement Finance Authority; and bond indentrues.

West Virginia

306

West Virginia

307

Schedule 10 Demographic and Economic Indicators Last Ten Calendar Years

2020 2019 2018 2017

Population West Virginia 1,767,859 1,792,147 1,805,832 1,815,857

Change -1.36 % -0.76 % -0.55 % (0.83) %

National 333,551,673 328,239,523 327,167,434 325,719,178

Change 1.62 % 0.33 % 0.44 % 0.80 %

Total Personal Income (Dollars in Millions) West Virginia $ 80,304 $ 75,835 $ 73,809 $ 68,864

Change 5.89 % 2.74 % 7.18 % 2.69 %

National $ 19,607,447 $ 18,542,262 $ 17,813,035 $ 16,413,551

Change 5.74 % 4.09 % 8.53 % 3.15 %

Per Capita Personal Income* (In Dollars) West Virginia $ 44,994 $ 42,315 $ 40,873 $ 37,924

Change 6.33 % 3.53 % 7.78 % 3.55 %

National $ 59,510 $ 56,490 $ 54,446 $ 50,392

Change 5.35 % 3.75 % 8.04 % 2.33 %

Median Age 42 42.9 42.7 38.0

Educational Attainment 9th Grade or Less 4.3 % 4.2 % 3.9 % 5 %

Some High School, No Diploma 8.8 % 8.7 % 8.3 % 8.4 %

High School Diploma 40.3 % 40.2 % 39.7 % 41.2 %

Some College, No Degree 18.6 % 17.9 % 19.2 % 18.6 %

Associate, Bachelor's, or Graduate Degree 28.0 % 28.9 % 28.8 % 27.3 %

Labor Force and Employment (People in Thousands)

Civilian Labor Force 792.2 797.0 783.3 773.8

Employed 726.0 757.9 742.2 733.4

Unemployed 66.1 39.1 41.2 40.4

Unemployment Rate 8.3 % 4.9 % 5.3 % 5.2 %

Nonfarm Wage and Salary Workers Employed in West Virginia Goods Producing Industries:

Mining 18.0 22.4 22.6 21.8

Construction 29.8 36.0 41.1 34.0

Manufacturing-Durable Goods 26.0 28.3 28.6 28.8

Manufacturing-NonDurable Goods 18.6 18.7 18.5 18.4

Total Goods Producing Industries 92.4 105.4 110.8 103.0

Non-Goods Producing Industries (people in thousands)

Trade 95.6 100.6 103.0 107.3

Service 337.4 361.7 359.7 389.9

State and Local Government 122.9 127.9 129.1 132.9

Federal Government 25.0 24.0 23.5 23.6

Total Non-Goods Producing Industries 580.9 614.2 615.3 653.7

Total Nonfarm Wage and Salary Employment 673.3 719.6 726.1 756.7

The most current period available is 2020.

*Per capita personal income is calculated by dividing total personal income by population.

Sources: WORKFORCE West Virginia Research, Information, and Analysis Office; the Census; the Survey of Current Business; and the Bureau of Economic Analysis.

West Virginia

308

2016 2015 2014 2013 2012 2011

1,831,102 1,844,128 1,850,326 1,854,304 1,855,413 1,855,364 (0.71) % (0.33) % (0.21) % (0.06) % — % 13.00 %

323,127,513 321,418,820 318,857,056 316,128,839 313,914,040 311,591,917 0.53 % 0.80 % 0.86 % 0.70 % 0.75 % 0.92 %

$ 67,062 $ 67,787 $ 66,857 $ 65,889 $ 63,968 $ 62,178 (1.07) % 1.39 % 1.45 % 3.00 % 2.88 % 4.65 %

$ 15,912,777 $ 15,463,981 $ 14,683,147 $ 14,151,427 $ 13,401,869 $ 12,981,741 2.90 % 5.32 % 3.62 % 5.59 % 3.24 % 5.08 %

$ 36,624 $ 36,578 $ 36,132 $ 35,533 $ 34,477 $ 33,513 0.13 % 1.23 % 1.66 % 3.06 % 2.88 % 4.59 %

$ 49,246 $ 48,112 $ 46,049 $ 44,765 $ 42,693 $ 41,663 2.36 % 4.48 % 2.79 % 4.85 % 2.47 % 4.32 %

42.2 41.8 41.3 41.3 41.3 41.1

4 % 5 % 5.0 % 5.4 % 5.6 % 6.8 % 9.6 % 9.8 % 9.9 % 10.0 % 9.9 % 11.3 %

39.7 % 40.7 % 41.1 % 40.2 % 40.6 % 41.3 % 18.1 % 18.5 % 18.4 % 18.6 % 19.0 % 17.7 % 28.2 % 25.7 % 25.7 % 25.7 % 25.0 % 23.0 %

771.8 776.0 787.8 797.4 805.0 799.9 732.5 730.1 733.5 744.6 746.0 736.1 39.3 45.9 54.3 52.8 59.0 63.8

5.1 % 5.9 % 690.0 % 6.6 % 7.3 % 8.0 %

20.7 23.7 25.5 33.3 33.7 33.6 29.5 31.2 27.7 31.9 35.6 33.0 27.5 28.0 28.9 30.1 29.6 30.0 18.7 18.9 18.8 18.9 19.6 19.5 96.4 101.8 100.9 114.2 118.5 116.1

109.4 112.4 107.9 108.8 111.0 109.9 389.0 397.9 389.6 398.4 381.7 376.2 134.8 132.2 130.0 132.8 130.7 128.3 23.9 23.4 22.2 23.2 23.3 23.5 657.1 665.9 649.7 663.2 646.7 637.9

753.5 767.7 750.6 777.4 765.2 754.0

West Virginia

309

Schedule 11 Principal Employers Current Year and Nine Years Ago

Estimated as of June 30, 2021

Major West Virginia Employers Number of Employees

Percentage of Total

Employed Local Government 70,000-74,999 9.53% State Government 40,000-44,999 5.73% Federal Government 20,000-24,999 3.44%

WVU MEDICINE (formerly West Virginia United Health System) 14,000-19,999 2.27%

Wal-Mart Associates, Inc. 11,000-13,999 1.72% Charleston Area Medical Center, Inc. 7,000-10,999 1.24% Mountain Health System 6,000-6,999 0.41% Kroger 4,000-5,999 0.41% Lowe's Home Centers , Inc. 2,000-3,999 0.41% Monongalia Health 2,000-3,999 0.41% Viatris (Mylan Pharmaceuticals, Inc.) 2,000-3,999 0.41% Contura Energy 2,000-3,999 0.41% Macy's Corporate Services, Inc 2,000-3,999 0.41%

Estimated as of June 30, 2012

Major West Virginia Employers Number of Employees

Percentage of Total

Employed Local Government 75,000-79,999 10.47% State of West Virginia 40,000-44,999 5.77% Federal Government 20,000-24,999 3.14% Wal-Mart Associates, Inc. 10,000-13,000 1.56% West Virginia United Health System 7,000-9,999 1.15% Charleston Area Medical Center, Inc. 5,000-6,999 0.82% Kroger 3,000-4,999 0.54% Consolidated Coal Company 3,000-4,999 0.54% Lowe's Home Centers, Inc. 1,000-2,999 0.27% Mylan Pharmaceuticals, Inc. 1,000-2,999 0.27% Mentor Management, Inc 1,000-2,999 0.27% St. Mary's Hospital 1,000-2,999 0.27% American Electric Power 1,000-2,999 0.27%

Source: WORKFORCE West Virginia Research, Information, and Analysis Office.

West Virginia

310

Schedule 12 Education Enrollment Last Ten Fiscal Years

Public School Enrollment Grades Pre-K Through 12

Year Elementary (Pre-K to 6)

Secondary (7 to 12) Total All Grades

2020-21 136,083 116,274 252,357 2019-20 145,746 115,887 261,633 2018-19 149,182 116,537 265,719 2017-18 152,584 118,023 270,607 2016-17 154,180 118,986 273,166 2015-16 157,003 120,134 277,137 2014-15 158,815 121,084 279,899 2013-14 160,112 120,901 281,013 2012-13 160,721 121,589 282,310 2011-12 160,571 121,517 282,088

Higher Education Enrollment Colleges and Universities

Public Independent

Year Enrollment

Number of Certificates and Degrees Enrollment

Number of Certificates and Degrees

2020-21 75,184 17,285 6,571 N/A* 2019-20 81,292 17,916 6,596 1,732 2018-19 80,931 18,451 8,167 2,037 2017-20 83,133 18,399 8,385 2,088 2016-17 84,447 18,573 8,607 2,109 2015-16 86,427 18,521 8,654 1,862 2014-15 87,082 18,410 8,637 1,794 2013-14 90,028 18,012 8,496 1,772 2012-13 92,140 16,938 8,758 2,425 2011-12 96,573 16,512 8,758 2,991

*This information was not available for FY 21.

Sources: West Virginia Board of Education and West Virginia Higher Education Policy Commission

West Virginia

311

Schedule 13 State Employees by Function Last Ten Fiscal Years

2021 2020 2019 2018

Executive 861 885 849 852

Legislative 160 174 164 157

Judicial 1,155 1,145 1,118 1,118

Administration 936 939 910 923

Commerce

Division of Natural Resources (Parks) 703 701 683 690

Tourism and Development 147 145 132 143

WORKFORCE West Virginia 326 278 287 291

Other 337 338 344 332 764

Environmental Protection 764 778 761 753

Education and the Arts

Department of Education 505 505 511 520

School for Deaf and Blind 138 155 163 162

Rehabilitation Services 403 412 442 476

Higher Education 10,632 10,636 10,519 10,510

Other 186 187 205 200

Revenue 865 873 891 894 5,096

Health & Human Services 5,096 5,215 5,132 5,402

Homeland Security

Corrections and Rehabilitation* 3,109 3,334 3,362 3,313

Juvenile Services* — — — 14

State Police 879 946 999 997

Regional Jail Authority* — — — 18

Other 274 745 703 687

Veterans Assistance 201 208 228 230

Transportation 5,976 6,042 5,648 5,519

Miscellaneous** 1,061 490 494 484

Total 34,714 35,131 34,545 34,685

Notes:

* In FY 2019, Regional Jail Authority merged with Division of Corrections, Division of Juvenile Services, and Correctional Industries to create the Division of Corrections and Rehabilitation Services

**In FY 2021, the Legislature passed a bill to move Adjutant General and Armory Board from Homeland Security to Miscellaneous Boards.

Sources: Leave system data warehouse reports, Higher Education Policy Commission, Housing Development Fund, and the Supreme Court of Appeals.

West Virginia

312

2017 2016 2015 2014 2013 2012

857 899 931 920 932 958

164 182 189 210 213 221

1,137 1,072 1,109 1,079 1,055 1,069

895 927 914 908 889 683

696 701 701 741 748 756

147 144 144 146 163 162

320 332 332 390 391 396

321 379 379 428 441 439

794 811 850 883 855 842

473 511 507 528 550 584

160 158 161 178 174 193

528 532 539 558 531 564

10,556 10,501 11,633 11,676 11,717 11,575

229 267 259 268 280 279

905 953 987 1,028 1,062 1,094

5,250 5,437 5,463 5,514 5,630 5,621

1,885 1,987 1,688 1,839 1,760 1,758

466 549 516 511 676 712

984 1,025 1,050 1,037 1,024 1,067

846 935 948 971 911 912

660 610 591 569 620 556

223 210 207 226 246 240

5,530 5,646 5,629 5,723 5,876 5,834

483 511 519 535 533 506

34,509 35,279 36,246 36,866 37,277 37,021

West Virginia

313

Schedule 14 Operating Indicators by Function Last Ten Fiscal Years

2021 2020 2019

Department of Transportation Division of Highways

Total highway construction projects authorized 995 851 1,014

Number of roadway resurfacing projects 537 217 461

Highway mileage resurfaced (in miles) 1,508 718 1,318

WORKFORCE West Virginia (Employment Programs) Applications processed for job seekers (in thousands) 14 105 104

Filled job openings 80 858 1,576

Department of Education Schools receiving exemplary accreditation status N/A N/A N/A

Schools receiving full accreditation status N/A N/A N/A

School districts receiving full approval status N/A N/A N/A

Department of Health and Human Resources Number of food stamp recipients 301,342 294,346 289,359

Number of food stamps issued 61,135,695 38,585,136 33,602,760

Medicaid enrollees 631,568 622,943 616,834

Counties enrolled in managed care 100 % 100 % 100 %

Child support collections (in millions) $182 $207 $194

Students served by school-based health clinics 36,761 45,254 44,868

Division of Natural Resources Attendance at State Parks (in millions) 6.9 6.7 6.5

Hunting and Fishing License Sales (calendar year) 891,774 883,964 854,434

Individuals whitewater rafting on rivers (calendar year) 112,372 136,779 136,233

Department of Environmental Protection Division of Air Quality

Number of air quality inspections 521 815 812

Average days open per complaint 6.82 7.55 7.79

Division of Land Restoration Programs Organizations that adopted highways 38 38 88

Division of Mining and Reclamation Surface mine blasting examinations and certifications 57 145 188

Surface mine mineral extractions inspections 23,707 23,500 18,241

Number of acres reclaimed through reclamation and restoration of land 2,874 2,989 1,048

Office of Miners Health and Safety (Calendar Year) Total Safety Inspections 5,190 6,107 5,365

Violations issued by mine Inspectors 6,145 9,227 9,748

Lost time injuries of mining personnel 377 488 500

Department of Military Affairs and Public Safety Division of Corrections and Rehabilitation

Adult inmate housing capacity 10,291 10,291 5,998

Inmate employment (Prison Industries) 231 265 271

Youth successfully completed programs/returned to community (Calendar Year) 74 129 145

Veterans' Home Average daily number of residents 74 76 82

Average daily cost per resident $ 110.84 $ 117.51 $ 96.98

Bureau of Senior Services Persons served under Medicaid Aged and Disabled Waiver 7,884 7,026 6,842

N/A – Information is not available. Accreditation has been suspended for school years beginning with 2014-15 and 2013-14 due to development of new state accreditation standards.

Sources: State of West Virginia Executive Budget Operating Detail Reports and state agencies.

West Virginia

314

2018 2017 2016 2015 2014 2013 2012

1,213 813 1,042 891 757 806 1,305 595 294 519 483 325 348 775 1,816 1,140 1,729 1,481 975 1,067 1,716

117 114 96 102 114 141 145 2,396 3,147 2,969 3,235 3,725 4,673 4,943

N/A N/A N/A N/A N/A 8.00 % 7.98 % N/A N/A N/A N/A N/A 63.72 % 72.08 % N/A N/A N/A N/A N/A 89.09 % 87.27 %

304,952 322,086 333,938 360,266 351,392 342,831 339,258 37,312,477 40,337,523 40,796,612 40,995,643 39,975,707 41,335,676 40,951,366 650,686 651,031 649,111 632,808 551,682 410,770 415,030

100 % 100 % 100 % 100 % 100 % 100 % 100 % $184 $189 $214 $212 $208 $209 $213 45,682 37,456 29,045 28,053 24,391 20,708 28,436

6.6 6.8 7.1 7.0 7.0 7.0 6.8 830,309 852,909 868,658 913,578 927,069 911,219 881,062 119,675 136,128 131,022 134,170 130,192 140,027 142,036

524 470 583 546 700 550 2,457 6.53 8.60 6.80 8.24 17.00 9.75 10.80

52 74 1,835 1,301 1,256 1,227 1,186

273 234 147 134 111 114 125 9,639 18,935 19,739 20,205 21,086 21,790 20,530 204,453 891 527 398 700 1,202 7,842

5,486 5,328 5,002 5,750 6,751 6,690 6,432 9,495 7,205 7,527 8,767 11,415 13,267 15,705 442 369 355 584 639 570 648

6,106 5,956 5,989 5,987 5,923 5,778 5,242 251 244 245 240 244 250 253

182 196 188 166 179 180 163

82 70 74 81 87 86 98 $107.05 $112.44 $107.02 $97.62 $97.15 $107.14 $87.05

6,419 6,151 6,385 6,455 6,208 7,107 8,530

West Virginia

315

Schedule 15 Capital Assets Statistics by Function Last Ten Fiscal Years

2021 2020 2019 2018 Vehicles

Executive 195 190 190 193 Judicial 17 19 19 19 Administration

Agency-Owned 3,004 2,950 2,776 202 Leased to other agencies — — — 2,585

Totals 3,004 2,950 2,776 2,787

Revenue — 1 Commerce

Division of Natural Resources 539 535 525 517 Division of Forestry 89 92 99 107 Others 8 8 8 7

Total Commerce 636 635 632 631

Environmental Protection 4 4 5 5 Education 28 28 29 28 Health and Human Services 21 22 25 26 Homeland Security

West Virginia State Police 734 810 802 706 Corrections and Rehabilitation 79 85 84 43 Regional Jail Authority* — — — 47 Others 37 55 49 51

Total Homeland Security 850 950 935 847 Veterans Affairs 52 54 54 54 Regulatory Boards and Commissions 19 — — — Boats

Commerce 241 225 199 199 Environmental Protection 15 16 14 14

Buildings Executive 104 104 105 98 Administration 234 228 225 217 Revenue 2 2 2 2 Commerce

Division of Natural Resources (Parks) 1,672 1,674 1,670 1,039 Division of Forestry 16 16 1 5 Others 13 14 13 12

Total Commerce 1,701 1,704 1,684 1,056 Environmental Protection 2 6 6 6 Education 70 76 76 76 Health and Human Services 452 452 452 452 Homeland Security

West Virginia State Police 203 203 203 203 Division of Corrections 463 457 455 183 Armory Board — 201 218 218 Others — 50 53 176

Total Homeland Security 666 911 929 780 Veterans Affairs 12 12 12 11 Regulatory Boards and Commissions 18 18 17 9

* In FY 2019, Regional Jail Authority merged with Division of Corrections, Division of Juvenile Services, and Correctional Industries to create the Division of Corrections and Rehabilitation Services.

*In FY 2021, the Legislature passed a bill that moved Adjutant General and Armory Board from Homeland Security to Regulatory Board and Commissions..

Sources: Financial Accounting and Reporting Section; West Virginia Financial Information Management System; Fixed Asset detailed ledger.

West Virginia

316

2017 2016 2015 2014 2013 2012

235 218 227 227 195 192 20 18 20 20 19 15

10 9 8 8 6 7 2,434 2,502 2,664 2,664 2,021 2,035 2,444 2,511 2,672 2,672 2,027 2,042 — — — — 1 1

907 581 710 606 549 571 140 119 135 139 135 96 18 14 18 15 17 17 1,065 714 863 760 701 684 8 8 8 17 8 11 48 30 42 53 48 42 42 35 38 29 29 25

1,164 867 1,014 895 902 852 29 26 25 47 45 42 — — 51 28 27 27 27 23 25 37 33 32 1,220 916 1,115 1,007 1,007 953 54 77 77 77 77 75

2 2 2 2 2

199 196 103 97 100 92 14 15 8 8 7 7

27 72 28 27 26 29 75 71 70 69 71 78 2 2 2 2 3 3

885 903 907 909 907 905 5 5 5 5 5 5 12 11 11 11 11 8 902 919 923 925 923 918 6 6 7 7 7 7 76 79 79 69 69 82 452 106 106 105 107 108

97 97 92 91 90 90 64 66 63 59 55 55 149 149 149 112 109 154 63 66 66 64 59 55 373 378 370 326 313 354 10 10 10 10 10 10 4 4 4 4 4 3

West Virginia

317

Schedule 16 Miscellaneous Statistics June 30, 2021

Date of Statehood June 20, 1863

West Virginia shares its history with Virginia from 1609 until Virginia seceded from the Union in 1861. The delegates of 40 western counties formed their own government, which was granted statehood in 1863. Declared a state by President Abraham Lincoln, West Virginia is the only state to be designated by Presidential Proclamation.

Form of Government Constitutional Representative Government

Branches of Government Legislative, Executive, Judicial

Area (Land and Water) 24,231.4 square miles (approximately)

Highest Elevation Point Spruce Knob - 4,863 feet above sea level

Lowest Elevation Point Harpers Ferry - 240 feet above sea level

Miles of Public Roads and Streets 38,770

Miles Maintained by the State 34,691

State Police Protection:

Number of State Police Detachments 56

Number of State Police Troopers 638

Higher Education (State Supported):

Number of Campuses 21

Number of Students 73,692

Recreation:

Number of State Parks 35

Area of State Parks 77.328

Number of State Forests 9

Area of State Forests 77,683.00

Number of State owned and Operated Rail Trails

Distance of Rail Trails 150 miles

Wildlife Fish and Game Management Areas

104

Acreage of Wildlife Management Areas (Owned and Leased)

429,122

Sources: Division of Highways, Division of Public Safety, Higher Education Policy Commission, and Division of Natural Resources.

West Virginia

318

Cover

Comprehensive Annual Financial Report
West Virginia
Governor Jim Justice
Acknowledgments

Table of Contents
Introductory Section

Letter of Transmittal
GFOA Certificate of Achievement
Organization Chart
State of West Virginia Principal Officials

Financial Section

Report of Independent Auditors
Management’s Discussion and Analysis

Basic Financial Statements

Government-wide Financial Statements

Statement of Net Position
Statement of Activities

Governmental Funds Financial Statements

Balance Sheet
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position
Statement of Revenues, Expenditures, and Changes in Fund Balances
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities

Proprietary Funds Financial Statements

Statement of Net Position
Statement of Revenues, Expenses, and Changes in Fund Net Position
Statement of Cash Flows

Fiduciary Funds Financial Statements

Statement of Fiduciary Net Position
Statement of Changes in Fiduciary Net Position

Discretely Presented Component Units Financial Statements

Combining Statement of Net Position
Combining Statement of Activities

Notes to the Financial Statements:

Note 1 – Summary of Significant Accounting Policies
Note 2 - Restatement and Restricted Balances
Note 3 – Net Position/Fund Deficits
Note 4 – Deposits and Investments
Note 5 – Receivables
Note 6 – Interfund Balances
Note 7 – Interfund Transfers
Note 8 – Restricted Assets
Note 9 – Capital Assets
Note 10 – Long-Term Obligations
Note 11 – Leases
Note 12 – Retirement Systems
Note 13 – Other Postemployment Benefits
Note 14 – Risk Management
Note 15 – Commitments and Contingencies
Note 16 – Subsequent Events

Required Supplementary Information

Budgetary Comparison Schedule
Notes to Required Supplementary Information – Budgetary Reporting
Budgetary Comparison Schedule, Budget-to-GAAP Reconciliation
Pension Plans Schedules
Notes to Required Supplementary Information – Pension
OPEB Plan Schedules
Notes to Required Supplementary Information – OPEB

Combining Financial Statements and Schedules

Nonmajor Governmental Funds

Combining Balance Sheet
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

Nonmajor Special Revenue Funds

Combining Balance Sheet
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

Nonmajor Debt Service Funds

Combining Balance Sheet
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

Internal Service Funds

Combining Statement of Fund Net Position
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Combining Statement of Cash Flows

Nonmajor Proprietary Funds

Combining Statement of Net Position
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Combining Statement of Cash Flows

Pension Trust and Other Employee Benefit Trust Funds

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

Investment Trust Funds

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

Custodial Funds

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

Nonmajor Discretely Presented Component Units

Combining Statement of Net Position
Combining Statement of Activities - Program Revenues

Statistical Section

Logo
Index to Statistical Section

Schedule 1 – Net Position by Component
Schedule 2 – Changes in Net Position
Schedule 3 – Fund Balances – Governmental Funds
Schedule 4 – Changes in Fund Balances – Governmental Funds
Schedule 5 – Revenue Base
Schedule 6 – Revenue Rates
Schedule 7 – Revenue Payers by Industry/Category
Schedule 8 – Ratios of Outstanding Debt
Schedule 9 – Pledged Revenue Coverage
Schedule 10 – Demographic and Economic Indicators
Schedule 11 – Principal Employers
Schedule 12 – Education Enrollment
Schedule 13 – State Employees by Function
Schedule 14 – Operating Indicators by Function
Schedule 15 – Capital Assets Statistics by Function
Schedule 16 – Miscellaneous Statistics

Draft CAFR 11-15-21.pdf

Cover

Comprehensive Annual Financial Report
West Virginia
Governor Jim Justice
Acknowledgments

Table of Contents
Introductory Section

Letter of Transmittal
GFOA Certificate of Achievement
Organization Chart
State of West Virginia Principal Officials

Financial Section

Management’s Discussion and Analysis

Basic Financial Statements

Government-wide Financial Statements

Statement of Net Position
Statement of Activities

Governmental Funds Financial Statements

Balance Sheet
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position
Statement of Revenues, Expenditures, and Changes in Fund Balances
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities

Proprietary Funds Financial Statements

Statement of Net Position
Statement of Revenues, Expenses, and Changes in Fund Net Position
Statement of Cash Flows

Fiduciary Funds Financial Statements

Statement of Fiduciary Net Position
Statement of Changes in Fiduciary Net Position

Discretely Presented Component Units Financial Statements

Combining Statement of Net Position
Combining Statement of Activities

Notes to the Financial Statements:

Note 1 – Summary of Significant Accounting Policies
Note 2 - Restatement and Restricted Balances
Note 3 – Net Position/Fund Deficits
Note 4 – Deposits and Investments
Note 5 – Receivables
Note 6 – Interfund Balances
Note 7 – Interfund Transfers
Note 8 – Restricted Assets
Note 9 – Capital Assets
Note 10 – Long-Term Obligations
Note 11 – Leases
Note 12 – Retirement Systems
Note 13 – Other Postemployment Benefits
Note 14 – Risk Management
Note 15 – Commitments and Contingencies
Note 16 – Subsequent Events

Required Supplementary Information

Budgetary Comparison Schedule
Notes to Required Supplementary Information – Budgetary Reporting
Budgetary Comparison Schedule, Budget-to-GAAP Reconciliation
Pension Plans Schedules
Notes to Required Supplementary Information – Pension
OPEB Plan Schedules
Notes to Required Supplementary Information – OPEB

Combining Financial Statements and Schedules

Nonmajor Governmental Funds

Combining Balance Sheet
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

Nonmajor Special Revenue Funds

Combining Balance Sheet
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

Nonmajor Debt Service Funds

Combining Balance Sheet
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances

Internal Service Funds

Combining Statement of Fund Net Position
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Combining Statement of Cash Flows

Nonmajor Proprietary Funds

Combining Statement of Net Position
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position
Combining Statement of Cash Flows

Pension Trust and Other Employee Benefit Trust Funds

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

Investment Trust Funds

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

Custodial Funds

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

Nonmajor Discretely Presented Component Units

Combining Statement of Net Position
Combining Statement of Activities - Program Revenues

Statistical Section

Logo
Index to Statistical Section

Schedule 1 – Net Position by Component
Schedule 2 – Changes in Net Position
Schedule 3 – Fund Balances – Governmental Funds
Schedule 4 – Changes in Fund Balances – Governmental Funds
Schedule 5 – Revenue Base
Schedule 6 – Revenue Rates
Schedule 7 – Revenue Payers by Industry/Category
Schedule 8 – Ratios of Outstanding Debt
Schedule 9 – Pledged Revenue Coverage
Schedule 10 – Demographic and Economic Indicators
Schedule 11 – Principal Employers
Schedule 12 – Education Enrollment
Schedule 13 – State Employees by Function
Schedule 14 – Operating Indicators by Function
Schedule 15 – Capital Assets Statistics by Function
Schedule 16 – Miscellaneous Statistics