Audit Report - Report Mt Legislative Audit Division Dept Labor Industry Ui Cares Crf 20 01B 2022
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- Report Mt Legislative Audit Division Dept Labor Industry Ui Cares Crf 20 01B 2022
Summary
Financial audit report 20-01B of the Montana Legislative Audit Division, dated March 2022, on the State of Montana's basic financial statements and Schedule of Expenditures of Federal Awards for the fiscal year ended June 30, 2021. The division issued unmodified opinions on the statements and found the schedule, which reports federal grant expenditures of approximately $6.54 billion, reasonable. The report lists three material weaknesses in internal controls, covering Unemployment Insurance reporting at the Department of Labor and Industry, Pandemic Electronic Benefit Transfer reporting at the health department and the preparation of the statements. Its one recommendation says the Department of Administration's controls did not prevent or detect several multimillion-dollar errors in Unemployment Insurance enterprise fund activity.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
A R eport
to the
M ontana
L egislature
F i n a n c i al A u d i t
State of Montana
For the Fiscal Year Ended
June 30, 2021
M arch 2022
Legislative Audit
Division
20-01B
Financial Audits
Legislative Audit
Financial audits are conducted by the Legislative Audit Division
Committee
to determine if the financial statements included in this report
Representatives are presented fairly and the agency has complied with laws and
Kim Abbott regulations having a direct and material effect on the financial
Kim.Abbott@mtleg.gov statements. In performing the audit work, the audit staff uses
Denise Hayman, Chair standards set forth by the American Institute of Certified Public
Denise.Hayman@mtleg.gov Accountants and the United States Government Accountability
Emma Kerr-Carpenter Office. Financial audit staff members hold degrees with an
Emma.KC@mtleg.gov emphasis in accounting and many staff members hold Certified
Terry Moore Public Accountant (CPA) certificates.
terry.moore@mtleg.gov
Matt Regier The Single Audit Act Amendments of 1996 and the Uniform
Matt.Regier@mtleg.gov Administrative Requirements, Cost Principles, and Audit
Jerry Schillinger Requirements for Federal Awards require the auditor to issue
jerry.schillinger@mtleg.gov certain financial, internal control, and compliance reports in
Senators addition to those reports required by Government Auditing
Jason Ellsworth, Vice Chair Standards. This individual agency audit report is not intended
Jason.Ellsworth@mtleg.gov to comply with these reporting requirements and is therefore
John Esp not intended for distribution to federal grantor agencies. The
Johnesp2001@yahoo.com Legislative Audit Division issues a statewide biennial Single Audit
Pat Flowers Report which complies with the above reporting requirements.
Pat.Flowers@mtleg.gov The Single Audit Report for the two fiscal years ended June 30,
Tom Jacobson 2019, was issued March 30, 2020. The Single Audit Report
Tom.Jacobson@mtleg.gov for the two fiscal years ended June 30, 2021, will be issued by
Tom McGillvray September 30, 2022.
Tom.McGillvray@mtleg.gov
Mary McNally
McNally4MTLeg@gmail.com
Members serve until a
member’s legislative term
of office ends or until a
Audit Staff
successor is appointed,
whichever occurs first. Mary Currin Katie Majerus
Donald Erdmann Karen E. Simpson
§5-13-202(2), MCA Jennifer Erdahl Shandell VanDonsel
Brenda Keller
Fraud Hotline Reports can be found in electronic format at:
(Statewide)
1-800-222-4446 https://leg.mt.gov/lad/audit-reports
(in Helena)
444-4446
LADHotline@mt.gov
www.montanafraud.gov
LEGISLATIVE AUDIT DIVISION
Angus Maciver, Legislative Auditor Deputy Legislative Auditors:
Deborah F. Butler, Legal Counsel Cindy Jorgenson
William Soller
March 2022
The Legislative Audit Committee
of the Montana State Legislature:
This financial audit report contains our Independent Auditor’s Report on the basic financial statements (BFS) and the
Schedule of Expenditures of Federal Awards (SEFA) of the state of Montana for the fiscal year ended June 30, 2021.
Personnel of the State Financial Services Division (SFSD) of the Department of Administration prepare the BFS.
Personnel from the Governor’s Office of Budget and Program Planning prepare the SEFA.
We issued an unmodified opinion on the SEFA in relation to the amounts presented in the BFS. We also issued
unmodified opinions on the BFS, as described in the Independent Auditor’s Report on page A-5. This means a reader
can rely on the information presented in the BFS.
The report also contains our Report on Internal Control Over Financial Reporting and on Compliance and Other
Matters Based on an Audit of Financial Statements. Government Auditing Standards require we issue this report.
The report includes three material weaknesses in internal controls, related to financial reporting of Unemployment
Insurance activity at the Department of Labor and Industry (DLI), financial reporting of Pandemic Electronic Benefit
Transfer activity at the Department of Public Health and Human Services (PHHS), and SFSD’s controls over preparing
the BFS. The report also includes a significant deficiency in internal controls, related to Montana State University and
University of Montana controls over capital assets. Additionally, the report addresses material noncompliance for one
retirement system that is not actuarially sound as required by the Montana Constitution and state law.
Lastly, the report contains one recommendation to the Department of Administration’s SFSD related to internal
controls over the BFS preparation process.
Department of Administration, Governor’s Office, DLI, and PHHS officials reviewed the contents of this report.
The Department of Administration’s response is on page B-1, the Governor’s Office response is on page B-3, the DLI
response is on page B-4, and the PHHS response is on page B-5. Responses from Montana State University, University
of Montana, and PERB are included in their respective separately issued audit reports (#21-11A, #21-10A, and
#20-08B, respectively).
We thank the Department of Administration’s director, the SFSD staff, and the Governor’s Office staff for their
cooperation and assistance throughout the audit.
Respectfully submitted,
/s/ Angus Maciver
Angus Maciver
Legislative Auditor
Room 160 • State Capitol Building • PO Box 201705 • Helena, MT • 59620-1705
Phone (406) 444-3122 • FAX (406) 444-9784 • E-Mail lad@mt.gov
TABLE OF CONTENTS
Figures and Tables......ccccsesesssssesesesessseseseseseseesescseseseseacacacseacsseeseseeeseeeseeeseseeuseaeeseseseseaeaeaeaees iii
Elected, Appointed, and Administrative Officials... cccssseeeeseseseseeesesesestenseeneeeeseseneaeaeaees iv
Report SUMIMALY oo. esecsceeseseseesseescsesscsesscssseescsesseecsseesscesssesseesssesssesssessseesseeesaeeaegs S-l
CHAPTER I - INTRODUCTION AND BACKGROUND 1
Introduction ......cececeesessesesesessesesesesscscseseesescsesessesesesesseseseseesesesesesseacsssesseacsssessessensessescaesesseseaeeney 1
CHAPTER II —- FINDING AND RECOMMENDATION 5
Internal Controls Over Financial Reporting... ccecsssesesesesssessseseseeeseseseseseaeaesessssasaseseseeenens 5
Double Recorded Activity ....c.cccessssseseeseseseseseseeseseseseseseeeeeeseseaeseeeeeeeeseaeaeeeeeeeeseaeaceeeeeees 6
Incomplete Allowance for Doubtful Accounts and Bad Debt Expense Adjustments........ 6
Statement of Cash Flows Reporting......ccssssssssssssseseseseesesesesssssesesssseeseseeeeeeneeseeneeeeeeees 7
SUIMIMALY ooeeeeeeeeeeeseeseesceeeseeseesceceseeseeseacseeseeseeacseeseeseeaeaeseeseeaeeasseeaeeaeeaeseeseeaeeaeeesseeaeeaeeaeaes 8
INDEPENDENT AUDITOR’S REPORT,
BASIC FINANCIAL STATEMENTS,
REQUIRED SUPPLEMENTARY INFORMATION, AND SCHEDULE OF EXPENDITURES OF
FEDERAL AWARDS
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed in Accordance with Government
Auditing Standards viiccecccccscsesesesesssessssesesssssssessessessseseseseeeseseseseaeseaeseseseaeaeeeaseeeeeeseeeeseeeeeeeees A-1
Independent Auditor’s Report ....c.cccecssssssesssssssessessesseeseseseseseseasacseecseseeeeeeeeeeeeeeeeeeeeeeeeeeeeees A-5
Management’s Discussion and Analysis .....cesessssssssessseseesesesesesssssesesesseeeeeeeneneeeeeeeeeneeeneees A-9
Statement of Net Position.....ccceesssssescseseeseseseseseseseseseseeessseseseseesescscsesescaeaeaeasaeacaessesenenens A-22
Statement Of ACtiVItICS.... cc ceeeteeeseseseseeeeeeeeeseeeseseseseseseseseaeseaeacasasaeaeaeaeeeeeeeseeneeeneeeeeeeeeeeeey A-24
Balance Sheet Governmental Funds .......ceesesesssssssseseseescsesesesesesesesessseseeeeeeseeeeeneeeeeeeneeeees A-26
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of
Net Position wo. cece ccecseessescsecscsesscsesscessessssesscscssessseesssesceesseessecsssesseessseessseessessesesseessseeeaes A-28
Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental
FUNS ooo eeeseseseseeseescsescsescsescsesesesesesesesesesesesesesesesususscseucseseseseaeacasasaeacaeaeseseeeeeeeeeeeeneeeeeeeeeeeey A-30
Reconciliation of the Statement of Revenues, Expenditures, and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 00... ccc A-32
Statement of Fund Net Position-Proprietary Funds ......ccccsseseseseeeseeseeeeeeeeeeeeeeneeeeeeeeees A-33
Statement of Revenues, Expenses, and Changes in Fund Net Position-Proprietary Funds . A-35
Statement of Cash Flows-Proprietary Funds ......cccesssssseseseseceeseseseseseseseeeeseeeeeeeneeeeeeeeees A-36
Statement of Fiduciary Net Position-Fiduciary Funds.....cccceceeseseseesececeseseteeeeeeseseseeeeeeeeees A-38
Statement of Changes in Fiduciary Net Position-Fiduciary Funds.......ceeeeeeeeeeeeeeees A-39
Notes to the Financial Statement ........ccssessseseseseseseseseseseseseeeseeeeeseseeeseeeseseseseseneseseaeaeaeaees A-40
Budgetary Comparison Schedule-General and Major Special Revenue Funds................. A-162
Notes to the Required Supplementary Information
Budgetary Reporting.....ccccesesessssssseseseseeesesesesessseseeseseseseseseseaesesseeseesesseseeeeeeneeeeeneneeneees A-164
Pension Plan Information.....ccccccsesesesesesesesesesesesesssesesesesesssessseeeuesescsescacacaeaeaeaeesseasaeeees A-166
Other Postemployment Benefits Plan Information (OPEB).......ccsesesssssseseseseseeesenesenees A-181
Risk Management Trend Information wc cceescssssssesesesescsesesesesesesessseeeseseeeeeeeeeeeeeeeeeeeenes A-185
Schedule of Expenditures of Federal Awards.......ccccssssssssssesssssesesescsescscseseaesssssesesssneees A-188
Notes to the Schedule of Expenditures of Federal Awards ..0...c.ccsssseeseseeeeeeeeeeeeneeeeeees A-230
20-01B
ii Montana Legislative Audit Division
STATE RESPONSES
Department of Administration.............................................................................................. B-1
Governor’s Office of Budget and Program Planning.............................................................B-3
Department of Labor and Industry. ......................................................................................B-4
Department of Public Health and Human Services.............................................................. B-5
iii
Figures and Tables
Tables
Table 1 Summary of Financial Statements and Related Opinion Units Contained in the
State’s Basic Financial Statements...........................................................................................2
Table 2 Select UI Financial Activity for the Fiscal Year Ended. .......................................................... 5
Table 3 Changes in Select UI Statement of Cash Flow Line Items......................................................8
20-01B
iv Montana Legislative Audit Division
Elected, Appointed, and Administrative Officials
State of Montana Greg Gianforte, Governor
Department of Misty Ann Giles, Director
Administration
State Financial Services Division
Cheryl Grey, CPA, Administrator
State Accounting Bureau
Cody Pearce, CPA, State Accountant (through January 2022)
State Accounting & Financial Reporting Section
Frank Cornwell, CPA, Manager
Brian Feller, CPA, Accountant
Wenruzi Koch, CPA, Accountant
Karen Pocha-Melby, CPA, Accountant
Susan Rogge, CPA, Accountant
Governor’s Office of Ryan Osmundson, Budget Director
Budget and Program
Planning Sonia Powell, CPA, Single Audit Coordinator
For additional information concerning the basic financial statements,
contact:
Frank Cornwell, CPA, State Accounting & Financial Reporting
Section Manager
State Financial Services Division
Department of Administration
Rm 255, Sam W. Mitchell Building
Helena, MT 59620-0102
email: frank.cornwell@mt.gov
For additional information concerning the Schedule of Expenditures of
Federal Awards, contact:
Sonia Powell, CPA, Single Audit Coordinator
Governor’s Office of Budget and Program Planning
P.O. Box 200802
Helena, MT 59620-0802
email: SoniaPowell@mt.gov
Report Summary S-1
Financial Audit 20-01B M arch 2022
Montana Legislative Audit Division
State of Montana
For the Fiscal Year Ended June 30, 2021
Background The state’s General Fund reports an ending fund balance
of $856.3 million as of June 30, 2021, which is an
The Department of approximate $263.5 million, or 44 percent, increase from
Administration (department) the prior year-end. The overall increase is attributed, in
prepares the Basic Financial part, to strong tax collections during the fiscal year. In
Statements (BFS) for the fiscal year 2021, the state also saw a large increase in
state of Montana. The BFS federal revenues and related expenditures due to federal
programs established in response to the coronavirus public
provide legislators, citizens, health emergency. Unspent funds, related to emergency
and other interested parties rental assistance and American Rescue Plan Act (ARPA),
with a summary of the state’s are reported as cash and cash equivalents and unearned
overall financial position revenue in the Federal Special Revenue Fund. This
as of June 30, 2021, as well report contains one recommendation to the Department of
Administration related to strengthening internal controls
as financial information on over the preparation of the Basic Financial Statements
all operations and activities (BFS). The department’s controls did not prevent, or
of state government for the detect and correct, several multimillion-dollar errors
fiscal year. in Unemployment Insurance Enterprise Fund activity
reported in the BFS.
The Governor’s Office AUDITOR’S OPINIONS (page A-5): UNMODIFIED
of Budget and Program We found the state’s BFS present fairly the activity of the state of Montana
Planning prepares the and its component units, in all material respects in relation to requirements in
Generally Accepted Accounting Principles (GAAP). This means a reader can rely
Schedule of Expenditures
on the information presented in the BFS contained in this report.
of Federal Awards (SEFA),
as required by federal We also determined the Schedule of Expenditures of Federal Awards (SEFA) is
regulation. The SEFA reasonable in relation to amounts reported in the state’s BFS.
reports total federal grant
See the financial statements and notes beginning on page A-9 for the full context
expenditures for the fiscal
of the state’s financial activity. See also the SEFA beginning on page A-188.
year ended June 30, 2021, of
approximately $6.54 billion, RECOMMENDATIONS:
including noncash assistance In this report, we issued the following recommendations:
amounts and loan amounts To the department: 1
To the legislature: 0
for certain programs.
There were no recommendations in the prior audit report.
R ecommendation #1 (page 9):
Internal Control
The Department of Administration State Financial Services Division’s internal
controls were ineffective in preventing, or detecting and correcting, several
multimillion-dollar errors in the activity reported for the Unemployment
Insurance enterprise fund, prior to the BFS being provided for audit. While the
errors were corrected, controls should be improved.
Department response: Concur
(continued on back)
S-2
For the full report or more SUMMARY OF AUDIT WORK:
information, contact the Our audit work included obtaining and evaluating the results of agency
audits, as well as analyzing financial data, performing testing of the
Legislative Audit Division. adjustments and corrections made to the state’s accounting records, and
reviewing the financial statements and note disclosures to determine whether
leg.mt.gov/lad they were supported and presented in accordance with GAAP.
Additionally, we performed procedures to determine the reasonableness of the
Room 160, State Capitol SEFA in relation to amounts presented in the state’s BFS. These procedures
PO Box 201705 included tying amounts on the SEFA back to the amounts in the state’s
Helena, MT 59620-1705 accounting records, reviewing the note disclosures to determine whether they
(406) 444-3122 were completed and supported, and ensuring the SEFA’s presentation aligns
with federal regulations.
The mission of the REPORT ON INTERNAL CONTROL AND COMPLIANCE
Legislative Audit Division (page B-1):
is to increase public trust In this report, we identified the following:
in state government by Material Weaknesses in Internal Control: 3
Significant Deficiencies in Internal Control: 1
reporting timely and accurate Material Non-Compliance: 1
information about agency Other Matters: 0
operations, technology, and
finances to the Legislature For the full context of this information, including the distinction between the
types of items reported, see the report beginning on page A-1.
and the citizens of Montana.
The material noncompliance included in the Report on Internal Control
and Compliance is associated with the Game Wardens’ and Peace Officers
To report fraud, waste, or Retirement System’s actuarial soundness and is included in the Public
Employees’ Retirement Board (#20-08B) audit report.
abuse:
The material weaknesses in internal controls are associated with:
Online Department of Administration’s internal controls over preparing
www.Montanafraud.gov the BFS, related to the Unemployment Insurance enterprise fund
activity. This weakness is related to Recommendation #1 above.
Email Department of Labor and Industry’s (DLI) internal controls over
LADHotline@mt.gov financial reporting, related to Unemployment Insurance activity.
This weakness is briefly discussed in Chapter I of the current State
of Montana (#20-01B) report, and the recommendation will be
Call made to DLI in a separate (#21-15) report.
(Statewide) Department of Public Health and Human Service’s (PHHS)
(800) 222-4446 or internal controls related to ensuring federal program expenditures
(Helena) are separately identifiable in the accounting records and
(406) 444-4446 appropriately presented on the SEFA. This weakness is briefly
discussed in Chapter I of the current State of Montana (#20-01B)
report, and the recommendation will be made to PHHS in a
Text separate (#21-14) report.
(704) 430-3930
The significant deficiency in internal controls is related to controls over
capital assets at Montana State University and University of Montana.
When aggregated, the deficiencies reported in the Montana State University
(#20-11A) and University of Montana (#20-10A) audit reports associated with
capital assets are significant deficiencies at the state-wide level.
1
Chapter I – Introduction and Background
Introduction
We conducted a financial audit of the state of Montana’s basic financial statements (BFS) for the
fiscal year ended June 30, 2021. The objectives of the audit were to:
1. Determine whether the BFS are presented fairly in accordance with Generally Accepted
Accounting Principles (GAAP) and determine the reasonableness of the state’s Schedule of
Expenditures of Federal Awards (SEFA) in relation to the state’s BFS.
2. Obtain an understanding of the internal control structures to the extent necessary to
support the audit of the financial statements and, where necessary, make recommendations
for improvement in the state’s management and internal controls.
3. Prepare the Report on Internal Control over Financial Reporting and on Compliance and
Other Matters Based on our audit of the state of Montana’s BFS for the fiscal year ended
June 30, 2021, as required by Government Auditing Standards. This report is prepared based
on the results of this audit and all other audits.
The Department of Administration (department) prepares the BFS for the state of Montana. To
prepare the BFS, the department uses financial data from the Statewide Accounting, Budgeting,
and Human Resources System (SABHRS) used by all agencies. Department personnel adjust the
SABHRS data to present the financial activity in accordance with GAAP. Adjustments include,
but are not limited to, corrections of errors and eliminating internal balances that roll together for
presentation purposes. Additionally, the department obtains and incorporates information into the
BFS from separately issued and audited financial statements of its component units and stand-alone
programs like the programs at the Board of Investments.
To address the objectives above, we focused our audit efforts on analyzing financial data, testing the
adjustments and corrections made to SABHRS, and reviewing the financial statements and note
disclosures to determine whether they were supported and presented in accordance with GAAP.
We also evaluated the results of completed agency audits and compared information in the BFS to
separately issued and audited financial statements of the state’s component units and stand-alone
programs. Additionally, we performed procedures to determine the reasonableness of the SEFA,
as prepared by the Governor’s Office of Budget and Program Planning (OBPP), in relation to the
amounts presented in the BFS and requirements in Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
Because of the unique nature of governmental financial reporting, we use an opinion unit concept
in performing our audit. This concept separates the activity contained in the BFS into 11 separate
portions which are individually audited and evaluated by our audit team. The opinion units are
related to the type of financial statements included in the BFS and the state’s determination of
major funds in accordance with GAAP requirements. Table 1 (see page 2) summarizes the types
of financial statements in the BFS and the related opinion units and provides a reference to their
location in this report.
20-01B
2 Montana Legislative Audit Division
Table 1
Summary of Financial Statements and Related Opinion Units Contained in the
State’s Basic Financial Statements
Type of Financial Page # in
Financial Statement Titles Related Opinion Units
Statement this Report
Governmental Activities (1)
Statement of Net Position; A-22
Government Wide Business Type Activities (2)
Statement of Activities A-24
Discretely Presented Component Units (3)
Governmental Funds Balance
A-26
Sheet; Statement of Revenues,
A-30
Expenditures, and Changes in Fund General Fund (4)
Balances State Special Revenue Fund (4)
Federal Special Revenue Fund (4)
Proprietary Fund Statement of Fund Land Grant Permanent Fund (4)
A-33
Fund Financial Net Position; Statement of Revenues, Coal Tax Permanent Fund (4)
A-35
Expenses, and Changes in Fund Net Unemployment Insurance enterprise fund (5)
A-36
Position; Statement of Cash Flows Municipal Finance Program enterprise fund (5)
Remaining Fund Information (6)
Fiduciary Fund Statement of
A-38
Fiduciary Net Position; Statement of
A-39
Changes in Fiduciary Net Position
SOURCE: Compiled by Legislative Audit Division.
(1) In general, the Governmental Activities are those supported by fees, taxes, and intergovernmental revenues. For example, the
General Fund activities are a portion of the Governmental Activities opinion unit.
(2) Business Type Activities are those supported by fees and charges for services. For example, the Unemployment Insurance
enterprise fund activities are a portion of the Business-Type Activities opinion unit.
(3) The state’s component units presented in the Component Unit opinion unit are Montana State Fund, Montana State
University, University of Montana, Facility Finance Authority, and the Board of Housing.
(4) These opinion units are presented as individual columns in the Governmental Fund Financial Statements.
(5) These opinion units are presented as individual columns in the Proprietary Fund Financial Statements.
(6) This opinion unit is comprised of the nonmajor columns in the Governmental and Proprietary Fund Financial Statements
and the entirety of the Fiduciary Fund Financial Statements.
We issued unmodified opinions on the 11 opinion units included in the BFS, as described in the
Independent Auditor’s Report on page A-5. Unmodified opinions mean the readers of the BFS can
rely on the information presented. We also issued an unmodified opinion on the SEFA in relation to
the amounts presented in the BFS.
In our Report on Internal Control Over Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements on page A-1, we report several items, discussed in greater
detail below. Chapter II – Findings and Recommendations only includes a recommendation to the
Department of Administration for the item below that applies to their specific control structure for
preparing the BFS.
Material noncompliance for one retirement system that is not actuarially sound as required
by the Montana Constitution and state law. The Public Employees’ Retirement Board
(#20-08B) audit report discloses this retirement system’s noncompliance.
3
A material weakness in internal controls over financial reporting, related to the Department
of Administration’s preparation of the BFS. The related recommendation to the department
is reported in this audit report. See Chapter II for more information, including the
recommendation we are making to the department.
A material weakness in internal controls over financial reporting at the Department
of Labor and Industry (DLI). DLI’s internal controls over financial reporting were not
sufficient to detect and correct misstatements in relation to its Unemployment Insurance
activity prior to the state’s accounting records closing at fiscal year-end. As a result, there
were several multimillion-dollar misstatements in the agency’s accounting records in fiscal
year 2021. The related recommendation to DLI will be included in the current financial-
compliance audit of the department (#21-15). Because that report is not yet published,
page B-4 of this report includes DLI’s response to the control deficiency reported on
page A-1.
A material weakness in internal controls over financial reporting at the Department of
Public Health and Human Services (PHHS). Pandemic-Electronic Benefit Transfer
(P-EBT) federal program expenditures were co-mingled with Supplemental Nutrition
Assistance Program (SNAP) federal program expenditures in the PHHS accounting
records, resulting in approximately $27 million of expenditures of the Pandemic-EBT
program initially being reported as SNAP program expenditures on the SEFA. Reporting
program expenditures in the incorrect federal assistance listing on the SEFA increases the
risk of improper identification of major federal programs requiring audit attention under
the Single Audit Act of 1996 and Uniform Guidance. While OBPP corrected the error
on the SEFA, there is room for improvement in internal controls at PHHS. The related
recommendation to PHHS will be included in the current financial-compliance audit of
the department (#21-14). Because that report is not yet published, page B-5 of this report
includes PHHS’s response to control deficiency reported on page A-1.
A significant deficiency in internal controls related to accounting and financial reporting
of capital assets at Montana State University and University of Montana. The related
recommendations to the universities, and their responses to the findings, are included
in the Montana State University (#21-10A) and University of Montana (#21-11A) audit
reports.
20-01B
4
5
Chapter II – Finding and Recommendation
Internal Controls Over Financial Reporting
The Department of Administration State Financial Services Division’s internal controls
were ineffective in preventing, or detecting and correcting, errors in the Unemployment
Insurance enterprise fund activity presented within the state’s basic financial statements.
The Department of Administration (department) prepares the basic financial statements (BFS) for
the state of Montana. State law requires the department to follow Generally Accepted Accounting
Principles (GAAP). To prepare the BFS, personnel in the department’s State Financial Services
Division (SFSD) use financial data from the Statewide Accounting, Budgeting, and Human
Resources System (SABHRS) used by all agencies, and record adjustments as necessary for
corrections of errors made by agencies and to present the BFS in accordance with GAAP. State
accounting policy requires department management to establish internal control policies and
procedures designed to ensure the accuracy and reliability of financial data, including information in
the BFS.
Our audit work identified several multimillion-dollar errors in the Unemployment Insurance (UI)
enterprise fund information presented in the BFS. These errors are discussed in greater detail below
and indicate room for improvement in SFSD procedures for preparing the BFS. Overall, we noted
SFSD’s processes for preparing the BFS did not accommodate or fully contemplate the significant
fluctuations in UI enterprise fund financial activity resulting from the coronavirus public health
emergency. The Department of Labor and Industry (DLI) received an influx in federal funding
through the UI program for new, expanded benefits, in response to COVID. Table 2 below provides
a summary of UI enterprise fund financial activity with significant changes as a result of the new
federal funding.
Table 2
Select UI Financial Activity for the Fiscal Year Ended June 30
(Amounts in Thousands)
2019 2020 2021
Receivables
Receivables for Contributions/Premiums $5,387 $6,068 $5,634
Receivables for Benefit Overpayments $2,279 $2,129 $28,466
Allowance for Doubtful Accounts ($2,928) ($3,719) ($7,289)
Due from Federal Government $43 $16,745 $406
Long-Term Receivables, Net (1) $507 $2,266 $33,906
Accounts Payable $1,741 $29,005 $46,953
Federal Non-Operating Grant Revenues (COVID-related) $0 $496,499 $549,316
Benefit Expenditures $108,507 $745,250 $714,367
Other Operating Expense - Bad Debt Expense $0 $1,258 $14,109
SOURCE: Compiled by Legislative Audit Division from SFSD records.
(1) Associated primarily with benefit overpayments in FY2021.
20-01B
6 Montana Legislative Audit Division
Double Recorded Activity
As noted on page 3, internal controls at DLI were ineffective in ensuring all UI-related financial
activity was recorded on SABHRS at fiscal year-end. DLI personnel notified SFSD personnel of the
errors on SABHRS. SFSD personnel recorded several large adjustments to the UI enterprise fund’s
accounting records as part of preparing the BFS. One of the necessary adjustments increased cash
and federal revenues in the fund by approximately $26.3 million.
As part of a separate process completed while preparing the BFS, SFSD written procedures directed
staff to review the fiscal year-end cash reconciliation of the UI enterprise fund cash on SABHRS
to the state’s cash balance in the U.S. Treasury. The written procedures directed personnel to
adjust cash and accounts payable for the reconciling items, without considering the nature of the
reconciling items. For fiscal year 2021, there were approximately $34 million in reconciling items,
the largest of which was the $26.3 million in federal revenues and cash that were not recorded on
SABHRS at fiscal year-end. SFSD personnel did not consider the nature of the reconciling items or
identify that they previously adjusted the accounting records for $26.3 million of the $34 million,
and recorded the adjustment as directed by written procedures. As a result, the BFS provided to us
for audit purposes included a $26.3 million overstatement of cash and accounts payable in the UI
enterprise fund.
Department personnel indicated their preliminary review procedures did not identify the overstated
accounts, partly due to the volatility of activity in the UI enterprise fund caused by the coronavirus
public health emergency. They also believed additional review procedures, completed later in their
process, would have identified the error. Regardless of whether additional procedures later in the
process would have identified the error, controls should be in place and operating effectively prior to
the audit process.
Incomplete Allowance for Doubtful Accounts
and Bad Debt Expense Adjustments
DLI’s UI enterprise fund accounting records at fiscal year-end also contained errors in the allowance
for doubtful accounts and bad debt expense related to accounts receivable for benefit overpayments.
SFSD recorded adjustments to SABHRS for these errors based on preliminary adjusting entries in
DLI’s accounting records, but did not realize DLI’s adjustments were not yet finalized. Per SFSD
personnel, when DLI finalized their analysis, the dollar amounts changed. As a result, SFSD’s
adjusting entries were for incorrect amounts and the BFS provided for audit contained errors.
Specifically:
Bad debt expense was overstated by approximately $12.65 million.
Allowance for doubtful accounts, current portion, was overstated by approximately
$2.30 million.
Allowance for doubtful accounts, noncurrent portion, was understated by approximately
$14.99 million.
Net position was understated by approximately $12.65 million.
7
We identified these errors as part of our normal audit process and communicated them to SFSD.
While SFSD subsequently corrected the errors, controls should be enhanced to ensure correcting
entries made for agency errors are based on complete and accurate information.
Statement of Cash Flows Reporting
We also identified several errors in the Statement of Cash Flows (SCF) for the UI enterprise fund.
The initial SCF provided for audit included the effect of the errors in cash and accounts payable
previously discussed, and therefore required modification by SFSD personnel. In each of the next
two versions of the SCF provided for audit, we identified multiple errors in the activity presented
for the UI enterprise fund. Errors ranged from approximately $6.5 million to $87.8 million and
impacted multiple lines on the financial statement.
Based on our review of SFSD’s workpapers for preparing the SCF, we determined their processes did
not consider the nature of the cash activity associated with various asset and liability accounts, and
which revenue and expense streams are affected by changes in the asset and liability accounts. As
examples:
The procedures presumed the accounts payable at June 30, 2020, were paid in fiscal year
2021, as payments to suppliers for goods and services. In reality, the accounts payable in
the fund are primarily related to benefits owed to UI recipients at fiscal year-end. It would
have been more appropriate to consider the change in accounts payable when determining
the amount to report as cash payments for claims.
The procedures presumed a majority of the accounts receivable in the fund were attributed
to employer contribution revenues. In reality, the significant accounts receivable in the
fund are associated with benefit overpayments and it would have been more appropriate
to consider the change in receivables when determining the amount to report as cash
payments for claims.
As part of the normal audit process, we communicated our estimation of the errors in the third
version of the SCF and discussed the basis for our conclusions on errors with SFSD personnel. SFSD
personnel considered the information provided through this process and conducted independent
research in determining the amounts reported in the final version of the SCF reported in the BFS.
Table 3 (see page 8) summarizes select lines on the SCF for the UI enterprise fund, including
the amounts reported on the first, second, and third versions of the SCF provided for audit, our
estimation of the errors in the third version, and the final amounts SFSD reported after researching
the errors communicated.
20-01B
8 Montana Legislative Audit Division
Table 3
Changes in Select UI Statement of Cash Flow Line Items
(Amounts in Thousands)
Version of the Statement of Cash Flows
Auditor Projected
Initial Second Third Amounts After Final
Line Item
Version Version Version Review of Third Version
Version Support
Cash Flows from Operating
Activities
Receipt from Sales and Service $137,939 $137,939 $71,240 $123,019 $123,601
Payments to Suppliers for Goods
$0 ($26,312) ($31,626) $0 $0
and Services
Grant Receipts (expenses) $23,282 $23,282 $24,057 $8,066 $7,504
Cash Payments for Claims ($724,998) ($724,998) ($677,663) ($770,598) ($765,477)
Other Operating payments ($26,751) ($26,751) ($6,448) $0 $0
Cash Flows from Noncapital
Financing Activities
Grant Receipts and Federal
$549,457 $549,457 $553,058 $565,795 $566,990
Indirect Cost Recoverable
SOURCE: Compiled by Legislative Audit Division from SFSD records and auditor projections.
Summary
Auditing standards require us to evaluate whether the errors we identify in financial reporting
as part of our audit are indicative of deficiencies in internal controls. Based on the extent, size,
and nature of the errors identified, we believe there is material weakness in internal controls over
financial reporting as indicated in our Report on Internal Control Over Financial Reporting and
on Compliance and Other Matters Based on an Audit of Financial Statements on page A-1. This
material weakness is isolated to reporting for the Unemployment Insurance enterprise fund, which
is presented in both the Government-Wide financial statements, in the Business-Type Activities
column, and the Proprietary Fund financial statements, in the Unemployment Insurance column.
While SFSD adjusted the BFS for the errors identified as part of the audit, SFSD’s internal control
procedures should be enhanced to allow management to prevent, or detect and correct, errors in the
BFS before providing them to our office for audit.
9
Recommendation #1
We recommend the Department of Administration State Financial Services Division
enhance internal controls to ensure:
A. Staff consider the underlying nature of UI enterprise fund activity when
preparing the basic financial statements, especially in years where the fund has
new or unusual activity and
B. Adjustments made for errors in agency accounting records do not duplicate
adjustments made through other processes completed while preparing the basic
financial statements and are appropriate to correct the errors.
20-01B
Independent Auditor’s Report,
Basic Financial Statements,
Required Supplementary Information, and
Schedule of Expenditures of Federal Awards
LEGISLATIVE AUDIT DIVISION A-1
Angus Maciver, Legislative Auditor Deputy Legislative Auditors:
Deborah F. Butler, Legal Counsel Cindy Jorgenson
William Soller
Report on Internal Control Over Financial Reporting
and on Compliance and Other Matters Based on an Audit
of Financial Statements Performed in Accordance with
Government Auditing Standards
The Legislative Audit Committee
of the Montana State Legislature:
We have audited, in accordance with the auditing standards generally accepted in the United States
of America and the standards applicable to the financial audits contained in Government Auditing
Standards issued by the Comptroller General of the United States, the 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 Montana, as of and
for the year ended June 30, 2021, and the related notes to the financial statements, which collectively
comprise the state of Montana’s basic financial statements, and have issued our report thereon dated
March 4, 2022. Our report includes a reference to other auditors who audited the financial statements
of the Montana State University component units and the University of Montana component units,
as described in our report on the state of Montana’s financial statements. The financial statements of
the Montana State University component units and the University of Montana component units were
not audited in accordance with Government Auditing Standards, and accordingly, this report does not
include reporting on internal control over financial reporting or instances of reportable noncompliance
associated with these component units.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the state of Montana’s
internal control over financial reporting as a basis for designing audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinions on the financial statements, but not
for the purpose of expressing an opinion on the effectiveness of the state of Montana’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the state of Montana’s internal
control.
Our consideration of internal control was for the limited purpose described in the preceding paragraph
and was not designed to identify all deficiencies in internal control that might be material weaknesses
or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that
were not identified. However, as described below, we identified certain deficiencies in internal control
that we consider to be material weaknesses and significant deficiencies.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or
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Phone (406) 444-3122 • FAX (406) 444-9784 • E-Mail lad@mt.gov
A-2
detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination
of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement
of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis.
We consider the deficiencies described below to be material weaknesses.
The Department of Labor and Industry’s (DLI) internal controls over financial reporting were
not sufficient to detect and correct misstatements in relation to its Unemployment Insurance
activity prior to the books closing at fiscal year-end resulting in several multimillion-dollar
misstatements in the DLI’s accounting records in fiscal year 2021. This deficiency affects the
Business Type Activities Opinion Unit and the Unemployment Insurance opinion unit.
Department of Administration State Financial Services Division’s (SFSD) procedures for
preparing the state’s basic financial statements did not prevent, or detect and correct, errors
in Unemployment Insurance enterprise fund activity. In attempting to correct the errors
in the BFS caused by the errors in DLI’s accounting records, SFSD personnel duplicated
adjustments for Unemployment Insurance fund activity and recorded adjustments at incorrect
amounts. Additionally, controls didn’t prevent, or detect and correct, errors in amounts
reported in the Statement of Cash Flows for the Unemployment Insurance enterprise fund.
This deficiency affects the Business Type Activities Opinion Unit and the Unemployment
Insurance Fund Opinion Unit.
Pandemic-Electronic Benefit Transfer (P-EBT) federal program expenditures were
co-mingled with Supplemental Nutrition Assistance Program (SNAP) federal program
expenditures in the Department of Public Health and Human Services financial records,
resulting in approximately $27 million of the Pandemic-EBT program expenditures initially
reported as SNAP program expenditures on the Schedule of Expenditures of Federal Awards
(SEFA). Reporting program expenditures in the incorrect federal assistance listing in the
SEFA increases the risk of improper identification of major federal programs requiring audit
attention under the Single Audit Act of 1996 and Uniform Guidance.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less
severe than a material weakness, yet important enough to merit attention by those charged with
governance. We consider the deficiency described below to be a significant deficiency.
Internal controls over financial reporting at the University of Montana were not effective in
ensuring accurately reported capital asset classifications in the university’s financial statements
and note disclosures. Additionally, Montana State University does not have sufficient internal
controls in place to ensure the accuracy of capital asset-related information processed by
their asset management information system. Collectively, we consider these issues to be a
significant deficiency in internal controls affecting the Component Unit opinion unit.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the state of Montana’s financial statements
are free from material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and
material effect on the determination of financial statement amounts. However, providing an opinion on
compliance with those provisions was not an objective of our audit, and accordingly, we do not express
such an opinion. The results of our tests disclosed an instance of noncompliance or other matters
A-3
that are required to be reported under Government Auditing Standards. The identified instance of
noncompliance is described below.
The Montana Public Employees’ Retirement Board administers eight defined benefit
retirement plans. The Montana Constitution and state law require all retirement systems to
be actuarially sound, meaning the retirement system must amortize in 30 years or less. The
actuarial valuation as of June 30, 2021, indicates the Game Wardens’ and Peace Officers
Retirement System is not actuarially sound, as it amortizes in 35 years.
State of Montana’s Response to Findings
The state of Montana’s response to the findings identified in our audit are described in the separately
issued Public Employees’ Retirement Administration (#20-08B), University of Montana (#21-10A),
and Montana State University (#21-11A) reports, and on pages B-1 through B-5 of this report. The
responses in these reports were not subjected to the auditing procedures applied in the audit of the
financial statements and, accordingly, we express no opinion on them.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the state of Montana’s internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the state of Montana’s
internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Respectfully submitted,
/s/ Cindy Jorgenson
Cindy Jorgenson, CPA
Deputy Legislative Auditor
Helena, MT
March 4, 2022
A-4
LEGISLATIVE AUDIT DIVISION
A-5
Angus Maciver, Legislative Auditor Deputy Legislative Auditors:
Deborah F. Butler, Legal Counsel Cindy Jorgenson
William Soller
Independent Auditor’s Report
The Legislative Audit Committee
of the Montana State Legislature:
Report on 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 Montana, as of and for the year ended
June 30, 2021, and the related notes to the financial statements which collectively comprise the state of
Montana’s basic financial statements, as follows:
Statement of Net Position
Statement of Activities
Balance Sheet–Governmental Funds
Reconciliation of the Balance Sheet–Governmental Funds to the Statement of Net Position
Statement of Revenues, Expenditures, and Changes in Fund Balances–Governmental
Funds
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund
Balances–Governmental Funds to the Statement of Activities
Statement of Fund Net Position–Proprietary Funds
Statement of Revenues, Expenses, and Changes in Fund Net Position–Proprietary Funds
Statement of Cash Flows–Proprietary Funds
Statement of Fiduciary Net Position–Fiduciary Funds
Statement of Changes in Fiduciary Net Position–Fiduciary Funds.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal controls relevant to the preparation and fair
presentation of financial statements that are free from 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 the Montana State University (MSU) component units and the
University of Montana (UM) component units, which represent 17.29 percent, 32.47 percent, and
10.06 percent, respectively, of the assets, net position, and revenues of the aggregate discretely presented
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Phone (406) 444-3122 • FAX (406) 444-9784 • E-Mail lad@mt.gov
A-6
component units. Those financial statements were audited by other auditors whose reports have been
furnished to us, and our opinions, insofar as they relate to the amounts included for the university
component units, are based solely on the reports of other auditors.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement. The financial statements of the MSU and UM component units were
not audited in accordance with Government Auditing Standards.
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 state
of Montana’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 state of Montana’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 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.
Summary of Opinions
Opinion Unit Type of Opinion
Governmental Activities Unmodified
Business-Type Activities Unmodified
General Fund Unmodified
State Special Revenue Fund Unmodified
Federal Special Revenue Fund Unmodified
Land Grant Unmodified
Coal Severance Tax Unmodified
Unemployment Insurance Unmodified
Municipal Finance Programs Unmodified
Aggregate Discretely Presented Component Units Unmodified
Aggregate Remaining Fund Information Unmodified
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the Governmental Activities and Business-Type Activities, General Fund,
State Special Revenue Fund, Federal Special Revenue Fund, Land Grant, Coal Severance Tax,
Unemployment Insurance, and Municipal Finance Programs major funds, and the aggregate discretely
presented component units and aggregate remaining fund information of the state of Montana, as of
June 30, 2021, and the respective changes in financial position and, where applicable, cash flows thereof
for the fiscal year then ended in accordance with accounting principles generally accepted in the United
States of America.
A-7
Emphasis of Matter
As discussed in Note 1C to the basic financial statements, in fiscal year 2021, the Unemployment
Insurance Fund reported federal contributions to fund benefit claims related to the statewide
unemployment impact of the coronavirus public health emergency. These federal contributions
are reported as non-operating revenues. Additionally, the Federal Special Revenue Fund reports a
significant increase in revenue and expenditure activity in fiscal year 2021, as a result of spending funds
the state received from the Coronavirus Relief Fund, authorized by the federal Coronavirus Aid, Relief,
and Economic Security (CARES) Act and other federal acts passed in response to the public health
emergency. Lastly, the Federal Special Revenue Fund reports significant Cash & Cash Equivalent and
Unearned Revenue balances, associated with funds received but not yet spent under the American
Rescue Plan Act (ARPA). See Note 17 to the basic financial statements for more information on these
ARPA funds. Our opinions are not modified with respect to these matters.
As discussed in Note 6 to the basic financial statements, retirement system investment rates of return
were significantly higher in fiscal year 2021 than in fiscal year 2020. The Net Pension Liabilities
reported in the basic financial statements at June 30, 2021, were measured as of June 30, 2020, and
therefore do not reflect the strong investment performance from fiscal year 2021. The Net Pension
Liabilities are expected to decrease for financial reporting in fiscal year 2022. Our opinions are not
modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management’s
Discussion and Analysis, the Budgetary Comparison Schedule, the Pension Plan Information,
the Other Postemployment Benefits (OPEB) Plan Information, and the Risk Management Trend
Information, and the related notes, 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 who 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 have
applied certain limited procedures to the required supplementary information in accordance with
auditing standards generally accepted in the United States of America, which consisted of inquiries
of management about the methods of preparing the information and comparing the information for
consistency with management’s responses to 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.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the state of Montana’s basic financial statements as a whole. The Schedule of
Expenditures of Federal Awards, as required by Title 2 U.S. Code of Federal Regulations Part 200,
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, is
presented for purposes of additional analysis and is not a required part of the basic financial statements.
Such information is 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 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
A-8
auditing standards generally accepted in the United States of America. In our opinion, the Schedule of
Expenditures of Federal Awards is fairly stated, in all material respects, in relation to the basic financial
statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated March 4,
2022, on our consideration of the state of Montana’s internal control over financial reporting and on
our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements
and other matters. The purpose of that report is to describe the scope of our testing of internal
control over financial reporting and compliance and the results of that testing, and not to provide
an opinion on the effectiveness of the state of Montana’s internal control over financial reporting or
on compliance. That report is an integral part of an audit performed in accordance with Government
Auditing Standards in considering the state of Montana’s internal control over financial reporting and
compliance.
Respectfully submitted,
/s/ Cindy Jorgenson
Cindy Jorgenson, CPA
Deputy Legislative Auditor
Helena, MT
March 4, 2022
A-9
MANAGEMENT’S DISCUSSION AND ANALYSIS
INTRODUCTION
Management of the State of Montana (State) provides this Management’s Discussion and Analysis of the
State of Montana’s basic financial statements included in the Annual Comprehensive Financial Report
(ACFR). This is a narrative overview and analysis of the financial activities of the State of Montana for the
fiscal year ended June 30, 2021. We encourage readers to consider this information in conjunction with
the additional information that is furnished in the State’s financial statements, which follow.
In late 2019, a novel strain of coronavirus (“COVID-19”) started to spread throughout the world, including
to the United States, resulting in the World Health Organization proclaiming COVID-19 to be a pandemic
and the President of the United States declaring a national emergency. In response to the spread of
COVID-19, the United States government, state governments (including the State), local governments,
and private industries have taken measures to limit social interactions in an effort to limit the spread of
COVID-19. In March of 2020, Montana declared a state emergency, and a national emergency was
announced in the United States shortly after. The Coronavirus Aid, Relief, and Economic Security
(CARES) Act was passed by Congress and signed into law by the President of the United States on
March 27, 2020. On March 11, 2021, the American Rescue Plan Act of 2021 (ARPA) was signed into law
to provide additional funding for state and local governments. On June 30, 2021, Montana ended the
state emergency. In the following discussion and analysis, COVID-19 refers to this pandemic, CARES
refers to the CARES Act funding, and ARPA refers to the American Rescue Plan Act funding.
FINANCIAL HIGHLIGHTS
Government-wide
The assets and deferred outflows of resources of the State exceeded its liabilities and deferred inflows of
resources at the end of fiscal year 2021 by $11.0 billion compared with $10.2 billion at the end of fiscal
year 2020, representing a 7.5% increase in net position. Component units reported net position of $2.5
billion at the end of fiscal year 2021 compared to $2.2 billion at the end of fiscal year 2020, representing a
13.3% increase in net position. More detail is provided in the financial statement overview below.
Fund Level
As of the close of fiscal year 2021, the State’s governmental funds reported combined ending fund
balances of $5.7 billion compared with $5.0 billion at fiscal year 2020. This represents a $700.4 million
(14.1%) increase in total fund balance. Of the 2021 balance, $2.0 billion is not in spendable form,
primarily as permanent fund principal. Thus, $3.7 billion is available for spending. The fund balance in
spendable form is segregated by constraint as follows: $1.2 billion restricted, $1.7 billion committed, $97.6
million assigned, and $629.1 million unassigned. These changes are discussed in more detail in the
financial analysis of the State’s major funds presented below.
The State’s business-type activity funds reported net position at the close of fiscal year 2021 in the
amount of $566.7 million compared with fiscal year 2020 net position of $393.3 million. Of the 2021
business-type activity net position, $21.4 million was reported as net investment in capital assets. Net
position of $545.3 million was in spendable form with $24.6 million unrestricted and $520.7 million
restricted to expenditure for a specific purpose. This represents a $174.0 million (46.9%) increase in
spendable net position from the fiscal year 2020 balance of $371.3 million. These changes are discussed
in more detail in the financial analysis of the State’s major funds presented below.
Long-term Debt
The State’s total governmental activity bonds and notes payable for governmental activities increased by
$43.9 million, from $127.4 million in fiscal year 2020 to $171.3 million, a 34.5% increase in fiscal year
2021.
Further detail relating to the State’s long-term debt is provided in notes to the financial statement’s Note
11.
A-10
OVERVIEW OF THE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introduction to the State of Montana’s basic
financial statements. The State’s basic financial statements include three components: (1) government-
wide financial statements, (2) fund financial statements, and (3) notes to the financial statements. The
report also contains additional required supplementary information, which includes budgetary schedules,
pension and other post employment benefits plan information, and risk management trends. These
components are described below:
Basic Financial Statements
The basic financial statements include two types of financial statements that present different views of the
State – the government-wide financial statements and the fund financial statements. These financial
statements also include the notes to the financial statements, which provide further detail and information
related to the balances of the financial statements.
Government-wide Financial Statements
The government-wide financial statements provide a broad view of the State’s operations in a manner
similar to a private-sector business. The statements provide both short-term and long-term information
about the State’s financial position, which assists in assessing the State’s economic condition at the end
of the fiscal year. These are prepared using the flow of economic resources measurement focus and the
accrual basis of accounting. In other words, they follow methods that are similar to those used by most
businesses, including all revenues and expenses connected with the fiscal year, even if cash involved has
not been received or paid. The government-wide financial statements include two statements: The
Statement of Net Position and the Statement of Activities, as defined below.
The Statement of Net Position presents all of the government’s assets, deferred outflows of resources,
liabilities, deferred inflows of resources, and net position. Over time, increases or decreases in the State’s
net position may serve as a useful indicator of whether the financial position of the State is improving or
deteriorating.
The Statement of Activities presents information related to the government’s net position changes during
the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving
rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses
are reported in this statement for some items that will not result in cash flows until future fiscal periods.
This statement also presents a comparison between direct expenses and program revenues for each
function of the State.
Both of the above financial statements have separate sections for three different types of state activities.
These three types of activities are as follows:
Governmental Activities – Activities mostly supported by taxes and intergovernmental revenues, including
federal grants. Most services normally associated with state government fall into this category, including
education (support for both K-12 public schools and higher education), general government, health and
human services, natural resources, public safety, and transportation.
Business-type Activities – Functions normally intended to recover all or a significant portion of their costs
through user fees and charges to external users of goods and services. The major business-type
activities of the State include the Unemployment Insurance Fund and the Municipal Finance Programs,
which assists Montana’s small businesses and local governments in obtaining long-term, fixed-rate
financing through private Montana lending institutions.
Discretely Presented Component Units – Operations for which the State has financial accountability, but
have certain independent qualities as well. In order to be considered component units, these entities must
be legally separate to the extent that they may sue, or be sued, in their own right. For the most part, these
entities operate similarly to private sector businesses and the business-type activities described above.
A-11
The State’s component units consist of one financing authority, one housing board, one nonprofit
independent public corporation, and two universities.
Fund Financial Statements - Reporting the State’s Major Funds
A fund is a grouping of related accounts that is used to maintain control over resources that have been
segregated for specific activities or objectives. The State, like other state and local governments, uses
fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
The fund financial statements focus on individual parts of the state government, reporting the State’s
operations in more detail than the government-wide statements. All of the funds can be divided into three
categories. It is important to note that these fund categories use different accounting approaches and
should be interpreted individually. The three categories of funds are as follows:
Governmental Funds – Most of the basic services provided by the State are financed through
governmental funds. Governmental funds are used to account for essentially the same functions reported
as governmental activities in the government-wide financial statements. However, unlike the government-
wide financial statements, the governmental fund financial statements focus on near-term inflows and
outflows of spendable resources. They also focus on the balances of spendable resources available at
the end of the fiscal year. Such information may be useful in evaluating the government’s near-term
financing requirements. This approach is known as using the flow of current financial resources
measurement focus and the modified accrual basis of accounting. These statements provide a detailed
short-term view of the State’s finances that assists in determining whether there will be adequate financial
resources available to meet the current needs of the State.
The State has five governmental funds that are considered major funds for presentation purposes. Each
major fund is presented in a separate column in the governmental fund balance sheet and in the
governmental fund statement of revenues, expenditures, and changes in fund balances. The State’s five
major governmental funds are the General Fund, the State Special Revenue Fund, the Federal Special
Revenue Fund, the Coal Severance Tax Fund, and the Land Grant Fund.
Proprietary Funds – When the State charges customers for the service it provides, whether to outside
customers or to other agencies within the State, these services are generally reported in proprietary
funds. Like the government-wide statements, proprietary fund statements utilize full accrual accounting,
the same method used by private sector businesses. Enterprise funds report activities that provide
supplies and services to the general public. Whereas internal service funds report activities that provide
supplies and services to the State’s other programs and activities.
Fiduciary Funds – Resources held for the benefit of parties outside state government are accounted for in
fiduciary funds. Fiduciary funds are not reflected in the government-wide financial statements because the
resources of these funds are not available to support the State’s own programs. Fiduciary fund
statements use the full accrual basis of accounting.
Notes to the Financial Statements
The notes to the financial statements provide additional information that is essential for a full
understanding of the government-wide and the fund financial statements. The notes to the financial
statements can be found immediately following the fiduciary fund financial statements.
Required Supplementary Information
The basic financial statements are followed by a section of required supplementary information. This
section contains a budgetary comparison schedule, which includes the reconciliation between the
statutory fund balance for budgetary purposes and the fund balance for the General Fund and major
special revenue funds as presented in the governmental fund financial statements. Required
supplementary information also includes pension and other post employment benefits plan information, as
well as additional risk management trend data.
A-12
GOVERNMENT-WIDE FINANCIAL ANALYSIS
Montana’s overall financial position increased from the last fiscal year, as reflected in the $768.5 million
increase (7.5%) in net position. This improvement resulted from the continued moderate growth, despite
the impacts of COVID-19, particularly in tax, tobacco settlement proceeds, and investment revenue.
However, growth is not expected to persevere in fiscal year 2022, as the associated financial and
economical affects of the pandemic continued to be realized.
Net Position
As noted earlier, net position may serve over time as a useful indicator of a government’s financial
position. The State’s combined net position (government and business-type activities) totaled $11.0 billion
at the end of fiscal year 2021. Net position of both governmental and business-type activities increased by
$595.1 million (6.1%) and increased by $173.4 million (44.1%), respectively. These changes are
explained in detail in the Financial Analysis of the State's Major Funds section.
A portion of the State’s net position reflects its investment in capital assets such as land, buildings,
equipment, and infrastructure (roads, bridges, and other immovable assets) less any related debt used to
acquire those assets that is still outstanding. The State uses these capital assets to provide services to
citizens; consequently, these assets are not available for future spending. Although the State’s investment
in its capital assets is reported net of related debt, it should be noted that the resources needed to repay
this debt must be provided from other sources since the capital assets themselves cannot be used to
liquidate these liabilities.
An additional portion of the State’s net position represents resources that are subject to external
restrictions on how they may be used. The remaining balance of unrestricted net position may be used to
meet the State’s ongoing obligations to citizens and creditors. Internally imposed designations of
resources are not presented as restricted net position.
At the end of the current fiscal year, the State reported positive balances in net investment in capital
assets and restricted net position categories, along with a negative balance in the unrestricted category of
net position, for both the governmental activities and the primary government as a whole. The negative
unrestricted net position is primarily due to the State's net pension liability. GASB Statements No. 68 and
71, related to pension liabilities and other balance sheet components, were implemented in fiscal year
2015 and are contributing factors to the negative net position. The State also reported positive balances
for all categories of net position for the business-type activities.
A-13
Net Position
June 30,
(expressed in thousands)
Governmental Business-type Total Primary
Activities Activities Government
2020 2021 2020 2021 2020 2021
Current and other assets $ 7,572,307 $ 7,849,347 $ 554,386 $ 746,786 $ 8,126,693 $ 8,596,133
Capital assets 6,823,046 7,067,035 22,052 21,377 6,845,098 7,088,412
Total assets 14,395,353 14,916,382 576,438 768,163 14,971,791 15,684,545
Deferred outflows of resources 613,249 1,031,934 2,423 5,792 615,672 1,037,726
Long-term liabilities
Due in more than one year 2,707,169 3,535,117 18,302 23,131 2,725,471 3,558,248
Other liabilities 2,251,217 1,823,324 163,594 181,844 2,414,811 2,005,168
Total liabilities 4,958,386 5,358,441 181,896 204,975 5,140,282 5,563,416
Deferred inflows of resources 219,243 163,799 3,645 2,299 222,888 166,098
Net investment in capital assets 6,743,003 6,962,944 22,035 21,360 6,765,038 6,984,304
Restricted 3,452,344 3,574,995 350,309 520,696 3,802,653 4,095,691
Unrestricted (364,374) (111,863) 20,976 24,625 (343,398) (87,238)
Total net position $ 9,830,973 $ 10,426,076 $ 393,320 $ 566,681 $ 10,224,293 $ 10,992,757
A-14
The following condensed financial information was derived from the government-wide Statement
of Activities, and reflects how the State’s net position changed during the fiscal year:
Changes in Net Position
For Fiscal Year Ended June 30,
(expressed in thousands)
Governmental Business-type Total Primary
Activities Activities Government
2020 2021 2020 2021 2020 2021
Revenues:
Program revenues
Charges for services $ 686,335 $ 693,875 $ 443,048 $ 519,186 $ 1,129,383 $ 1,213,061
Operating grants 2,930,307 4,441,208 71,422 68,576 3,001,729 4,509,784
Capital grants 564,431 531,666 950 883 565,381 532,549
General revenues
Taxes 2,793,211 3,170,440 32,576 38,141 2,825,787 3,208,581
Other 186,194 130,057 504,749 555,820 690,943 685,877
Total revenues 7,160,478 8,967,246 1,052,745 1,182,606 8,213,223 10,149,852
Expenses:
General government 957,534 1,699,213 957,534 1,699,213
Public safety 458,526 544,839 458,526 544,839
Transportation 557,290 611,537 557,290 611,537
Health and human service 2,896,774 3,418,518 2,896,774 3,418,518
Education 1,352,323 1,492,682 1,352,323 1,492,682
Natural resources 338,957 361,420 338,957 361,420
Interest on long-term debt 5,365 5,026 5,365 5,026
Unemployment Insurance 746,508 728,476 746,508 728,476
Liquor Stores 98,324 120,913 98,324 120,913
State Lottery 51,385 99,353 51,385 99,353
Municipal Finance Programs 2,542 1,602 2,542 1,602
Hail Insurance 1,154 796 1,154 796
Other Services 74,323 81,765 74,323 81,765
Prison Funds 8,506 7,042 8,506 7,042
MUS Group Insurance 100,958 106,068 100,958 106,068
MUS Workers Comp 657 2,852 657 2,852
Total expenses 6,566,769 8,133,235 1,084,357 1,148,867 7,651,126 9,282,102
Increase (decrease) in net
position before transfers 593,709 834,011 (31,612) 33,739 562,097 867,750
Transfers 58,703 (138,881) (58,703) 138,881 — —
Change in net position 652,412 695,130 (90,315) 172,620 562,097 867,750
Net position, beg of year
(as adjusted) 9,178,561 9,730,946 483,635 394,061 9,662,196 10,125,007
Net position, end of year $ 9,830,973 $ 10,426,076 $ 393,320 $ 566,681 $ 10,224,293 $ 10,992,757
A-15
Governmental Activities
The following chart depicts revenues of the governmental activities for the fiscal year:
Revenues - Governmental Activities
Fiscal Year Ended June 30, 2021
Other : 1.5%
Charges for Services: 7.7%
Grants: 49.5%
Taxes: 35.4%
Capital Grants: 5.9%
The following chart depicts expenses of the governmental activities for the fiscal year:
Expense - Governmental Activities
Fiscal Year Ended June 30, 2021
Interest on Long-Term Natural Resources: 4.4%
Debt: 0.1%
General Government: 20.9% Education: 18.4%
Public Safety: 6.7%
Transportation: 7.5%
Health and Human
Services: 42.0%
A-16
Business-type Activities
The following chart depicts revenues of the business-type activities for the fiscal year:
Revenues - Business-type Activities
Fiscal Year Ended June 30, 2021
Operating Grants: 5.8%
Capital Grants: 0.1%
Taxes: 3.2%
Services: 43.9%
Other: 47.0%
The Other Revenue in the above table is primarily related to additional federal funding received for
Unemployment Insurance claims due to COVID-19.
The following chart depicts expenses of the business-type activities for the fiscal year:
Expenses - Business-type Activities
Fiscal Year Ended June 30, 2021
Gen Govt Services: 7.1% Prison Funds: 0.6%
Hail Insurance: 0.1% MUS Group Insurance : 9.2%
Municipal Finance: 0.1% MUS Workers Comp: 0.2%
State Lottery: 8.7%
Liquor Stores: 10.5%
Unemployment Insurance: 63.5%
A-17
FINANCIAL ANALYSIS OF THE STATE’S MAJOR FUNDS
As the State completed the year, its governmental funds reported fund balances of $5.7 billion. Of this
total, $3.7 billion (65.1%) constitutes spendable fund balance and $2.0 billion (34.9%) is classified as non-
spendable. The analysis of the following major funds, providing the majority of the fund balance for the
government, follows.
General Fund Revenues and Expenditures
The General Fund is the chief operating fund of the State. For fiscal year 2021, the total fund balance of
the General Fund was reported at approximately $856.3 million. Of this balance, $5.2 million is non-
spendable. The remaining $851.1 million is spendable with $114.2 million committed, $95.4 million
assigned, and $641.5 million unassigned. This spendable fund balance of the General Fund represents
23.1% of the $3.7 billion spendable governmental fund balances for all governmental funds. Of the
assigned fund balance, $75.0 million pertains to the projected general fund spend down of fund balance
in fiscal year 2022 and $20.4 million relates to outstanding encumbrances at the end of the fiscal year.
The committed fund balance of $114.2 million relates to the balance of the Budget Stabilization Reserve
Fund, which is combined with the General Fund for financial statement presentation. Further detail on the
breakdown of fund balance for the General Fund is provided in Note 14 – Major Purpose Presentation.
Total fund balance increased by $263.5 million when compared to the previously reported fund balance of
$592.8 million. Changes in both expenditures and revenues are discussed in detail below. The 2021
legislative session projected $408.6 million of unassigned fund balance for fiscal year 2021, without
regard to a fund balance spend down. The difference was primarily the result of a larger than anticipated
beginning fund balance and smaller than anticipated expenditures.
General Fund Revenues – Total General Fund revenues were $2.8 billion for fiscal year 2021 (higher than
legislative estimation), a 16.6% increase from the $2.4 billion reported in 2020 (which were lower than
legislative estimation). Fiscal year 2021 tax revenue increased by 18.3% in total over 2020, with corporate
income tax collections up 41.3% and individual income tax collections increased by 22.0%. The large tax
revenue gains were the result of the strong economic conditions of the state coming out of the COVID-19
restrictions last year. In addition, the large federal spending provisions implemented during fiscal year
2021 were also increasing disposable incomes for individuals, state governments, and businesses. Other
noted increases in revenues included charges for services/fines/forfeits/settlements and licenses/permits.
General Fund Expenditures – Total General Fund expenditures for fiscal year 2021 increased by $47.2
million (2.0%). This increase in expenditures occurred in the general government, transportation, health
and human services, education, and natural resources functions and the decrease in expenditures
occurred in the public safety function as follows:
• General government expenditures increased by $13.4 million (3.6%)
• Transportation expenditures increased by $174.0 thousand
• Health and human services expenditures increased by $10.1 million (2.1%)
• Education expenditures increased by $37.0 million (3.4%)
• Natural resources expenditure increased by $2.0 million (5.4%)
• Public safety expenditures decreased by $11.3 million (3.5%)
The expenditures in the public safety function decreased because some of the personal services were
eligible to be paid by the Federal Special Revenue Fund for COVID-19 relief.
The General Fund’s actual revenues and expenditures in comparison to budgeted revenues and
expenditures is provided in more depth on the Budgetary Comparison Schedule within the Required
Supplementary Information section of this report. The same level of detail used to report the actual
revenues and expenditures is not readily available for all budgetary revenues and expenditures, which
may cause some variances.
General Fund Expenditure Budget Reversions
Fund balances are not reserved for reverted appropriations. For fiscal year 2021, General Fund
appropriations that reverted to 2022 were $96.6 million.
A-18
The Department of Public Health and Human Services had unspent appropriations of $58.8 million related
to Medicaid savings and other operational costs.
The Department of Corrections had unspent appropriations of $14.8 million related to the costs
reimbursed by federal funding associated with COVID-19.
The Office of Public Instruction had unspent appropriations of $10.0 million related to K-12 distributions to
schools and participation or eligibility in some programs.
The Judicial Branch had unspent appropriations of $2.8 million related to vacancy savings and
operational costs.
The Legislative Branch had unspent appropriations of $2.0 million related to vacancy savings and
operational costs.
The Department of Revenue had unspent appropriations of $2.0 million related to funds available to local
governing bodies pursuant to Section 15-1-402 (6)(d), MCA, regarding protested property taxes, Section
15-1-120, MCA, regarding entitlement share payments, and other operational costs.
The Office of the Governor had unspent appropriations of $1.6 million related to personal services
contingency funding held in the office for the entire state, operating cost savings, and vacancy savings.
The Department of Natural Resources and Conservation had unspent appropriations of $1.5 million
related to unspent operation costs associated with reduction in travel, training and other various
expenditures due to COVID-19.
The remaining unspent appropriation of $3.2 million was attributable to miscellaneous reversions across
other agencies.
State Special Revenue Fund
The fund balance of the State Special Revenue Fund increased by $143.1 million to $2.0 billion.
Revenues increased by $59.3 million (5.6%) and expenditures increased $50.9 million (4.5%), for fiscal
year 2021. The largest increases in revenues are attributable to an increase in charges for services/fines/
forfeits/settlements, taxes collections, and licenses and permits. The largest increases in expenditures are
attributable to natural resources related expenditures. Other financing sources, such as refunding bond
issued, increased due to the General Obligation Bonds, Series 2010F refunded with 2020I, Series 2015C
refunded with 2020J, the Special Revenue Bonds, Series 2010C refunded with 2020L, in fiscal year 2021.
Other financing sources, such as bond proceeds, increased due to the General Obligation Bonds, Series
2020E, 2020G, 2020H, 2020J, and 2020K, the Special Revenue Bonds, Series 2020L and 2020M, issued
in fiscal year 2021. Primarily, transfers into the State Special Revenue Fund from other governmental
funds resulted in an increase in fund balance.
Federal Special Revenue Fund
The fund balance of the Federal Special Revenue Fund decreased by $4.5 million (66.5%) to the balance
of negative $11.3 million. Revenues and expenditures increased by $1.5 billion (46.2%) and $1.3 billion
(41.7%) respectively, for the fiscal year 2021. Revenue increases are attributable to increases in federal
program revenue, including COVID-19 related federal funding. Expenditure increases are attributable to
increases in general government and health and human services related expenditures. The general
government and health and human services related expenditure increases are attributable to COVID-19.
Coal Severance Tax Permanent Fund
The fund balance of the Coal Severance Tax Permanent Fund increased by $7.3 million (0.6%) to $1.2
billion. Revenue decreased by $60.1 million (60.1%) to $39.9 million, primarily due to an decrease of
investment earnings. The excess of revenue over expenditures and transfers out helped lead to the
increase in fund balance.
A-19
Land Grant Permanent Fund
The fund balance of the Land Grant Permanent Fund increased by $25.9 million (3.1%) to $871.7 million.
Revenue decreased by $33.0 million to a total of $93.6 million, and the investment earnings were
attributable to the decrease. Primarily, income generated by the State's trust lands resulted in an increase
in fund balance.
The State's proprietary funds financial statements provided the same type of information founded in the
government-wide financial statements, but in more detail. As the State completed the year, the enterprise
funds reported fund balances of $566.7 million. Of this total, $545.3 million (96.2%) constitutes spendable
net position and $21.4 million (3.8%) is classified as net investment in capital assets. The analysis of the
following major enterprise funds, providing the majority of the net position for the business-type activities,
follows.
Unemployment Insurance Enterprise Fund
Net position restricted for unemployment compensation increased by $162.4 million (68.1%). The
increase in net position is attributable to the transfers into the Unemployment Insurance Enterprise Fund
from the Federal Special Revenue Fund for COVID-19 relief in fiscal year 2021.
Municipal Finance Programs Fund
Net position decreased by 8.2% to $4.9 million in fiscal year 2021. Financing income revenue decreased
$922.0 thousand, and investment earnings decreased $436.0 thousand, while expenses from interest
expense decreased $1.1 million. Overall revenues and expenditures decreased 53.2% and 37.0%, which
resulted in an decrease of $438.0 thousand to net position.
CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The State’s investment in capital assets for its governmental and business-type activities, as of June 30,
2021, amounted to $9.7 billion, with related accumulated depreciation of $2.6 billion, leaving a net book
value of $7.1 billion. This investment in capital assets includes land, buildings, improvements, equipment,
infrastructure, intangible assets, and construction in progress. Infrastructure assets are items that are
normally immovable and of value only to the State, such as roads, bridges, streets and sidewalks,
drainage systems, lighting systems, and similar items.
The total increase in the State’s investment in capital assets for the current fiscal year was $243.3 million
or 3.6% in terms of net book value. Most increases in capital expenditures were seen in construction, or
reconstruction, of roads and bridges. Additional information relating to the State’s capital assets can be
found in Note 5 of the notes to the financial statements.
Debt Administration
Montana continues to receive excellent general obligation bond ratings from Moody’s Investor Service
(Aa1), Standard and Poor’s Corporation (AA), and Fitch Ratings (AA+), which remain unchanged from
2020.
State debt may be authorized either by a two-thirds vote of the members of each house of the Legislature
or by a favorable vote of a majority of the State’s electors voting thereon. There is no constitutional limit
on the amount of debt that may be incurred by the State. The Montana Constitution does, however,
prohibit the incurring of debt to cover deficits caused by appropriations exceeding anticipated revenue.
The State of Montana’s general obligation debt increased from $90.3 million at June 30, 2020, to $127.6
million at June 30, 2021. There is cash available, of $6.7 million at the end of fiscal year 2021, in debt
service funds to service general obligation debt.
The below table contains the ratio of general obligation debt and total State debt to personal income and
to the amount of debt per capita:
A-20
Amount Percentage of State Debt
(in thousands) Personal Income (1) Per Capita (2)
General obligation debt $ 127,633 0.22% $ 118
Total State debt (3) $ 172,555 0.30% $ 160
(1)
Based on personal income for calendar year 2020.
(2)
Based on estimated 2020 Montana population.
(3)
Based on total of general obligation bonds, special revenue bonds, notes payable, and lease/installment purchase payable for the
percentage and state debt per capita.
More detailed information regarding the State’s long-term obligations is provided in Note 11 of the notes to
the financial statements and in the statistical tables.
ECONOMIC CONDITION AND OUTLOOK
On March 3, 2020, Governor Bullock formed a multi-agency task force to coordinate the State’s
preparations with respect to COVID-19. On March 12, 2020, Governor Bullock issued Executive Orders
No. 2-2020 and 3-2020 declaring a State of Emergency in the State in response to the COVID-19
pandemic. Montana residents were under a Stay at Home Directive from March 28, 2020 through April 24,
2020. On June 30, 2021, Governor Gianforte ended the State of Emergency in Montana.
Because Montana’s continued and effective response to the COVID-19 pandemic, the State has
determined that extending the State income tax filing deadline to July 15, 2020, did not have an adverse
effect on the State’s liquidity for fiscal years 2020 and 2021.
The State was allocated $1.6 billion from ARPA during fiscal year 2021. The legislature has appropriated
approximately $1.2 billion and enacted laws to allow appropriations to continue into the 2023 and 2025
bienniums. The programs designated by the legislature for ARPA funding are infrastructure,
communications, economic transformation and stabilization, workforce development, and health. ARPA
funds spent before June 30, 2021, totaled $58.4 million. Since June 30, 2021, another $116.0 million has
been spent. The State plans to spend all funds received by June 30, 2026.
The extent of the impact of COVID-19 on the State’s operational and financial performance, and on the
State’s general financial condition, will depend on future developments, many of which are out of the
State’s control, including the implementation of federal aid; the duration and spread of the COVID-19
pandemic; and associated restrictions and limitations.
The State cannot predict: (i) the duration or extent of the COVID-19 pandemic or any other outbreak or
pandemic; (ii) the duration or expansion of travel restrictions and warnings – both domestically and
internationally; (iii) whether additional countries or destinations will be added to the travel restriction or
warning; (iv) what effect any COVID-19 or any other outbreak/pandemic-related travel restrictions or
warnings may have on demand for travel; (v) whether and to what extent the COVID-19 pandemic or any
other outbreak or pandemic may disrupt the local or global economy, manufacturing or supply chain, or
whether any such disruption may adversely impact State-related operations and financial results; or (vi)
whether any of the foregoing may have a material adverse effect on the finances and operations of the
State.
Despite the economic effects of COVID-19, Montana’s primary economic base remains concentrated in
nonresident travel, agriculture, and mining, as well as service-providing industries. Per the 2021 Labor
Day Report issued by the Montana Department of Labor and Industry, Montana's economy is in the midst
of a strong recovery from the pandemic recession. Montana had real wage growth of 6.6% in calendar
year 2020, ranking 8th among states for the fastest average annual wage growth over the last 10 years.
Montana’s unemployment rate dropped quickly after the pandemic recession, reaching 3.6% in July 2021,
with the national rate around 5.4%. Prior recessions took much longer for unemployment to return to
normal levels. In October 2021, the Montana's preliminary unemployment rate was 3.1% with the national
rate around 4.6%. Even with a strong recovery and rapid job growth, it is likely that the pandemic will have
continued impacts on Montana's economy, particularly labor shortages and the impacts of rising prices on
businesses and workers.
A-21
Montana had an estimated 1,080,577 population as of July 1, 2020. The Montana labor market has total
nonfarm workers of 481,800 in August 2021 as compared to 464,600 in August 2020. A more in-depth
analysis of the State’s overall financial position can be found in the transmittal letter of this report.
The Montana Constitution, Article VIII, Section 15, states that public retirement systems shall be funded
on an actuarially sound basis. Public pension plans are considered actuarially sound if the unfunded
accrued actuarial liability amortization period is within 30 years. As of June 30, 2021, the Game Warden &
Peace Officers’ Retirement System (GWPORS) was not in compliance and did not amortize within 30
years. The unfunded liabilities in the other state retirement systems amortize in 30 years or less as of the
fiscal year ended June 30, 2021.
The actuarial condition of these retirement plans is disclosed in greater detail in Note 6 of the financial
statements. The unfunded actuarial liability of these plans is long-term in nature and does not translate
into an inability of the plans to meet their current obligations in the near future.
REQUESTS FOR INFORMATION
This financial report is designed to provide a general overview of the State of Montana’s finances for all of
Montana’s citizens, taxpayers, customers, investors, and creditors. The financial report seeks to
demonstrate the State’s accountability for the money it receives. Questions concerning any of the
information provided in this report or requests for additional information should be addressed to the State
of Montana, Statewide Accounting Bureau, Room 255 Mitchell Building, PO Box 200102, Helena, MT
59620.
A-22
STATEMENT OF NET POSITION
JUNE 30, 2021
(amounts expressed in thousands)
PRIMARY GOVERNMENT
GOVERNMENTAL BUSINESS-TYPE COMPONENT
ACTIVITIES ACTIVITIES TOTAL UNITS
ASSETS
Cash/cash equivalents (Note 3) $ 3,401,680 $ 553,507 $ 3,955,187 $ 619,427
Receivables (net) (Note 4) 530,038 74,659 604,697 130,533
Due from primary government — — — 2,319
Due from other governments 355,220 792 356,012 36,473
Due from component units 553 1,445 1,998 289
Internal balances 6,415 (6,415) — —
Inventories 30,734 6,195 36,929 4,507
Advances to component units 9,539 8,515 18,054 —
Long-term loans/notes receivable 550,050 78,175 628,225 611,393
Equity in pooled investments (Note 3) 2,663,550 18,379 2,681,929 50,778
Investments (Note 3) 199,873 9,504 209,377 2,369,504
Securities lending collateral (Note 3) 48,105 332 48,437 5,182
Net pension asset (Note 6) 36,545 — 36,545 —
Other assets 17,045 1,698 18,743 19,122
Depreciable capital assets and infrastructure, net (Note 5) 4,545,872 16,061 4,561,933 877,316
Land and nondepreciable capital assets (Note 5) 2,521,163 5,316 2,526,479 143,081
Total assets 14,916,382 768,163 15,684,545 4,869,924
DEFERRED OUTFLOWS OF RESOURCES (Note 4) 1,031,934 5,792 1,037,726 140,462
LIABILITIES
Accounts payable (Note 4) 749,171 65,304 814,475 75,884
Lottery prizes payable — 4,459 4,459 —
Due to primary government — — — 1,998
Due to other governments 33,251 355 33,606 371
Due to component units 2,319 — 2,319 289
Due to pension trust funds 35,825 — 35,825 —
Advances from primary government — — — 18,054
Unearned revenue 759,052 6,151 765,203 99,793
Amounts held in custody for others 56,690 30 56,720 13,935
Securities lending liability (Note 3) 48,105 332 48,437 5,182
Other liabilities 5,658 — 5,658 26,935
Short-term debt (Note 11) — 90,600 90,600 —
Long-term liabilities (Note 11):
Due within one year 133,253 14,613 147,866 171,931
Due in more than one year 449,938 5,391 455,329 1,774,141
Net pension liability (Note 6) 2,943,785 15,290 2,959,075 237,781
Total OPEB liability (Note 7) 141,394 2,450 143,844 58,124
Total liabilities 5,358,441 204,975 5,563,416 2,484,418
DEFERRED INFLOWS OF RESOURCES (Note 4) 163,799 2,299 166,098 58,029
A-23
PRIMARY GOVERNMENT
GOVERNMENTAL BUSINESS-TYPE COMPONENT
ACTIVITIES ACTIVITIES TOTAL UNITS
NET POSITION
Net investment in capital assets $ 6,962,944 $ 21,360 $ 6,984,304 $ 711,960
Restricted for:
General government 34,624 — 34,624 —
Transportation 125,943 — 125,943 —
Health and human service 17,031 — 17,031 —
Natural resources 652,447 — 652,447 —
Public safety 199,135 — 199,135 —
Education 9,212 — 9,212 —
Funds held as permanent investments:
Nonexpendable 1,952,534 — 1,952,534 464,669
Expendable 584,069 — 584,069 —
Unemployment compensation — 400,873 400,873 —
Montana Board of Housing — — — 160,105
Other purposes (Note 1) — 119,823 119,823 342,747
Unrestricted (111,863) 24,625 (87,238) 788,458
Total net position $ 10,426,076 $ 566,681 $ 10,992,757 $ 2,467,939
The notes to the financial statements are an integral part of this statement.
A-24
STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(amounts expressed in thousands)
PROGRAM REVENUES
OPERATING CAPITAL
CHARGES GRANTS GRANTS NET
FOR AND AND (EXPENSE)
FUNCTIONS/PROGRAMS EXPENSES SERVICES CONTRIBUTIONS CONTRIBUTIONS REVENUE
Primary government:
Governmental activities:
General government $ 1,699,213 $ 214,699 $ 1,451,597 $ 5,918 $ (26,999)
Public safety 544,839 198,475 29,095 — (317,269)
Transportation 611,537 35,802 83,533 505,281 13,079
Health and human services 3,418,518 39,781 2,476,116 245 (902,376)
Education 1,492,682 3,563 251,968 1,379 (1,235,772)
Natural resources 361,420 201,555 148,899 18,843 7,877
Interest on long-term debt 5,026 — — — (5,026)
Total governmental activities 8,133,235 693,875 4,441,208 531,666 (2,466,486)
Business-type activities:
Unemployment Insurance 728,476 122,626 14,632 — (591,218)
Liquor Stores 120,913 135,369 — — 14,456
State Lottery 99,353 112,327 — — 12,974
Municipal Finance Programs 1,602 40 1,124 — (438)
Hail Insurance 796 1,152 4 — 360
Other Service 81,765 31,401 52,387 883 2,906
Prison Funds 7,042 7,005 — — (37)
1
MUS Group Insurance 106,068 105,336 339 — (393)
1
MUS Workers Compensation 2,852 3,930 90 — 1,168
Total business-type activities 1,148,867 519,186 68,576 883 (560,222)
Total primary government $ 9,282,102 $ 1,213,061 $ 4,509,784 $ 532,549 $ (3,026,708)
Component units:
Montana Board of Housing $ 21,820 $ 2,612 $ 18,908 $ — $ (300)
Facility Finance Authority 538 821 112 — 395
Montana State Fund 171,042 148,625 — — (22,417)
Montana State University 646,557 273,506 320,508 11,663 (40,880)
University of Montana 464,845 148,670 240,803 336 (75,036)
Total component units $ 1,304,802 $ 574,234 $ 580,331 $ 11,999 $ (138,238)
1
Montana University System
A-25
PRIMARY GOVERNMENT
GOVERNMENTAL BUSINESS-TYPE COMPONENT
ACTIVITIES ACTIVITIES TOTAL UNITS
Changes in net position:
Net (expense) revenue $ (2,466,486) $ (560,222) $ (3,026,708) $ (138,238)
General revenues:
Taxes:
Property 329,585 — 329,585 —
Fuel 274,417 — 274,417 —
Natural resource 160,987 — 160,987 —
Individual income 1,712,162 — 1,712,162 —
Corporate income 261,686 — 261,686 —
Other (Note 1) 431,603 38,141 469,744 —
Unrestricted grants and contributions 447 549,317 549,764 4
Settlements 86,092 — 86,092 —
Unrestricted investment earnings 32,902 14 32,916 138,851
Transfers from primary government — — — 256,944
Gain (loss) on sale of capital assets 4,750 84 4,834 (14)
Miscellaneous 5,866 6,405 12,271 2,002
Contributions to term and permanent endowments — — — 29,507
Transfers between primary government (138,881) 138,881 — —
Total general revenues, contributions, and transfers 3,161,616 732,842 3,894,458 427,294
Change in net position 695,130 172,620 867,750 289,056
Total net position - July 1 - as previously reported 9,830,973 393,320 10,224,293 2,178,642
Adjustments to beginning net position (Note 2) (100,027) 741 (99,286) 241
Total net position - July 1 - as adjusted 9,730,946 394,061 10,125,007 2,178,883
Total net position - June 30 $ 10,426,076 $ 566,681 $ 10,992,757 $ 2,467,939
The notes to the financial statements are an integral part of this statement.
A-26
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2021
(amounts expressed in thousands)
SPECIAL REVENUE
GENERAL STATE FEDERAL
ASSETS
Cash/cash equivalents (Note 3) $ 910,776 $ 1,084,767 $ 792,458
Receivables (net) 314,579 108,104 72,886
Interfund loans receivable (Note 12) 98,139 78,337 5
Due from other governments 12,534 1,459 341,207
Due from other funds (Note 12) 34,585 16,247 2,289
Due from component units — 312 —
Inventories 4,087 21,669 —
Equity in pooled investments (Note 3) — 391,954 —
Long-term loans/notes receivable — 524,607 5,480
Advances to other funds (Note 12) 355 38,123 —
Advances to component units — 1,983 —
Investments (Note 3) 10,907 1,734 —
Securities lending collateral (Note 3) — 7,079 —
Other assets 3,322 10,058 208
Total assets $ 1,389,284 $ 2,286,433 $ 1,214,533
LIABILITIES, DEFERRED INFLOWS OF RESOURCES,
AND FUND BALANCES
Liabilities:
Accounts payable $ 324,199 $ 169,734 $ 230,664
Interfund loans payable (Note 12) — 5,001 166,377
Due to other governments 430 31,227 1,594
Due to other funds (Note 12) 2,533 12,395 13,627
Due to component units 36,275 459 1,409
Advances from other funds (Note 12) — 5,328 36,879
Unearned revenue 40 21,186 736,758
Amounts held in custody for others 8,044 42,042 468
Securities lending liability (Note 3) — 7,079 —
Other liabilities 28 1,332 —
Total liabilities 371,549 295,783 1,187,776
DEFERRED INFLOWS OF RESOURCES 161,435 11,452 38,078
Fund balances (Note 14):
Nonspendable 5,171 22,630 151
Restricted — 1,197,079 —
Committed 114,199 757,536 —
Assigned 95,387 1,953 —
Unassigned 641,543 — (11,472)
Total fund balances 856,300 1,979,198 (11,321)
Total liabilities, deferred inflows of resources, and fund balances $ 1,389,284 $ 2,286,433 $ 1,214,533
The notes to the financial statements are an integral part of this statement.
A-27
PERMANENT
COAL
SEVERANCE LAND
TAX GRANT NONMAJOR TOTAL
$ 57,936 $ 38,001 $ 287,638 $ 3,171,576
11,030 2,399 10,542 519,540
— — — 176,481
— — — 355,200
— — 4,935 58,056
113 — 128 553
— — — 25,756
976,655 836,860 424,063 2,629,532
— — 19,964 550,051
— — 5,328 43,806
7,365 — 190 9,538
184,756 — — 197,397
17,639 15,114 7,659 47,491
— 116 — 13,704
$ 1,255,494 $ 892,490 $ 760,447 $ 7,798,681
$ — $ 5 $ 5,942 $ 730,544
1,593 2 335 173,308
— — — 33,251
4,380 — 2,408 35,343
— — — 38,143
— — 1,761 43,968
— — — 757,984
— 5,688 — 56,242
17,639 15,114 7,659 47,491
— — — 1,360
23,612 20,809 18,105 1,917,634
2,822 — 1,307 215,094
664,992 871,681 414,009 1,978,634
— — 34,229 1,231,308
564,068 — 293,558 1,729,361
— — 251 97,591
— — (1,012) 629,059
1,229,060 871,681 741,035 5,665,953
$ 1,255,494 $ 892,490 $ 760,447 $ 7,798,681
A-28
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF NET POSITION
JUNE 30, 2021
(amounts expressed in thousands)
Total fund balances - governmental funds $ 5,665,953
Amounts reported for governmental activities in the Statement of Net Position are different due to:
Capital assets used in governmental activities are not current financial resources and therefore not
reported in the governmental funds (Note 5):
Depreciable capital assets and infrastructure, net $ 4,545,872
Land and nondepreciable capital assets 2,521,163 7,067,035
Deferred outflows of resources represent a consumption of net assets that will be reported as an
outflow of resources in a future period and therefore are not reported in the governmental funds. 1,031,934
Other assets not available in the current period and therefore are not reported in the governmental
funds:
Net pension asset 36,545
Long-term receivables (286)
Internal service funds are used by management to charge the costs of certain activities, such as
insurance and central computer services, to individual governmental funds. The assets and liabilities
of the internal service funds are included in the governmental activities in the Statement of Net
Position, excluding internal service funds' capital assets, deferred outflows of resources, deferred
inflows of resources and long-term liabilities reported in specific areas. 258,300
Other liabilities that are not due and payable in the current period and are not reported in the
governmental funds. (16,330)
A portion of deferred inflows of resources represents an acquisition of net assets that will be
recognized as an inflow of resources in a future period, which differs than that reported in the
governmental funds. 51,295
Long-term liabilities and related accrued interest are not due and payable in the current period and
therefore are not reported in the governmental funds (Note 11):
Other long-term liabilities (583,191)
Net pension liability (2,943,785)
Total OPEB liability (141,394) (3,668,370)
Total net position - governmental activities $ 10,426,076
The notes to the financial statements are an integral part of this statement.
A-29
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A-30
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(amounts expressed in thousands)
SPECIAL REVENUE
GENERAL STATE FEDERAL
REVENUES (Note 14)
Licenses/permits $ 142,810 $ 299,035 $ —
Taxes:
Natural resource 68,068 64,910 —
Individual income 1,734,627 — —
Corporate income 263,869 11 —
Property 309,495 20,090 —
Fuel — 274,417 —
Other 253,940 171,436 —
Charges for services/fines/forfeits/settlements 45,488 151,369 7,925
Investment earnings 5,093 9,744 572
Securities lending income 39 47 —
Sale of documents/merchandise/property 251 9,061 —
Rentals/leases/royalties 8 1,254 —
Contributions/premiums — 35,092 —
Grants/contracts/donations 13,665 15,470 44
Federal 10,767 8,996 4,692,258
Federal indirect cost recoveries 164 56,549 98,207
Other revenues 379 3,763 1,335
Total revenues 2,848,663 1,121,244 4,800,341
EXPENDITURES
Current:
General government 385,619 196,146 834,438
Public safety 310,373 104,668 58,076
Transportation 174 254,873 129,320
Health and human services 490,805 221,921 2,710,755
Education 1,119,344 86,028 289,715
Natural resources 38,226 230,006 128,353
Debt service:
Principal retirement 295 2,996 135
Interest/fiscal charges 247 1,229 11
Capital outlay 7,436 90,291 427,568
Securities lending 10 10 —
Total expenditures 2,352,529 1,188,168 4,578,371
Excess of revenue over (under) expenditures 496,134 (66,924) 221,970
OTHER FINANCING SOURCES (USES)
Inception of lease/installment contract 193 4,137 57
Insurance proceeds — 437 —
General capital asset sale proceeds 119 617 —
Refunding bond issued — 24,896 —
Payment to refunding bond escrow agent — (23,935) —
Bond premium — 8,799 —
Bond proceeds — 56,904 —
Energy conservation loans — 149 —
Transfers in (Note 12) 85,086 212,201 2,059
Transfers out (Note 12) (330,993) (72,058) (229,172)
Total other financing sources (uses) (245,595) 212,147 (227,056)
Net change in fund balances 250,539 145,223 (5,086)
Fund balances - July 1 - as previously reported 592,812 1,836,115 (6,799)
Adjustments to beginning fund balance (Note 2) 13,335 (591) 564
Fund balances - July 1 - as adjusted 606,147 1,835,524 (6,235)
Increase (decrease) in inventories (386) (1,549) —
Fund balances - June 30 $ 856,300 $ 1,979,198 $ (11,321)
The notes to the financial statements are an integral part of this statement.
A-31
PERMANENT
COAL
SEVERANCE LAND
TAX GRANT NONMAJOR TOTAL
$ — $ 1,908 $ — $ 443,753
19,832 — 7,599 160,409
— — — 1,734,627
— — — 263,880
— — — 329,585
— — — 274,417
— — 8,068 433,444
— — 32,339 237,121
19,917 12,827 17,741 65,894
113 96 48 343
— 23,466 — 32,778
— 55,255 — 56,517
— — — 35,092
— 24 — 29,203
— — — 4,712,021
— — — 154,920
— — — 5,477
39,862 93,576 65,795 8,969,481
— — 1,045 1,417,248
— — 23 473,140
— — — 384,367
— — 2,443 3,425,924
— — 22 1,495,109
— 5,152 3,179 404,916
— — 17,523 20,949
— — 4,510 5,997
— — 63,031 588,326
25 21 10 76
25 5,173 91,786 8,216,052
39,837 88,403 (25,991) 753,429
— — — 4,387
— — — 437
— 4,278 15 5,029
— — 12,425 37,321
— — (13,326) (37,261)
— — — 8,799
— — — 56,904
— — — 149
167 94 319,959 619,566
(33,210) (66,840) (27,944) (760,217)
(33,043) (62,468) 291,129 (64,886)
6,794 25,935 265,138 688,543
1,221,777 845,746 475,900 4,965,551
489 — (3) 13,794
1,222,266 845,746 475,897 4,979,345
— — — (1,935)
$ 1,229,060 $ 871,681 $ 741,035 $ 5,665,953
A-32
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(amounts expressed in thousands)
Net change in fund balances - total governmental funds $ 688,543
Amounts reported for governmental activities in the Statement of Activities are different due to:
Capital outlays are reported as expenditures in governmental funds. However, in the Statement of
Activities, these costs are allocated as depreciation expense over the useful life of the capital asset.
Capital outlays exceeded depreciation expense in the current year by the following amount (Note 5):
Capital outlay $ 588,326
Depreciation expense and amortization (270,682) 317,644
Miscellaneous transactions involving capital assets such as sales (gain/loss) and donations are
reported in the Statement of Activities, but only proceeds from sales are reported in the governmental
funds. 3,982
Revenues reported in the Statement of Activities that do not provide current financial resources are
not reported as revenues in the governmental funds. (8,142)
Bond proceeds provide current financial resources to governmental funds, but issuing debt increases
long-term liabilities in the statement of net assets. (65,703)
Internal service funds are used by management to charge the costs of certain activities, such as
insurance and central computer services, to individual governmental funds. Internal service funds are
reported separately from governmental funds in the fund financial statements. In the government-
wide statements, internal service funds are included with governmental activities. 22,481
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 the governmental funds. Some
expenditures reported in the governmental funds either increase or decrease items reported in the
Statement of Net Position. (263,675)
Change in net position - governmental activities $ 695,130
The notes to the financial statements are an integral part of this statement.
A-33
STATEMENT OF FUND NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2021
(amounts expressed in thousands)
GOVERNMENTAL
BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS ACTIVITIES -
MUNICIPAL INTERNAL
UNEMPLOYMENT FINANCE SERVICE
INSURANCE PROGRAMS NONMAJOR TOTAL FUNDS
ASSETS
Current assets:
Cash/cash equivalents (Note 3) $ 390,303 $ 16,055 $ 147,149 $ 553,507 $ 230,105
Receivables (net) (Note 4) 26,811 7,319 40,529 74,659 10,784
Interfund loans receivable (Note 12) — — 215 215 —
Due from other governments 406 — 386 792 20
Due from other funds (Note 12) — 3,730 38 3,768 43
Due from component units — 1,445 — 1,445 —
Inventories — — 6,195 6,195 4,979
Short-term investments (Note 3) — 7,524 — 7,524 —
Securities lending collateral (Note 3) — — 332 332 614
Other current assets — 1 335 336 3,341
Total current assets 417,520 36,074 195,179 648,773 249,886
Noncurrent assets:
Advances to other funds (Note 12) — 7,189 — 7,189 —
Advances to component units — 8,515 — 8,515 —
Long-term investments (Note 3) — — 20,359 20,359 36,495
Long-term notes/loans receivable 33,906 44,269 — 78,175 —
Other long-term assets — — 1,362 1,362 —
Capital assets (Note 5):
Land — — 800 800 —
Land improvements — — 3,830 3,830 95
Buildings/improvements — — 16,379 16,379 6,069
Equipment — 1 9,845 9,846 276,909
Infrastructure — — 1,175 1,175 —
Construction work in progress — — 1,303 1,303 2,091
Intangible assets — — 3,432 3,432 426
Other capital assets — — 3,213 3,213 —
Less accumulated depreciation — — (18,601) (18,601) (181,123)
Total capital assets — 1 21,376 21,377 104,467
Total noncurrent assets 33,906 59,974 43,097 136,977 140,962
Total assets 451,426 96,048 238,276 785,750 390,848
DEFERRED OUTFLOWS OF RESOURCES (Note 4) — 130 5,662 5,792 21,764
A-34
STATEMENT OF FUND NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2021
(amounts expressed in thousands)
GOVERNMENTAL
BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS ACTIVITIES -
MUNICIPAL INTERNAL
UNEMPLOYMENT FINANCE SERVICE
INSURANCE PROGRAMS NONMAJOR TOTAL FUNDS
LIABILITIES
Current liabilities:
Accounts payable (Note 4) $ 46,953 $ 71 $ 18,280 $ 65,304 $ 16,155
Lottery prizes payable — — 3,534 3,534 —
Interfund loans payable (Note 12) — — 2,700 2,700 688
Due to other governments — — 355 355 —
Due to other funds (Note 12) — — 14,887 14,887 2,076
Unearned revenue 3,600 — 2,551 6,151 1,071
Lease/installment purchase payable (Note 10) — 1 13 14 2,388
Short-term debt (Note 11) — 90,600 — 90,600 —
Bonds/notes payable - net (Note 11) — — — — 171
Amounts held in custody for others — — 30 30 449
Securities lending liability (Note 3) — — 332 332 614
Estimated insurance claims (Note 8) — — 13,804 13,804 32,616
Compensated absences payable (Note 11) — 25 770 795 3,362
Total current liabilities 50,553 90,697 57,256 198,506 59,590
Noncurrent liabilities:
Lottery prizes payable — — 925 925 —
Advances from other funds (Note 12) — — — — 7,027
Lease/installment purchase payable (Note 10) — — 7 7 2,307
Bonds/notes payable - net (Note 11) — — — — 72
Estimated insurance claims (Note 8) — — 3,880 3,880 36,622
Compensated absences payable (Note 11) — 60 1,444 1,504 5,580
Net pension liability (Note 6) — 404 14,886 15,290 65,097
Total OPEB liability (Note 7) — 45 2,405 2,450 8,503
Total noncurrent liabilities — 509 23,547 24,056 125,208
Total liabilities 50,553 91,206 80,803 222,562 184,798
DEFERRED INFLOWS OF RESOURCES (Note 4) — 39 2,260 2,299 6,944
NET POSITION
Net investment in capital assets — 1 21,359 21,360 90,706
Restricted for:
Unemployment compensation 400,873 — — 400,873 —
Other purposes — 405 119,418 119,823 —
Unrestricted — 4,527 20,098 24,625 130,164
Total net position $ 400,873 $ 4,933 $ 160,875 $ 566,681 $ 220,870
The notes to the financial statements are an integral part of this statement.
A-35
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(amounts expressed in thousands)
GOVERNMENTAL
BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS ACTIVITIES -
MUNICIPAL INTERNAL
UNEMPLOYMENT FINANCE SERVICE
INSURANCE PROGRAMS NONMAJOR TOTAL FUNDS
Operating revenues:
Charges for services $ 149 $ 40 273,552 $ 273,741 $ 172,949
Investment earnings 7,548 5 468 8,021 790
Securities lending income — — 2 2 4
Financing income — 1,119 — 1,119 —
Contributions/premiums 122,477 — 122,396 244,873 230,212
Grants/contracts/donations 7,084 — 52,300 59,384 4,518
Other operating revenues — — 6,978 6,978 13,595
Total operating revenues 137,258 1,164 455,696 594,118 422,068
Operating expenses:
Personal services — 432 18,291 18,723 74,512
Contractual services — 38 31,163 31,201 40,511
Supplies/materials — 40 116,095 116,135 20,525
Benefits/claims 714,367 — 162,843 877,210 194,664
Depreciation — — 1,119 1,119 14,251
Amortization — — 573 573 421
Utilities/rent — 55 1,159 1,214 6,945
Communications — 9 1,113 1,122 13,583
Travel — 1 113 114 150
Repairs/maintenance — 1 1,583 1,584 28,856
Grants — — — — 478
Lottery prize payments — — 80,348 80,348 —
Securities lending expense — — — — 1
Interest expense — 866 8 874 403
Other operating expenses 14,109 160 4,127 18,396 6,487
Total operating expenses 728,476 1,602 418,535 1,148,613 401,787
Operating income (loss) (591,218) (438) 37,161 (554,495) 20,281
Nonoperating revenues (expenses):
Tax revenues (Note 1) — — 38,141 38,141 —
Grant revenue 549,316 — — 549,316 —
Insurance proceeds — — — — 147
Gain (loss) on sale of capital assets — — (602) (602) 182
Federal indirect cost recoveries — — 65 65 4,547
Increase (decrease) value of livestock — — 433 433 —
Total nonoperating revenues (expenses) 549,316 — 38,037 587,353 4,876
Income (loss) before contributions and
transfers (41,902) (438) 75,198 32,858 25,157
Capital contributions — — 955 955 394
Transfers in (Note 12) 203,571 — 26 203,597 2,020
Transfers out (Note 12) — — (64,788) (64,788) (5,088)
Change in net position 161,669 (438) 11,391 172,622 22,483
Total net position - July 1 - as previously reported 238,429 5,371 149,520 393,320 198,435
Adjustments to beginning net position (Note 2) 775 — (36) 739 (48)
Total net position - July 1 - as adjusted 239,204 5,371 149,484 394,059 198,387
Total net position - June 30 $ 400,873 $ 4,933 $ 160,875 $ 566,681 $ 220,870
The notes to the financial statements are an integral part of this statement.
A-36
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(amounts expressed in thousands)
GOVERNMENTAL
BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS ACTIVITIES -
MUNICIPAL INTERNAL
UNEMPLOYMENT FINANCE SERVICE
INSURANCE PROGRAMS NONMAJOR TOTAL FUNDS
CASH FLOWS FROM OPERATING ACTIVITIES
Receipt from sales and service $ 123,601 $ 39 $ 389,811 $ 513,451 $ 401,217
Payments to suppliers for goods and services — (234) (157,519) (157,753) (111,606)
Payments to employees — (442) (18,233) (18,675) (73,605)
Grant receipts (expenses) 7,504 — 51,913 59,417 4,030
Cash payments for claims (765,477) — (161,605) (927,082) (198,245)
Cash payments for prizes — — (79,042) (79,042) —
Other operating revenues — — 7,041 7,041 18,252
Other operating payments — — (4,024) (4,024) (6,487)
Net cash provided by (used for)
operating activities (634,372) (637) 28,342 (606,667) 33,556
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Collection of taxes — — 38,141 38,141 —
Transfer to other funds — — (63,420) (63,420) (5,087)
Transfer from other funds 203,571 — 27 203,598 2,019
Proceeds from interfund loans/advances — — 2,761 2,761 2,081
Payment of interfund loans and advances (1,500) — (295) (1,795) (49)
Payment of principal and interest on bonds and notes — (1,193) (7) (1,200) (570)
Grant receipts and Federal indirect cost recoverable 566,990 — 65 567,055 —
Net cash provided by (used for)
noncapital financing activities 769,061 (1,193) (22,728) 745,140 (1,606)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Proceeds from insurance — — — — 147
Acquisition of capital assets — — (1,437) (1,437) (13,051)
Proceeds from sale of capital assets — — 1,213 1,213 1
Net cash provided by (used for) capital and
related financing activities — — (224) (224) (12,903)
CASH FLOWS FROM INVESTING ACTIVITIES
Sale (purchase) of investments — (20,621) 300 (20,321) (12,780)
Proceeds (loss) on sales or maturities of investments — 13,804 — 13,804 —
Proceeds (loss) from securities lending transactions/
investments — — 3 3 4
Interest and dividends on investments 7,548 13 490 8,051 787
Payment of securities lending costs — — — — (1)
Collections of principal and interest on loans — 23,752 — 23,752 —
Cash payment for loans — (25,609) — (25,609) —
Net cash provided by (used for)
investing activities 7,548 (8,661) 793 (320) (11,990)
Net increase (decrease) in cash
and cash equivalents 142,237 (10,491) 6,183 137,929 7,057
Cash and cash equivalents, July 1 248,066 26,546 140,966 415,578 223,048
Cash and cash equivalents, June 30 $ 390,303 $ 16,055 $ 147,149 $ 553,507 $ 230,105
The notes to the financial statements are an integral part of this statement.
A-37
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(amounts expressed in thousands)
GOVERNMENTAL
BUSINESS-TYPE ACTIVITIES - ENTERPRISE FUNDS ACTIVITIES
MUNICIPAL INTERNAL
UNEMPLOYMENT FINANCE SERVICE
INSURANCE PROGRAMS NONMAJOR TOTAL FUNDS
Reconciliation of operating income to net
cash provided by operating activities:
Operating income (loss) $ (591,218) $ (438) $ 37,161 $ (554,495) $ 20,281
Adjustments to reconcile operating income
to net cash provided for (used for)
operating activities:
Depreciation — — 1,119 1,119 14,251
Amortization — — 573 573 421
Securities lending expense — — — — 1
Investment earnings (7,548) (5) (468) (8,021) (790)
Securities lending income — — (3) (3) (4)
Financing income — (1,118) — (1,118) —
Interest expense — 866 7 873 403
Other revenue 776 — — 776 4,551
Arbitrage rebate tax — (22) — (22) —
Change in assets, deferred outflows, liabilities and
deferred inflows:
Decr (Incr) in accounts receivable (53,975) — (4,826) (58,801) 862
Decr (Incr) in due from other funds — — (38) (38) 67
Decr (Incr) in due from component units — — — — 9
Decr (Incr) in due from other governments (355) — (386) (741) (10)
Decr (Incr) in inventories — — (1,773) (1,773) (45)
Decr (Incr) in other assets — — 35 35 (2,778)
Incr (Decr) in accounts payable 17,948 (6) (2,257) 15,685 (845)
Incr (Decr) in due to other funds — — (2,805) (2,805) 152
Incr (Decr) in due to other governments — — 107 107 —
Incr (Decr) in lottery prizes payable — — 1,306 1,306 —
Incr (Decr) in unearned revenue — — (209) (209) (192)
Incr (Decr) in amounts held in custody for others — — — — (45)
Incr (Decr) in compensated absences payable — 31 54 85 593
Incr (Decr) in total OPEB liability — — 1,364 1,364 5,709
Incr (Decr) in estimated claims — — 120 120 (3,581)
Incr (Decr) in other payables — (11) (6) (17) (2,343)
Incr (Decr) in net pension liability and related
accounts — 66 (733) (667) (3,111)
Net cash provided by (used for)
operating activities $ (634,372) $ (637) $ 28,342 $ (606,667) $ 33,556
Schedule of noncash transactions:
Capital asset acquisitions from contributed capital $ — $ — $ 955 $ 955 $ 395
Incr (Decr) in fair value of investments — 3 338 341 275
Total noncash transactions $ — $ 3 $ 1,293 $ 1,296 $ 670
The notes to the financial statements are an integral part of this statement.
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STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2021
(amounts expressed in thousands)
PENSION
(AND OTHER
EMPLOYEE PRIVATE INVESTMENT
BENEFIT) PURPOSE TRUST CUSTODIAL
TRUST FUNDS TRUST FUNDS FUNDS FUNDS
ASSETS
Cash/cash equivalents (Note 3) $ 187,408 $ 39,493 $ 1,854,550 $ 8,165
Receivables (net):
Accounts receivable 25,716 — — 621
Interest 14 — 187 —
Due from primary government 35,825 — — —
Due from other PERB plans 1,734 — — —
Long-term loans/notes receivable 8 — — —
Total receivables 63,297 — 187 621
Investments at fair value:
Equity in pooled investments (Note 3) 14,397,166 — 12,953 —
Other investments (Note 3) 1,091,293 206,088 — —
Total investments 15,488,459 206,088 12,953 —
Securities lending collateral (Note 3) 83,372 — 234 —
Capital Assets:
Buildings/improvements 316 — — —
Equipment 133 — — —
Accumulated depreciation (170) — — —
Intangible assets 3,884 — — —
Total capital assets 4,163 — — —
Other assets — 29,964 — 2,887
Total assets 15,826,699 275,545 1,867,924 11,673
DEFERRED OUTFLOWS OF RESOURCES 1,076 — — —
LIABILITIES
Accounts payable 1,767 12 150 2,579
Due to primary government 8 — — —
Due to other PERB plans 1,734 — — —
Unearned revenue 83 — — —
Securities lending liability (Note 3) 83,372 — 234 —
Compensated absences payable 726 — — —
Net pension liability (Note 6) 1,921 — — —
Total OPEB liability (Note 7) 796 — — —
Total liabilities 90,407 12 384 2,579
DEFERRED INFLOWS OF RESOURCES 242 — — —
NET POSITION
Restricted for:
Pensions 15,048,021 — — —
Postemployment benefits other than pensions 689,105 — — —
Pool participants — — 1,867,540 —
Individuals, organizations, and other governments — 275,533 — 9,094
Total net position $ 15,737,126 $ 275,533 $ 1,867,540 $ 9,094
The notes to the financial statements are an integral part of this statement.
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STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(amounts expressed in thousands)
PENSION
(AND OTHER
EMPLOYEE PRIVATE INVESTMENT
BENEFIT) PURPOSE TRUST CUSTODIAL
TRUST FUNDS TRUST FUNDS FUNDS FUNDS
ADDITIONS
Contributions/premiums:
Employer $ 288,688 $ — $ — $ —
Employee 268,411 — — —
Other contributions 121,465 21,468 1,536,607 —
Investment earnings:
Net increase in fair value of investments 3,487,911 31,186 (186) —
Interest, dividends, and other 23,931 1 4,228 3
Securities lending income 1,011 — 1 —
Total investment earnings 3,512,853 31,187 4,043 3
Less investment costs:
Administrative investment expense 83,504 — — —
Securities lending expense 200 — — —
Net investment earnings 3,429,149 31,187 4,043 3
Charges for services 849 — — —
Other additions and miscellaneous 2,124 8,234 — 61,651
Total additions 4,110,686 60,889 1,540,650 61,654
DEDUCTIONS
Benefits 1,039,868 — — —
Refunds 32,147 — — —
Distributions — 31,274 1,392,012 62,674
Administrative expenses 15,316 883 — 16
Local assistance 13 — — —
Transfers to MUS-RP 264 — — —
Transfers to PERS-DCRP 2,328 — — —
Total deductions 1,089,936 32,157 1,392,012 62,690
Change in net position 3,020,750 28,732 148,638 (1,036)
Net position - July 1 - as previously reported 12,716,675 248,114 1,718,902 8,817
Adjustments to beginning net position (Note 2) (299) (1,313) — 1,313
Net position - July 1 - as adjusted 12,716,376 246,801 1,718,902 10,130
Net position - June 30 $ 15,737,126 $ 275,533 $ 1,867,540 $ 9,094
The notes to the financial statements are an integral part of this statement.
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NOTES TO THE FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements for the State of Montana (State) have been prepared in
accordance with Generally Accepted Accounting Principles (GAAP), as prescribed by the Governmental
Accounting Standards Board (GASB).
A. Reporting Entity
For financial reporting purposes, the State includes funds that comprise the primary government and its
component units. The component units are entities that the State is financially accountable for, or whose
relationship with the State is such that exclusion would cause the State's financial statements to be
misleading or incomplete. GASB has set forth criteria to be considered in determining financial
accountability. This criteria includes appointing a voting majority of an organization's governing body, and
(1) the ability of the State to impose its will on that organization or (2) the potential for the organization to
provide specific financial benefits to, or impose specific financial burdens on, the State.
Discretely Presented Component Units
These component units are entities that are legally separate from the State because they possess
corporate powers, but are financially accountable to the State, or whose relationships with the State are
such that exclusion would cause the State's financial statements to be misleading or incomplete. The
condensed financial statements, presented in Note 18, include the financial data of the entities listed
below.
Complete financial statements for each of the individual discretely presented component units, which are
separately issued and audited, may be obtained at the following addresses:
Montana Board of Housing Montana State Fund
301 South Park, Room 240 855 Front Street
PO Box 200528 PO Box 4759
Helena, MT 59620-0528 Helena, MT 59604-4759
Facility Finance Authority Universities and Colleges
2401 Colonial Drive, 3rd Floor Commissioner of Higher Education
PO Box 200506 560 North Park Ave, 4th Floor
Helena, MT 59620-0506 PO Box 203201
Helena, MT 59620-3201
Montana Board of Housing (MBOH) – MBOH, which is a legally separate entity, is governed by a quasi-
judicial board appointed by the Governor with the advice and consent of the Senate. The State of
Montana has the ability to modify or approve: the budget, the rate or fee changes affecting revenues, and
the ability to appoint, hire, reassign, or dismiss those responsible for the day-to-day operations of MBOH.
The board was created in 1975 to facilitate the availability of safe and affordable housing to persons and
families of lower-income. MBOH issues negotiable notes and bonds to fulfill its purposes. The total
amount of notes and bonds outstanding at any time may not exceed $1.5 billion. The discount price of
bonds sold, not the face amount of the bonds, counts against this statutory ceiling. Neither the faith and
credit nor taxing power of the State of Montana may be pledged for the amounts so issued. MBOH is
attached to the Department of Commerce for administrative purposes only. MBOH is audited annually by
the State’s Legislative Audit Division.
Facility Finance Authority (FFA) – FFA, which is a legally separate entity, is governed by a quasi-judicial
board appointed by the Governor with the advice and consent of the Senate. The State of Montana has
the ability to modify or approve: the budget, the rate or fee changes affecting revenues, and the ability to
appoint, hire, reassign, or dismiss those responsible for the day-to-day operations of FFA. FFA assists
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eligible, nonprofit Montana health care and other community-based service providers to obtain and
maintain access to the broadest range of low-cost capital financing as possible. FFA issues revenue
bonds to fulfill its purposes. Neither the faith and credit or taxing power of the State of Montana may be
pledged for the amounts so issued. FFA is attached to the Department of Commerce for administrative
purposes only. Individual financial reports are issued every two years and are audited by the State’s
Legislative Audit Division.
Montana State Fund (MSF) – MSF is a nonprofit, independent public corporation established under Title
39, Chapter 71 of the Montana Code Annotated (MCA). MSF provides Montana employers with an option
for workers’ compensation and occupational disease insurance and guarantees available coverage for all
employers in Montana. MSF is governed by a seven-member Board of Directors appointed by the
Governor with the advice and consent of the Senate. This Board has full power, authority, and jurisdiction
in the administration of MSF. MSF's results are included in the State's Annual Comprehensive Financial
Report because of the significance of MSF's financial relationship with the State. MSF's board is allocated
to the Department of Administration for administrative purposes only. MSF is reported on a calendar year
basis and is audited annually by the State’s Legislative Audit Division and is also regulated by the
Montana State Auditor's Office as an authorized insurer that is subject to the provisions of Title 33,
Montana Insurance Code.
MSF functions as an autonomous insurance entity supported solely from its own revenues. All assets,
debts, and obligations of MSF are separate and distinct from assets, debts, and obligations of the State of
Montana. If MSF is dissolved by an act of law, the assets held by MSF are subject to the disposition
provided by the Legislature enacting the dissolution with due regard given to obligations incurred and
existing (Section 39-71-2322, MCA).
MSF handles the administration of the claims of Montana State Fund and State of Montana (Old Fund),
including determining who a claimant is; what, if any, claims will be paid; and the amount of claims
allowed to be paid. Old Fund covers workers’ compensation claims that were incurred before July 1,
1990, and is reported within the governmental activities of the primary government, on the government-
wide financial statements.
Universities and Colleges – The Montana Constitution, Article X, Section 9, grants governance authority
over the Montana University System (MUS) to the Board of Regents (Board), with seven members
appointed by the Governor and confirmed by the Senate. All state funds appropriated by the Legislature
to the Board for the support of the MUS are channeled through the Office of the Commissioner of Higher
Education (OCHE). The Constitution charges the Board with hiring a Commissioner of Higher Education
who serves as its executive staff. OCHE is the state-level administrative organization of the MUS.
The Board has responsibility for the following institutions: Montana State University - Bozeman and the
units under it including Montana State University - Billings, Montana State University - Northern, and
Great Falls College Montana State University; and University of Montana - Missoula and the units under it
including Montana Technological University, University of Montana - Western, and Helena College
University of Montana. All units are funded through state appropriations, tuition, federal grants, and
private donations and grants. The universities are audited annually by the State’s Legislative Audit
Division.
Though the following organizations perform functions related to the MUS, they are not considered part of
Montana's reporting entity: (1) Community Colleges which are considered part of local units of
government; (2) the Montana Higher Education Student Assistance Corporation, a private nonprofit
corporation; and (3) the Student Assistance Foundation of Montana, a private nonprofit corporation.
Entities such as local school districts and local authorities of various kinds are considered part of local
units of government and have not been included. The state and federal support of local public education
systems is reported in the General Fund, the State Special Revenue Fund, and the Federal Special
Revenue Fund.
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Fiduciary Fund Component Units
Complete financial statements for each of the individual fiduciary fund component units may be obtained
at the following addresses:
Teachers’ Retirement System Public Employees’ Retirement Board
100 North Park Avenue, Suite 110 100 North Park Avenue, Suite 200
PO Box 200139 PO Box 200131
Helena, MT 59620-0139 Helena, MT 59620-0131
Teachers’ Retirement System (Pension Trust Fund) – This retirement plan is a legally separate entity with
a board appointed by the Governor. Its purpose is to provide retirement, disability, death, and lump-sum
payments to benefit recipients of Montana's public teaching profession. The plan is funded from employer
and employee contributions, investment earnings, and the State’s General Fund. The benefit payments
and administrative costs of the Teachers’ Retirement System are paid from the same funding sources.
The system is audited annually by the State’s Legislative Audit Division. Further detail related to the
Teachers’ Retirement System is provided in Note 6.
Public Employees’ Retirement Board (Pension and Other Employee Benefit Trust Funds) – The Public
Employees’ Retirement Board (PERB) is appointed by the Governor and administers ten separate plans
for the purpose of providing retirement, disability, death, and lump-sum payments to plan members.
These legally separate plans include the Public Employees’ Retirement Plan – Defined Benefit and
Defined Contribution and the associated education funds; the Judges’; the Highway Patrol Officers’; the
Sheriffs’; the Game Wardens’ and Peace Officers’; the Municipal Police Officers’; the Firefighters’ Unified
Retirement Systems; the Volunteer Firefighters’ Compensation Act; and the State of Montana Deferred
Compensation Program (457(b) Plan) retirement plans. The board also administers an Other Post
Employment Benefit (OPEB) disability plan on behalf of Public Employees’ Retirement Plan-Defined
Contribution members. The board is audited annually by the State’s Legislative Audit Division. Further
detail related to the PERB is provided in Note 6 and its OPEB plan information in Note 7.
B. Government-wide and Fund Financial Statements
The government-wide financial statements, Statement of Net Position and Statement of Activities, report
information on all of the non-fiduciary activities of the State of Montana and its component units. For the
most part, the impact of interfund activity has been removed from these statements. Governmental
activities, which are normally supported by fees, taxes, and intergovernmental revenues, are reported
separately from business-type activities, which rely to a significant extent on fees and charges for support.
Likewise, the State of Montana is reported separately from certain legally separate component units for
which the State is financially accountable.
The Statement of Activities demonstrates the degree to which program revenues offset the direct
expenses of a function. Direct expenses are those that are clearly identifiable with a specific function.
Certain indirect costs are included in the program expense reported for the individual functions and
activities. 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; and (2) grants and
contributions restricted to meeting the operational or capital requirements of a particular function. Taxes
and other revenues not meeting the definition of program revenues are reported as general revenues.
The State does not allocate indirect expenses to functions in the Statement of Activities.
Separate fund financial statements are provided for governmental, proprietary, and fiduciary funds. Major
individual governmental and enterprise funds are reported as separate columns in the fund financial
statements. Fiduciary fund statements are reported only in the fund financial statements.
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C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
Government-wide, Proprietary, and Fiduciary Fund Financial Statements
The government-wide, proprietary fund, and fiduciary fund financial statements are reported using the
economic resources measurement focus and the accrual basis of accounting. Revenues are reported
when earned; expenses are recorded when a liability is incurred regardless of the timing of the related
cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and
similar items are recognized as revenues as soon as all of the eligibility requirements imposed by the
provider are met.
As a general rule, material interfund revenues and expenses have been eliminated from the government-
wide financial statements. These have not been eliminated where their elimination would distort the direct
costs and program revenues of the functions involved.
Governmental Fund Financial Statements
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 are realizable,
measurable, earned, and available. Revenue is considered realizable when it is probable the amount will
be collected. Revenue is considered measurable and realizable if the precise amount is known because
the transaction is completed, or if there is enough information to provide a reasonable estimate of the net
realizable revenue to be received. Revenue is considered to have been earned when the exchange of
goods or services has taken place. Revenue is considered to be available if it is collectible within the
current period or soon enough thereafter, to pay liabilities of the current period. For this purpose, the State
considers revenue available if it is expected to be collected within 60 days of the end of the current fiscal
period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures as well as expenditures relating to compensated absences, claims,
and judgments are recorded only when payment is due.
The major revenue sources considered susceptible to accrual are licenses and permits, natural resource
taxes, individual income taxes, corporate income taxes, property taxes, fuel taxes, and certain federal
revenues (reimbursable grants and U.S. mineral royalties). All other revenue is considered to be
measurable and available when the cash is received.
Fund Financial Statements
The State uses funds to report on its financial position and the results of its operations. A fund is a
separate accounting entity with a self-balancing set of accounts. Fund accounting is designed to
demonstrate legal compliance and to aid financial management by segregating transactions related to
certain government functions or activities.
The financial activities of the State of Montana are classified into fund categories as described below:
Governmental Funds
General Fund – To account for all governmental financial resources, except those required to be
accounted for in another fund.
Special Revenue Funds – To account for the proceeds of specific revenue sources restricted to
expenditure for specified purposes other than major capital projects. (1) The State Special Revenue Fund
accounts for activities funded from state resources used to account for and report the proceeds of specific
revenue sources that are restricted or committed to expenditure for specified purposes other than debt
service or capital projects. Several funds are defined in statute as Permanent Funds, however per GASB
Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions (GASB 54), these
funds should be reported within the State Special Revenue Fund. The respective effect on fund balance is
approximately a $96.0 million increase. One specific fund is defined in statute as a Federal Special
Revenue Fund; however, per GASB 54, this fund should be reported within the State Special Revenue
Fund. The respective effect on fund balance is approximately a $27.7 million increase. (2) The Federal
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Special Revenue Fund accounts for activities funded from federal sources used in the operation of state
government.
Debt Service Funds – To account for resources accumulated for payment of principal and interest on
general long-term obligation debt.
Capital Projects Funds – To account for resources used for the acquisition or construction of major capital
facilities, other than those financed by proprietary or trust funds.
Permanent Funds – To account for resources that are permanently restricted to the extent that only
earnings, not principal, may be used to support the government’s programs. Several funds are defined in
statute as Permanent Funds, however per GASB 54 these funds should be reported within the State
Special Revenue Fund as noted above.
Proprietary Funds
Enterprise Funds – To account for operations: (1) financed and operated similar to private business
enterprises, where the intent of the Legislature is to finance or recover costs primarily through user
charges; (2) where the Legislature has decided periodic determination of revenue earned, expenses
incurred, or net income is appropriate; (3) where the activity is financed solely by a pledge of the net
revenues from fees and charges of the activity; or (4) when laws or regulations require that the activities’
costs of providing services, including capital costs, be recovered with fees and charges rather than with
taxes or similar revenues. The primary focus of fee revenues charged by enterprise funds is users outside
of the primary government. One specific fund is defined in statute as an Enterprise Fund, however, per
GASB 34, this fund should be reported within Internal Service Funds. The respective effect on net position
is approximately a $5.9 million increase.
Internal Service Funds – To account for the financing of goods and services provided by one department
or agency to other departments, agencies, or other governmental entities on a cost-reimbursement basis.
The State of Montana reports two employee group benefits funds. The MUS Group Insurance Fund
primarily charges its fees to Montana State University and the University of Montana. The universities are
reported as discretely presented component units, which the State considers to be external users, and as
such, reports the MUS Group Insurance Fund as an enterprise fund. The Employee Group Benefits Fund
charges its fees to funds of the primary government, and as such, is reported as an internal service fund.
Fiduciary Funds
Fiduciary Funds are used to account for assets held by the State in a trustee capacity or as an agent for
individuals, private organizations, or other governments. These assets cannot be used to support the
government’s own programs.
Pension (and Other Employee Benefit) Trust Funds – To account for resources that are required to be
held in trust for the members and beneficiaries of the State’s defined benefit plans, defined contribution
plans, other retirement plans, and other post-employment benefit plan. Plan members receive retirement,
disability, death, and lump-sum payments from the fund. Further detail related to the individual plans is
provided in Note 6 and Note 7.
Private-Purpose Trust Funds –To account for assets held by the State in a trustee capacity, where both
the principal and earnings benefit individuals, private organizations, or other governments. For example,
unliquidated security bonds held on deposit from self-insured employers.
Investment Trust Fund – To account for the receipt of monies and the distribution of related investment
earnings to local government agencies by the Montana Board of Investments for investment in the Short
Term Investment Pool (STIP) and Trust Fund Investment Pool (TFIP).
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Custodial Funds – To account for transactions related to assets held by the State as an agent for
individuals, private organizations, and other governments. For example, monies belonging to one parent
submitted by another, as is the case with child support payments.
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Major Governmental Funds
The General Fund is the State’s primary operating fund, as previously defined.
The State Special Revenue Fund accounts for activities funded from state sources, which are restricted
either legally or administratively for particular costs of an agency, program, or function.
The Federal Special Revenue Fund accounts for activities funded from federal sources used in the
operation of state government.
The Coal Severance Tax Fund, created by Article IX, Section 5 of the Montana State Constitution,
receives 50% of all coal tax collections. The principal in this fund can be expended only upon an
affirmative vote of three-fourths of each house of the Legislature.
The Land Grant Permanent Fund accounts for lands granted to the State for support of public schools
and state institutions.
Major Enterprise Funds
The Unemployment Insurance Fund accounts for employer contributions deposited with the Secretary of
the Treasury of the United States to the credit of the State’s unemployment trust fund. Unemployment
benefits are paid from this fund to eligible recipients. For fiscal year 2021, federal contributions were also
made to this fund due to increased claims related to the statewide unemployment impact of COVID-19.
The Board of Investments (BOI) Municipal Finance Programs Fund accounts for the programs created
under the Municipal Finance Consolidation Act (MFCA) and the Economic Development Act. Primarily,
this involves a MFCA revolving loan program that provides variable low interest rate loans to eligible
Montana State agencies, universities, and local governments for a variety of projects statutorily defined.
The funding for the revolving loan program is from the issuance of put bonds. The MFCA program also
provides local government entities access to tax-exempt funds through the issuance of conduit (no-
commitment) debt. In previous years this activity was referred to as the Economic Development Bonds
Fund. Separately issued financial statements may be obtained by contacting the Montana Board of
Investments, 2401 Colonial Drive, 3rd Floor, PO Box 200126, Helena, MT 59620-0126.
D. Proprietary Activity Accounting and Financial Reporting
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating
revenues generally result from providing services and delivering goods in connection with a proprietary
fund’s principal ongoing operations. Operating expenses for enterprise and internal service funds include
the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues
and expenses not meeting these definitions are reported as non-operating.
E. Cash/Cash Equivalents
For all funds, cash and cash equivalents consist of amounts deposited in the State Treasurer’s pooled
cash account, cash deposits in checking accounts, cash invested in the Short Term Investment Pool
(STIP), cash held by trustees, undeposited cash held by individual state agencies, and investments
categorized as cash equivalents, which are short-term, highly liquid investments with original maturities of
three months or less. Further detail related to cash and cash equivalents is provided in Note 3.
F. Receivables
This classification, net of estimated uncollectibles, consists primarily of receivables for goods sold and
services provided; short-term loans and notes; interest and dividends; taxes due within 60 days of fiscal
year-end; and income, withholding, and inheritance taxes that are past due. An allowance for uncollectible
taxes is provided based upon historical analysis. Further detail related to receivables is provided in Note
4.
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G. Inventories
Inventories of materials and supplies are reported at cost. The State allows agencies to use any generally
accepted inventory pricing method but specifies the first-in, first-out method generally to be appropriate
for most agencies. Governmental funds use the "purchase method," meaning inventory purchases are
recorded as expenditures. At fiscal year-end, inventory balances are shown as nonspendable, indicating
they do not constitute available expendable resources. Proprietary and fiduciary funds report using the
"consumption method," meaning inventories are expensed as used.
H. Equity in Pooled Investments
To account for equity in pooled investments, BOI uses one internal investment pool and one external
investment pool. The internal investment pool is the Consolidated Asset Pension Pool (CAPP). The
State's nine defined benefit pension trust funds are the only participants in CAPP. The external investment
pool is the Trust Funds Investment Pool (TFIP). State agencies and qualifying local governments can
participate in TFIP. Current State agency TFIP participation is within the enterprise funds, internal service
funds, permanent funds, investment trust funds, Montana University System Units, and specific accounts
established within the State and Federal Special Revenue Funds. The participant investments in the
pools are reported at fair value in the assets within the individual funds. Further detail related to cash and
cash equivalents and investments is provided in Note 3.
I. Investments
For agencies whose investment needs are not met by BOI’s established investment pools, BOI provides
separate investments, which are combined and reported as Separately Managed Accounts (SMA). SMA
participants have direct fixed income, equity, and Montana mortgage and loan investments. SMA
investments are reported at fair value. Certain securities including asset-backed securities, variable-rate
instruments, zero-coupon bonds, preferred stocks, and mortgage-backed securities are purchased for
portfolio diversification and a competitive rate of return. Other State agencies, on a limited basis by
statute, may administer other long-term investments. Most investments are reported at fair value on the
Statement of Net Position. Further detail related to investments is provided in Note 3.
J. Capital Assets
Capital asset valuation is based on actual historical cost or, in the case of donations, acquisition value.
General government infrastructure capital assets are capitalized and reported on the government-wide
financial statements. Infrastructure assets of proprietary funds are capitalized on the fund financial
statements. Interest incurred during the construction of capital assets for proprietary funds is capitalized.
Interest incurred during the construction of capital assets for higher education component units is
expensed. The State has chosen to use the depreciation approach for infrastructure assets. The State is
reporting accumulated depreciation on the Statement of Net Position and depreciation expense on the
Statement of Activities for these assets. Further detail related to capital assets is provided in Note 5.
Capital assets in proprietary, private-purpose trust, and pension trust funds are accounted for within their
respective funds and are depreciated or amortized on their fund financial statements. Capital assets in
governmental funds are accounted for in the governmental activities of the government-wide financial
statements, as is the associated depreciation and amortization. Depreciation is on a straight-line basis
with estimated useful lives of 25 to 60 years for buildings, 10 to 50 years for infrastructure, 7 to 20 years
for building improvements, and 3 to 10 years for equipment. State agencies are also required to extend or
shorten the useful lives of capital assets to reflect their actual experience or industry standards when
appropriate. Amortization is on a straight-line basis with estimated useful lives of 4 years for software
(internally and externally generated), 30 years for land use rights, and 20 years for other intangibles.
The capitalization limit for buildings and building/land improvements is $25.0 thousand. The capitalization
threshold for infrastructure and internally-generated software is $500.0 thousand. The capitalization
threshold for intangible assets is $100.0 thousand. The capitalization limit for other capital assets is $5.0
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thousand. Agencies are allowed to capitalize additions to collections and land acquisitions at any cost.
Purchases under these thresholds are recorded as expenditures/expenses in the current period.
K. Deferred Outflows, Deferred Inflows, and Unearned Revenue
A deferred outflow of resources is a consumption of net assets by the government that is applicable to a
future reporting period. A deferred inflow of resources is an acquisition of net assets by the government
that is applicable to a future reporting period. Deferred outflows and inflows of resources may include
financial transactions related to refunding debt, non-exchange transactions, derivative investments, and
OPEB, and pension related components; and are reported on the government-wide, proprietary fund, and
fiduciary fund financial statements. Additionally, deferred inflows of resources may include financial
transactions related to unavailable revenue on the governmental fund financial statements. Unavailable
revenue is reported when assets are recognized, but those assets are not considered available to pay
liabilities of the current period. Unearned revenue, which is neither a deferred outflow of resources nor a
deferred inflow of resources; is recognized as a liability on government-wide, governmental, and
proprietary fund financial statements. Further detail related to deferred outflows of resources and deferred
inflows of resources is provided in Note 4.
L. Long-term Obligations
Long-term obligations expected to be financed from governmental funds are reported on the government-
wide financial statements. Long-term debt is recognized as a liability of a governmental fund when due, or
when resources have been accumulated in the debt service fund for payment early in the following year.
For other long-term obligations, only that portion expected to be financed from current expendable
available financial resources is reported as a fund liability of a governmental fund on the fund financial
statements. The remaining portion of such obligations is reported on the government-wide financial
statements. Long-term liabilities expected to be financed from proprietary and fiduciary fund operations
are accounted for in those funds. Further detail related to leases/installment purchases payable and long-
term liabilities is provided in Note 10 and Note 11, respectively.
M. Capital Leases
A capital lease is a lease that transfers benefits and risks of ownership to the lessee. At the inception of a
capital lease, on the government-wide, proprietary fund, and fiduciary fund financial statements, a capital
asset and a capital lease liability are recorded at the present value of the future minimum lease payments.
On the governmental fund financial statements no asset or liability is recorded related to assets under
capital leases. Governmental funds record capital outlay expenditures and other financing sources
(inception of lease/installment contract), at the inception of a capital lease, at net present value of the
minimum lease payments. Further detail related to capital leases is provided in Note 10.
N. Bond Discounts/Premiums/Issuance Costs
Bond premiums and discounts, as well as issuance costs, are recognized in the period they are incurred.
Bond proceeds and bond premiums are reported as an other financing sources, and bond discounts are
reported as an other financing use. Issuance costs are reported as debt service expenditures whether or
not they are withheld from the bond proceeds. Bonds payable are recorded net of any applicable premium
or discount. Further detail related to long-term debt is provided in Note 11.
O. Compensated Absences
Full-time state employees earn vacation leave ranging from 15 to 24 days per year depending on the
individual's years of service. Teachers employed by the State do not receive vacation leave. Vacation
leave may be accumulated and carried over from one year to the next. The carryover is limited to two
times the maximum number of days earned annually. Sick leave is earned at the rate of 12 days per year
with no limit on accumulation. Each contribution year, an employee may contribute a maximum of 80
hours of sick or annual leave to a nonrefundable sick leave pool. Excess annual leave that is being
forfeited can also be contributed, with no maximum contribution. For fiscal year 2021, 1,352 sick leave
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hours, 185 annual leave hours, and 4,818 excess annual leave hours were contributed to the sick leave
pool, and 5,608 hours were withdrawn, leaving a balance of 17,626 hours in the pool. The liability
associated with the pool is not reported in the accompanying financial statements because these hours
are nonrefundable to contributors, except by grants approved through an application process.
Vested or accumulated leave for proprietary and fiduciary funds is recorded as an expense and liability of
those funds in the fund financial statements. For governmental funds, the liability is not expected to be
liquidated with expendable financial resources. The expenditure and liability for the governmental funds is
reported only on the government-wide financial statements. Upon retirement or termination, an employee
is paid for 100% of unused vacation leave and 25% of unused sick leave. Further detail related to
compensated absences is provided in Note 11.
P. Nonexchange Financial Guarantee
BOI provides loan guarantees from the Coal Severance Tax Fund to the Facility Finance Authority (FFA),
a discretely presented component unit of the State. BOI exposure to bond issues, surety bonds, and
designated loans of the FFA totaled $100.2 million as of June 30, 2021. FFA guarantee requests are
submitted to BOI for review and approval. BOI’s participation, either duration or any other consideration,
to either purchase bonds or loans or to lend money for deposit into FFA’s statutorily allowed capital
reserve account is explicitly limited by statute which requires BOI to act prudently. The guarantee
requests from FFA pertain to bonds issued by FFA with a term of up to 40 years. BOI and FFA have
entered into an agreement detailing repayment to BOI. BOI has not had to perform on any loan guarantee
in the past.
Q. Fund Balance/Net Position
Fund Balance
The classifications for fund balance used for governmental funds are reported in two general
classifications, nonspendable and spendable. Nonspendable represents the portion of fund balance that
is legally or contractually required to remain intact or is not in spendable form such as inventories, and, in
the General Fund, long-term notes and loans receivable. Spendable fund balance is further categorized
as restricted, committed, assigned, and unassigned.
The restricted fund balance category includes amounts that can be spent only for the specific purposes
stipulated by the State Constitution or external parties, such as the federal government, or through
enabling legislation. For the purpose of determining restricted amounts, enabling legislation does not
include commitments resulting from State legislation if these constraints can be removed or changed by a
similar legislative action.
The committed fund balance classification includes amounts that can be used only for the specific
purposes determined by a formal action of the government’s highest level of decision-making authority,
the State’s Legislature, through legislation passed into law.
Amounts in the assigned fund balance classification are intended to be used by the government for
specific purposes. Still they do not meet the criteria to be classified as restricted or committed.
Assignments of fund balance are created by the executive branch. In governmental funds other than the
General Fund, assigned fund balance also represents the remaining amount that is not restricted or
committed. The assigned fund balance for the General Fund are encumbrances and assignments for the
portion of current General Fund balance that is projected to be used to fund expenditures and other cash
outflows in excess of the expected revenues and other cash inflows in fiscal years as needed. The
projected spend down for fiscal year 2022 is $75.0 million; thus, a related assignment of fund balance is
reported at 2021 fiscal year-end.
Unassigned fund balance is the residual classification for the General Fund and includes all spendable
amounts not contained in the other classifications. In other funds, the unassigned classification should be
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used only to report a deficit balance resulting from overspending for specific purposes for which amounts
had been restricted, committed, or assigned.
The State generally segregates restricted, committed, and assigned resources by account (sub-fund)
within the governmental funds other than the General Fund. When resources meeting more than one of
these spendable classifications are commingled in an account on the State’s accounting system, the
assumed order of spending is restricted first, committed second, and finally assigned. State statute
requires non-General Fund money be spent first whenever possible so any related available unassigned
balance would be spent last.
General Fund - Fund Balance
As of June 30, 2021, the State maintains a Budget Stabilization Reserve Fund as required by statute. For
financial reporting purposes, this fund is combined with the General Fund as it does not meet the GASB
54 requirements to be a special revenue fund as the Legislature prescribed. The June 30, 2021,
committed fund balance in the General Fund of $114.2 million, represents the Budget Stabilization
Reserve Fund balance.
Additionally, statute provides a minimum fund balance amount as follows: Section 17-7-140, MCA,
defines minimum ending fund balance and specifies the procedures that must be followed to make
expenditure reductions or allow transfers from the Budget Stabilization Reserve Fund if a projected
ending fund balance drops below minimum statutory requirements.
If the Budget Director determines that a deficit exists, statute requires reductions that must be made to
assure that the projected ending fund balance complies with the minimum ending fund balance of General
Fund appropriations for the biennium. Under circumstances when a deficit of this level is projected during
a biennium, the Governor may direct reductions from any General Fund expenditure not exempted by
Section 17-7-140, MCA, including House Bill (HB) 2 (the State’s main appropriation bill), any other
appropriation bills, statutory appropriations, or language appropriations. Reductions may not exceed 10%
of General Fund appropriations for any single “program,” as defined in HB 2. If a program has more than
one appropriation, the reduction for one or more of the appropriations may exceed 10% as long as the
reduction for the program as a whole does not exceed 10%.
The Legislative and Judicial branches, the Montana School for the Deaf and Blind, principal and interest
on State debt, salaries of elected officials, and public school BASE funding are exempt, statutorily, from
reductions. These exemptions shield approximately one-third of General Fund appropriations from
reduction. Of the remaining expenditures, the Governor may not direct executive agencies headed by
elected officials or the Board of Regents to reduce their expenditures by more than the average reduction
percentage imposed upon all other executive branch agencies.
Net Position
In funds other than governmental, net position represents the difference between assets plus deferred
outflows of resources and liabilities plus deferred inflows of resources. The net investment in the capital
assets portion of net position 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. Net position is reported as restricted when there are limitations imposed on their use either
through constitutional provisions, enabling legislation or through external restrictions imposed by
creditors, grantors, or laws or regulations of other governments. The government-wide Statement of Net
Position reported restricted net position of $4.1 billion.
Net position associated with the Unemployment Insurance Fund is classified as restricted. The majority of
the restricted net position for other purposes business-type activities amounting to $119.8 million is made
up of $97.4 million from MUS Group Insurance Fund and $12.9 million from MUS Workers Compensation
Fund. Certain investments of the Municipal Finance Programs Fund are also classified as restricted net
position for other purposes as business-type activities and on the Statement of Fund Net Position for
proprietary funds because applicable bond indenture agreements limit their use.
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R. Property and Income Taxes
Real property taxes are normally levied in October and are usually payable in two installments on
November 30 and May 31. These taxes attach as an enforceable lien immediately if not paid when due.
Personal property tax levies are set each August, and notices are normally mailed the following March or
April. Half of mobile home taxes are due in 30 days and the remaining half on September 30. Taxes on all
other types of personal property are to be paid in full 30 days after receipt of the notice. Property tax
payments are recognized as deferred inflows of resources if received prior to levy or availability.
Personal property taxes attach as an enforceable lien immediately if not paid when due. Each of
Montana's 56 counties collect property taxes. The counties then remit the State's portion to the State
Treasury. The majority of these taxes help fund public school systems and higher education.
Calendar year 2020 State income tax filing deadline, normally April 15th of the subsequent year, was
delayed to May 17, 2021, due to COVID-19 pandemic. The State has determined that extending the
income tax filing deadline did not have a material adverse effect on the State's liquidity for fiscal year
2021, nor will it in fiscal year 2022.
S. Other Taxes
On the Statement of Activities, the revenue category “Other Taxes” consists of the following taxes (in
thousands):
Other
State Special Governmental Business-Type
General Fund Revenue Funds Funds Total
Accommodations $ 23,454 $ 33,175 $ 6,254 $ 5 $ 62,888
Agriculture — 11,734 — — 11,734
Car rental 3,624 1,208 — — 4,832
Cigarette/tobacco/etc. 33,477 49,031 1,604 — 84,112
Contractors gross receipts 3,897 — — — 3,897
Energy tax 6,350 — — — 6,350
Fire protection — 4,628 — — 4,628
Insurance premium 87,263 50,240 — — 137,503
Light vehicle registration — 6,310 — — 6,310
Liquor tax 5,996 2,419 — 38,136 46,551
Livestock — 5,316 — — 5,316
Other taxes 164 1,102 — — 1,266
Public service commission — 5,356 — — 5,356
Railroad car companies 5,194 — — — 5,194
Telephone license 8,888 — — — 8,888
Video gaming 74,917 2 — — 74,919
Total other taxes $ 253,224 $ 170,521 $ 7,858 $ 38,141 $ 469,744
T. Tax Abatement
In the Montana Board of Investment’s (BOI) Commercial Loan Program within the SMA, by statute, the
infrastructure loan program is funded by an $80.0 million allocation. Eligible local governments request a
loan for constructing or purchasing infrastructure to be used by a basic sector business. The basic sector
business will pay a user fee to the local government that is pledged to BOI for the loan repayment. BOI
reviews each loan, and only upon verification that the entities meet the loan requirements is the loan
approved by BOI. The local government entity must pass a resolution authorizing the acceptance of the
commitment agreement. BOI indemnifies the local government regarding repayment of the loan.
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The basic sector business must create at least 15 full-time basic sector jobs to be eligible for the program.
The maximum loan size is $16.7 thousand times the number of full-time jobs created and the minimum
loan size is $250.0 thousand. The maximum loan term is 25 years. There is also up to a 2.5% interest rate
reduction for job creation. The reduction will be reflected in the user fee rate charged to the basic sector
business upon BOI review and approval. The basic sector business must create the required jobs within
four years of the agreement. If the basic sector business does not create the required jobs within the four-
year period, then the basic sector business must pay down the loan balance of the local government
entity until the loan balance matches the eligible amount per the jobs created. BOI may increase the
interest rate commensurate with the number of jobs eliminated if the borrower eliminates 10 or more
qualifying jobs. The basic sector business must annually provide payroll documentation to BOI.
Pursuant to statute, a business that is created or expanded as the result of an Infrastructure Loan is
entitled to a credit against either their State individual income taxes or corporate income taxes for the
portion of the fees attributable to the use of the infrastructure. The total amount of tax credit claimed may
not exceed the amount of the loan. The credit may be carried forward for seven years or carried back for
three years.
During the fiscal year ended June 30, 2021, basic sector business entities made total user fee payments
of $1.8 million, representing $1.3 million of principal and $0.5 million in interest. During the fiscal year
ended June 30, 2021, a total of $5.3 million was claimed as a credit against State individual and
corporation tax. The following table details the fiscal year 2021 credit claimed by tax type and the tax year
it was applied against (in thousands):
Infrastructure Credit Claimed
Tax Year Tax Year
2020 2019 Total
Corporate income tax $ — $ 265 $ 265
Individual income tax 34 4,965 4,999
Total amount claimed $ 34 $ 5,230 $ 5,264
U. Irrevocable Split Interest Agreements
Irrevocable split-interest agreements are used by donors to provide resources to two or more
beneficiaries, including governments. These agreements can be created through trusts or other legally
enforceable agreements with characteristics that are equivalent to irrevocable split-interest agreements.
The University of Montana campuses have three irrevocable split interest agreements during the fiscal
year ended June 30, 2021. Further detail related to these agreements is provided in Note 3.
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NOTE 2. OTHER ACCOUNTING CHANGES
A. New Accounting Guidance Implemented
For the year ended June 30, 2021, the State of Montana early implemented the provisions of GASB
Statement No. 98, The Annual Comprehensive Financial Report (GASB 98). This Statement 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.
For the year ended June 30, 2021, the State of Montana implemented the provisions of GASB Statement
No. 92, Omnibus 2020 (GASB 92). The objectives of this Statement are to enhance comparability in
accounting and financial reporting and to improve the consistency of authoritative literature by addressing
practice issues that have been identified during implementation and application of certain GASB
Statements. This Statement addresses a variety of topics of which the following have implications for the
State of Montana: (1) Under GASB 10, amounts recoverable from reinsurances for paid claims were
required to be accounted for as assets and expense reductions. Under GASB 92, paid claims and claim
adjustments expenses may be reported as reductions of expenses but are not required to be. (2) The
terms derivative and derivatives in National Council on Governmental Accounting and GASB
pronouncements should be replaced with derivative instrument and derivative instruments, respectively.
For the calendar year ended December 31, 2020, Montana State Fund (MSF), a discretely presented
component unit of the State, early implemented the provisions of GASB Statement No. 87, Leases.
Accordingly, for all of its long-term leases, MSF will no longer be reporting leases as an operating lease
and has created an intangible right-to-use lease asset and lease liability. The assets are amortized over
the term of the lease, while the liabilities are reduced as scheduled lease payments are made. The State
did not early implement GASB 87 for the year ended June 30, 2021.
B. Adjustments to Beginning Net Position
Prior period adjustments reported in the accompanying financial statements relate to corrections of errors
from prior periods. The most significant of these adjustments affected the governmental activities and
related to long-term liability and natural resource expenditure understatement in the amount of $61.0
million.
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NOTE 3. CASH/CASH EQUIVALENTS AND INVESTMENTS
This note details the following asset classifications (in thousands):
Cash/cash equivalents $ 6,678,033
Equity in pooled investments $ 17,142,801
Investments $ 3,865,333
Carrying amounts for the bank balance for cash deposits and fair values for the State's cash equivalents
and investments are presented in Tables 1 through 4.
A. General
Outside of statutory requirements, the State does not maintain a statewide risk policy for cash/cash
equivalents or investments held outside of the Montana Board of Investments (BOI). The investment risk
policy for State cash/cash equivalents and investments including the BOI Municipal Finance Programs
Fund deposits and investments managed by BOI, have been detailed below.
(1) BOI was created by the Legislature to manage the Unified Investment Program (UIP) established by
the State Constitution. The UIP is comprised of involuntary participating state funds, including pensions,
trusts, insurance, operating funds, and by statute voluntarily participating local government funds. BOI
manages the UIP pursuant to the “Prudent Expert Principle” mandated by State law, which requires an
investment manager to:
1. discharge the duties with the care, skill, prudence, and diligence, under the circumstances then
prevailing, that a prudent person acting in a like capacity with the same resources and familiar
with like matters exercises in the conduct of an enterprise of a like character with like aims;
2. diversify the holdings of each fund within the UIP to minimize the risk of loss and to maximize the
rate of return unless, under the circumstances, it is clearly prudent not to do so; and
3. discharge the duties solely in the interest of and for the benefit of the funds forming the UIP.
BOI is not registered with the U.S. Securities and Exchange Commission as an investment company.
BOI’s investment program is governed by Investment Policy Statements (IPS) approved by BOI.
State agencies and local government entities may participate in one or more pools. By investing in pools,
participants are provided broad diversification. State agencies may also have direct fixed income, equity,
or loan investments. These investments are combined and reported as Separately Managed Accounts
(SMA). Currently, only the nine retirement funds that participate in the Consolidated Asset Pension Pool
(CAPP), the Defined Contribution Disability Plan, and the Montana State Fund (MSF) may invest in public
corporate capital stock. Neither State law nor the State Constitution place restrictions on retirement fund
investments. BOI approves a separate IPS for each pool and SMA participant, which provides BOI staff
with a broad strategic framework under which the investments are managed. The IPS’s also reflect BOI
approved asset allocation ranges.
By statute, local government entities can voluntarily invest in the Short Term Investment Pool (STIP). By
statute, with a qualifying event, local government entities may also voluntarily invest in the Trust Funds
Investment Pool (TFIP).
Separately issued investment pool financial statements may be obtained by contacting:
Montana Board of Investments
2401 Colonial Drive, 3rd Floor
PO Box 200126
Helena, MT 59620-0126
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BOI’s separately issued UIP financial statements include the activity for MSF within SMA on a June 30,
2021, basis. MSF, a discretely presented component of the State, by statute, prepares separately issued
financial statements on a calendar year-end basis. Due to the difference in reporting periods, there will be
a variance between the note disclosures and the financial statements for cash/cash equivalents and
investments.
(a) Cash and cash equivalents consist of funds deposited by individual funds in the State Treasurer’s
pooled cash account, cash deposits in checking accounts, cash invested in STIP, cash held by trustees,
undeposited cash held by individual state agencies, and investments categorized as cash equivalents.
Cash deposited with the State Treasurer’s pooled cash account is invested by BOI in short-term securities
and other investments. Because these funds are immediately available to the individual funds, their
investment in the pooled cash account is reported as a cash equivalent. BOI also manages STIP, which
provides individual State agencies and local governments an opportunity to invest excess cash in a pool
that is managed to preserve principal while providing 24-hour liquidity. Because these pooled funds are
invested in short-term, highly liquid investments, the individual fund investments in the STIP are reported
as a cash equivalent.
(b) Investment securities are reported by investment portfolio and type in Table 2 – Cash Equivalents,
Table 3 –Equity in Pooled Investments, and Table 4 – Investments. Unrealized gains and losses are
included as a component of investment income. Unrealized gains and losses are computed based on
changes in the fair value of investments held from the beginning of the year, but unsold at the fiscal year-
end. The net change in fair value of investments also consists of the realized gains or losses. Interest
income is recognized when earned. Dividend income is recorded on the ex-dividend date.
Investments reported at fair value are on a trade date basis. Quoted market prices, when available, have
been used to value investments. The fair values for securities that have no quoted market price represent
estimated fair value. Alternative investment securities are valued using the most recent estimates of fair
value from the investment managers. Fair value measurements are reviewed monthly, and third-party
valuations are reviewed for reasonableness and compliance with approved price source authorization
policy. BOI categorizes its fair value measurements within the fair value hierarchy established by
generally accepted accounting principles as follows:
Level 1 – Quoted prices for identical assets or liabilities in active markets.
Level 2 – Prices determined using inputs, other than quoted prices included within Level 1, that are
observable for an asset or liability, either directly or indirectly. These inputs can include quoted prices for
similar assets or liabilities in active or inactive markets, or market-corroborated inputs.
Level 3 – Prices are determined using unobservable inputs, which generally results in BOI using the best
information available and may include BOI’s own data.
(c) Security Lending - BOI is authorized by law to lend its securities and has contracted with the
custodial bank, to lend BOI’s securities to broker-dealers and other entities with a simultaneous
agreement to return the collateral for the same securities in the future. The custodial bank is required to
maintain collateral equal to 102% of the fair value of domestic securities and 105% of the fair value of
international securities while the securities are on loan. On any day, including June 30th, the markets may
move in a positive or negative direction resulting in under or over collateralization. The custodial bank
compensates for market movement by recalculating on the following business day to meet the
collateralization requirements. BOI and the custodial bank split the earnings 80% and 20% respectively,
on securities lending activities. BOI retains all rights and risks of ownership during the loan period. The
custodial bank indemnifies BOI’s credit risk exposure to the borrowers.
During fiscal year 2021, the custodial bank loaned BOI’s public securities and received as collateral
either: U.S. dollar cash; U.S. government and government sponsored agency securities; U.S. corporate
debt securities and structured securities rated AA- or Aa3 or higher; sovereign debt securities of the
Group of Ten nations; and debt securities issued by certain supranational agencies. The custodial bank
does not have the ability to sell collateral securities unless the borrower defaults.
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BOI imposed no restrictions on the amount of securities available to lend during fiscal year 2021.
However, STIP assets are currently not available for securities lending. There were no failures by any
borrowers to return loaned securities or pay distributions thereon during the period that resulted in a
declaration and notice of default of the borrower. There were no losses during fiscal year 2021 resulting
from a borrower default. As of June 30, 2021, no securities were recalled and not yet returned.
The cash collateral received for each loan was invested, together with the cash collateral of other
qualified plan lenders, in an investment fund, the Navigator Securities Lending Government Money
Market (Navigator) portfolio.
BOI and the borrowers maintain the right to terminate all securities lending transactions on notice.
Because the securities lending transactions were terminable at will, their duration did not generally match
the duration of the investments made with the cash collateral received from the borrower. The Navigator
portfolio had an average duration of 24 days and the average weighted final maturity of 93 days.
(d) Investment Pools and Separately Managed Accounts (SMA) are described in the following
paragraphs.
Consolidated Asset Pension Pool (CAPP)
The CAPP IPS contain prescribed asset allocation ranges among the allowable asset classes and is
subject to change as BOI adopts modifications. BOI annually affirms or revises the asset allocation
ranges for the retirement plans. The CAPP IPS also contains investment objectives and guidelines for
each underlying asset class, with a purpose of providing diversified exposure within the asset class in a
prudent and cost-effective manner.
Due to a longer-term focus, CAPP's asset classes differ from other classes that are allowable for other
programs. CAPP's underlying asset classes are as follows:
• Domestic Equities
• International Equities
• Private Investments
• Real Assets
• Real Estate
• Core Fixed Income
• Non-Core Fixed Income
• Cash
The CAPP IPS is the only IPS that allows for investments that can be held in non-U.S. securities in a
foreign currency. Per the CAPP IPS, the Core Fixed Income Asset Class and Non-Core Fixed Income
Asset Class sections have maximum restrictions that can be held. Currency exposures may be hedged, in
a defensive manner, at the discretion of the active managers to preserve the U.S. dollar value of
investments made.
As part of the asset allocation approved by BOI in November 2020, the Natural Resource PAC was
renamed the Real Assets PAC. The Private Investments PAC holds Private Equity and Private Credit
portfolios. The Real Assets PAC holds Commodities, Infrastructure, and Treasury Inflation Protected
Securities (TIPS) portfolios. These changes were effective in January 2021. The changes did not have an
impact on the underlying values of the securities within CAPP.
Trust Funds Investment Pool (TFIP)
The TFIP IPS provides for a 10% portfolio limit for non-core fixed income securities. TFIP invests primarily
in investment grade, U.S. dollar denominated fixed income securities. The portfolio has high yield and
core real estate exposure.
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Short Term Investment Pool (STIP)
The STIP IPS limits the concentration of credit risk exposure by limiting portfolio investment types to 3.0%
in any issuer except for U.S. Treasury and U.S. Agency securities as well as any repurchase agreements
with a financial institution.
STIP invests primarily in short-term, high quality, fixed income securities with a maximum maturity of 397
days or less. Variable securities shall have a maximum maturity of 2 years. STIP shall maintain a dollar-
weighted average portfolio maturity of 120 days or less. STIP is managed to preserve principal while
providing 24-hour liquidity for state agency and local government participants.
BOI maintains a reserve account that may be used to offset losses within the STIP portfolio. The STIP
reserve for the year ending June 30, 2021, is detailed as follows:
STIP Reserve Activity
(in thousands)
Beginning STIP Reserve $ 52,564
Additions
Investment Earnings:
Net increase (decrease) on fair value of investments 21
Interest income 12
Transfer of daily STIP income 760
Recoveries from write-offs 855
Total investment earnings 1,648
Total STIP Reserve activity 1,648
Ending STIP Reserve $ 54,212
Separately Managed Accounts (SMA)
SMA invests primarily in investment grade, U.S. dollar denominated, fixed income securities and custodial
bank interest bearing demand deposit account. However, one participant portfolio has exposure to core
real estate and high yield fixed income. The SMA portfolio also includes Veteran’s Home Loan mortgages
(VHLM) and loans funded by the Coal Severance Tax Trust Fund, as authorized by statute.
(e) Investment Risk Disclosures are described in the following paragraphs, with more detail provided in
later sections.
Custodial Credit Risk (Cash and Cash Equivalents and Investments Held at Custodial Bank)
Custodial credit risk is the risk that, in the event of the failure of the counterparty to a transaction, BOI will
not be able to recover the value of the investment or collateral securities that are in the possession of an
outside party. Per policy, BOI’s custodial bank must be rated at a minimum at the 6th highest investment
grade rating by at least two Nationally Recognized Statistical Rating Organizations (NRSROs) on an
annual basis.
As of June 30, 2021, all the public securities as well as securities held by the separate public equity
account managers were registered in the nominee name for BOI and held in the possession of BOI’s
custodial bank. The equity index funds, securities held at the State’s depository bank, real estate,
mortgage, and loan investments were purchased and recorded in BOI’s name. Commingled fund
investments are registered in the name of BOI. Therefore, BOI is not subject to custodial credit risk.
Concentration of Credit Risk
Concentration of credit risk is the risk of loss attributable to the magnitude of any single investment per
issuer name. Investments explicitly guaranteed by the U.S. government are excluded from the
concentration of credit risk requirements. Concentration of credit risk is addressed within all IPS as set by
BOI.
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Credit Risk
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligation.
Except for U.S. Government securities, the pools and SMA fixed income instruments have credit risk as
measured by NRSRO ratings. Credit risk is contemplated for each individual portfolio in the IPS. Credit
risk is managed by constraining portfolio purchases around investment grade NRSRO ratings as
appropriate. The U.S. Government guarantees its securities directly or indirectly. Obligations of the U.S.
Government or obligations explicitly guaranteed by the U.S. Government are not considered to have
credit risk and do not require disclosure of credit risk.
As of June 30, 2021, the CAPP's cash equivalents position held at its custodial bank, $163.1 million was
held in unrated money market funds.
As a matter of STIP investment policy, BOI can only purchase securities from a pre-approved “Approved
Issuer” list. By STIP policy, permitted money market investments include only SEC registered 2a-7
Institutional Money Market Funds that are considered “U.S. Treasury” or “U.S. Government” money
market mutual funds according to the SEC regulations or short-term investment vehicle available through
the custodial bank. As of June 30, 2021, all the STIP money market investments were in U.S.
Governmental money markets and $166.0 million was held on deposit in a short-term investment vehicle
available through the custodial bank.
Interest Rate Risk
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an
investment. BOI uses effective duration as a measure of interest rate risk for all fixed income portfolios.
CAPP, TFIP, and SMA at fair value investments are categorized to disclose credit and interest rate risk for
fixed income securities. Credit risk is disclosed using the weighted credit quality rating by investment type.
Interest rate risk is disclosed using the weighted effective duration. NRSRO provides the credit ratings.
According to the STIP investment policy, “The STIP portfolio will minimize interest rate risk by:
1. structuring the investment portfolio so securities mature to meet cash requirements for ongoing
operations thereby normally avoiding the need to sell securities on the open market prior to
maturity;
2. maintaining a dollar-weighted average portfolio maturity (WAM) of 120 days or less (for this
purpose, the date to the next coupon reset date will be used for all floating or variable rate
securities); and
3. STIP will maintain a reserve account.”
CAPP, TFIP, STIP, and SMA may hold fixed and variable rate securities. Interest payments on variable
securities are based on an underlying reference rate, for example, Secured Overnight Financing Rate
(SOFR).
STIP investments at fair value are categorized to disclose credit risk and weighted average maturity
(WAM). Credit risk reflects the weighted security quality rating by investment type as of the June 30 report
date. Although the STIP investments have been rated by investment security type, STIP, as an external
investment pool, has not been rated. STIP interest rate risk is determined using the WAM method. The
WAM measure expresses investment time horizons (the time when investments are due or reset and
payable in days, months, or years) weighted to reflect the dollar size of the individual investments within
an investment type. Inclusive of cash and cash equivalents, the WAM averages 115 days for the portfolio.
Based on their short weighted average maturity and the relative immaterial difference from their cost to
fair value, BOI determined the cash equivalents have little discernible interest rate risk.
Foreign Currency Risk
Foreign currency risk is the risk that changes in exchange rates will adversely affect the fair value of an
investment. BOI's foreign currency exposure by denomination and investment type are reported, in U.S.
dollars, at fair value and is limited to CAPP.
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Other Policy Considerations
For other risk, BOI approves both the IPS and benchmark used for each portfolio. Per the CAPP IPS, the
Core Fixed average duration will be maintained in a range within 20% of the benchmark duration. The
Core Fixed Income PAC and Non-Core Fixed Income PAC average duration will be maintained in a range
within 25% of the index duration. Per the TFIP IPS, the average duration will be maintained in a range
within 20% of the benchmark duration. Interest rate risk for SMA is contemplated in each individual IPS
and is managed by limiting the maturity of individual securities and/or matching liabilities to maturities per
estimated cash flows.
Fair Value of Derivative Instruments
The UIP invests in, currency forward contracts, credit default swaps, interest rate swaps, index futures
(long and short duration), rights and warrants which are classified as investment derivative instruments.
The investment derivative instruments decreased in fair value for the fiscal year ended June 30, 2021, by
$4.0 million. The derivative instruments had a fair value of $420.0 thousand as of June 30, 2021. The
notional amount of the contracts was $52.0 million.
Investment Derivative Instruments as of June 30, 2021
(in thousands)
Changes in
Fair Value
Included in
Investment Notional
Security Investment Type Classification Income Fair Value Amount
Credit default swaps bought Investment $ 17 $ (31) $ 2,215
Credit default swaps written Investment 283 258 10,180
Currency Forward Contracts Investment (58) 84 39,051
Index Futures Short Investment 64 — (2,600)
Index Futures Long Investment 3,602 — 3
Receive fixed interest rate swaps Investment 10 10 3,126
Rights Investment 15 40 1
Warrants Investment 45 59 19
Totals $ 3,978 $ 420 $ 51,995
Counterparty Credit Risk - Derivative Instruments
Counterparty credit risk is the risk that the counterparty will not fulfill its obligations. The maximum amount
of loss to BOI in case of default of all counterparties as of June 30, 2021 was $577.0 thousand. The
following table reflects BOI's applicable counter party credit ratings and risk concentrations.
Risk Concentrations - Credit Default Swaps as of June 30, 2021
Percentage of Moody's
Counterparty Name Net Exposure S&P Rating Fitch Rating Rating
Goldman Sachs ICE 45% BBB+ A A2
Barclays Bank PLC Wholesale 38% A A+ A1
BNP Paribas SA 16% A+ A+ Aa3
UBS LCH 1% A+ AA- Aa3
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(2) The BOI Municipal Finance Programs Fund deposits and investments are restricted by the bond
trust indentures to the following: government and agency obligations, certificates of deposits, repurchase
agreements, and investment agreements. The bond trust indenture addresses custodial credit risk,
concentration of credit risk, credit risk, interest rate, and credit quality risk, by detailing the permitted
investments. BOI's STIP IPS details custodial credit risk, concentration of credit risk, and credit risk.
Deposits and investments must be made with Montana banks or in the STIP administered by BOI.
Custodial Credit Risk – Custodial credit risk is the risk that, in the event of the failure of the counterparty
to a transaction, BOI will not be able to recover the value of the investment or collateral securities that are
in the possession of an outside party. Per policy, BOI’s custodial bank must be rated at a minimum, at the
6th largest investment grade rating by at least two Nationally Registered Statistical Ratings Organizations
(NRSROs) and is reviewed on an annual basis.
Cash – Custodial risk for cash is the risk that, in the event of the failure of the custodial financial
institution, the cash or collateral securities may not be recovered from an outside party. The
securities used as collateral are held by the Trustee in the name of BOI.
Investments – As of June 30, 2021, the Municipal Finance Programs securities were recorded by
the trustee in the name of BOI by specific account.
Concentration of Credit Risk - Concentration of credit risk is the risk of loss attributed to the magnitude of
any single investment per issuer name. The Municipal Finance Programs investments directly issued or
explicitly guaranteed by the U.S. government and investments in mutual funds are excluded from the
concentration of credit risk requirement. The STIP investment policy limits the concentration of credit risk
by limiting portfolio investment types to 3.0% in any issuer with the exception of U.S. Treasury and U.S.
Agency securities, as well as, any repurchase agreements with a financial institution. As of June 30, 2021,
STIP concentration risk was within the policy as set by BOI.
Credit Risk - Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its
obligation. The Municipal Finance Programs U.S. government direct-backed securities, consisting of U.S.
Treasury notes and bills, are guaranteed directly by the U.S. government. Obligations of the U.S.
government or obligations explicitly guaranteed by the U.S. government are not considered to have credit
risk and do not require disclosure of credit quality. Permitted investments, as described in the indenture,
include, “Either (i) long term obligations of such bank, trust company or association are rated in one of the
three highest investment category of the Standard & Poor’s Corporation or Moody’s Investor Service Inc.,
which investment category shall not be less than the prevailing rate on the bonds or (ii) the deposits are
continuously secured as to principal, but only to the extent not insured by the Bank Insurance Fund or the
Savings Association Insurance Fund, or any successor to either, of the Federal Deposit Insurance
Corporation (FDIC).”
BOI’s STIP IPS specifies that STIP securities have a minimum of two credit ratings as provided by
nationally recognized statistical rating organizations, to assist in the monitoring and management of credit
risk. The purchase of STIP securities other than U.S. government or U.S. agency obligations is restricted
to those who are pre-approved. Although the STIP investments have been rated by investment security
type, STIP, as an external investment pool, has not been rated.
Interest Rate Risk - Interest rate risk is the risk that changes in interest rates will adversely affect the fair
value of an investment. Permitted investments, as described in the Indenture, details the allowable
investments, including those in STIP. STIP interest rate risk is determined using the WAM method.
According to the STIP IPS, “The STIP portfolio will minimize interest rate risk by:
1. structuring the investment portfolio so securities mature to meet cash requirements for ongoing
operations, thereby normally avoiding the need to sell securities on the open market prior to
maturity;
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2. maintaining a dollar-weighted average portfolio maturity (WAM) of 120 days or less (for this
purpose, the date to the next coupon reset date will be used for all floating or variable rate
securities); and
3. STIP will maintain a reserve account.”
The Municipal Finance Program investments are categorized to disclose credit and interest rate risk as of
June 30, 2021. Credit risk is disclosed using the weighted credit quality rating by investment type. Interest
rate risk is disclosed using weighted effective duration as calculated by BOI. The credit quality ratings
have been calculated, excluding non-rated investment types. Both the credit quality ratings and duration
have been calculated excluding cash equivalents, as BOI determined that these securities did not contain
these risk elements. There were no derivative transactions during the 2021 fiscal year for investments
held by the trustee.
B. Cash/Cash Equivalents
(1) Cash Deposits – The State requires collateralization based on the average daily bank balance in the
depository bank holding the main state bank account. For other depository banks, state statutes require
collateralization at 50.0% of the bank balance. The cash deposits amount includes both primary
government and component unit deposits.
Table 1 – Cash Deposit Amounts
(in thousands)
Carrying
Amount
Cash held by State/State's agent $ 69,951
Uninsured and uncollateralized cash 4,274
Undeposited cash 2,062
Cash in U.S. Treasury 396,818
Cash in MSU component units 8,893
Cash in UM component units 16,445
Less: outstanding warrants (23,187)
$ 475,256
As of June 30, 2021, the carrying amount of deposits for component units was $217.7 million, as included in Table 1.
(2) Cash Equivalents – consists of cash in the State Treasury invested by individual funds in the Short-
term Investment Pool (STIP), the State Treasurer’s pooled cash account, and in identifiable securities and
investments considered to be cash equivalents. Cash equivalents, generally, are short-term, highly liquid
investments with original maturities of three months or less that are measured at cost. Cash equivalents
may be under the control of BOI or other agencies, as allowed by law.
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Table 2 - Cash Equivalents
(in thousands)
Fair
Value
Treasuries (1) $ 789,021
Corporate commercial paper (2) 913,481
(2)
Corporate notes 250,494
Certificates of deposit (2) 405,071
Agency or government related (2)
724,008
Money market fund unrated 214,805
Cash and cash equivalents (2) 3,234,299
Less: STIP Adjustments (3) (328,402)
Total cash equivalents $ 6,202,777
(1) A portion is also included in the Investments Measured at Fair Value and NAV table.
(2) Also included in the Investments Measured at Fair Value and NAV table.
(3) Includes adjustments for STIP Reserve, STIP included in pooled investments, and holding classification differences.
As of June 30, 2021, local governments had invested $1.9 billion, and component units of the State of Montana had invested $413.3
million in STIP.
STIP Cash Equivalent Credit Quality Ratings as of
June 30, 2021
(in thousands)
Total Cash
Equivalents Credit Quality Rating
Agency or government related $ 182,211 A-1+
Asset backed commercial paper 2,303,761 A-1+
Corporate commercial paper 531,325 A-1+
Certificates of deposit 51,002 A-1+
Interest Bearing Demand Deposit Account (IBDDA) 166,000 NR
Total cash equivalents $ 3,234,299
STIP
Credit Quality Rating and Weighted Average of Maturity as of
June 30, 2021
(in thousands)
Total Fixed
Income Credit
Investments Quality
Security Investment Type at Fair Value Rating WAM (Days)
Treasuries $ 789,021 A-1+ 99
Agency or government related 724,008 A-1+ 87
Corporate:
Commercial paper 913,481 A-1+ 153
Notes 250,494 A-1 111
Certificates of deposit 405,071 A-1 142
Total STIP fixed income investments at fair value $ 3,082,075
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C. Equity in Pooled Investments
These securities consist of investments held by BOI in pooled investment funds. The Consolidated Asset
Pension Pool (CAPP) and Trust Funds Investment Pool (TFIP) were created to allow qualifying funds to
participate in diversified investment pools. Purchases are subject to the statutorily mandated “Prudent
Expert Principle” (see Table 3 – Equity in Pooled Investments).
Table 3 – Equity in Pooled Investments
(in thousands)
Fair Value (1)
CAPP:
Consolidated asset pension pool $ 14,387,290
TFIP:
Trust funds investment pool 2,742,329
Total pooled investments 17,129,619
Pool adjustments (net) 13,182
Total equity in pooled investments $ 17,142,801
(1)
Includes cash/cash equivalents and investments.
As of June 30, 2021, the fair value of the underlying securities on loan was $700.3 million. Collateral provided for the securities on
loan totaled $715.2 million, consisting of $133.0 million in cash and $582.2 million in securities.
As of June 30, 2021, local governments invested $13.0 million in TFIP.
State of Montana investments are categorized below to disclose credit and interest rate risk as of June
30, 2021, as required for applicable pools.
Credit Quality Rating and Effective Duration as of June 30, 2021
Fair Value (in thousands)
Total Fixed
Income Effective
Investments Credit Quality Duration
Security Investment Type CAPP TFIP SMA at Fair Value Ratings Range (Years)
Treasuries $ 763,348 $ 382,471 $ 303,140 $ 1,448,959 AAA 4.30-9.36
Agency or Government Related 260,341 127,004 79,046 466,391 A to AAA 2.57-6.79
Asset-Backed Securities 93,892 59,885 37,243 191,020 AAA 1.38-2.59
Mortgage-Backed Securities:
Noncommercial 484,595 506,382 229,237 1,220,214 AAA 3.20-4.42
Commercial 135,266 131,495 30,830 297,591 AAA 3.79-6.26
Corporate:
Financial 454,371 307,952 221,401 983,724 BBB+ to A- 3.50-4.33
Industrial 817,833 669,766 341,299 1,828,898 BB to BBB+ 4.35-5.07
Industrial (Unrated) 697 264 — 961 NR 0.09
Utility 45,849 12,147 9,935 67,931 BB+ to BBB- 2.96-5.86
Total fixed income investments at fair value $ 3,056,192 $ 2,197,366 $ 1,252,131 $ 6,505,689
State of Montana investments are measured at fair value and categorized within the fair value hierarchy
established by GASB Statement No. 72 – Fair Value Measurement and Application, as defined below.
Fixed income and equity investments classified in Level 1 of the fair value hierarchy are valued using
prices quoted in active markets for those securities. Fixed income investments classified in Level 2 of the
fair value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities
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based on the securities’ relationship to benchmark quoted prices. Residential Mortgages classified in
Level 3 of the fair value hierarchy are present value adjusted. Direct real estate classified in Level 3 of the
fair value hierarchy are based on the latest appraised value. In years with no updated appraisal the
Montana Department of Revenue calculated growth rate is used to determine the adjusted value. The
direct real estate was last appraised in fiscal year 2020. Investments measured at cost are included to
account for all investments within each pool and SMA. These assets represent cash equivalents and
Montana Mortgages and Loans.
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Each of the investment pools and SMA has the following fair value measurements as of June 30, 2021:
Investments Measured at Fair Value
(in thousands)
Fair Value Measurements Using
Quoted prices in
Active Markets for Significant Other Significant
Identical Assets Observable Inputs Unobservable
June 30, 2021 (Level 1) (Level 2) (Level 3)
Investments by fair value level
Fixed income investments:
Treasuries $ 2,237,980 $ 2,237,980 $ — $ —
Agency or Government Related 1,190,399 — 1,190,399 —
Asset Backed Securities 191,020 — 191,020 —
Mortgage Backed Securities:
Noncommercial 1,220,214 — 1,220,214 —
Commercial 297,591 — 297,591 —
Corporate:
Commercial Paper 913,481 — 913,481 —
Commercial Notes 250,494 — 250,494 —
Certificates of Deposit 405,071 — 405,071 —
Financial 983,724 — 983,724 —
Industrial 1,828,898 — 1,828,898 —
Industrial (Unrated) 961 — 961 —
Utility 67,931 — 67,931 —
Equity investments 5,064,422 5,064,422 — —
International equity investments 2,498,920 2,498,920 — —
Direct Real Estate 21,104 — — 21,104
Residential Mortgages 1,601 — — 1,601
Investment derivative instruments 420 — 420 —
Total investments by fair value level 17,174,231 9,801,322 7,350,204 22,705
Investments measured at the net asset value (NAV)
Private Investments 2,063,108
Core Real Estate 780,811
Non-Core Real Estate 742,686
Real Assets 341,822
Real Estate High Income Fund 208,135
Total investments measured at NAV 4,136,562
Total investments measured at fair value 21,310,793
Investments at cost
Cash and cash equivalents held at custodial bank 3,421,675
SMA Montana Mortgages and Loans 192,235
Total investments not categorized 3,613,910
Total investments $ 24,924,703
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The investments measured at NAV for the year ended June 30, 2021, are detailed below:
Investments Measured at NAV (in thousands)
Redemption
Unfunded Frequency (If Redemption
Fair Value Commitments Currently Eligible) Notice Period
Private Investments $ 2,063,108 $ 1,005,805
Core Real Estate 780,811 — Monthly, quarterly 45-90 days
Non-Core Real Estate 742,686 789,773
Real Assets 341,822 340,045
Real Estate High Income Fund 208,135 — Daily 1-3 days
Total investments measured at the NAV $ 4,136,562 $ 2,135,623
STIP and $1.8 billion of SMA are included, and also reported in Tables 2 and 4, respectively.
Private Investments – This type includes investments in limited partnerships. Typically, the types of
partnership strategies included in this portfolio: venture capital, growth equity, buyouts, special situations,
mezzanine, and distressed debt. These investments are considered long-term. Redemptions are
restricted over the life of the partnership. During the life of the partnerships, distributions are received as
underlying partnership investments are realized. It is expected that the underlying assets of the funds will
be liquidated over 10 years. It is probable all the investments in this type will be sold at an amount
different from the NAV per share (or its equivalent) of the BOI’s ownership interest in partners’ capital.
Core Real Estate – This type includes funds that invest primarily in core real estate, which makes equity
investments in operating and substantially leased institutional quality real estate in traditional property
types (apartments, office, retail, industrial and hotel) via commingled funds. The primary investment
objectives of these core real estate funds are to invest in real estate that will generate income from
predictable sources of revenue and not to realize gains on the underlying assets. This investment type
receives distributions of generated income and occasionally through the liquidation of the underlying
assets of the fund. The fair values of the investments in this category have been determined using the
NAV per share (or its equivalent) of the BOI’s ownership interest in the partners’ capital. Redemption of
these investments is restricted based on the availability of cash flow arising from investment transactions,
sales, and other fund operations occurring in the ordinary course of business. Therefore, requested
redemptions from a fund will be redeemed as funds become available.
Non-Core Real Estate – This type includes private partnership funds that primarily invest in value added
and opportunistic real estate funds. These funds assume more risk than the core real estate funds to
achieve a greater return on investment. Returns are driven both by current income and by expected
capital appreciation. This investment type receives distributions of generated income and occasionally
through the liquidation of the underlying assets of the fund. It is expected that the underlying assets of the
funds will be liquidated over 7 to 10 years. The fair values of the investments in this category have been
determined using the NAV per share (or its equivalent) of the BOI’s ownership interest in the fund.
Real Assets – This type includes private partnership funds that primarily invest in timber, energy, broad
natural resource funds, and infrastructure. This investment type receives distributions of generated
income and occasionally through the liquidation of the underlying assets of the fund. It is expected that
the underlying assets of the funds will be liquidated over 10 to 20 years. The fair values of the
investments in this category have been determined using the NAV per share (or its equivalent) of the
BOI’s ownership interest in the partners’ capital.
Real Estate High Income Fund – This type consists of predominantly of real estate related instruments
with an emphasis in U.S. corporate credits, whether in the form of bonds or loans that are rated below
investment grade. These assets carry a higher risk of default than investment grade securities and
accordingly provide a higher level of income or yield commensurate with that risk. The fair values of the
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investments of this type have been determined using the NAV per share (or its equivalent) of the
investments.
As of the June 30, 2021, exchange date, BOI’s foreign currency exposure by denomination and
investment type are reported, in U.S. dollars, at fair value and is limited to CAPP. The following table
excludes the foreign investments denominated in U.S. dollars for the American Depository Receipts
(ADRs), sovereign debt and commingled index funds.
Foreign Currency Exposure by Country
Investment Type in U.S. Dollar Equivalent
(in thousands)
Foreign Currency Fixed International Private
Denomination Currency Income Equities Investments Real Estate Real Assets
Australian Dollar $ 41 $ — $ 27,640 $ — $ — $ —
Brazilian Real 131 2,115 25,098 — — —
Canadian Dollar 26 — 51,764 — — —
Chilean Peso 18 1,016 — — — —
Columbian Peso 87 4,492 — — — —
Danish Krone 11 — 21,364 — — —
Egyptian Pound — 3,716 — — — —
EMU – Euro 74 4,841 220,307 18,423 543 8,771
Hong Kong Dollar 122 — 94,526 — — —
Hungarian Forint 14 1,212 2,107 — — —
Indonesian Rupiah — 5,927 3,159 — — —
Japanese Yen 409 — 147,321 — — —
Malaysian Ringgit 37 2,223 987 — — —
Mexican Peso 198 5,163 16,231 — — —
New Israeli Sheqel 4 — 5,526 — — —
New Taiwan Dollar 22 — 36,553 — — —
New Zealand Dollar — — 1,030 — — —
Norwegian Krone — — 6,513 — — —
Philippine Peso 1 — 670 — — —
Polish Zloty 4 — 2,539 — — —
Pound Sterling — — 82,808 — — —
Russian Ruble 97 4,952 — — — —
Singapore Dollar 51 — 8,525 — — —
SOL 23 2,282 — — — —
South African Rand 143 5,694 7,934 — — —
South Korean Won 15 — 48,716 — — —
Swedish Krona — — 50,794 — — —
Swiss Franc 40 — 48,500 — — —
Thailand Baht 5 — 2,046 — — —
Turkish Lira 4 — 152 — — —
Yuan Renminbi 13 10 13,867 — — —
Total cash and
securities $ 1,590 $ 43,643 $ 926,677 $ 18,423 $ 543 $ 8,771
Investments in alternative equity are usually made via limited partnership agreements that involve many
limited partners and a general partner who is responsible for all investment decisions. The limited
partners make an original commitment, after which capital is called as needed by the general partner to
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make investments. These agreements will usually last for a minimum of 10 years. The following table
shows the remaining BOI commitments to alternative equity managers.
Commitments to Fund Managers
(in thousands)
Original Commitment
Pension Asset Class Commitment Remaining
Private Investments $ 3,429,448 $ 1,005,805
Real Assets 748,526 340,045
Real Estate 2,686,429 789,773
Total $ 6,864,403 $ 2,135,623
D. Investments
BOI was created by the State Legislature to manage the Unified Investment Program established by the
State Constitution. Long-term investments are administered by the following agencies, as allowed by
state law, Section 17-6-201, MCA:
Long-term Investments
Percent
Department Administered
Board of Investments 45.14 %
Universities 19.78
MPERA (Montana Public Employee Retirement Administration) 27.74
College Savings Plan 5.06
Montana Board of Housing 1.22
Other (1) 1.06
Total 100.00 %
(1)
Other consists of the Commissioner of Higher Education, the Department of Administration, the Department of Commerce,
the Department of Natural Resources and Conservation, the Department of Revenue, and State Auditor.
BOI must employ the "Prudent Expert Rule" in managing the State's investment portfolio. Investments are
presented at fair value. Investment fair values for publicly traded securities are determined primarily by
reference to market prices supplied to BOI's custodial bank or trustee. State investments are categorized
within the fair value hierarchy established by GASB Statement No. 72.
The PERS Defined Contribution Retirement Plan (DCRP) and the Deferred Compensation Plan’s
Montana Fixed Fund is a stable value investment option administered and monitored by the Public
Employees’ Retirement Board (PERB) with input from the Employee Investment Advisory Committee and
the investment consultant. The PERB has established an investment policy for the Montana Fixed Fund
to identify objectives, investment guidelines, and outline the responsibility of the outside vendors. This
investment policy includes stable value manager Pacific Investment Management Company LLC
(PIMCO), custodial bank State Street Bank and Trust Company (State Street), and third-party synthetic
Guaranteed Interest Contract (GIC) providers, Transamerica Life Insurance Company (Transamerica),
Prudential Insurance Company of America (Prudential), and Voya Retirement Insurance and Annuity
Company (Voya). All money invested in the Montana Fixed Fund of the PERS-DCRP and Deferred
Compensation Plan is held in a Pooled Trust. The third party record keeper, Empower Retirement™,
tracks and reports the daily trading and valuations of all investment options, including the assets held by
the individual mutual fund companies.
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Table 4 – Investments
(in thousands)
Quoted prices in
Significant
Active Markets for Significant Other Unobservable
Fair Value Identical Assets Observable Inputs Inputs
June 30, 2021 (Level 1) (Level 2) (Level 3)
Primary government
Investments by fair value level
Agency/Government Related (1) $ 6,191 $ — $ 6,191 $ —
Government Securities 7,523 7,523 — —
Stocks 10,580 10,580 — —
Other 327 — 327 —
Total investments at fair value 24,621 18,103 6,518 —
Investments at cost
Montana Mortgages and Loans (3) 184,756
Total investments at cost 184,756
Total primary government 209,377
Component units/fiduciary funds
Investments by fair value level
Treasuries (1) 138,256 138,256 — —
Agency/Government Related (1) 239,613 — 239,613 —
Asset-Backed Securities (1) 37,243 — 37,243 —
Mortgage-Backed Securities (1) 229,237 — 229,237 —
Commercial Mortgage-Backed Securities (1) 30,830 — 30,830 —
Financial-Corporate (1) 227,593 — 227,593 —
Industrial-Corporate (1) 335,107 — 335,107 —
Utility-Corporate (1) 9,936 — 9,936 —
Equity Investments 208,084 208,084 — —
529 College Savings Plan 195,544 — 195,544 —
VEBA 11,902 11,902 — —
State Auditor 10,544 5,930 4,614 —
MSU Investments (2) 1 — 1 —
MSU Component Unit Investments (2) 251,313 241,024 5,760 4,529
UM Component Unit Investments (2) 91,479 56,240 22,760 12,479
Board of Housing (2) 41,647 10,836 30,811 —
Total investments at fair value 2,058,329 672,272 1,369,049 17,008
Investments at net asset value (NAV)
Core Real Estate 98,139
Deferred Compensation (2) 662,866
Defined Contribution (2) 409,279
MSU Component Unit Investments (2) 98,249
UM Component Unit Investments (2) 307,568
UM Other Investments (2) 430
UM Interest in Split Interest (2) 5,072
Total investments at NAV 1,581,603
Investments at cost
MSU Component Unit Investments (2) 10,519
Board of Housing (2) 5,505
Total Investments at Cost 16,024
Total component unit/fiduciary investments 3,655,956
Total investments $ 3,865,333
Securities lending investment pool $ 15,613
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(1) The credit quality rating and duration are included in the above sections for the rated investments.
(2) For more detail, refer to component unit separately issued financial statements.
(3) The total for Montana Mortgages and Loans does not include Coal Severance Tax loans, which was included in SMA financial statements. This
amount of $7.5 million is considered advances to other funds/component units and amounts due from component units in the Coal Tax Severance column
of the governmental fund financial statements.
As of June 30, 2021, the fair value of the investments on loan was $82.6 million. Collateral provided for the investments on loan totaled $84.2 million
consisting of $15.6 million in cash and $68.6 million in securities.
$1.8 billion of SMA is included and also reported in the Investments Measured at Fair Value and NAV table.
Municipal Finance Programs – Rated Securities
Credit Quality Rating and Effective Duration as of
June 30, 2021
(in thousands)
Credit
Fair Quality Effective
Security Investment Type Value Rating (1) Duration (1)
Short-term investments
U.S. Treasury obligations $ 7,523 AA+ 0.26
Total investments $ 7,523
(1)
Credit Quality Rating and Effective Duration are weighted.
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NOTE 4. DISAGGREGATION OF ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE, DEFERRED
OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES
Accounts receivable, accounts payable, deferred outflows of resources, and deferred inflows of resources
on the Statement of Net Position as of June 30, 2021, consisted of the following (in thousands):
A. Accounts Receivables
Governmental Activities
Coal Federal Internal Nonmajor
Severance Special General Service Land Governmental State Special
Tax Revenue Fund Funds Grant Funds Revenue
Charges for services/fines/forfeitures $ — $ 5,643 $ 2,847 $ 312 $ — $ — $ 14,331
Contributions/premiums — — — 10,358 — — 1,847
Grants/contracts/donations — — — — — — 698
Investment income 3,495 — 214 114 2,399 7,366 3,350
License and permits — — — — — — 9,923
Other receivables — 1,971 8,668 529 — 1,139 136
Medicaid Drug Rebate Program — 67,498 — — — — —
Reimbursements/overpayments — 310 19,143 — — — 13,722
Taxes 8,268 — 398,178 — — 2,307 83,667
Total receivables 11,763 75,422 429,050 11,313 2,399 10,812 127,674
Less: allowance for doubtful accounts (733) (2,536) (114,472) (529) — (270) (19,855)
Receivables, net $ 11,030 $ 72,886 $ 314,578 $ 10,784 $ 2,399 $ 10,542 $ 107,819
Business-type Activities
Municipal
Finance Nonmajor Unemployment
Programs Enterprise Funds Insurance
Charges for services $ — $ 40,138 $ —
Contributions/premiums — 955 5,634
Loans/investment income 7,319 15 —
Other receivables — 64 —
Reimbursements/overpayments — — 28,466
Total receivables 7,319 41,172 34,100
Less: allowance for doubtful accounts — (643) (7,289)
Receivables, net $ 7,319 $ 40,529 $ 26,811
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B. Deferred Outflows of Resources
Governmental Activities
Nonmajor
Federal Special Internal Service Governmental State Special
Revenue General Fund Funds Funds Revenue
OPEB deferred outflows (1) $ — $ 100,973 $ 6,461 $ — $ —
(2)
Pension deferred outflows 21 907,580 15,303 — 113
Refunding deferred outflows — — — 1,483 —
Total deferred outflows $ 21 $ 1,008,553 $ 21,764 $ 1,483 $ 113
Business-type Activities
Municipal
Finance Nonmajor
Programs Enterprise Funds
OPEB deferred outflows (1) $ 35 $ 1,835
Pension deferred outflows (2) 95 3,827
Total deferred outflows $ 130 $ 5,662
(1)
Further detail regarding OPEB related deferred outflows of resources is provided in Note 7.
(2)
Further detail regarding pension related deferred outflows of resources is provided in Note 6.
C. Accounts Payables
Governmental Activities
Nonmajor
Federal Special Internal Service Governmental State Special
Revenue General Fund Funds Funds Land Grant Revenue
Accrued interest $ 6 $ 425 $ 25 $ 1,986 $ — $ 54
Payroll 9,952 18,266 3,609 4 — 17,567
Tax refunds — 226,626 — — — —
Vendors/individuals 220,713 79,307 12,521 5,938 5 152,167
Payables, net $ 230,671 $ 324,624 $ 16,155 $ 7,928 $ 5 $ 169,788
Business-type Activities
Municipal
Finance Nonmajor Unemployment
Programs Enterprise Funds Insurance
Accrued interest $ 45 $ 3 $ —
Payroll 22 826 —
Vendors/individuals 4 17,451 46,953
Payables, net $ 71 $ 18,280 $ 46,953
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D. Deferred Inflows of Resources
Governmental Activities
Nonmajor
Federal Special Internal Service Governmental State Special
Revenue General Fund Funds Funds Revenue
OPEB deferred inflows (1) $ — $ 29,331 $ 1,876 $ — $ —
Pension deferred inflows (2) 24 125,729 5,068 — 34
Refunding deferred inflows — — — 1,737 —
Total deferred inflows $ 24 $ 155,060 $ 6,944 $ 1,737 $ 34
Business-type Activities
Municipal
Finance Nonmajor
Programs Enterprise Funds
OPEB deferred inflows (1) $ 10 $ 565
Pension deferred inflows (2) 29 1,695
Total deferred inflows $ 39 $ 2,260
(1)
Further detail regarding OPEB related deferred inflows of resources is provided in Note 7.
(2)
Further detail regarding pension related deferred inflows of resources is provided in Note 6.
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NOTE 5. CAPITAL ASSETS
Changes in capital asset balances for the fiscal year ended June 30, 2021, are reflected in the following
table (in thousands):
Beginning Ending
Governmental Activities Balance Increases (1) Decreases (1) Balance
Capital assets not being depreciated:
Land $ 753,496 $ 23,648 $ (662) $ 776,482
Construction work in progress 1,222,251 503,529 (353,159) 1,372,621
Easements 236,872 18,555 — 255,427
Museum and art 86,078 87 — 86,165
Other 30,196 272 — 30,468
Total capital assets not being depreciated 2,328,893 546,091 (353,821) 2,521,163
Capital assets being depreciated:
Infrastructure 5,758,967 500,676 (390,283) 5,869,360
Land improvements 76,995 1,707 (42) 78,660
Buildings/improvements 618,180 19,653 (296) 637,537
Equipment 430,618 34,174 (13,175) 451,617
Easements - amortized 1,304 — (73) 1,231
Other 5,776 355 — 6,131
Total capital assets being depreciated 6,891,840 556,565 (403,869) 7,044,536
Less accumulated depreciation for:
Infrastructure (1,706,463) (216,956) 147,112 (1,776,307)
Land improvements (36,658) (3,547) 11 (40,194)
Buildings/improvements (417,897) (19,862) 193 (437,566)
Equipment (285,717) (24,460) 10,011 (300,166)
Other (4,562) (283) — (4,845)
Total accumulated depreciation (2,451,297) (265,108) 157,327 (2,559,078)
Total capital assets being depreciated, net 4,440,543 291,457 (246,542) 4,485,458
Intangible assets 53,610 28,250 (21,446) 60,414
Governmental activities capital assets, net $ 6,823,046 $ 865,798 $ (621,809) $ 7,067,035
(1)
The increases and decreases noted above include adjustments related to prior periods and correction of errors.
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Beginning Ending
Business-type Activities Balance Increases (1) Decreases (1) Balance
Capital assets not being depreciated:
Land $ 800 $ — $ — $ 800
Construction work in progress 2,361 1,091 (2,149) 1,303
Other 3,770 110 (667) 3,213
Total capital assets not being depreciated 6,931 1,201 (2,816) 5,316
Capital assets being depreciated:
Infrastructure 1,175 — — 1,175
Land improvements 3,830 — — 3,830
Buildings/improvements 16,379 — — 16,379
Equipment 9,810 162 (126) 9,846
Total capital assets being depreciated 31,194 162 (126) 31,230
Less accumulated depreciation for:
Infrastructure (765) (18) — (783)
Land improvements (2,213) (149) — (2,362)
Buildings/improvements (7,116) (584) — (7,700)
Equipment (7,500) (368) 112 (7,756)
Total accumulated depreciation (17,594) (1,119) 112 (18,601)
Total capital assets being depreciated, net 13,600 (957) (14) 12,629
Intangible assets 1,521 2,484 (573) 3,432
Business-type activities capital assets, net $ 22,052 $ 2,728 $ (3,403) $ 21,377
(1)
The increases and decreases noted above include adjustments related to prior periods and corrections of errors.
Depreciation expense was charged to governmental functions as follows (in thousands):
Depreciation (2)
General government $ 9,013
Public safety 9,136
Transportation, including depreciation of the highway system maintained by the State 218,671
Health and human services 3,293
Education 178
Natural resources, including depreciation of the state's dams 10,567
Depreciation on capital assets held by the internal service funds 14,250
Total depreciation expense – Governmental Activities $ 265,108
Depreciation expense was charged to business-type activities as follows (in thousands):
Depreciation (2)
Liquor Stores $ 105
State Lottery 51
Prison Funds 390
West Yellowstone Airport 513
Other Enterprise Funds 60
Total depreciation expense – Business-type Activities $ 1,119
(2)
Depreciation expenses noted above include adjustments related to prior periods and correction of errors.
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NOTE 6. RETIREMENT PLANS
A. General
The funding policies for each plan provide for periodic employee, employer, and State nonemployer
contributions at rates specified by state law. An actuary determines the actuarial implications of the
funding requirement in an annual actuarial valuation. The actuarial method used to determine the
implications of the statutory funding level is the Entry Age Actuarial Cost Method, with both normal cost
and amortization of the unfunded actuarial liability determined as a level percentage of payroll expense.
Benefits are established by state law and can only be amended by the Legislature.
Montana State Fund (MSF), a discretely presented component unit of the State, by statute, prepares
separately issued financial statements on a calendar year-end basis. Due to the difference in the
reporting period, there will be a variance between the note disclosures and the financial statements for
some pension-related items.
Public Employees’ Retirement Board
The Public Employees’ Retirement Board (PERB) oversees eight defined benefit plans: Public
Employees’ Retirement System-Defined Benefit Retirement Plan (PERS-DBRP); Judges’ Retirement
System (JRS); Highway Patrol Officers’ Retirement System (HPORS); Sheriffs’ Retirement System (SRS);
Game Wardens’ and Peace Officers’ Retirement System (GWPORS); Municipal Police Officers’
Retirement System (MPORS); Firefighters’ Unified Retirement System (FURS); and Volunteer
Firefighters’ Compensation Act (VFCA). The PERB also oversees two defined contribution plans: Public
Employees’ Retirement System-Defined Contribution Retirement Plan (PERS-DCRP) and the 457(b)-
Deferred Compensation Plan (457(b) Plan). The PERB also oversees education funds related to the
pension plans. All of the benefit plans, defined benefit and defined contribution, are administered by the
Montana Public Employees’ Retirement Administration (MPERA). Separately issued financial statements
and actuarial reports can be obtained at 100 North Park, Suite 200, PO Box 200131, Helena, MT
59620-0131. The financial statements and the latest actuarial valuation may also be obtained here: http://
mpera.mt.gov/. The financial statements for the PERS-DBRP include activity for the defined benefit plan
and the associated education fund. The PERS-DCRP financial statements include activity for the defined
contribution plan and the associated education fund.
The PERB is an independent, seven-member board, appointed by the Governor. The members are
assigned five-year, staggered terms. The PERB consists of two members at large, two active defined
benefit public employees, one active defined contribution public employee, one member experienced in
investments, and one retired public employee. The PERB approves the annual operating budget,
developed by MPERA management, before the beginning of the fiscal year. As governed by statute, the
PERB’s defined benefit administrative expenses may not exceed 1.5% of the total defined benefit plan
retirement benefits paid. In addition, the PERB decides legislative policy and priorities, hires the executive
director, establishes the policies and procedures that govern operations at MPERA, and hears and rules
on appeal matters of disabilities, retirees, and members. PERB members do not receive compensation for
their service to the MPERA but are reimbursed for necessary expenses incurred while serving.
All defined benefit pension plans provide retirement, disability, and death benefits to the plan members
and their beneficiaries. The PERS-DCRP Disability OPEB Plan provides a defined benefit for disabled
members of the PERS-DCRP. Beneficiaries do not receive disability benefits but may attain retirement
benefits from the PERS-DCRP. A summary of the plan eligibility and benefits are found in the Summary of
Benefits sections throughout Note 6.
Teachers’ Retirement System
The Teachers’ Retirement System (TRS) is a defined benefit plan administered by the Teachers
Retirement Board (TRB). The plan prepares a publicly issued annual comprehensive financial report that
includes financial statements and required supplementary information for TRS. Separately issued
financial statements, actuarial valuations, and experience studies can be obtained at 100 N Park Avenue,
Suite 110, PO Box 200139, Helena, MT 59620-0139, or can be found online at https://trs.mt.gov/.
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The TRB consists of six members, all of whom are appointed by the Governor. Three TRB members must
be teaching professionals who, when appointed, are active members of TRS; at least one of them must
be an active classroom teacher. One TRB member must be a retired teacher who was a member of TRS
at the time of retirement. Two TRB members are appointed from the public at large. TRB members serve
staggered, five-year terms. Three TRB members constitute a quorum.
A summary of the number of participating employer and nonemployer contributing entities as of June 30,
2021, follows:
PERS- PERS-
Classification of Participant GWPORS DBRP DCRP SRS MPORS FURS VFCA TRS
Employer 7 553 340 57 34 27 220 363
Nonemployer
contributing entity — 1 — — 1 1 1 1
Total Participants 7 554 340 57 35 28 221 364
There are 647 State employees who are eligible to participate in defined benefit pension plans, other than
the plans listed above.
B. Summary of Significant Accounting Policies
The MPERA prepares its financial statements using fund accounting principles and the accrual basis of
accounting. The basis of accounting indicates the timing of transactions or events for recognition in the
financial statements. Plan member contributions, employer contributions, and related receivables are
recognized as revenues in the accounting period in which they are earned and become measurable,
pursuant to formal commitments and statutory requirements. Benefit payments and refunds/distributions
are recognized in the accounting period in which they are due and payable in accordance with the terms
of each plan. Administrative and other expenses, and the associated liabilities, are recognized in the
period the liability is incurred. Administrative expenses are financed through investment earnings on the
pension trust fund for the defined benefit plans. Interfund receivables and payables exist at year-end for
defined benefit administrative expenses that are accounted for within PERS-DBRP and allocated to the
other defined benefit plans at year-end. Costs specifically related to the computer system upgrades are
charged directly to the individual plans. The MPERA adheres to all applicable Governmental Accounting
Standards Board (GASB) statements.
The TRS prepares its financial statements using the accrual basis of accounting. For the purposes of
measuring the net pension liability, deferred inflows of resources, and deferred outflows of resources
related to pensions, pension expense, information about the fiduciary net position of the TRS, and
additions to/deductions from TRS’s fiduciary net position, the items have been determined on the same
accrual basis as they are reported by the TRS. For this purpose, plan contributions are recognized as of
employer payroll paid dates. Benefit payments and refunds are recognized when due and payable in
accordance with the benefit terms. Investments are reported at fair value. The TRS adheres to all
applicable GASB statements.
The pension trust fund financial statements presented in this report are prepared using the accrual basis
of accounting in the same manner as that described for the pension plan administrators above.
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C. Summary of All Public Employee Retirement Plans
A summary of classes of members in JRS, HPORS, GWPORS, PERS-DBRP, SRS, MPORS, FURS,
VFCA, TRS, PERS-DCRP, and 457-Deferred Compensation covered by benefit terms at June 30, 2021,
follows:
Multi-Employer
Type of Plan for Reporting Single-Employer Defined Multi-Employer Defined Benefit Defined
Purposes Benefit Contribution
HPORS PERS- MPORS PERS- 457(b)-
Plan Designation JRS GWPORS SRS FURS VFCA TRS
(1)
DBRP(2) (1)
DCRP DC
Classification of Member
Active 57 244 1,023 29,028 1,495 823 734 2,031 19,658 3,311 5,507
Inactive entitled to, but not yet
receiving, benefits or a
refund:
Vested 2 18 148 4,390 178 107 43 890 1,955 776 4,392
Non-vested 2 30 524 21,760 805 199 81 — 7,869 1,005 —
Inactive members and
beneficiaries currently
receiving benefits:
Service retirements(3) 68 343 407 23,742 752 857 661 1,525 16,315 152 —
Disability retirements — 3 2 127 30 24 13 1 182 10 —
(4)
Survivor benefits 5 10 11 534 23 29 18 6 488 — —
Total membership 134 648 2,115 79,581 3,283 2,039 1,550 4,453 46,467 5,254 9,899
(1)
Includes Deferred Retirement Option Plan (DROP) in the Active count.
(2)
The inactive non-vested count includes dormant accounts that were previously not counted.
(3)
Includes "Alternative Payees" and "Death After Retirement" benefit payments. As of Fiscal Year 2019, the TRS plan stopped reporting separate benefit
recipient categories.
(4)
Includes "Death Before Retirement" benefit payments.
The following table represents the aggregate proportional share of the pension amounts for all defined
benefit plans from the perspective of the State as the employer and/or nonemployer contributing entity for
primary government, discretely presented component units, and fiduciary component units reported as of
June 30, 2021, based on the actuarial valuation as of June 30, 2019 (amounts presented in thousands):
Aggregate Pension Amounts - All Defined Benefit Plans
Primary Government
Discretely
State as Presented Fiduciary
Total Component TOTAL
State as Nonemployer Component
Primary Units
Employer Contributing Government Units (1)
Entity
Net Pension Liabilities $ 1,483,274 $ 1,475,801 $ 2,959,075 $ 237,781 $ 1,921 $ 3,198,777
(Net Pension Assets) (36,545) — (36,545) — — (36,545)
Pension Deferred Outflows of Resources 510,946 415,994 926,940 83,633 452 1,011,025
Pension Deferred Inflows of Resources 86,501 46,078 132,579 13,216 114 145,909
Pension Expense or Nonemployer 246,824 258,238 505,062 50,850 344 556,256
Contributing Entity Grant Expense
(1)
MSF pension deferred outflows of resources difference of $936.9 thousand is due to MSF reporting on a calendar year-end basis on
financial statements with a 6-month subsequent contribution while a 12-month subsequent contribution is disclosed in Note 6.
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D. Defined Benefit Retirement Plans
The information below includes all defined benefit retirement plans administered by MPERA and TRS.
(1) Plan Descriptions and Funding Policies
Judges’ Retirement System – The JRS, administered by the MPERA, is a single-employer defined
benefit plan established in 1967 and governed by Title 19, chapters 2 & 5, MCA (Montana Code
Annotated). This plan provides retirement benefits for all Montana judges of the district courts, justices of
the Supreme Court, the Chief Water Judge, and the Associate Water Judge. Benefits are established by
state law and can only be amended by the Legislature. The JRS provides retirement, disability, and death
benefits to plan members and their beneficiaries. Benefits are based on eligibility, years of service, and
compensation. Member rights are vested after five years of service.
Summary of Benefits
Member’s current salary1 or highest average compensation (HAC)2
1
Hired prior to July 1, 1997, and non-Guaranteed Annual Benefit Adjustment (GABA) –
monthly compensation at time of retirement;
2
Hired on or after July 1, 1997, or electing GABA – HAC during any consecutive 36 months;
2
Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of
a member’s HAC.
Eligibility for benefit
Age 60, 5 years of membership service;
Any age with 5 years of membership service – involuntary termination, actuarially reduced.
Vesting
5 years of membership service.
Monthly benefit formula
3.33% of current salary1 (non-GABA) or HAC2 (GABA) per year of service credit for the first
15 years of service credit, plus 1.785% per year for each year after 15 years.
Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA – after the member has completed 12
full months of retirement, the member’s benefit increases by a maximum of 3.0% each
January, inclusive of all other adjustments to the member’s benefit.
Minimum benefit adjustment (non-GABA)
If hired prior to July 1, 1997, and member did not elect GABA – current salary of an active
member in same position is used in the calculation of the monthly benefit each time the
Legislature increases salaries for active judges.
Contributions to the Plan
Rates are specified by state law for periodic employee and employer contributions. The Legislature has
the authority to establish and amend contribution rates to the plan.
Member contributions to the system – Contributions are deducted from each member’s
salary and remitted by the participating employer. An individual account is established for
each member’s contributions and interest allocations until a retirement or refund request is
processed. Plan members are required to contribute 7.0% of the member’s monthly
compensation.
Employer contributions to the system – As the employer, the State is required to contribute
25.81% of a member’s compensation.
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Highway Patrol Officers’ Retirement System – The HPORS, administered by the MPERA, is a single-
employer defined benefit plan established on July 1, 1945, and governed by Title 19, chapters 2 & 6,
MCA. This plan provides retirement benefits to all members of the Montana Highway Patrol, including
supervisory personnel. Benefits are established by state law and can only be amended by the
Legislature. The HPORS provides retirement, disability, and death benefits to plan members and their
statutory beneficiaries. Benefits are based on eligibility, years of service, and highest average
compensation. Member rights for death and disability are vested immediately. All other member rights are
vested after 5 or 10 years of service.
Section 19-6-709, MCA provides eligible members retired prior to July 1, 1991, or their survivors, an
annual supplemental lump-sum payment distributed each September. This lump-sum payment is funded
by a statutory appropriation requested by the PERB from the General Fund. Factors impacting eligibility
include the number of years the recipient has received a service retirement or disability benefit, the
recipient’s age, and whether the recipient is employed in a position covered by a retirement system under
Title 19, MCA.
Deferred Retirement Option Plan (DROP)
Beginning October 1, 2015, eligible members of HPORS can participate in the DROP by filing a one-time
irrevocable election with the PERB. The DROP is governed by Title 19, Chapter 6, Part 10, MCA. A
member must have completed at least twenty years of membership service to be eligible. They may elect
to participate in the DROP for a minimum of one month and a maximum of 60 months and may only
participate in the DROP once. A participant remains a member of the HPORS, but will not receive
membership service or service credit in the system for the duration of the member’s DROP period. During
participation in the DROP, all mandatory employer contributions continue to the retirement system;
mandatory employee contributions are deposited to the member's DROP account. A monthly benefit is
calculated based on salary and years of service to date as of the beginning of the DROP period. The
monthly benefit is paid into the member’s DROP account until the end of the DROP period. At the end of
the DROP period, the participant may receive the balance of the DROP account in a lump-sum payment
or in a direct rollover to another eligible plan, as allowed by the Internal Revenue Service (IRS). If the
participant continues employment after the DROP period ends, they will again accrue membership
service and service credit. The DROP account cannot be distributed until employment is formally
terminated. As of June 30, 2021, the balance held by MPERA for HPORS DROP participants was
approximately $4.8 million.
Summary of Benefits
Member’s highest average compensation (HAC)
Hired prior to July 1, 2013 – HAC during any consecutive 36 months;
Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of
a member’s HAC.
Eligibility for benefit
20 years of membership service, regardless of age.
Early Retirement
Hired prior to July 1, 2013 – 5 years of membership service, actuarially reduced from age
60.
Hired on or after July 1, 2013 – 10 years of membership service, actuarially reduced from
age 60.
Second Retirement (applies to retirement system members who return on or after July 1,
2017, to active service covered by the system from which they retired):
a. If the member works more than 480 hours in a calendar year and accumulates
less than 5 years of service credit before terminating again, the member:
• is not awarded service credit for the period of reemployment;
• is refunded the accumulated contributions associated with the
period of reemployment;
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• starting the first month following termination of service receives
the same retirement benefit previously paid to the member; and
• does not accrue post-retirement benefit adjustments during the
term of reemployment but receives a GABA in January
immediately following the second retirement.
b. If the member works more than 480 hours in a calendar year and accumulates
at least 5 years of service credit before terminating again, the member:
• is awarded service credit for the period of reemployment;
• starting the first month following termination of service, receives:
◦ the same retirement benefit previously paid to the
member; and
◦ a second retirement benefit for the period of
reemployment calculated based on the laws in effect as
of the member's rehire date; and
• does not accrue post-retirement benefit adjustments during the
term of reemployment but receives a GABA:
◦ on the initial retirement benefit starting January
immediately following second retirement; and
◦ on the second retirement benefit starting in January after
receiving that benefit for at least 12 months
c. A member who returns to covered service is not eligible for a disability benefit.
Vesting
Hired prior to July 1, 2013 – 5 years of membership service.
Hired on or after July 1, 2013 – 10 years of membership service.
Monthly benefit formula
Retire prior to July 1, 2013 – 2.5% of HAC per year of service credit.
Retire on or after July 1, 2013 – 2.6% of HAC per year of service credit.
Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA – after the member has completed 12
full months of retirement, the member’s benefit increases by a maximum of 3.0% each
January, inclusive of all other adjustments to the member’s benefit.
Hired on or after July 1, 2013 – after the member has completed 36 full months of
retirement, the member’s benefit increase by a maximum of 1.5% each January, inclusive of
all other adjustments to the member’s benefit.
Minimum Monthly Benefit (non-GABA)
If hired prior to July 1, 1997, and member did not elect GABA – the minimum monthly
benefit is equal to 2% of the service credit multiplied by the current base compensation of a
probationary highway patrol officer. Any annual increase is limited to 5.0% over the current
benefit and may not exceed 60% of the current base salary of a probationary officer.
Contributions to the Plan
Rates are specified by state law for periodic employee and employer contributions. The Legislature has
the authority to establish and amend contribution rates to the plan.
Member contributions to the system – Contributions are deducted from each member’s
salary and remitted by participating employer.
Hired prior to July 1, 1997, and not electing GABA – Plan members are required to
contribute 13.00%.
Hired after June 30, 1997, and electing GABA – Plan members are required to contribute
13.05%.
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Employer contributions to the system – As the employer, the State is required to contribute
38.33% of a member’s compensation. The first 28.15% is payable from the same sources
used to pay a member’s compensation. The remaining amount, equal to 10.18%, is payable
from the General Fund through a statutory appropriation.
Game Wardens’ & Peace Officers’ Retirement System – The GWPORS, administered by the MPERA,
is a multi-employer, cost-sharing defined benefit plan established in 1963, and governed by Title 19,
chapters 2 & 8, MCA. This plan provides retirement benefits to all persons employed as a game warden,
warden supervisory personnel, or state peace officer. Benefits are established by state law and can only
be amended by the Legislature. The GWPORS provides retirement, disability, and death benefits to plan
members and their beneficiaries. Benefits are based on eligibility, years of service, and highest average
compensation.
The State of Montana and its discretely presented component units are the only employers who
participate in the GWPORS. Therefore, while the plan is considered to be a multi-employer, cost-sharing
defined benefit plan for actuarial valuation purposes, in accordance with GASB 68, the plan is treated as if
it were a single-employer defined benefit pension plan type for financial reporting.
Summary of Benefits
Member’s highest average compensation (HAC)
Hired prior to July 1, 2011 – highest average compensation during any consecutive 36
months;
Hired on or after July 1, 2011 – highest average compensation during any consecutive 60
months;
Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of
a member’s HAC.
Eligibility for benefit
Service Retirement
Age 50, 20 years of membership service.
Early Retirement (reduced benefit)
Age 55, vested members who terminate employment prior to 20 years of membership
service.
Vesting
5 years of membership service.
Monthly benefit formula
2.5% of HAC per year of service credit.
Guaranteed Annual Benefit Adjustment (GABA)
After the member has completed 12 full months of retirement, the member’s benefit
increases by the applicable percentage (provided below) each January, inclusive of all other
adjustments to the member’s benefit:
◦ 3.0% for members hired prior to July 1, 2007
◦ 1.5% for members hired on or after July 1, 2007
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Contributions to the Plan
Rates are specified by state law for periodic employee and employer contributions. The Legislature has
the authority to establish and amend contribution rates to the plan.
Member contributions to the system – Contributions are deducted from each member’s
salary and remitted by participating employers. Plan members are required to contribute
10.56% of member’s compensation.
Employer contributions to the system – State agency and university employers are required
to contribute 9.0% of a member’s compensation.
Public Employees’ Retirement System - Defined Benefit Retirement Plan – The PERS-DBRP,
administered by the MPERA, is a multiple-employer, cost-sharing plan established July 1, 1945, and
governed by Title 19, Chapters 2 & 3, MCA. This plan covers employees of the State and local
governments, and certain employees of the Montana University System and school districts.
All new members are initially members of the PERS-DBRP and have a 12-month window during which
they may choose to remain in the PERS-DBRP or join the Public Employees’ Retirement System-Defined
Contribution Retirement Plan (PERS-DCRP) by filing an irrevocable election. Members may not be
participants of both the defined contribution and defined benefit retirement plans. All new members from
the universities also have a third option to join the university system’s Montana University System-
Retirement Program (MUS-RP).
The PERS-DBRP provides retirement, disability, and death benefits to plan members and their
beneficiaries. Benefits are established by state law and can only be amended by the Legislature. Benefits
are based on eligibility, years of service, and highest average compensation.
Summary of Benefits
Member’s highest average compensation (HAC)
Hired prior to July 1, 2011 – HAC during any consecutive 36 months;
Hired on or after July 1, 2011 – HAC during any consecutive 60 months;
Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of
a member’s HAC.
Eligibility for benefit
Service retirement:
Hired prior to July 1, 2011 –
Age 60, 5 years of membership service;
Age 65, regardless of membership service; or
Any age, 30 years of membership service.
Hired on or after July 1, 2011 –
Age 65, 5 years of membership service;
Age 70, regardless of membership service.
Early retirement, actuarially reduced:
Hired prior to July 1, 2011 –
Age 50, 5 years of membership service; or
Any age, 25 years of membership service.
Hired on or after July 1, 2011 – Age 55, 5 years of membership service.
Second retirement (all require retuning to PERS-covered employment or PERS service):
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Retire before January 1, 2016, and accumulate less than 2 years’ additional service
credit or retire on or after January 1, 2016, and accumulate less than 5 years’
additional service credit:
• A refund of member’s contributions from second employment plus regular
interest (0.77%);
• No service credit for second employment;
• Start the same benefit amount the month following termination; and
• GABA starts again in the January immediately following second retirement
Retire before January 1, 2016, and accumulate at least 2 years of additional service
credit:
• A recalculated retirement benefit based on laws in effect at second
retirement; and
• GABA starts the January after receiving recalculated benefit for 12 months
Retire on or after January 1, 2016, and accumulate 5 or more years of additional
service credit:
• The same retirement benefit as prior to their return to service;
• A second retirement benefit for second period of service based on laws in
effect at second retirement;
• GABA starts on both benefits in the January after receiving the original and
new benefit for 12 months
Vesting
5 years of membership service
Monthly benefit formula
Members hired prior to July 1, 2011 –
Less than 25 years of membership service: 1.785% of HAC per year of service credit;
25 years of membership service or more: 2% of HAC per year of service credit.
Members hired on or after July 1, 2011 –
Less than 10 years of membership service: 1.5% of HAC per year of service credit;
10 years or more, but less than 30 years of membership service: 1.785% of HAC per
year of service credit;
30 years or more of membership service: 2% of HAC per year of service credit.
Guaranteed Annual Benefit Adjustment (GABA) – After the member has completed 12 full
months of retirement, the member’s benefit increases by the applicable percentage
(provided below) each January, inclusive of other adjustments to the member’s benefit:
• 3.0% for members hired prior to July 1, 2007
• 1.5% for members hired between July 1, 2007 and June 30, 2013
• Members hired on or after July 1, 2013
• 1.5% for each year PERS is funded at or above 90%;
• 1.5% is reduced by 0.1% for each 2% PERS is funded below 90%; and,
• 0% whenever the amortization period for PERS is 40 years or more.
Contributions to the Plan
Rates are specified by state law for periodic employee, employer, and nonemployer entity contributions.
The Legislature has the authority to establish and amend contribution rates to the plan.
Member contributions to the system: Contributions are deducted from each member’s
salary and remitted by participating Employers. Plan members are required to contribute
7.90% of member’s compensation. The 7.90% member contribution rate is temporary and
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will be decreased to 6.9% on January 1 following actuary valuation results that show the
amortization period has dropped below 25 years and would remain below 25 years following
the reduction of both the additional Employer and additional member contribution rates.
Employer contributions to the system
State and University System employers are required to contribute 8.87% of member
compensation.
Local government entities are required to contribution 8.77% of member compensation.
School district employers contributed 8.50% of member compensation.
Per the 2013 Legislative Session’s House Bill 454, section 4, effective July 1, 2013, PERS
employer contributions temporarily increased 1%. Beginning July 1, 2014, employer
contributions will increase an additional 0.1% a year over 10 years, through 2024. The
Employer additional contributions, including the 0.27% added in 2007 and 2009, terminates
on January 1 following actuary valuation results that show the amortization period of the
PERS-DBRP has dropped below 25 years and would remain below 25 years following the
reductions of both the additional employer and member contributions rates. As of January 1,
2021, the additional contributions will not be terminated.
Effective July 1, 2013, employers are required to make contributions on working retirees’
compensation. Member contributions for working retirees are not required.
The portion of employer contributions allocated to the Plan Choice Rate (PCR) are included
in the employer's reporting. The PCR was paid off effective March 2016 and the
contributions previously directed to the PCR are now directed to member accounts.
Non-Employer Entity Contributions
Special Funding
The State contributes 0.1% of member compensation on behalf of local government
entities.
The State contributes 0.37% of member compensation on behalf of school district
entities.
The State contributes a statutory appropriation from the General Fund. Funding
provided for the year ended June 30, 2021, totaled $34.0 million.
Sheriffs’ Retirement System – The SRS, administered by the MPERA, is a multiple-employer, cost-
sharing defined benefit plan established July 1, 1974, and governed by Title 19, chapters 2 & 7, MCA.
This plan provides retirement benefits to all Department of Justice criminal and gambling investigators
hired after July 1, 1993, all detention officers hired after July 1, 2005, and to all Montana sheriffs. Benefits
are established by state law and can only be amended by the Legislature. The SRS provides retirement,
disability, and death benefits to plan members and their beneficiaries. Benefits are based on eligibility,
years of service, and highest average compensation.
Summary of Benefits
Member’s highest average compensation (HAC)
Hired prior to July 1, 2011 – highest average compensation during any consecutive 36
months;
Hired on or after July 1, 2011 – highest average compensation during any consecutive 60
months.
Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of
a member’s HAC.
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Eligibility for benefit
Service Retirement: 20 years of membership service, regardless of age.
Early Retirement: Age 50, 5 years of membership service, actuarially reduced.
Second Retirement (applies to retirement system members re-employed in a SRS position
on or after July 1, 2017):
a. If the member works more than 480 hours in a calendar year and accumulates
less than 5 years of service credit before terminating again, the member:
• is not awarded service credit for the period of reemployment;
• is refunded the accumulated contributions associated with the
period of reemployment;
• starting the first month following termination of service receives
the same retirement benefit previously paid to the member; and
• does not accrue post-retirement benefit adjustments during the
term of reemployment but receives a GABA in January
immediately following the second retirement.
b. If the member works more than 480 hours in a calendar year and accumulates at
least 5 years of service credit before terminating again, the member:
• is awarded service credit for the period of reemployment;
• starting the first month following termination of service receives:
◦ the same retirement benefit previously paid to the
member; and
◦ a second retirement benefit for the period of
reemployment calculated based on the laws in effect as
of the member's rehire date; and
• does not accrue post-retirement benefit adjustments during the
term of reemployment but receives a GABA:
◦ on the initial retirement benefit starting in January
immediately following second retirement; and
◦ on the second retirement benefit starting in January after
receiving that benefit for at least 12 months
c. A member who returns to covered service is not eligible for a disability benefit.
Vesting
5 years of membership service
Monthly benefit formula
2.5% of HAC per year of service
Guaranteed Annual Benefit Adjustment (GABA)
After the member has completed 12 full months of retirement, the member’s benefit
increases by the applicable percentage (provided below) each January, inclusive of all other
adjustments to the member’s benefit.
◦ 3.0% for members hired prior to July 1, 2007
◦ 1.5% for members hired on or after July 1, 2007
Contributions to the Plan
Rates are specified by state law for periodic employee and employer contributions and are a percentage
of the member’s compensation. The Legislature has the authority to establish and amend contribution
rates to the plan.
Member contributions to the system – Contributions are deducted from each member’s
salary and remitted by participating employers. Plan members are required to contribute
10.495% of member’s compensation.
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Employer contributions to the system – The employers are required to contribute 13.115%
of member compensation. Employer contributions are required to be paid on working retiree
compensation. Member contributions are not required for working retirees.
Municipal Police Officers’ Retirement System – The MPORS, administered by the MPERA, is a
multiple-employer, cost-sharing defined benefit plan that was established in 1974 and is governed by Title
19, chapters 2 & 9, MCA. This plan covers all municipal police officers employed by first- and second-
class cities and other cities that adopt the plan. Benefits are established by state law and can only be
amended by the Legislature. The MPORS provides retirement, disability, and death benefits to plan
members and their beneficiaries. Benefits are based on eligibility, years of service, and final average
compensation.
Deferred Retirement Option Plan (DROP)
Beginning July 2002, eligible members of the MPORS can participate in the DROP by filing a one-time
irrevocable election with the PERB. The DROP is governed by Title 19, Chapter 9, Part 10, MCA. A
member must have completed at least twenty years of membership service to be eligible. They may elect
to participate in the DROP for a minimum of one month and a maximum of 60 months and may only
participate in the DROP once. A participant remains a member of the MPORS, but will not receive
membership service or service credit in the system for the duration of the member’s DROP period. During
participation in the DROP, all mandatory contributions continue to the retirement system. A monthly
benefit is calculated based on salary and years of service to the date of the beginning of the DROP
period. The monthly benefit is paid into the member’s DROP account until the end of the DROP period. At
the end of the DROP period, the participant may receive the balance of the DROP account in a lump-sum
payment or a direct rollover to another eligible plan, as allowed by the IRS. If the participant continues
employment after the DROP period ends, they will again accrue membership service and service credit.
The DROP account cannot be distributed until employment is formally terminated. As of June 30, 2021,
the balance held by MPERA for MPORS DROP participants was approximately $8.7 million.
The State is not an employer participant in the MPORS plan. However, because the PERB is a fiduciary
component unit of the State, this ACFR presents certain information to help ensure compliance with
GASB 67. In addition, the State provides nonemployer entity contributions classified as special funding in
accordance with GASB 68. Disclosures made in this financial report for MPORS are meant to reflect the
aforementioned relationships.
Summary of Benefits
Member’s final average compensation (FAC)
Hired prior to July 1, 1977 – average monthly compensation of final year of service;
Hired on or after July 1, 1977 – final average compensation (FAC) for last consecutive 36
months.
Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of
a member’s FAC.
Eligibility for benefit
Service Retirement: Age 50, with 5 years of membership service, or 20 years of
membership service, regardless of age.
Second Retirement: Age 50, reemployed in a MPORS position
Vesting
Death and disability rights are vested immediately.
5 years of membership service.
Monthly benefit formula
2.5% of FAC per year of service credit.
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Second retirement benefit formula for members re-employed in a MPORS position after July
1, 2017:
(1) If the member works more than 480 hours in a calendar year and accumulates
less than 5 years of service credit before terminating again, the member:
a. Is not awarded service credit for the period of reemployment;
b. Is refunded the accumulated contributions associated with the period of
reemployment;
c. Starting the first month following termination of service receives the same
retirement benefit previously paid to the member; and
d. Does not accrue post-retirement benefit adjustments during the term of
reemployment but receives a Guaranteed Annual Benefit Adjustment (GABA)
in January immediately following second retirement.
(2) If the member works more than 480 hours in a calendar year and accumulates
at least 5 years of service credit before terminating again, the member:
a. Is awarded service credit for the period of reemployment;
b. Starting the first month following termination of service receives:
i. The same retirement benefit previously paid to the member, and
ii. A second retirement benefit for the period of reemployment calculated
based on the laws in effect as of the member's rehire date; and
c. Does not accrue post-retirement benefit adjustments during the term of
reemployment but receives a GABA:
i. On the initial retirement benefit in January immediately following second
retirement, and
ii. On the second retirement benefit starting in January after receiving that
benefit for at least 12 months.
(3) A member who returns to covered service is not eligible for a disability benefit.
Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA – after the member has completed 12
full months of retirement, the member’s benefit increases by a maximum of 3% each
January, inclusive of all other adjustments to the member’s benefit.
Minimum benefit adjustment (non-GABA) If hired before July 1, 1997, and member did not
elect GABA – the monthly retirement, disability, or survivor’s benefit may not be less than
50% of the compensation of a newly confirmed officer of the employer where the member
was last employed.
Contributions to the Plan
Rates are specified by state law for periodic employee, employer, and nonemployer entity contributions.
The Legislature has the authority to establish and amend contribution rates to the plan.
Member contributions – Contribution rates are dependent upon the date of hire as a police
officer. Contributions are deducted from each member’s salary and remitted by the
participating Employer. For fiscal year 2021:
• If hired prior to July 1, 1975, member contributions as a percentage of salary are 5.80%
• If hired after June 30, 1975, and prior to July 1, 1979, member contributions as a
percentage of salary are 7.00%;
• If hired after June 30, 1979, and prior to July 1, 1997, member contributions as a
percentage of salary are 8.50%; and,
• If hired on or after July 1, 1997, and for members electing GABA, member contributions
as a percentage of salary are 9.00%.
Employer Contributions – Employers are required to contribute 14.41% of a member’s
compensation.
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Nonemployer Entity Contributions – The State contributes 29.37% of a member’s
compensation from the General Fund. These amounts are considered a special funding
situation in accordance with GASB 68.
Firefighters’ Unified Retirement System – The FURS, administered by the MPERA, is a multiple-
employer, cost-sharing defined benefit plan established in 1981, and governed by Title 19, chapters 2 &
13, MCA. This system provides retirement benefits to firefighters employed by first- and second-class
cities, other cities and rural fire district departments that adopt the plan, and to firefighters hired by the
Montana Air National Guard on or after October 1, 2001. Benefits are established by state law and can
only be amended by the Legislature. The FURS provides retirement, disability, and death benefits to plan
members and their beneficiaries. Benefits are based on eligibility, years of service, and compensation.
Summary of Benefits
Member’s compensation
Hired prior to July 1, 1981, and not electing GABA – highest monthly compensation (HMC);
Hired after June 30, 1981, and those electing GABA – highest average compensation (HAC)
during any consecutive 36 months.
Hired on or after July 1, 2013 – 110% annual cap on compensation considered as a part of
a member’s highest average compensation.
Part-time firefighter – 15% of regular compensation of a newly confirmed full-time firefighter.
Eligibility for benefit
Service retirement: 20 years of membership service, regardless of age.
Early Retirement: Age 50, 5 years of membership service.
Vesting
Death and disability rights are vested immediately
5 years of membership service.
Monthly benefit formula
Members hired prior to July 1, 1981, and not electing GABA are entitled to the greater of:
2.5% of HMC per year of service; or
• if less than 20 years of service – 2% of HMC for each year of service;
• if more than 20 years of service – 50% of the member’s HMC plus 2% of
the member’s HMC for each year of service over 20 years.
Members hired on or after July 1, 1981, and those electing GABA: 2.5% of HAC per year of
membership service.
Guaranteed Annual Benefit Adjustment (GABA)
Hired on or after July 1, 1997, or those electing GABA – after the member has completed 12
full months of retirement, the member’s benefit increases by a maximum of 3% each
January, inclusive of all other adjustments to the member’s benefit.
Minimum Benefit Adjustment (non-GABA)
If hired before July 1, 1997, and the member did not elect GABA, the monthly retirement,
disability, or survivor’s benefit may not be less than 50% of the compensation of a newly
confirmed active firefighter of the employer that last employed the member.
Contributions to the Plan
Rates are specified by state law for periodic employee, employer, and nonemployer entity contributions.
The Legislature has the authority to establish and amend contribution rates to the plan. Effective July 1,
2013, employer and state contributions are required to be paid on working retiree compensation. Member
contributions are not required for working retirees.
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Member contributions to the system – Contributions are deducted from each member’s
salary and remitted by the participating employer. For members:
Hired prior to July 1, 1997, and not electing GABA, member contributions as a
percentage of salary are 9.50%;
Hired on or after July 1, 1997, and electing GABA, member contributions as a
percentage of salary are 10.70%.
Employer contributions to the system – Employers are required to contribute 14.36% of
member’s compensation.
Nonemployer entity contributions to the system – The State contributes 32.61% of a
member’s compensation from the General Fund.
Volunteer Firefighters’ Compensation Act – The VFCA, administered by the MPERA, is a multiple-
employer, cost-sharing defined benefit plan that was established in 1965, and governed by Title 19,
chapter 17, MCA. All members are unpaid volunteers and the State is the only contributor to the plan.
Benefits are established by state law and can only be amended by the Legislature. The VFCA provides
pension, disability, and survivorship benefits for all eligible volunteer firefighters who are members of
qualified volunteer fire companies in unincorporated areas, towns or villages, and includes volunteer fire
departments, fire districts, and fire service areas under the laws of the State. Benefits are based on
eligibility and years of service. Member rights are vested after ten years of credited service. The VFCA
also provides limited benefits for death or injuries incurred in the line of duty. A member who chooses to
retire and draw a pension benefit may return to service with a volunteer fire department without loss of
benefits. However, a returning retired member may not be considered an active member accruing credit
for service.
Summary of Benefits
Eligibility for benefit
Age 55, 20 years of credited service;
Age 60, 10 years of credited service.
Effective July 1, 2011, members who retire on or after July 1, 2011, and have greater than
30 years of credited service will receive $7.50 per month for each additional year of credited
service over 30 years if the pension trust fund is actuarially sound, amortizing any unfunded
liabilities in 20 years or less. This determination will be made annually and a member’s
benefit will be capped at $250 a month (30 years of credited service) if the amortization
period grows to greater than 20 years.
Vesting
10 years of credited service.
Monthly benefit formula (effective January 1, 2016)
$8.75 per year of credited service up to 20 years;
$7.50 per year of credited service after 20 years
Contributions to the Plan
The State, as a nonemployer contributing entity, is the only contributor to the VFCA. Contributions are 5%
of fire insurance premium taxes collected on certain fire risks. This requires the plan to be treated as a
special funding situation in accordance with GASB 68. The State Auditor makes annual payments from
the General Fund to the VFCA fund. Rates are specified by state law for contributions to the VFCA plan.
The State legislature has the authority to establish and amend contribution rates to the plan.
Teachers’ Retirement System – The TRS is administered by the Teachers’ Retirement Board (TRB),
which is the governing body of a mandatory multiple-employer cost-sharing defined benefit pension plan
that provides retirement services to persons in Montana employed as teachers or professional staff of any
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public elementary or secondary school, community college, or unit of the university system. The TRS, as
an employer, does not participate in the plan and acts only as the administrator of the plan.
The TRB is the governing body of the TRS, and the TRS’s staff administer the TRS in conformity with the
laws set forth in Title 19, chapter 20, MCA, and administrative rules set forth in Title 2, chapter 44 of the
Administrative Rules of Montana.
Summary of Benefits
Through June 30, 2013, all members enrolled in TRS participated in a single-tiered plan ("Tier One").
Employees with a minimum of 25 years of service or who have reached age 60 with 5 years of service are
eligible to receive an annual retirement benefit equal to creditable service years divided by 60 times the
average final compensation. Final compensation is the average of the highest three consecutive years of
earned compensation. Benefits fully vest after 5 years of creditable service. Vested employees may retire
at or after age 50 and receive reduced retirement benefits. Benefits are established by state law and can
only be amended by the Legislature.
Beginning July 1, 2013, new members in TRS participate in a second benefit tier ("Tier Two"), which
differs from Tier One as follows:
• Tier Two uses a 5-year average final compensation (AFC) (as opposed to 3-year AFC in Tier
One)
• Tier Two provides for unreduced service retirement benefits at age 60 with 5 years of creditable
service or at age 55 with at least 30 years of creditable service (rather than at age 60 with 5 years
of service or at any age with creditable service in 25 years in Tier One)
• Tier Two provides for early retirement benefits with 5 years of creditable service at age 55 (rather
than age 50 in Tier One)
• Tier Two has one percent higher normal employee contribution rate (though a temporary 1%
supplemental employee contribution rate is also currently in place for Tier One members), and
• Tier Two provides for an enhanced benefit calculation—1.85% of the AFC multiplied by the years
of creditable service—for members retiring with at least 30 years of creditable service and at least
60 years of age (rather than 1.6667 x AFC x years of creditable service)
A guaranteed annual benefit adjustment (GABA) is payable on January 1 of each calendar year for each
retiree who has received at least 36 monthly retirement benefit payments prior to that date. The GABA is
applicable to both Tier One and Tier Two members. The GABA for Tier One members is 1.5% of the
benefit payable as of January 1. For Tier Two members, the GABA each year may vary from 0.5% to
1.5% based on the retirement system’s funding status and the period required to amortize any unfunded
accrued actuarial liability as determined in the prior actuarial valuation.
Contributions to the System
All active employees in the TRS, regardless of employer type, are required to provide a contribution equal
to 8.15% of their compensation.
All State and University employers are required to contribute 11.55% of compensation provided to an
active, non-reemployed member. All school districts and other employers are required to contribute 9.17%
of an active, non-reemployed, member's compensation to the System.
Section 19-20-605, MCA, requires each employer to contribute 9.85% of total compensation paid to all
reemployed TRS retirees employed in a TRS reportable position. Pursuant to Section 19-20-609, MCA,
this amount shall increase by 1.00% for fiscal year 2014 and increase by 0.10% each fiscal year through
2024 until the total employer contribution is equal to 11.85% of reemployed retiree compensation.
The TRS receives a portion of the total required statutory contributions directly from the State for all
employers. The employers are considered to be in a special funding situation, and the State is treated as
a nonemployer contributing entity in the TRS. The System receives 0.11% of earned compensation from
the General Fund for all TRS members. The TRS also receives 2.38% of earned compensation from the
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General Fund for TRS members employed at school districts, community colleges, educational
cooperatives, and counties in Montana. Finally, the State is also required to contribute $25.0 million in
perpetuity payable July 1 of each year. The Legislature has the authority to establish and amend
contribution rates to the plan.
(2) Actuarial Assumptions
For all plans administered by MPERA, the total pension liability used to calculate the net pension liability/
(asset) for each plan was determined by an actuarial valuation date indicated in the table below using the
following actuarial assumptions, applied to all periods included in the measurement, with update
procedures used to roll forward the total pension liability to June 30, 2020. For the TRS plan, the total
pension liability used to calculate the net pension liability as of June 30, 2020, is based on the results of
an actuarial valuation as of July 1, 2020. Therefore, no update procedures were used for TRS to roll
forward the total pension liability to the measurement date. The significant assumptions and other inputs
used to measure the total pension liability were the following:
PERS-
Plan JRS HPORS GWPORS SRS MPORS FURS VFCA TRS
DBRP
Administrator MPERA TRS
Valuation
June 30, 2019 July 1, 2020
Date
Actuarial
Experience May 2017 May 2018
Study
Inflation 2.40% 2.40 %
Total Wage 3.25% to 7.76% for
non-university
Increases, 3.50% to 3.50% to 3.50% to 3.50% to 3.50% to 3.50% to
3.50% N/A members
including 10.02% 10.02% 8.47% 10.02% 10.33% 10.02%
4.25% for university
inflation members
General
3.50% N/A 3.25 %
Wage Growth
0 to 4.51% for non-
Merit university members
None 0 to 6.30% 0 to 6.30% 0 to 4.80% 0 to 6.30% 0 to 6.60% 0 to 6.30% N/A
Increase 1.00% for university
members
Investment
7.34% 7.34 %
Return
Administrativ
$202.0
e Expense as 0.08% 0.18% 0.16% 0.30% 0.16% 0.15% 0.13% thousand 0.45 %
a % of Payroll
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Pre-7/1/2007
- 3.0%
7/1/2007
through
6/30/2013 -
1.5%
7/1/2013 -
(a) 1.5% for
each year if
PERS is
funded at or
Post- 7/1/1997 or above 90%; Tier One members -
7/1/1997 or elected Pre-7/1/2007 Pre-7/1/2007 7/1/1997 or 7/1/1997 or 1.5%
retirement (b) 1.5% is
elected GABA - - 3.0% - 3.0% elected elected Tier Two members -
Benefit reduced by GABA - GABA -
N/A
GABA – 3.0% 7/1/2007 - 7/1/2007 - equal to or greater
Increases 3.0% 7/1/2013 - 1.5% 0.1% for 1.5% 3.0% 3.0% than 0.5% but no
and GABA 1.5% each more than 1.5%
2% PERS is
funded
below 90%;
and,
(c) 0%
whenever
the
amortization
period is 40
years or
more
Post-
retirement Pre-7/1/2013
Benefit -
1 year 1 year 1 year 1 year 1 year 1 year 1 year N/A 3 years
Increases - 7/1/2013 -
Waiting 3 years
Period
Pre-7/1/1997
and did
not elect
GABA:
2% x service
Pre-7/1/1997 credits x
Post- Pre-7/1/1997
and did base salary Pre-7/1/1997
and did
retirement not elect of and did
not elect
Benefit probationary not elect
GABA: GABA -
officer. GABA -
Increases - benefits N/A N/A N/A 1/2 of N/A N/A
Limited to 1/2 of
Minimum increase monthly
5.0% over monthly
same salary of
Benefit current salary of
new
Adjustment as salary of benefit and new officer
firefighter
sitting judge. may
not exceed
60% of base
salary of
probationary
officer.
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Mortality among
contributing
members, service
retired members, and
beneficiaries are
based on RP-2000
Healthy Combined
Mortality Table
projected to 2022
adjusted for partial
credibility setback for
two years. The tables
include margins for
mortality
improvements which
Mortality assumptions among contributing members, terminated vested members, service retired members, and is expected to occur
beneficiaries are based on RP-2000 Combined Employee and Annuitant Mortality Tables projected to 2020 using in the future.
Mortality Scale BB, set back one year for males. Mortality among
Mortality assumptions among disabled retirees are based on RP-2000 Combined Employee and Annuitant Mortality disabled members
Tables. are based on
RP-2000 Disabled
Mortality Table for
Males, set back three
years, with mortality
improvements
projected by Scale
BB to 2022, and
RP-2000 Disabled
Mortality Table for
Females, set forward
two years, with
mortality
improvements
projected by Scale
BB to 2022.
Changes in actuarial assumptions and methods: For JRS, PERS-DBRP, SRS, MPORS, FURS, and
VFCA, the discount rate was lowered from 7.65% to 7.34%. For HPORS, the discount rate was lowered
from 7.65% to 4.43%. For GWPORS, the discount rate was lowered from 7.65% to 5.65%. For TRS, the
discount rate was lowered from 7.50% to 7.34%. For JRS, HPORS, GWPORS, PERS-DBRP, SRS,
MPORS, FURS, VFCA, the investment rate of return was lowered from 7.65% to 7.34%. For TRS, the
investment rate of return was lowered from 7.50% to 7.34%. For JRS, HPORS, GWPORS, PERS-DBRP,
SRS, MPORS, FURS, VFCA, the inflation rate was reduced from 2.75% to 2.40%. For TRS, the inflation
rate was reduced from 2.50% to 2.40%.
Changes in benefit terms: There have been no changes in benefit terms since the previous measurement
date, for JRS, HPORS, GWPORS, PERS-DBRP, SRS, MPORS, FURS, VFCA, and TRS.
Changes in proportionate share: Because the State is the single employer for JRS and HPORS, there
were no changes in proportion of the net pension assets for JRS plan and the net pension liability for
HPORS plan. Between the measurement date of the net pension liability (asset) and the State’s reporting
date, the investment rates of return of JRS and HPORS were substantially higher than the investment
rates of return assumption. Therefore, the State's net pension assets for JRS are expected to increase
and the State's net pension liability for HPORS are expected to decrease.
Changes in proportionate share: Between the measurement date of the collective net pension liability and
the State’s reporting date, the investment rate of return of GWPORS was substantially higher than the
investment rate of return assumption. Therefore, the State’s proportionate share of the collective net
pension liability as the State’s primary government employer, and the State’s discretely presented
component units are expected to change. The State still reports 100.0% GWPORS plan, and the total
plan net pension liability are expected to decrease.
A-95
Changes in proportionate share: Between the measurement date of the collective net pension liability and
the State’s reporting date, the investment rates of return of PERS-DBRP, SRS, MPORS, FURS, and TRS
plans were substantially higher than the investment rates of return assumption. Therefore, the State’s
proportionate share amounts of the collective net pension liability as the State’s employer and non-
employer contributing entity in applicable plans are expected to decrease.
Changes in proportionate share: Because the State is the only contributing entity, there were no changes
in proportion of the net pension liability for VFCA plan. The State reports 100.0% VFCA plan. Between the
measurement date of the collective net pension liability and the non-employer’s reporting date, the
investment rate of return of VFCA was substantially higher than the investment rate of return assumption.
Therefore, the State's non-employer proportionate share of the collective net pension liability is expected
to decrease.
(3) Discount Rate
The discount rate used to measure the total pension liability was 7.34% for JRS, 4.43% for HPORS,
5.65% for GWPORS, and 7.34% for SRS. The projection of cash flows used to determine the discount
rate assumed that contributions from participating plan members and employers will be made based on
the PERB’s funding policy, which establishes the contractually required rates under MCA. Based on those
assumptions, each pension plan’s fiduciary net position was projected to be adequate to make all the
projected future benefit payments of current plan members through the year 2106 for JRS, 2129 for
HPORS, 2120 for GWPORS, and 2121 for SRS. Therefore, the long-term expected rate of return on
pension plan investments was applied to all periods of projected benefit payments to determine the total
pension liability. A municipal bond rate was not incorporated in the discount rate for JRS and SRS. A
municipal bond rate of 2.19% was incorporated in the discount rate for HPORS and GWPORS.
The discount rate used to measure the total pension liability for PERS-DBRP, MPORS, and FURS was
7.34%. The projection of cash flows used to determine the discount rate assumed that contributions from
participating plan members, employers, and nonemployer contributing entity will be made based on the
PERB’s funding policy, which establishes the contractually required rates under MCA. Based on those
assumptions, each pension plan’s fiduciary net position was projected to be adequate to make all the
projected future benefit payments of current plan members through the year 2123 for PERS-DBRP, 2134
for MPORS, and 2133 for FURS. Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total pension
liability. A municipal bond rate was not incorporated in the discount rate.
The discount rate used for VFCA to measure the total pension liability was 7.34%. The projection of cash
flows used to determine the discount rate assumed that contributions from the nonemployer contributing
entity will be made based on the PERB’s funding policy, which establishes the contractually required rates
under MCA. Based on those assumptions, the VFCA’s fiduciary net position was projected to be adequate
to make all the projected future benefit payments of current plan members through the year 2112. A
municipal bond rate was not incorporated in the discount rate.
The discount rate used to measure the total pension liability for TRS was 7.34%. The projection of cash
flows used to determine the discount rate assumed that contributions from participating plan members,
employers, and nonemployer contributing entity will be made based on the TRB’s funding policy, which
establishes the contractually required rates under MCA. Based on those assumptions, the TRS’s fiduciary
net position was projected to be adequate to make all the projected future benefit payments of current
plan members through the year 2124. Therefore, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total pension
liability. A municipal bond rate was not incorporated in the discount rate.
A-96
(4) Target Allocations
The long-term expected return on pension plan assets is reviewed as part of the regular experience study
prepared for the JRS, HPORS, GWPORS, PERS-DBRP, SRS, MPORS, FURS, and VFCA plans
administered by MPERA. The most recent analysis of each plan, performed for the six-year period ended
June 30, 2016, is outlined in a report dated May 2017, and can be located on the MPERA website. The
assumed long-term expected return on pension plan assets is reviewed as part of the regular experience
studies prepared for the TRS. The most recent analysis, performed for the period covering fiscal years
2013 through 2017, is outlined in a report dated May 3, 2018. The long-term expected rate of return on
pension plan investments was determined by considering information from various sources, including
historical rates of return, rate of return assumptions adopted by similar public pension systems, and by
using a building-block method in which best-estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each major
asset class. These ranges were combined to produce the long-term expected rate of return by weighing
the expected future real rates of return by the target asset allocation percentage and by adding expected
inflation. The average long term capital market assumptions published in the Survey of Capital Market
Assumptions 2020 Edition by Horizon Actuarial Service, LLC, yield a median real return of 4.94%.
Assumed inflation is based on the intermediate inflation assumption of 2.40% in the 2020 OASDI Trustees
Report used by the Chief Actuary for Social Security to produce 75 year cost projections. Combining
these two results yields a nominal return of 7.34%. All the plans administered by MPERA and TRS have
the same target allocation and long-term expected real rate of return. The target allocation and best
estimates of the arithmetic real rates of return for each major asset class as of June 30, 2020, are
summarized in the table below:
Target Asset Long-term Expected
Asset Class Allocation Real Rate of Return
Domestic Equity 30.00% 6.19%
International Equity 16.00% 6.92%
Private Investments 14.00% 10.37%
Natural Resources 4.00% 3.43%
Real Estate 9.00% 5.74%
Core Fixed Income 20.00% 1.57%
Non-Core Fixed Income 5.00% 3.97%
Cash 2.00% 0.11%
Total 100.00%
A-97
(5) Change in Net Pension Liability (Asset)
A schedule of changes in the net pension liability (asset) is presented for each of the single-employer
defined benefit plans (amounts expressed in thousands). The date in the schedules is a measurement
date, which is one year earlier than the financial reporting date.
JRS
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balances at 6/30/2019 $ 65,319 $ 104,886 $ (39,567)
Service costs 1,748 — 1,748
Interest 4,842 — 4,842
Difference between expected and actual experience (262) — (262)
Changes of assumptions 1,912 — 1,912
Contributions – employer — 1,988 (1,988)
Contributions – member — 560 (560)
Net investment income — 2,827 (2,827)
Refunds of contributions — — —
Benefit payments (4,038) (4,038) —
Plan administrative expense — (157) 157
Other changes — — —
Net changes 4,202 1,180 3,022
Balances at 6/30/2020 $ 69,521 $ 106,066 $ (36,545)
HPORS
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability
Balances at 6/30/2019 $ 237,728 $ 152,778 $ 84,950
Service costs 3,337 — 3,337
Interest 17,688 — 17,688
Difference expected and actual experience (993) — (993)
Changes in assumptions 141,055 — 141,055
Contributions – employer — 6,003 (6,003)
Contributions – non-employer (State) — 226 (226)
Contributions – member — 2,170 (2,170)
Net investment income — 4,101 (4,101)
Refund of contributions (331) (331) —
Benefit payments (12,685) (12,685) —
Plan administrative expense — (163) 163
Other changes — (131) 131
Net changes 148,071 (810) 148,881
Balances at 6/30/2020 $ 385,799 $ 151,968 $ 233,831
A-98
GWPORS
State as Primary Government State’s Discretely Presented
Total State (Plan)
Employer Component Units
Plan Plan Plan
Total Net Total Net Total Net
Fiduciary Fiduciary Fiduciary
Pension Pension Pension Pension Pension Pension
Net Net Net
Liability Position Liability Liability Position Liability Liability Position Liability
Balances at 6/30/2019 $ 234,679 $ 196,044 $ 38,635 $ 12,334 $ 10,304 $ 2,030 $ 247,013 $ 206,348 $ 40,665
Service costs 7,622 — 7,622 407 — 407 8,029 — 8,029
Interest 17,595 — 17,595 940 — 940 18,535 — 18,535
Difference between expected
and actual experience (1,924) — (1,924) (103) — (103) (2,027) — (2,027)
Changes in assumptions 81,606 — 81,606 4,361 — 4,361 85,967 — 85,967
Contributions – employer — 4,622 (4,622) — 246 (246) — 4,868 (4,868)
Contributions – member — 5,509 (5,509) — 294 (294) — 5,803 (5,803)
Net investment income — 5,300 (5,300) — 283 (283) — 5,583 (5,583)
Refunds of contributions (1,139) (1,139) — (61) (61) — (1,200) (1,200) —
Benefit payments (7,829) (7,829) — (418) (418) — (8,247) (8,247) —
Plan administrative expense — (228) 228 — (13) 13 — (241) 241
Other changes (1) (200) (171) (29) 200 167 33 — (4) 4
Net changes 95,731 6,064 89,667 5,326 498 4,828 101,057 6,562 94,495
Balances at 6/30/2020 $ 330,410 $ 202,108 $ 128,302 $ 17,660 $ 10,802 $ 6,858 $ 348,070 $ 212,910 $ 135,160
(1)
The Changes in Net Pension Liability table is only provided at the system level. The ending balances and the components of the changes
are derived from the primary government's proportionate share of the total plan balances and the discretely presented component unit's
proportionate share of the total plan balances. Due to the change in proportionate share in each year, the other changes line item includes
the difference between the proportionate share of the balances and the preliminary calculated balances.
A-99
(6) Sensitivity Analysis
In accordance with GASB 68 regarding the disclosure of the sensitivity of the net pension liability/(asset)
to changes in the discount rate, the table below presents the net pension liability/(asset), of the plans
administered by MPERA and TRS, calculated using the discount rate of 7.34% for JRS, PERS-DBRP,
SRS, MPORS, FURS, VFCA, and TRS; 4.43% for HPORS; and 5.65% for GWPORS; as well as what the
net pension liability/(asset) would be if it were calculated using a discount rate that is 1.00% lower (6.34%
for JRS, PERS-DBRP, SRS, MPORS, FURS, VFCA, and TRS; 3.43% for HPORS, and 4.65% for
GWPORS) or 1.00% higher (8.34% for JRS, PERS-DBRP, SRS, MPORS, FURS, VFCA, and TRS; 5.43%
for HPORS, and 6.65% for GWPORS) than the current rate.
Sensitivity of the Plan Participating Employer and Nonemployer Contributing Entities
Net Pension Liability (Asset) to Changes in the Discount Rate
(amounts expressed in thousands)
Plan JRS HPORS GWPORS PERS-DBRP SRS MPORS FURS VFCA TRS
1.0% Decrease $ (29,733) $ 306,955 $ 184,487 $ 1,498,548 $ 9,226 $ — $ 6,020 $ — $ 30,499
State as
Primary Government
Current (36,545) 233,831 128,302 1,088,713 5,800 — 3,722 — 22,906
Employer
1.0% Increase (42,413) 177,819 83,222 744,453 2,998 — 1,876 — 16,553
1.0% Decrease — — — 516,210 — 233,100 171,222 13,962 1,094,843
State as
Current — — — 375,032 — 163,514 105,867 9,106 822,282
NER
1.0% Increase — — — 256,444 — 108,001 53,353 5,002 594,239
Discretely 1.0% Decrease — — 9,861 278,065 — — — — 38,488
Presented Current — — 6,858 202,017 — — — — 28,906
Component
Units 1.0% Increase — — 4,448 138,138 — — — — 20,890
1.0% Decrease — — — 2,644 — — — — —
Fiduciary
Component Current — — — 1,921 — — — — —
Units 1.0% Increase — — — 1,314 — — — — —
1.0% Decrease (29,733) 306,955 194,348 2,295,467 9,226 233,100 177,242 13,962 1,163,830
Total Current (36,545) 233,831 135,160 1,667,683 5,800 163,514 109,589 9,106 874,094
1.0% Increase $ (42,413) $ 177,819 $ 87,670 $ 1,140,349 $ 2,998 $ 108,001 $ 55,229 $ 5,002 $ 631,682
(7) Net Pension Liability (Asset), Pension Expense, and Deferred Outflows of Resources and
Deferred Inflows of Resources Related to Pensions
In accordance with GASB 68, the employer is required to recognize and report certain amounts
associated with its participation in the JRS, HPORS, and GWPORS, the plans the State participates in as
a single-employer. GASB 68 became effective June 30, 2015, and includes requirements for participant to
record and report its net pension liability (NPL) or net pension asset (NPA), pension expense, deferred
inflows of resources, and deferred outflows of resources associated with pensions. In accordance with
GASB 68, employers and the nonemployer contributing entities are required to recognize and report
certain amounts associated with their participation in the PERS-DBRP, SRS, MPORS, FURS, VFCA, and
TRS. GASB 68 became effective June 30, 2015, and includes requirements for participants to record and
report their proportionate share of the collective net pension liability, pension expense, deferred inflows of
resources, and deferred outflows of resources associated with pensions. The proportionate shares were
determined based on contributions made to the plan by employers and the nonemployer contributing
entity in a special funding situation, when a plan has the nonemployer contributing entity, during the
measurement period July 1, 2019, through June 30, 2020, relative to the total contributions received from
all participating employers and the nonemployer contributing entity. Due to the existence of the special
funding situation in the PERS-DBRP, FURS, MPORS, VFCA, and TRS, the State is required to report a
proportionate share of the collective net pension liability that is associated with the non-State employers
in these plans, respectively.
A-100
Net Pension Liability (Asset): The following presents the state's net pension liability as of June 30,
2021 (amounts presented in thousands):
Net Pension Net Pension Percent of Percent of Change in
Liability Liability
Plan as of Measurement Date NPL/NPA as NPL/NPA as Percent of
(Asset) as of (Asset) as of of 6/30/2019 of 6/30/2020 NPL/NPA
6/30/2019 6/30/2020
JRS Primary government $ (39,567) $ (36,545) 100 % 100 % —%
HPORS Primary government 84,950 233,831 100 % 100 % —%
Primary government 38,635 128,302 95.007027 % 94.926189 % (0.080838)%
GWPORS Discretely presented component units 2,030 6,858 4.992973 % 5.073811 % 0.080838 %
State of Montana totals 40,665 135,160 100 % 100 % —%
Collective Net Pension Liability: The following presents the state's proportionate share of the
collective net pension liability as of June 30, 2021 (amounts presented in thousands).
Percent of Percent of Change in
Net Pension Net Pension Collective Collective Percent of
Plan as of Measurement Date Liability as of Liability as of NPL as of NPL as of Collective
6/30/2019 (1) 6/30/2020 6/30/2019 (1) 6/30/2020 NPL
Primary government $ 866,431 $ 1,088,713 41.440995 % 41.267072 % (0.173923)%
Discretely presented component units 156,990 202,017 7.517256 % 7.657348 % 0.140092 %
PERS-DBRP Fiduciary component units 1,488 1,921 0.071053 % 0.072815 % 0.001762 %
Nonemployer contributing entity 303,530 375,032 14.522915 % 14.215404 % (0.307511)%
State of Montana totals 1,328,439 1,667,683 63.552219 % 63.212639 % (0.339580)%
SRS Primary government 4,067 5,800 4.876949 % 4.758893 % (0.118056)%
MPORS Nonemployer contributing entity 133,487 163,514 67.063878 % 66.853347 % (0.210531)%
Primary government 2,309 3,722 2.013129 % 2.378643 % 0.365514 %
FURS Nonemployer contributing entity 79,524 105,867 69.323577 % 67.656380 % (1.667197)%
State of Montana totals 81,833 109,589 71.336706 % 70.035023 % (1.301683)%
VFCA Nonemployer contributing entity 6,907 9,106 100 % 100 % —%
Primary government 19,118 22,906 0.991432 % 1.018287 % 0.026855 %
Discretely presented component units 27,375 28,906 1.419681 % 1.285043 % (0.134638)%
TRS
Nonemployer contributing entity 715,637 822,282 37.112880 % 36.554642 % (0.558238)%
State of Montana totals 762,130 874,094 39.523993 % 38.857972 % (0.666021)%
(1)
The breakdown of the PERS-DBRP net pension liability as of 6/30/2019 were restated applying the allocation method for note disclosure.
A-101
Pension Expense
The State recognized the following pension expenses for the State as the primary government employer,
the State's discretely presented component units, and the State's fiduciary component units, and pension
grant expenses for the State as nonemployer contributing entity, for the year ended June 30, 2021
(amounts presented in thousands):
Primary Government
State as Discretely
Plan Fiduciary
State as Nonemployer Presented Component Total
Employer Contributing Component Units
Entity Units
JRS $ 1,243 $ — $ — $ — $ 1,243
HPORS 48,232 — — — 48,232
GWPORS 25,886 — 1,355 — 27,241
PERS-DBRP (1) 167,295 115,099 34,829 344 317,567
SRS 354 — — — 354
MPORS (2) — 29,464 — — 29,464
FURS (3) 832 21,039 — — 21,871
VFCA (4) — 1,844 — — 1,844
(5)
TRS 2,982 90,792 14,666 — 108,440
(1)
Of the total pension expense for the State as a nonemployer contributing entity, $1.1 million is the grant
expense for special funding support provided by the General Fund to local government and school district
participants, $34.0 million is the grant expense for special funding support provided by the General Fund as
a statutory appropriation for all participating employers; $80.1 million is the pension expense that is
actuarially allocated to the State as a nonemployer contributing entity.
(2)
The grant expense for the State as a nonemployer contributing entity is for special funding support
provided by the General Fund for its proportionate share of the collective MPORS pension expense that is
associated with other employer participants in the plan.
(3)
The grant expense for the State as a nonemployer contributing entity is for special funding support
provided by the General Fund for its proportionate share of the collective FURS pension expense that is
associated with other employer participants in the plan.
(4)
The grant expense for the State as a nonemployer contributing entity is for special funding support
provided by a portion of fire tax premiums paid to the State and transferred to MPERA for its proportionate
share of the collective VFCA pension expense that is associated with other employer participants in the
plan.
(5)
The grant expense for the State as a nonemployer contributing entity is for special funding support
provided by the General Fund for its proportionate share of the collective TRS pension expense that is
associated with other employer participants in the plan.
Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions
As of the fiscal year ended June 30, 2021, the State reported deferred outflows of resources and deferred
inflows of resources related to pensions from the following sources (amounts presented in thousands):
Deferred Outflows Deferred Inflows
JRS of Resources of Resources
Differences between expected and actual $ 1,372 $ 921
experience
Changes of assumptions 1,434 —
Net difference between projected and actual 4,135 —
earnings on pension plan investments
Contributions subsequent to the measurement 2,138 —
date
Totals $ 9,079 $ 921
A-102
Deferred Outflows Deferred Inflows
HPORS of Resources of Resources
Differences between expected and actual $ 1,354 $ 745
experience
Changes of assumptions 105,791 —
Net difference between projected and actual 5,982 —
earnings on pension plan investments
Contributions subsequent to the measurement 6,599 —
date
Totals $ 119,726 $ 745
Discretely Presented
Primary Government Total
Component Units
GWPORS Deferred Deferred Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources Resources Resources
Difference between expected and actual $ 3,053 $ 4,232 $ 163 $ 226 $ 3,216 $ 4,458
experience
Changes in assumptions 66,400 — 3,549 — 69,949 —
Net difference between projected and actual 7,900 — 422 — 8,322 —
earnings on pension plan investments
Changes in proportion and differences between
employer contributions and proportionate share of 168 139 39 68 207 207
contributions
Contributions subsequent to the measurement 5,165 — 229 — 5,394 —
date
Totals $ 82,686 $ 4,371 $ 4,402 $ 294 $ 87,088 $ 4,665
Primary Government
Discretely Presented Fiduciary Component
State as Nonemployer Component Units Units
State as Employer Contributing Entity
PERS-DBRP
Deferred Deferred Deferred Deferred
Deferred Deferred Deferred Deferred
Outflows Inflows Outflows Inflows Outflows Inflows Outflows Inflows
of of of of
of of of of
Resources Resources Resources Resources
Resources Resources Resources Resources
Difference between
expected and actual $ 17,574 $ 31,128 $ 6,054 $ 10,723 $ 3,261 $ 5,776 $ 31 $ 55
experience
Change of assumptions 75,389 — 25,970 — 13,989 — 133 —
Net difference between
projected and actual 94,273 — 32,474 — 17,493 — 167 —
earnings on pension plan
investments
Changes in proportion and
differences between
employer contributions and 36,201 47,596 51,635 92 — 7,065 — 59
proportionate share of
contributions
Contributions subsequent to 65,720 — 21,180 — 13,037 — 121 —
the measurement date
Totals $ 289,157 $ 78,724 $ 137,313 $ 10,815 $ 47,780 $ 12,841 $ 452 $ 114
A-103
Deferred Outflows Deferred Inflows
SRS of Resources of Resources
Difference between expected and actual $ 263 $ 2
experience
Changes of assumptions 1,193 903
Net difference between projected and actual 713 —
earnings on pension plan investments
Changes in proportion and differences between
employer contributions and proportionate share of — 252
contributions
Contributions subsequent to the measurement 607 —
date
Totals $ 2,776 $ 1,157
Deferred Outflows Deferred Inflows
MPORS of Resources of Resources
Difference between expected and actual $ 7,838 $ 516
experience
Change of assumptions 13,895 —
Net difference between projected and actual 12,716 —
earnings on pension plan investments
Changes in proportion and differences between
employer contributions and proportionate share of 954 1,265
contributions
Contributions subsequent to the measurement 17,395 —
date
Totals $ 52,798 $ 1,781
Primary Government
State as Nonemployer
State as Employer Contributing Entity
FURS
Deferred Deferred
Deferred Deferred
Inflows Inflows
Outflows of Outflows of
of of
Resources Resources
Resources Resources
Difference between expected and actual $ 253 $ 19 $ 7,206 $ 551
experience
Change of assumptions 661 — 18,807 —
Net difference between projected and actual 478 — 13,591 —
earnings on pension plan investments
Changes in proportion and differences between
employer contributions and proportionate share of 120 12 2,330 2,671
contributions
Contributions subsequent to the measurement 665 — 17,897 —
date
Totals $ 2,177 $ 31 $ 59,831 $ 3,222
A-104
Deferred Outflows Deferred Inflows
VFCA of Resources of Resources
Difference between expected and actual $ 250 $ 58
experience
Change of assumptions 897 —
Net difference between projected and actual 1,690 —
earnings on pension plan investments
Contributions subsequent to the measurement 2,578 —
date
Totals $ 5,415 $ 58
Primary Government
Discretely Presented
State as Nonemployer Component Units
State as Employer Contributing Entity
TRS
Deferred Deferred Deferred Deferred Deferred Deferred
Outflows of Inflows of Outflows of Inflows of Outflows of Inflows of
Resources Resources Resources Resources Resources Resources
Difference between expected and actual $ 222 $ — $ 7,971 $ — $ 281 $ —
experience
Change of assumptions 1,200 26 43,066 945 1,514 33
Net difference between projected and actual 1,605 — 57,604 — 2,025 —
earnings on pension plan investments
Changes in proportion and differences
between employer contributions and 863 526 5,295 29,257 12,983 48
proportionate share of contributions
Contributions subsequent to the 1,455 — 46,701 — 14,648 —
measurement date
Totals $ 5,345 $ 552 $ 160,637 $ 30,202 $ 31,451 $ 81
The amounts reported in the tables above as deferred outflows of resources related to pensions resulting
from the contributions made subsequent to the June 30, 2020, measurement date will be recognized as a
reduction of the net pension liability (asset) in the fiscal year ended June 30, 2022.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to
pensions will be recognized in pension expense as follows (amounts presented in thousands):
Year ended June 30: JRS HPORS SRS MPORS VFCA
2022 $ 849 $ 36,457 $ (272) $ 10,251 $ 757
2023 2,298 37,357 467 11,881 1,065
2024 1,846 37,088 456 8,552 564
2025 1,027 1,480 361 2,938 393
2026 — — — — —
Thereafter — — — — —
A-105
GWPORS
Discretely
Year ended June 30: Primary Presented Total
Government Component
Units
2022 $ 19,360 $ 1,006 $ 20,366
2023 18,220 968 19,188
2024 17,696 944 18,640
2025 17,874 961 18,835
2026 — — —
Thereafter — — —
PERS-DBRP
Primary Government
Discretely
Year ended June 30: State as Fiduciary
Presented
State as Nonemployer Component
Component
Employer Contributing Units
Units
Entity
2022 $ 29,644 $ 67,311 $ (584) $ —
2023 58,576 18,547 12,004 117
2024 32,940 11,347 6,112 58
2025 23,553 8,113 4,370 42
2026 — — — —
Thereafter — — — —
FURS
Primary Government
Year ended June 30: State as
State as Nonemployer
Employer Contributing
Entity
2022 $ 279 $ 8,463
2023 372 10,335
2024 325 8,840
2025 209 5,855
2026 — —
Thereafter 296 5,219
TRS
Primary Government
Discretely
Year ended June 30: State as Presented
State as Nonemployer Component
Employer Contributing Units
Entity
2022 $ 1,120 $ 22,432 $ 8,512
2023 1,017 22,679 5,326
2024 798 24,166 2,376
2025 403 14,457 508
2026 — — —
Thereafter — — —
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E. Legal Actuarial Status of Plans
The Montana Constitution, Article VIII, Section 15, and Section 19-2-409, MCA state that public retirement
systems shall be funded on an actuarially sound basis. To maintain a fund on an actuarially sound basis,
the rate of contributions should fund the normal cost, in addition to amortizing the unfunded liability over a
period not to exceed 30 years.
A traditional funding actuarial valuation of each of the defined benefit plans is performed annually. The
purpose of the traditional funding actuarial valuation is to measure funding progress and to determine the
actuarial determined contribution, contribution sufficiency or deficiency, and other actuarial information
necessary for monitoring funding position. The most recent actuarial valuation was performed for fiscal
year ended June 30, 2021. The statutory funding rate is tested in the valuation of each public retirement
plan to determine if it is sufficient to cover the normal cost rate plus an amortization payment of the
unfunded actuarial liability, if any, within 30 years. As of June 30, 2021, the Game Warden & Peace
Officers’ Retirement System (GWPORS) was not in compliance and did not amortize within 30 years.
F. Public Employee Defined Contribution Retirement Plans
Public Employees’ Retirement System-Defined Contribution Retirement Plan – The Public
Employees’ Retirement System - Defined Contribution Retirement Plan (PERS-DCRP) is a multiple
Employer plan established July 1, 2002, and governed by Title 19, Chapters 2 & 3, MCA. This plan is
available to eligible employees of the State, Montana University System, local governments, and school
districts. All new PERS members are initially members of the PERS-DBRP and have a 12-month window
during which they may choose to transfer to the PERS-DCRP, or remain in the PERS-DBRP, by filing an
irrevocable election. If an election is not filed, the member remains in the PERS-DBRP. Members may not
be members of both the defined contribution and defined benefit retirement plans. The PERS-DCRP
provides retirement, disability, and death benefits to plan members and their beneficiaries.
Member and employer contribution rates are established by state law and may be amended only by the
Legislature. Employees contribute at a rate of 7.90% of their compensation. Contributions made to the
plan by an employee remain 100% vested in their interest. Members who achieve 5 years of employment
are vested in the plan. Should they terminate prior to this 5-year period, all employer contributions are
forfeited to the plan. Amounts forfeited are held in a separate plan forfeiture account and can only be used
to pay the administrative expenses, including startup costs, of the plan. Total pension expense for the
State as a PERS-DCRP employer for the year ended June 30, 2021, is $9.7 million and, contribution
forfeitures were $643.0 thousand.
Local government entities contribute 8.77% of member compensation. School district employers
contributed 8.50% of member compensation. The State contributes 0.10% of member compensation on
behalf of local government entities and 0.37% of member compensation on behalf of school district
entities. Each State agency and University employer contributed 8.87% of member compensation.
The total contribution rate of 8.87%, referenced in the preceding paragraph, is allocated as follows: 8.53%
to the member’s retirement account; 0.04% to the defined contribution education fund; and 0.30% to the
defined contribution Other Post Employment Benefit (OPEB) disability plan.
The PERS-DCRP also administers an OPEB disability plan. Refer to PERB's annual financial report for
additional information related to this portion of the plan.
457(b)-Deferred Compensation Plan – The 457(b)-Deferred Compensation Plan (457(b)-Plan) is a
voluntary supplemental retirement savings plan established in 1974. The Deferred Compensation Plan is
governed by Title 19, Chapter 50, MCA, in accordance with Internal Revenue Code (IRC) Section 457.
This plan is available to all employees of the State, Montana University System, and contracting political
subdivisions. The State and 62 non-state entity employers participate in the 457(b)-Plan.
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Assets of the Deferred Compensation Plan are required to be held in trusts, custodial accounts, or
insurance company contracts for the exclusive benefit of participants and their beneficiaries. Empower
Retirement™ is the record keeper for the plan. Participants elect to defer a portion of their salary, within
IRC limits. The deferred salary is not available to employees until separation from service, retirement,
death, or upon an unforeseeable emergency while still employed, provided IRS-specified criteria are met.
G. Montana University System Retirement Program
Montana University System-Retirement Program (MUS-RP) – This system was established in January
1988 and is underwritten by the Teachers Insurance and Annuity Association (TIAA). Effective July 1,
1993, MUS-RP was made the mandatory retirement plan for new faculty and administrative staff with
contracts under the authority of the Board of Regents, previously referred to as the Optional Retirement
Program (ORP). The MUS-RP is a defined contribution retirement plan governed by Title 19, Chapter 21,
MCA. Combined contributions to the faculty and professional staff plan cannot exceed 13% of the
participant’s compensation per Section 19-21-203, MCA. Combined contributions to the classified staff
plan are 16.77% per Section 19-3-316, MCA and Section 19-3-315, MCA.
The benefits at retirement depend upon the amount of contributions, amount of investment gains and
losses, and investment allocations by the participant. Individuals are immediately vested for both
employee and employer contributions. The Montana University System records employee/employer
contributions, and remits monies to TIAA. Total contributions made to the plan by the employer were
$17.4 million, and the total employee contributions were $20.0 million for the fiscal year ended June 30,
2021.
H. Method Used to Value Investments
The Montana Board of Investments (BOI) manages the investments, as authorized by state law, for the
defined benefit retirement plans in two investment pools, the Consolidated Asset Pension Pool (CAPP)
and the Short-Term Investment Pool (STIP). CAPP is an internal investment pool and STIP is an external
investment pool. Each retirement plan’s ownership in the pools is based on the funds contributed.
Individual investments in the pools are not specifically identified to the respective retirement plan.
Investments are reported at either fair value or cost, depending on the underlying investment type. Fixed
income and equity investments classified in Level 1 of the fair value hierarchy are valued using prices
quoted in active markets for those securities. Fixed income investments classified in Level 2 of the fair
value hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities
based on the securities' relationship to benchmark quoted prices. Mortgages are present value adjusted.
Investment valuation not classified within the fair value measurement levels are reported at Net Asset
Value. Further detail related to investments is provided in Note 3.
I. Long-term Contracts for Contributions
Per Section 19-2-706, MCA, the Montana Legislature enacted a provision of the Employee Protection Act
(EPA) allowing state and university system employees who are eligible for a service retirement and whose
positions have been eliminated, to have their employer pay a portion of the total cost of purchasing up to
three years of “1-for-5” additional service. In fiscal year 2021, 269 employees participated in the program.
The Employer has up to ten years to complete payment for the service purchases and is charged the
actuarially required rate of return as established by MPERA on the unpaid balance. Total contributions
received (including interest) during fiscal year 2021 totaled $171.4 thousand. The outstanding balance at
June 30, 2021, totaled $7.6 thousand.
J. Litigation
Tadman, et al. v. State. A retired member of the Sheriffs' Retirement System filed a class action in the
Eighth Judicial District of Montana against the State of Montana on October 6, 2015, alleging the
inappropriate advising, reporting, and withholding of state and federal income taxes on certain line-of-duty
disability benefits before conversion to a normal retirement benefit. The State was served with the
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Complaint on November 25, 2015, and is represented by Jean Faure and Jason Holden of the Faure
Holden law firm in Great Falls, Montana. On June 11, 2019, the Court issued an Order granting Plaintiff's
Motion to Certify Class. The Court has defined the prospective class of plaintiffs in this matter and the
parties were instructed by the Court to meet and confer to agree on the class form of notice and notice
plan concerning the matter. Counsel representing the class are Lawrence A. Anderson from Great Falls,
Montana and Tom and Sean Morrison from Helena, Montana. This matter was settled between the parties
and approved by the Court as of March 22, 2021. Below is the detail of litigation settlements with amounts
presented in thousands.
Tadman, et al. v. State JRS HPORS SRS GWPORS Totals
Benefits $ 3.2 $ 420.6 $ 1,549.3 $ 26.9 $ 2,000.0
Administrative expense (legal costs) 1.6 210.3 774.7 13.4 1,000.0
Totals $ 4.8 $ 630.9 $ 2,324.0 $ 40.3 $ 3,000.0
PERB v. Lewis and Clark County. On May 1, 2020, the PERB filed a Complaint for Declaratory Relief in
the First Judicial District of Montana against Lewis and Clark County. This complaint asked the Court to
rule that the Montana Constitution, Article VIII, Section 15, vests the PERB with the authority to actuarially
determine the amount of the unfunded pension liabilities attributable to a component unit of Lewis and
Clark County that has terminated its participation in a PERB administered defined benefit plan, and
compel the payment of and collect this unfunded pension liability upon this component unit's termination.
On May 13, 2020, Lewis and Clark County filed a motion to dismiss the Complaint. This motion has been
fully briefed by both parties and the PERB awaits a ruling from the Court. On June1, 2020, the PERB filed
its First Amended Complaint amending its original pleading to add a claim for breach of contract against
Lewis and Clark County. On June 18, 2020, Lewis and Clark County filed a motion to dismiss PERB's
First Amended Complaint. This motion has been fully briefed and the PERB awaits a ruling from the
Court. This matter was consolidated with Montana Association of Counties, Lewis and Clark County, and
Cascade County v. PERB and MPERA by the Court on February 22, 2021.
Montana Association of Counties (MACo), Lewis and Clark County, and Cascade County v. PERB
and MPERA. On May 1, 2020, the MACo filed a Complaint for Declaratory Judgement, Injunctive Relief,
and a Writ of Prohibition against the PERB and MPERA in the First Judicial District Court of Lewis and
Clark County. This Complaint asked the Court to rule that the Montana Constitution, Article VIII, Section
15, does not vest the PERB with the authority to determine and collect unfunded pension liabilities owed
to the PERS-DBRP trust as a result of partial withdrawals of employees or reductions in force, and that
the 1947 Contract between the PERB and Lewis and Clark County and Cascade County, as well as other
similar agreements between the PERB and all other Montana counties, does not vest the PERB with the
authority to determine and collect unfunded pension liabilities owed to the PERS-DBRP trust as a result of
partial withdrawals of employees or reductions in force, and that MACo is entitled to a preliminary and
permanent injunction enjoining PERB from assessing withdrawal penalties against Montana counties, and
that MACo is entitled to a Writ of Prohibition arresting the PERB from assessing withdrawal penalties
against Montana counties. On May 15, 2020, MACo amended its original pleading by filing its First
Amended Complaint. This amendment added the additional parties of Lewis and Clark County and
Cascade County to this action as plaintiffs as well as the additional claims for breach of express and
implied contract. On June 25, 2020, the PERB filed a Motion to Dismiss, or in the Alternative, Partial
Summary Judgement with regard to the Plaintiffs' Count II, IV, V, and VI. This motion has been fully
briefed by all parties and the PERB awaits a ruling from the Court. This matter was consolidated with
PERB v. Lewis and Clark County by the Court on February 22, 2021.
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NOTE 7. OTHER POSTEMPLOYMENT BENEFITS (OPEB)
A. General Information Non-trust Plans
The State of Montana (State) and the Montana University System (MUS) provide optional
postemployment healthcare benefits in accordance with Section 2-18-704, MCA to the following
employees and dependents who elect to continue coverage and pay administratively established
contributions: (1) employees and dependents who retire under applicable retirement provisions and (2)
surviving dependents of deceased employees. Medical, dental, and vision benefits are available through
this plan. The State and MUS offer OPEB plans that are not administered through trusts; as such, there
are no plan assets accumulated to offset the total OPEB liability.
In accordance with Section 2-18-704, MCA, the State provides post-retirement health insurance benefits
to eligible employees who receive retirement benefits from the Public Employees’ Retirement System
(PERS) or various other State retirement systems, and elect to start medical coverage within 60 days of
leaving employment. Retirement eligibility criteria differ by state retirement plan. Further detail on state
retirement plans is provided in Note 6. MUS provides post-retirement health insurance benefits to eligible
employees who receive retirement benefits from their plan, or an annuity under the MUS-RP, and have
been employed by MUS for at least five years, are age 50, or have worked 25 years with MUS. They must
elect to start medical coverage within 60 days of leaving employment. Spouses, unmarried dependent
children, and surviving spouses are also eligible for both plans.
Montana State Fund, a discretely presented component of the State and participant in the State OPEB
plan, by statute, prepares separately issued financial statements on a calendar year-end basis. Due to the
difference in reporting period, there will be a variance between the note disclosures and the financial
statements for OPEB related information.
B. Plan Descriptions
Both healthcare OPEB plans for the State and MUS are reported as single-employer plans. In addition to
the primary government, the participating employers under the State OPEB plan are Facility Finance
Authority, Montana Board of Housing, Public Employees’ Retirement System, Montana State Fund, and
Teachers’ Retirement System. The participating employers under the MUS OPEB plan are Office of
Commissioner of Higher Education (OCHE), Montana State University - Billings (MSU-Billings), Montana
State University - Bozeman (MSU-Bozeman), Great Falls College MSU, Montana State University -
Northern (MSU-Northern), Montana Technological University, Helena College UM, University of Montana -
Missoula (UM-Missoula), and University of Montana - Western (UM-Western). Participating employers
under MUS, but excluded from the total OPEB liability due to not qualifying as component units, are
Dawson Community College (Dawson CC), Flathead Valley Community College (Flathead CC), and Miles
Community College (Miles CC). Each participating employer is required to disclose additional information
as required per GASB Statement No. 75, Accounting and Financial Reporting for Postemployment
Benefits Other than Pensions (GASB 75).
The State and MUS pay for post-employment healthcare benefits on a pay-as-you-go basis. Section
2-18-812, MCA gives authority for establishing and amending the funding policy to the Department of
Administration for the State group health insurance plan. Section 20-25-1310, MCA gives authority for
establishing and amending the funding policy to the Board of Regents for the MUS group health
insurance plan. The healthcare OPEB plans allow retirees to participate, as a group, at a rate that does
not cover all of the related costs. This results in reporting the total OPEB liability in the related financial
statements and note disclosures. Reported contributions are not a result of direct funding to the plans or
for associated liabilities, but are a measure of the difference in retiree payments into the plans and actual
medical costs associated with those individuals paid for by the plans.
As of December 31, 2020, the State OPEB plan’s administratively established retiree medical premiums
vary between $457.00 and $2,172.00 per month, depending on the medical plan selected, family
coverage, and Medicare eligibility. Administratively established dental premiums vary between $41.10 and
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$70.00 per month and vision hardware premiums vary between $7.64 and $22.26 per month, depending
on the coverage selected. The plan provides different coinsurance amounts and deductibles depending
on whether members use participating or non-participating providers. Once retiree members become
Medicare eligible, the plan automatically processes claim reimbursement as the secondary insurer, even if
the member is not enrolled in Medicare. A basic life insurance plan on the life of the retiree is also
included with a retiree’s core benefits until the retiree reaches age 65 or is eligible for Medicare.
As of June 30, 2021, the MUS OPEB plan’s administratively established retiree medical premiums vary
between $368.00 and $2,452.00 per month. Retiree dental premiums vary between $52.00 and $156.00
per month, while vision premiums vary from $10.70 to $31.18, depending on the types and number of
dependents enrolled and which medical Third Party Administrator (TPA) was selected. The plan provides
different coinsurance amounts and deductibles depending on whether members use in-network or out-of-
network providers. The plan automatically reduces claim reimbursement for members eligible for
Medicare, even if the member is not enrolled in Medicare. The premium changes were based on actual
claims experience and actuarial projections based on the experience and trends.
C. Basis of Accounting
Total OPEB liability is reported on an accrual basis on the proprietary and fiduciary fund financial
statements, the government-wide financial statements, and the component unit financial statements. Total
OPEB liability is not reported on the governmental fund financial statements, as it is considered a long-
term liability. Plan member contributions are recognized in the period in which the contributions are made.
Benefits and refunds are recognized when due and payable in accordance with the terms of each plan.
Both OPEB plans state, that an employee enrolled in the OPEB plan, who (a) at least meets the early
retirement criteria defined by Montana Public Employees’ Retirement Administration (MPERA); and (b)
makes arrangements with their respective benefit office, within 60 days of the date active employee
coverage ends, to continue post-retirement coverage, may continue with the OPEB plan on a self-pay
basis, retroactive back to the date active employee coverage was lost, and adhere to these provisions.
Therefore, each plan does not include terminated employees who have accumulated benefits but are not
yet receiving them. There have been no significant changes in the number covered or the type of
coverage as of June 30, 2021.
The number of State Plan participants as of March 31, 2021, follows:
State Plan Participants
Facility Montana Public Employee Montana Teachers
Finance Board Retirement State Retirement
(1)
Enrollment State Authority (2) of Housing (2)
Board (3) Fund (2) System (3) Total
Active employees 12,210 3 36 51 285 21 12,606
Retired employees,
spouses, and
surviving spouses 2,178 2 3 1 17 4 2,205
Total 14,388 5 39 52 302 25 14,811
The number of MUS Plan participants as of March 31, 2021, follows:
MUS Plan Participants
MSU- UM- MSU- MSU- MSU- UM- UM-MT UM-
Enrollment GFC (2) HC (2) Billings (2) Bozeman (2) Northern (2) OCHE (1) Missoula (2) Tech (2) Western (2) Total
Active employees 103 71 427 3,026 171 46 1,856 382 179 6,261
Retired employees,
spouses, and
surviving spouses 8 14 109 459 35 16 475 97 52 1,265
Total 111 85 536 3,485 206 62 2,331 479 231 7,526
(1)
Primary Government
(2)
Discrete Component Units of Primary Government
(3)
Fiduciary Component Units of Primary Government
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D. Schedule of Changes in Total OPEB Liability
The following table presents the other items related to and changes in the total OPEB liability:
Annual OPEB Cost & Changes in Total OPEB liability
(in thousands)
State Plan MUS Plan
Discrete
Component
Unit and
Fiduciary Discrete
Primary Component Primary Component
Government Unit Total Government Unit Total
Total OPEB OPEB Total State Total OPEB OPEB Total MUS
Liability Liability Plan Liability Liability Plan
Balances at 6/30/2020 $ 46,129 $ 1,213 $ 47,342 $ 283 $ 26,566 $ 26,849
Changes for the year:
Service cost 1,684 50 1,734 16 1,396 1,412
Interest 1,299 34 1,333 8 769 777
Difference between expected and (6,389) 252 (6,137) (207) (17,181) (17,388)
actual experience
Changes of assumptions or other 101,723 2,716 104,439 461 45,213 45,674
inputs
Benefit payments (1,165) (31) (1,196) — (13) (13)
Net changes 97,152 3,021 100,173 278 30,184 30,462
Balances at 6/30/2021 (1) $ 143,281 $ 4,234 $ 147,515 $ 561 $ 56,750 $ 57,311
(1)
State, fiduciary component units, and discretely presented component units proportion of the collective total OPEB liability as of the measurement
date for fiscal years 2020 and 2021 for the State Plan was 100% both years and for the MUS Plan is 94.92% and 95.18%, respectively.
E. Actuarial Methods and Assumptions
The total OPEB liability (TOL) measured under GASB 75 is based upon service cost and more
standardized reporting assumptions than prior GASB Statements. As a pay-as-you-go public entity, GASB
75 requires a 20-year current municipal bond discount rate to establish an Actuarially Determined
Contribution (ADC). The GASB 75 valuation is further required to show both historical and projected
future net changes in TOL, as well as sensitivity to changes in key underlying assumptions. Actuarially
determined amounts are subject to continual revisions, meaning actual results are compared with past
expectations and new estimates are made about the future. Actuarial calculations reflect a long-term
perspective. The projection of benefits for financial reporting purposes does not explicitly incorporate the
potential effects of legal or contractual funding limitations on the pattern of cost-sharing between the
employer and plan members in the future.
The schedule of changes in the State’s and MUS's TOL and related ratios, presented as required
supplementary information following the notes to the financial statements is designed to present multi-
year trend information about whether the actuarial value of plan TOL is increasing or decreasing over time
relative to the actuarial liabilities for benefits. The schedule of changes in the State’s and MUS's TOL and
related ratios are based on the substantive plan (the plan as understood by the employer and the plan
members). This includes 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.
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The State's OPEB Plan TOL on December 31, 2020, rolled forward to March 31, 2021, actuarial valuation
was determined using the following actuarial assumptions and other inputs, applied to all periods included
in the measurement, unless otherwise specified:
Other Postemployment Benefits
State Single Employer Plan
Retiree/Surviving
Spouse Spouse
Contributions (weighted average):
Before Medicare eligibility $ 15,072 $ 6,908
After Medicare eligibility 5,484 4,820
Actuarial valuation date December 31, 2020
Experience study period January 1, 2018 through December 31, 2020
(1)
Actuarial measurement date March 31, 2021
Actuarial cost method Entry age normal funding method
Amortization method Level percent of payroll, open basis
Asset valuation method Not applicable since no assets meet the definition
of plan assets under GASB 75
Actuarial assumptions:
Discount rate 2.23%
Projected payroll increases 2.50%
Participation:
Future retirees 40.00%
Future eligible spouses 70.00%
Marital status at retirement 70.00%
(1)
Updated procedures were used to roll forward the total OPEB liability to the measurement date.
Mortality - Health: For TRS, healthy mortality is assumed to follow the RP-2000 Healthy Annuitant
Mortality Table for ages 50 and above and the RP-2000 Combined Healthy Annuitant Mortality
Table for ages below 50, set back four years for males, set back two years for females, with
mortality improvements projected by Scale BB to 2018. For all other groups, healthy mortality is
assumed to follow the RP-2000 Combined Mortality Table with improvements projected by Scale
BB to 2020, set back one year for males.
Mortality - Disabled: For TRS, disabled mortality is assumed to follow the RP-2000 Disabled
Mortality Table, set forward one year for males and set forward five years for females, with
mortality improvements projected by Scale BB to 2018. For all other groups, disabled mortality is
assumed to follow the RP-2000 Combined Mortality Table with no projections.
Changes in actuarial assumptions and methods since last measurement date: Changes in
assumptions for 2021 were due to no retiree contribution increase and a decrease in the discount
rate from 2.75% to 2.23%
Changes in benefit terms since last measurement date: None
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Additional information as of the latest actuarial valuation for MUS OPEB plan follows:
Other Postemployment Benefits
MUS Single Employer Plan
Retiree/Surviving
Spouse Spouse
Contributions (in thousands):
Before Medicare eligibility $ 11,772 $ 9,637
After Medicare eligibility 4,416 5,205
Actuarial valuation date December 31, 2020
Actuarial measurement date (1) March 31, 2021
Experience study period January 1, 2018, through December 31, 2020
Actuarial cost method Entry age normal funding method
Amortization method Level percent of payroll, open basis
Asset valuation method Not applicable since no assets meet the definition of
plan assets under GASB 75
Actuarial assumptions:
Discount rate 2.23%
Projected payroll increases 2.50%
Participation:
Future retirees 40.00%
Future eligible spouses 70.00%
Marital status at retirement 70.00%
(1)
Updated procedures were used to roll forward the total OPEB liability to the measurement date.
Mortality - Healthy: For TRS and MUS-RP, healthy mortality is assumed to follow the RP-2000
Healthy Annuitant Mortality Table for ages 50 and above and the RP-2000 Combined Healthy
Annuitant Mortality Table for ages below 50, set back four years for males, set back two years for
females, with mortality improvements projected by Scale BB to 2018. For all other groups, healthy
mortality is assumed to follow the RP-2000 Combined Mortality Table with improvements
projected by Scale BB to 2020, set back one year for males.
Mortality - Disabled: For TRS and MUS-RP, disabled mortality is assumed to follow the RP-2000
Disabled Mortality Table, set forward one year for males and set forward five years for females,
with mortality improvements projected by Scale BB to 2018. For all other groups, disabled
mortality is assumed to follow the RP-2000 Combined Mortality Table with no projections.
Changes in actuarial assumptions and methods since last measurement date: Changes in
assumptions for 2021 were due to no retiree contribution increase and a decrease in the discount
rate from 2.75% to 2.23%
Changes in benefit terms since last measurement date: Carrier options reduced to one.
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Sensitivity of the TOL to changes in the discount rate
The following presents the TOL of the State and MUS OPEB plans, as well as what they would be if
calculated using a discount rate that is 1-percentage-point lower (1.23 percent) or 1-percentage-point
higher (3.23 percent) than the current discount rate:
State OPEB plan (in thousands)
Current Discount Rate
1.0% Decrease (1.23%) (2.23%) 1.0% Increase (3.23%)
Primary Government $ 180,880 $ 143,281 $ 115,098
Discrete Component Units and
Fiduciary Component Units 5,394 4,234 3,360
Total OPEB liability $ 186,274 $ 147,515 $ 118,458
MUS OPEB plan (in thousands)
Current Discount Rate
1.0% Decrease (1.23%) (2.23%) 1.0% Increase (3.23%)
Primary Government $ 731 $ 561 $ 436
Discrete Component Units 73,839 56,750 44,195
Total OPEB liability $ 74,570 $ 57,311 $ 44,631
Sensitivity of the TOL to changes in the healthcare cost trend rates
The following presents the TOL of the State and MUS OPEB plans, as well as what they would be if
calculated using healthcare cost trend rates that are 1-percentage-point lower (5.0 percent) or 1-
percentage-point higher (7.0 percent) than the current healthcare cost trend rates:
State Plan (in thousands)
Current Healthcare Cost
1.0% Decrease (5.0%) Trend Rate (6.0%) 1.0% Increase (7.0%)
Primary Government $ 113,213 $ 143,281 $ 184,813
Discrete Component Unit and
Fiduciary Component Units 3,293 4,234 5,528
Total OPEB liability $ 116,506 $ 147,515 $ 190,341
MUS Plan (in thousands)
Current Healthcare Cost
1.0% Decrease (5.0%) Trend Rate (6.0%) 1.0% Increase (7.0%)
Primary Government $ 434 $ 561 $ 737
Discrete Component Unit 44,022 56,750 74,588
Total OPEB liability $ 44,456 $ 57,311 $ 75,325
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OPEB Expense and Deferred Outflows and Deferred Inflows of Resources Related to OPEB
For the year ended June 30, 2021, the State OPEB plan's OPEB expense is $9.4 million and the MUS
OPEB plan's OPEB expense is $3.1 million.
At June 30, 2021, the State OPEB plan deferred outflows and inflows of resources are from the following
sources:
State Plan (in thousands)
Deferred Outflows of Deferred Inflows of
Resources Resources
Primary Government
Difference between expected and actual experience $ — $ 16,982
Changes of assumptions or other inputs 108,754 14,370
Amounts associated with transactions subsequent to the
measurement date of the total OPEB liability 29 —
Total $ 108,783 $ 31,352
Discrete Component Units and Fiduciary Component Units
Difference between expected and actual experience $ 395 $ 165
Changes of assumptions or other inputs 2,904 384
Amounts associated with transactions subsequent to the
measurement date of the total OPEB liability 21 —
Total $ 3,320 $ 549
At June 30, 2021, MUS OPEB plan deferred outflows and inflows of resources are from the following
sources:
MUS Plan (in thousands)
Deferred Outflows of Deferred Inflows of
Resources Resources
Primary Government
Difference between expected and actual experience $ — $ 336
Changes of assumptions or other inputs 521 103
Amounts associated with transactions subsequent to the
measurement date of the total OPEB liability 3 —
Total $ 524 $ 439
Discrete Component Units
Difference between expected and actual experience $ — $ 29,206
Changes of assumptions or other inputs 51,079 10,120
Amounts associated with transactions subsequent to the
measurement date of the total OPEB liability (1) 197 —
Total $ 51,276 $ 39,326
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Deferred outflows of resources and deferred inflows of resources related to TOL will be recognized as
OPEB expense as follows:
Amount recognized in OPEB expense as an increase or (decrease) to OPEB
expense
State Plan (in thousands)
Discrete Component
Units and Fiduciary
Year ended June 30 Primary Government Component Units State Plan Total
2022 $ 6,149 $ 224 $ 6,373
2023 6,149 224 6,373
2024 6,149 224 6,373
2025 6,149 224 6,373
2026 6,149 224 6,373
Thereafter 46,657 1,630 48,287
Amount recognized in OPEB expense as an increase or (decrease) to OPEB
expense
MUS Plan (in thousands)
Discrete Component
Year ended June 30 Primary Government Units MUS Plan Total
2022 $ 6 $ 897 $ 903
2023 6 897 903
2024 6 897 903
2025 6 897 903
2026 6 897 903
Thereafter 52 7,268 7,320
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F. General Information Trust Plan
General Information
Section 19-3-2141, MCA, establishes a long-term disability plan trust fund (PERS-DCRP Disability) for all
State of Montana employees that participate in the Public Employee Retirement System-Defined
Contribution Retirement Plan (PERS-DCRP). All new PERS members are initially members of the Public
Employee Retirement System-Defined Benefit Retirement Plan (PERS-DBRP) and have a 12-month
window during which they may choose to transfer to the PERS-DCRP or remain in the PERS-DBRP by
filing an irrevocable election. If an election is not filed, the member remains in the PERS-DBRP. Members
may not be members of both the defined contribution and defined benefit retirement plans. Only those
participants that choose the PERS-DCRP are covered by the PERS-DCRP Disability plan.
Plan Description
The PERS-DCRP Disability is a multiple-employer cost-sharing plan that covers employees of the State,
local governments, and certain employees of the university system and school districts, who are not
covered by a separate retirement system governed by Title 19, MCA. The PERS-DCRP Disability plan
provides disability benefits to PERS-DCRP plan members who are vested in the plan and are currently
ineligible for retirement.
A separate trust has been established for purposes of providing disability benefits to PERS-DCRP
Disability plan members, and it is accounted for as a fiduciary fund. The assets are held in a trust
capacity for the beneficiaries. The Public Employee Retirement System issues publicly available annual
reports, which include financial statements and required supplemental information for the plan. Those
reports may be obtained online (http://mpera.mt.gov) or by contacting the following:
Public Employees’ Retirement Board
100 North Park, Suite 200
P.O. Box 200131
Helena, MT 59620-0131
G. Termination Benefits
During the year ended June 30, 2021, the State made the following termination benefit arrangements:
continued coverage of group health insurance benefits for one employee provided for up to six months,
one-time lump-sum incentive payments for 12 employees, and paid administrative leave for 30
employees.
During the year ended June 30, 2021, component units of the State made the following termination
benefit arrangements: continued coverage of health insurance benefits and/or one-time incentive
payments for 7 employees.
During the year ended June 30, 2021, the cost of termination benefits for the fiscal year was $229.5
thousand and $184.7 thousand for the State and its component units, respectively.
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NOTE 8. RISK MANAGEMENT
There are three primary government public entity risk pools and one claims-servicing pool that are
reported within the enterprise funds. These pools include Hail Insurance, the Montana University System
(MUS) Group Insurance Plan, the MUS Workers Compensation Program, and the Subsequent Injury
claims-servicing pool. The State of Montana (Old Fund) provides risk financing as an entity other than a
public entity risk pool. The liability and payment of the workers' compensation claims for incidents
occurring before July 1, 1990, are reported in the government-wide financial statements within the primary
government. Unpaid claims and claim adjustment expenses are estimated based on the ultimate cost of
settling the claims, including the effects of inflation and other societal/economic factors. Additionally, the
primary government reports its own risk management activity within two internal service funds:
Employees Group Benefits Plans and Administration Insurance Plans. In all of these funds, there are no
significant reductions in insurance coverage from the prior year. These funds use the accrual basis of
accounting. By statute, these funds cannot invest in common stock. Investments are recorded at fair
value. Premiums and discounts are amortized using the straight-line method over the life of the securities.
A. Public Entity Risk Pools
(1) Hail Insurance – Any Montana producer engaged in growing crops subject to destruction or damage
by hail may participate in the Hail Insurance program. The Hail Insurance program issued 318 policies
during the 2021 growing season. This fund accounts for premium assessments paid by producers for crop
acreage insured, investment and interest earnings, administrative costs, and claims paid for hail damage.
Depending upon the reserve fund's actuarial soundness and the damage in a season, producers may
receive a premium refund. Anticipated investment income is considered in computing a premium
deficiency, of which there is none.
A claim must be submitted to the State Board of Hail Insurance within 14 days of a loss occurrence. The
claim must indicate whether the grain is stemming, in the boot, heading out, in the milk, in the stiff dough,
ready to bind, or combine. If beans, peas, or other crops are damaged, the growth-stage must also be
indicated. Inspection of a crop will occur as promptly as possible after claim receipt. The liability on all
insured crops expires after October 1. The insurance only covers loss or damage to growing grain that
exceeds 5.0% destruction by hail.
To reduce its exposure to large losses, the fund purchased Crop Hail Quota Share Reinsurance for the
2021 growing season, with a 70.0% share of premiums and losses allotted to the Reinsurer and a 30.0%
share of each allotted to the State Hail Insurance. The fund recorded a liability of $76.0 thousand, which
is 30.0% of the estimated claims ($247.1 thousand) plus adjustment expenses through June 30, 2021.
The amount deducted from the estimated claims as of June 30, 2021, for reinsurance was $172.9
thousand (70.0% of estimated claims). The premiums ceded to the Reinsurer through June 30, 2021,
were $499.8 thousand, which was 70.0% of total premiums of $714.0 thousand.
Any crop insurance liability is paid to the producers within one year of occurrence; therefore, liabilities are
not discounted. The fund has no excess insurance or annuity contracts.
(2) Montana University System (MUS) Group Insurance Plan – This plan is authorized by the Board of
Regents and in Section 20-25-13, MCA. The Plan's purpose is to provide medical, dental, prescription
drug, and related group benefits coverage to employees of the Montana University System and affiliates,
and their dependents, retirees, and COBRA members. The MUS Group Benefits Plan is fully self-insured,
except for life insurance, long-term care, long-term disability, and accidental death and dismemberment
insurance. Delta Dental administers the dental plan, Blue Cross and Blue Shield of Montana administers
the vision plan, and Navitus is the administrator for the prescription drug program. Blue Cross and Blue
Shield of Montana is the third-party claims administrators for the self-insured managed care plan and also
has a contract for utilization management. The utilization management program consists of hospital pre-
authorization and medical necessity review, as well as large case management. Premiums are collected
from employees through payroll deductions and recorded in the MUS Group Insurance enterprise fund.
The claims liability is calculated by Actuaries Northwest and estimated to be $10.7 million as of June 30,
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2021, based on prior year experience. A liability is reported in the accompanying financial statements for
these estimated claims.
(3) Montana University System (MUS) Workers’ Compensation Program – This plan was formed to
provide self-insured workers compensation coverage for MUS employees. The MUS Board of Regents
provides workers’ compensation coverage under Compensation Plan Number One (Section 39-7-2101,
MCA). The program is self-insured for workers’ compensation claims with losses in excess of $750.0
thousand per occurrence ($500.0 thousand for claims occurring prior to July 1, 2013) and $1.0 million per
aircraft occurrence covered by reinsurance with a commercial carrier. Employer’s liability claims are
covered to a maximum of $1.0 million above the self-insured amount of $750.0 thousand ($500.0
thousand for claims occurring prior to July 1, 2013). During fiscal year 2021, the program ceded $344.4
thousand in premiums to reinsurers.
The MUS Workers' Compensation Program Committee establishes premium rates for all participating
campuses based on actuarial calculations of premium need and composite premium rate. Premium rates
are adjusted periodically based on inflation, claims experience, and other factors. Premiums are recorded
as revenue in the MUS Workers’ Compensation Program in the period for which coverage is provided.
Members may be subject to supplemental assessments in the event of deficiencies. The program
considers anticipated investment income in determining if a premium deficiency exists.
The fund recorded a liability of $5.2 million for estimated claims at June 30, 2021. The liability is based on
the estimated ultimate cost of settling the reported and unreported claims, claims reserve development,
including the effects of inflation, and other societal and economic factors. Estimated amounts of
subrogation and reinsurance recoverable on unpaid claims are deducted from the liability for unpaid
claims. Estimated claims liabilities are recomputed periodically based on a current review of claims
information, experience with similar claims, and other factors. Adjustments to estimated claims liabilities
are recorded as an increase or decrease in claims expense in the period the adjustments are made.
(4) Subsequent Injury – The purpose of the Subsequent Injury Fund (SIF) is to assist individuals with a
permanent impairment that may create an obstacle to employment by limiting workers' compensation
exposure for employers who hire SIF-certified individuals. The program is funded through an annual
assessment for Montana self-insured employers and a surcharge on premium for private insured and
Montana State Fund policyholders.
The Employment Relations Division sets the assessment and surcharge rates annually. The amount
assessed is calculated by adding the amount of paid losses reimbursed by SIF from April 1 of the
previous calendar year through March 31 of the current calendar year, plus administration expenses, less
other income earned. Employers share in the reimbursement in two ways: (1) if self-insured, the
reimbursement is based on their share of overall paid losses in the previous calendar year, (2) if insured
through a private carrier or Montana State Fund, the reimbursement is based on both overall paid losses
in the previous calendar year, and the amount of the employer's premium paid for their business.
The SIF program reduces the liability of the employer (if self-insured) or insurer by placing a limit of 104
weeks on the amount an employer (if self-insured), or the employer’s insurer, will have to pay for medical
and wage loss benefits in the event a worker who is SIF-certified becomes injured or re-injured on the job.
SIF will assume liability for the claim when the 104 weeks is reached. For an insured employer, since the
insurer's liability is limited to 104 weeks on the claim, this can favorably impact the employer’s
modification factor, which in turn could keep premiums lower than would otherwise be the case without
SIF. For a self-insured employer, it provides a direct recovery of expenses paid for a workers’
compensation claim. If a certified worker does become injured on the job, the worker remains entitled to
all benefits due under the Workers’ Compensation Act.
An estimated liability is recorded based on a projected cost analysis and total population of registered SIF
participants. As of June 30, 2021, this liability amount was estimated to be $1.7 million.
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(5) Changes in Claims Liabilities for the Past Two Years – As indicated above, these funds establish
liabilities for both reported and unreported insured events, including estimates of future payments of
losses and related claim adjustment expenses. The following tables present changes (in thousands) in
those aggregate liabilities during the past two years. All information in these tables is presented at face
value and has not been discounted.
MUS Group MUS Workers
Hail Insurance Insurance Plan Compensation
2021 2020 2021 2020 2021 2020
Unpaid claims and claim adjustment
expenses at beginning of year $ 11 $ 17 $ 10,300 $ 10,000 $ 4,837 $ 6,789
Incurred claims and claim
adjustment expenses:
provision for insured events
of the current year 520 793 97,018 92,564 2,363 1,992
Increase (decrease) in provision for
insured events of prior years 12 (5) — — (550) (2,485)
Total incurred claims and claim
adjustment expenses 532 788 97,018 92,564 1,813 (493)
Payments:
Claims and claim adjustment
expenses attributable to insured
events of the current year (444) (782) (96,655) (92,264) (376) (539)
Claims and claim adjustment
expenses attributable to
insured events of prior years (23) (12) — — (1,040) (920)
Total payments (467) (794) (96,655) (92,264) (1,416) (1,459)
Total unpaid claims and claim
adjustment expenses at end of year $ 76 $ 11 $ 10,663 $ 10,300 $ 5,234 $ 4,837
B. Entities Other Than Pools
(1) Administration Insurance Plans – This self-insurance plan provides coverage for general liability,
automobile liability, automobile physical damage, foster care liability, and State-administered foreclosure
of housing units. The State self-insures the $2.0 million deductible per occurrence for most property
insurance, as well as various deductible amounts for other State property. The State also self-insures
against property losses below $2.0 million of value, with State agencies paying the first $1.0 thousand.
Commercial property insurance protects approximately $6.0 billion of State-owned buildings and contents.
The State’s property insurance includes separate earthquake and flood protection coverage, with
deductibles of $2.0 million for earthquake and $2.0 million for flood per occurrence. Premiums are
collected from all state agencies, including component units, and recorded as revenue in the
Administration Insurance Fund.
An annual actuarial study prepared by Willis Towers Watson Company, and issued for the accident period
July 1, 2011, through June 30, 2021, is the basis for estimating the liability for unpaid claims and is
supported by historical loss data. As of June 30, 2021, the estimated claims liability was $49.6 million. Of
the $49.6 million estimated claims liability, $32.4 million is related to a catastrophic property loss for which
the insurance proceeds were received prior to the incurred expenses.
(2) Employee Group Benefits Plans – The medical and dental health plans provided by the State are
fully self-insured with the State assuming the risk for claims incurred by employees of the State, elected
officials, retirees, former employees covered by COBRA benefits, and their dependents. The State
contracted with Allegiance as the third-party administrator for medical coverage. Delta Dental is the
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administrator for dental coverage. Navitus is the administrator for the pharmacy program. Contributions
are collected through payroll deductions, deductions through the Public Employees Retirement
Administration, the Legislative Branch, and self-payments. The contributions are recorded as revenue in
the Employee Group Benefits internal service fund. As of June 30, 2021, estimates for claims liabilities,
which include both incurred but not reported claims and grandfathered claims resulting from a 1998
change in period for which the benefit coverage is available, as well as other actuarially determined
liabilities, were $19.7 million as provided by Actuaries Northwest, a consulting actuarial firm. In fiscal year
2022, $19.5 million of these claims liabilities are estimated to be paid.
(3) State of Montana (Old Fund) – State of Montana (Old Fund) covers workers’ compensation claims
that were incurred before July 1, 1990. Old Fund was originally a risk financing insurance entity, but upon
depletion of all of its assets, is now financed by the General Fund. The participants within the pool are
individuals outside of governmental entities.
An actuarial study prepared by Willis Towers Watson, as of June 30, 2021, estimated the cost of settling
claims that have been reported but not settled and claims that have been incurred but not reported. At
June 30, 2021, $43.7 million of unpaid claims and claim adjustment expenses were reported at face
value.
(4) Changes in Claims Liabilities for the Past Two Years – These funds establish liabilities for both
reported and incurred but not reported claims. Grandfathered claims are not included as they relate to
future claims not yet incurred. The following table presents changes in the balances of claims liabilities
during the past two fiscal years (in thousands).
Administration Employers Group State of Montana
Insurance Plans Benefits Plan Old Fund
2021 2020 2021 2020 2021 2020
Amount of claims liabilities at the
beginning of each fiscal year $ 17,431 $ 16,157 $ 18,982 $ 18,896 $ 48,280 $ 44,266
Incurred claims:
Provision for insured events
of the current year 5,555 7,091 181,363 170,812 — —
Increase (decrease) in provision for
insured events of prior years 6,867 1,120 (3,267) (4,377) 1,769 12,616
Total incurred claims 12,422 8,211 178,096 166,435 1,769 12,616
Payments:
Claims attributable to insured
events of the current year (1,574) (3,063) (161,870) (151,950) — —
Claims attributable to
insured events of prior years (11,133) (3,874) (15,543) (14,399) (6,345) (8,602)
Total payments (12,707) (6,937) (177,413) (166,349) (6,345) (8,602)
Total claims liability at end of
each fiscal year $ 17,146 $ 17,431 $ 19,665 $ 18,982 $ 43,704 $ 48,280
(1)
$32.4 million of additional claims for the Administration Insurance Plans not included in the table above, are related to a catastrophic
property loss for which the insurance proceeds were received prior to the incurred expenses.
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NOTE 9. COMMITMENTS
A. Highway Construction
At June 30, 2021, the Department of Transportation had contractual commitments of approximately
$463.2 million for construction of various highway projects. Funding for these highway projects is to be
provided by federal grants and matched with state special revenue funds.
B. Capital Assets and/or Other Construction
At June 30, 2021, the Department of Administration, Architecture & Engineering Division, had
commitments of approximately $31.7 million for capital projects construction. The primary government will
fund $17.4 million of these projects, with the remaining $14.3 million funded by the Montana University
System.
At June 30, 2021, the Department of Fish, Wildlife, and Parks had contractual commitments of
approximately $2.1 million for engineering and construction of various capital projects and $5.9 million to
build a new licensing software called Explore Montana. The majority of funding for these commitments will
be provided by federal grants and state special revenue funds.
At June 30, 2021, the Department of Labor and Industry had $1.9 million contractual commitments for
Montana State AmeriCorps Programs and a $4.4 million commitment for information technology
contracts. The funding for these programs is to be provided by federal grants and state special revenue
funds.
At June 30, 2021, the Office of the Secretary of State had a contractual commitment of approximately
$1.5 million for developing and implementing the ElectMT system to replace the existing statewide Voter
Registration and Election Management system (MT Votes). The majority of the funding for this project is
to be provided by a federal grant from the U.S. Election Assistance Commission.
At June 30, 2021, the Department of Transportation, had a $2.0 million contractual commitment for three,
55 passenger coach buses. The funding for this purchase is to be provided by the Coronavirus Aid, Relief,
and Economic Security (CARES) Act funding through the Federal Transit Administration.The Department
also had contractual commitments of approximately $8.7 million for development and implementation of
various IT projects. Funding for these projects is to be provided by federal grants, matched with state
special revenue funds and unrestricted state revenue funds. Included within the department’s
commitments are $4.4 million dedicated to the purchase and upgrade of PeopleSoft modules.
C. Loan and Mortgage Commitments
The Montana Board of Investments (BOI) makes firm commitments to fund commercial loans, residential
mortgages, and Veterans' Home Loan Mortgages (VHLM) from the Coal Severance Tax Permanent Trust
Fund. These commitments have expiration dates and may be extended according to BOI policies. As of
June 30, 2021, BOI had committed, but not yet purchased, $18.1 million in loans from Montana lenders.
Additionally, lenders had reserved $18.7 million for loans as of June 30, 2021. As of June 30, 2021,
another $2.0 million represented lender reservations for the VHLM residential mortgage purchases with
no purchase commitments.
The BOI makes reservations to fund mortgages from the State’s pension funds. As of June 30, 2021,
there were no mortgage reservations. All BOI residential mortgage purchases are processed by the
Montana Board of Housing (MBOH). The MBOH does not differentiate between a mortgage reservation
and a funding commitment.
The BOI makes firm commitments to fund loans from the INTERCAP loan program. The BOI’s
outstanding commitments to eligible Montana governments, as of June 30, 2021, totaled $23.8 million.
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D. Bond Commitments
At June 30, 2021, the outstanding tax-exempt bonds distributed by the Facility Finance Authority were
issued in the amount of $8.5 million of which $1.4 million in principal payments are scheduled to be paid
by June 30, 2022. These bonds have been issued to facilities operating treatment and prerelease centers.
The Department of Corrections agrees to provide payment on behalf of the contractors for the total
principle and interest due regarding these outstanding bonds. These costs are then recovered through the
center’s monthly billing for inmate room and board.
E. Proprietary Fund Commitments
Budgets are administratively established in the enterprise and internal service funds, excluding
depreciation, compensated absences, and bad debt expense. Appropriations may be committed for
goods/services that are not received as of fiscal year-end. These executory commitments are included in
unrestricted net position in the accompanying financial statements as follows (in thousands):
Enterprise Funds Amount
Liquor Warehouse $ 155
State Lottery Fund 14
Other Enterprise Funds 12
Subtotal - Enterprise funds $ 181
Internal Service Funds
Prison Industry $ 189
Labor Central Services 1,537
Subtotal - Internal Service funds $ 1,726
F. Encumbrances
As of June 30, 2021, the State of Montana encumbered expenditures as presented in the table below (in
thousands):
Nonmajor
Federal Special Governmental State Special
Revenue Fund General Fund Funds Revenue Fund Total
Encumbrances $ 43,953 $ 20,387 $ 78 $ 90,023 $ 154,441
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NOTE 10. LEASES/INSTALLMENT PURCHASES PAYABLE
The State has entered into various capital and operating leases for land, buildings, equipment, and
computer software. Lease contracts are required by law to contain a clause indicating if the continuation
of the lease is subject to funding by the Legislature. It is expected, in the normal course of operations, that
most of these leases will be replaced by similar leases.
A. Capital Leases/Installment Purchases
Obligations under capital leases/installment purchases at June 30, 2021, were as follows (in thousands):
Governmental Business-Type
Fiscal Year Ending June 30: Activities Activities
2022 $ 4,773 $ 16
2023 3,242 6
2024 2,294 1
2025 1,703 —
2026 1,441 —
2027 - 2031 4,112 —
Total minimum payments 17,565 23
Less: interest (1,522) (2)
Present value of minimum payments $ 16,043 $ 21
Assets acquired under capital leases for the primary government by asset class were as follows (in
thousands):
Asset Class
Buildings $ 1,596
Equipment 34,654
Less: Accum Depreciation (13,258)
Net Book Value $ 22,992
B. Operating Leases
Primary government rental payments for operating leases in fiscal year 2021 totaled $28.9 million. Future
rental payments under operating leases are as follows (in thousands):
Governmental Business-Type
Fiscal Year Ending June 30: Activities Activities
2022 $ 27,584 $ 665
2023 23,980 617
2024 20,831 616
2025 17,833 586
2026 15,205 581
2027 - 2031 49,127 1,104
2032 - 2036 26,281 747
Thereafter 8,682 487
Total future rental payments $ 189,523 $ 5,403
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NOTE 11. STATE SHORT-TERM DEBT AND LONG-TERM LIABILITIES
A. General Information
The State has no constitutional limit on its power to issue obligations or incur debt, other than a provision
that no debt may be created to cover deficits incurred because appropriations exceeded anticipated
revenues. No State debt shall be created unless authorized by a two-thirds vote of the members of each
house of the Legislature or a majority of the electors voting thereon. The Board of Examiners (consisting
of the Governor, Secretary of State, and Attorney General) is authorized, pursuant to various enabling
acts, to issue bonds and notes of the State.
B. Short-term Debt
The Board of Examiners, upon recommendation of the Department of Administration, may issue notes in
anticipation of the receipt of taxes and revenues. Notes may not be issued to refund outstanding notes.
The State issues bond anticipation notes to finance the State Revolving Fund Programs that improve and
rehabilitate wastewater and drinking water systems. The following schedule summarizes the activity for
the year ended June 30, 2021 (in thousands):
Ending
Bond Anticipation Notes Beginning Balance Additions Reductions Balance
Drinking Water - 2019A 600 — 600 —
Drinking Water – 2019D 1,300 2,100 3,251 149
Water/Wastewater – 2020D 1,100 2,900 4,000 —
Drinking Water - 2020N — 1,663 — 1,663
The State's Board of Investments (BOI) is authorized to issue Intermediate-Term Capital (INTERCAP)
bonds under the Municipal Finance Consolidation Act. These bonds may not aggregate more than $190.0
million, as amended by the 2007 Legislature. The purpose of the bonds is to provide funds for BOI to
make loans to eligible government units. The bonds are not a debt or liability of the State. The bonds are
limited obligations of BOI, payable solely from:
1. Repayments of principal and interest on loans made by BOI to participating eligible governmental
units.
2. Investment income under the indenture.
3. An irrevocable pledge by BOI.
BOI has no taxing power. At the bondholder's option, the bonds may be redeemed any March 1, before
maturity. BOI did not enter into an arms-length financing agreement to convert the bonds "put" or tender
and did not resell the bonds into some other form of long-term obligation. Accordingly, these bonds,
considered demand bonds, are included in short-term debt.
The Board annually remarkets the bonds and annually adjusts the interest in accordance with the Bonds’
Indenture of Trust. Interest is paid semi-annually on September 1 and on March 1. Interest is computed
based on a year of 360 days. The interest rate paid to bondholders on September 1, 2020 and March 1,
2021 was 1.00%. The interest rate effective for March 1, 2021 – February 28, 2022 is 0.15%.
In accordance with the Indenture, BOI can issue additional bonds at any time that would bear the interest
rate determined at the time of issuance until the next remarketing date. No new bonds were issued in the
fiscal year ending June 30.
The INTERCAP program does not have principal payments except in the instance of an optional
redemption by BOI. There was a change in outflow in 2021 that occurred primarily due to the optional
redemption of outstanding bonds by the Board in the amount of $70.0 thousand. The bonds are
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remarketed each February and are treated as a new issuance. Interest expense attributable to the current
year was $649.8 thousand.
The amounts issued and outstanding for the year ended June 30, 2021, were as follows (in thousands):
Amount Balance
Series Issued June 30, 2021
2003 $ 15,000 $ 14,305
2004 18,500 17,935
2007 15,000 14,615
2010 12,000 11,860
2013 12,000 11,960
2017 20,000 19,925
$ 90,600
The following schedule summarizes the activity relating to the demand bonds during the year ended June
30, 2021 (in thousands):
Beginning Additions Reductions Ending
Balance Balance
Demand bonds $ 90,670 $ — $ 70 $ 90,600
C. Long-term Debt
The full faith, credit, and taxing powers of the State are pledged for the payment of all general obligation
debt. Revenue and mortgage bonds are secured by a pledge from the facilities to which they relate and
by certain other revenues, fees, and assets of the State and the various colleges and universities. Primary
government bonds and notes outstanding at June 30, 2021, were as follows (in thousands):
Principal Payments
Amount Interest Fiscal Year In Year of Balance
Governmental Activities Series Issued Range (%) (1) 2022 Maturity (2) June 30, 2021
General obligation bonds
Hard Rock Mining Reclamation 2002C 2,500 3.5-4.7 190 200 (2023) 390
CERCLA Program (3) 2005D 2,000 3.25-4.3 120 140 (2026) 650
(4)
Energy Conservation Program 2006B 3,750 4.0-6.0 330 330 (2022) 330
Long-Range Bldg Program 2008D 3,100 3.375-4.35 165 220 (2028) 1,335
Long-Range Bldg Program Refunding 2011D 5,755 3.0-3.25 695 720 (2023) 1,415
Long-Range Bldg Program Refunding 2013C 6,780 2.0-4.0 705 115 (2025) 2,325
Long-Range Bldg Program Refunding 2014 28,810 1.5-5.0 2,195 820 (2028) 15,470
Long-Range Bldg Program 2020C 28,900 2.0-5.0 2,470 3,465 (2030) 26,295
St. Mary Water Project (Taxable)(10) 2020E 2,658 1.62 276 315 (2030) 2,658
2019 Session House Bill 652 2020G 32,505 5.0 2,570 4,030 (2031) 32,505
Long-Range Bldg Program 2020H 5,900 1.75-5.0 210 390 (2041) 5,900
Trust Lands Refunding (Taxable) 2020I 12,510 0.225-1.316 1,245 1,265 (2031) 12,510
(5)
Water Pollution Control Revolving Fund Program 2020J 24,865 0.225-2.456 1,620 305 (2041) 24,865
St. Mary Water Project (Taxable)(10) 2020K 985 1.5 105 115 (2030) 985
Total general obligation bonds $161,018 $ 12,896 $ 127,633
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Principal Payments
Amount Interest Fiscal Year In Year of Balance
(1) (2)
Governmental Activities Series Issued Range (%) 2022 Maturity June 30, 2021
Special revenue bonds
U.S. Highway 93 GARVEE Refunding (7) 2016 22,540 0.74-1.86 3,555 3,740 (2023) 7,295
State Hospital Project (6) 2018 4,575 4.0-5.05 1,165 1,165 (2022) 1,165
(10)
Coal Severance Tax Refunding (Taxable) 2020L 11,965 1.62 1,570 55 (2031) 11,170
Coal Severance Tax ( Taxable) (10) 2020M 2,680 1.94 230 130 (2031) 2,300
Total special revenue bonds $ 41,760 $ 6,520 $ 21,930
Notes Payable
Middle Creek Dam Project (8) 3,272 8.125 100 226 (2034) 1,759
(9)
Tongue River Dam Project 11,300 — 290 290 (2038) 4,926
ITSD IBM Professional Services 758 0.19 170 72 (2023) 243
Total notes payable $ 15,330 $ 560 $ 6,928
Subtotal governmental activities,
before unamortized balances 218,108 19,976 156,491
Unamortized premium 14,846
Total governmental activities $218,108 $ 19,976 $ 171,337
(1)
The interest range is over the life of the obligation.
(2)
Year of maturity refers to fiscal year.
(3)
The CERCLA (Comprehensive Environmental Response, Compensation, and Liability Act) Program Bonds were issued for the purpose of financing the
costs of State of Montana participation in the remedial actions under Section 104 of the CERCLA 42 United States Code Sections 9601-9657, and State of
Montana costs for maintenance of sites under CERCLA. The CERCLA Bonds are secured additionally by a pledge of monies received by the State as cost
recovery payments and revenues derived from the resource indemnity and groundwater assessment tax in the event cost recovery payments are
insufficient.
(4)
Bonds issued for financing the design, construction, and installation of energy conservation projects at various state buildings.
(5)
Bonds were issued to refund the State's General Obligation Bonds (Water Pollution Control State Revolving Fund Program), Series 2015C, maturing on
and after July 15, 2021; provide matching funds to enable the State to obtain capitalization grants from the U.S. Environmental Protection Agency for water
pollution control facilities or other authorized improvements, to state political subdivisions; and pay costs of issuance of the Series 2020J Bonds and of the
refunding.
(6)
Facility Finance Authority loan to the Department of Public Health and Human Services for the Montana State Hospital Project.
(7)
The U.S. Highway 93 GARVEES (Grant Anticipation Revenue Vehicles) Bonds were issued for the purpose of improving a 44.8-mile stretch of U.S.
Highway 93. Repayment of the bonds is secured by a pledge of certain federal aid revenues.
(8)
U.S. Bureau of Reclamation loan to the Department of Natural Resources & Conservation.
(9)
Northern Cheyenne Tribe loan to the Department of Natural Resources & Conservation. The loan will not accrue interest and will be repaid over 39 years.
Loan repayment is secured by the issuance of a coal severance tax bond to the tribe.
(10)
Bonds were private sales.
D. Debt Service Requirements
Primary government debt service requirements at June 30, 2021, were as follows (in thousands):
Governmental Activities
General Obligation Bonds Special Revenue Bonds Notes Payable
Year Ended June 30: Principal Interest Principal Interest Principal Interest
2022 $ 12,896 $ 4,161 $ 6,520 $ 618 $ 560 $ 45
2023 12,911 3,693 5,565 375 466 41
2024 12,396 3,277 1,850 158 398 41
2025 12,115 2,867 1,885 127 403 41
2026 12,410 2,453 1,635 96 408 41
2027 - 2031 52,240 5,993 4,475 156 2,125 204
2032 - 2036 9,335 921 — — 1,988 122
2037 - 2041 3,330 188 — — 580 —
Total $ 127,633 $ 23,553 $ 21,930 $ 1,530 $ 6,928 $ 535
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E. Summary of Changes in Long-term Liabilities
Primary government long-term liability activities for the year ended June 30, 2021, were as follows (in
thousands):
Amounts
Amounts Due In More
Beginning Ending Due Within Than One
Balance Additions Reductions Balance One Year Year
Governmental activities
Bonds/notes payable
General obligation bonds $ 90,250 $ 79,423 $ 42,040 $ 127,633 $ 12,896 $ 114,737
Special revenue bonds 19,330 14,645 12,045 21,930 6,520 15,410
Notes payable 7,478 — 550 6,928 560 6,368
117,058 94,068 54,635 156,491 19,976 136,515
Unamortized premium 10,348 4,498 — 14,846 — 14,846
Total bonds/notes payable (3) 127,406 98,566 54,635 171,337 19,976 151,361
Other liabilities
Lease/installment purchase payable 20,617 1,381 5,955 16,043 4,344 11,699
Compensated absences payable (1) 109,293 53,778 47,716 115,355 47,641 67,714
Estimated insurance claims (1) (2) 121,098 190,517 198,674 112,941 39,989 72,952
Pollution remediation 173,492 806 6,783 167,515 21,303 146,212
Net pension liability 2,243,084 700,884 183 2,943,785 — 2,943,785
Total OPEB liability 45,593 95,801 — 141,394 — 141,394
Total other liabilities 2,713,177 1,043,167 259,311 3,497,033 113,277 3,383,756
Total governmental activities long-term
liabilities $ 2,840,583 $ 1,141,733 $ 313,946 $ 3,668,370 $ 133,253 $ 3,535,117
Business-type activities
Lease/installment purchase payable $ 26 $ 5 $ 10 $ 21 $ 14 $ 7
Compensated absences payable 2,217 879 797 2,299 795 1,504
Arbitrage rebate tax payable 22 — 22 — — —
Estimated insurance claims 17,523 99,363 99,202 17,684 13,804 3,880
Net pension liability 11,510 3,848 68 15,290 — 15,290
Total OPEB liability 817 1,641 8 2,450 — 2,450
Total business-type activities long-term
liabilities $ 32,115 $ 105,736 $ 100,107 $ 37,744 $ 14,613 $ 23,131
(1)
The compensated absences liability attributable to the governmental activities will be liquidated by several of the governmental and internal service funds.
The Employee Group Benefits and Administration Insurance internal service funds will liquidate the estimated insurance claims liability.
(2)
$32.4 million Administration Insurance Plans included in the table above, are related to a catastrophic property loss for which the insurance proceeds were
received prior to the incurred expenses.
(3)
Deferred outflows, including those related to bonds payable, are reported separately on the Statement of Net Position based on GASB Statement No. 65.
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F. Refunded and Early Retired Debt
Prepayments
The Department of Natural Resources and Conservation (DNRC) used current available resources to
make a prepayment of special revenue bond series 2020M in the amount of $270.0 thousand, resulting in
the reduction of the outstanding balance.
Refundings
On September 29, 2020, the State issued general obligation refunding bonds series 2020I in the amount
of $12.5 million to prepay series 2010F bonds in the amount of $12.3 million resulting in a payoff. The
balance of the proceeds was used to pay the cost of issuance of 2020I. The refunding resulted in an
economic gain of $2.2 million and s difference in cash flows of $2.2 million.
On October 20, 2020, the State issued general obligation bonds series 2020J in the amount of $24.9
million. New bond issuances consisted of $5.0 million, while $19.8 million was to prepay series 2015C
resulting in a payoff. The refunding resulted in an economic gain of $1.5 million and a difference in cash
flows of $4.8 million.
On December 23, 2020, the State issued special revenue refunding bonds series 2020L in the amount of
$12.0 million, using $4.3 million of the proceeds to refund series 2010C and 2013B, resulting in payoffs.
This refunding resulted in an economic gain of $548.0 thousand and a difference in cash flows of $747.6
thousand.
G. No-Commitment Debt
Information is presented below for financing authorities participating in debt issues. The related debt
issued does not constitute a debt, liability, obligation, or pledge of faith and credit of the State.
Accordingly, these bonds and notes are not reflected on the accompanying financial statements.
Montana Board of Investments (BOI)
BOI is authorized to issue Qualified Zone Academy Bonds (QZAB) under the Municipal Finance
Consolidation Act as conduit (no-commitment) debt. The revenues, and in some cases, the taxing power
of the borrower, are pledged to repay the bonds. At June 30, 2021, QZAB debt outstanding aggregated
$5.0 million.
BOI is also authorized to issue Qualified School Construction Bonds (QSCB) under the Municipal Finance
Consolidation Act as conduit (no-commitment) debt. The revenues of the borrower are pledged to repay
the bonds. At June 30, 2021, QSCB debt outstanding aggregated $3.2 million.
H. Estimated Pollution Remediation Obligation
Estimated pollution remediation obligations are obligations to address the current or potential detrimental
effects of existing pollution by participating in pollution remediation activities such as site assessments
and cleanups. The estimates are derived using the expected cash flows method as well as technical
estimates from record of decisions, consent decrees, and/or settlement agreements. There may be
factors influencing the estimates that are not known at this time. Prospective recoveries from other
responsible parties may reduce the State’s obligation.
The State’s estimated pollution remediation liability as of June 30, 2021, was $167.5 million. Of this
liability, $3.7 million resulted in settlement agreements to provide restoration of natural resources, water
supplies, and natural resource-based recreational opportunities up to the settlement amount; $163.8
million is based on decrees or settlements for remediation activities. Other estimated liabilities have been
recorded for soil and Polychlorinated Biphenyls (PCB) contamination, as well as removal of asbestos
contamination. The estimated pollution remediation liability was recorded in compliance with accounting
and reporting standards and does not constitute the State’s total acceptance of the liability or
responsibility on these matters.
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I. Non-Exchange Financial Guarantee
BOI provides loan guarantees from the Coal Severance Tax Fund to the Facility Finance Authority (FFA).
BOI exposure to bond issues, surety bonds, and designated loans of the FFA totaled $100.2 million as of
June 30, 2021. FFA is a discretely presented component unit of the State of Montana. FFA guarantee
requests are submitted to BOI for review and approval. BOI’s participation, either duration or any other
consideration, to either purchase bonds or loans or to lend money for deposit into FFA’s statutorily
allowed capital reserve account is explicitly limited by statute, which requires BOI to act prudently. The
guarantee requests from FFA pertain to bonds issued by FFA with a term of up to 40 years. BOI receives
a credit enhancement fee at FFA bond closing based on the term of the financing, the type of bond, the
rating of the borrower, and the type of reserve fund. BOI and FFA have entered into an agreement
detailing repayment to BOI. The credit enhancement fee received during the fiscal year was $385.0
thousand. BOI has not had to perform on any loan guarantee in the past.
The following schedule summarizes the activity related to the non-exchange financial guarantee during
the year ended June 30, 2021 (in thousands):
Beginning Ending
Balance Additions Reductions Balance
$ 88,346 $ 33,465 $ 21,563 $ 100,248
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NOTE 12. INTERFUND BALANCES AND TRANSFERS
A. Balances Due From/To Other Funds
Balances due from/to other funds arise when there is a timing difference between the dates that
reimbursable expenditures and interfund services provided/used are recorded in the accounting system
and the dates on which payments are made. Balances also arise when there is a timing difference
between the dates transfers between funds are recorded and the dates on which payments are made.
Balances due from/to other funds also include the current portion of balances related to amounts loaned
by the Municipal Finance Programs to other funds, under the Board of Investments' INTERCAP loan
program. Balances due from/to other funds are expected to be repaid within one year from origination.
Balances due from/to other funds at June 30, 2021, consisted of the following (in thousands):
Due to Other Funds
Coal Federal Internal Nonmajor Nonmajor State
Severance Special General Service Enterprise Governmental Special
Tax Revenue Fund Funds Funds (2) Funds Revenue Total
Due from Other Funds
Federal Special Revenue $ — $ — $ 2,040 $ — $ — $ — $ 249 $ 2,289
General Fund — 8,844 — — 14,386 — 11,355 34,585
Internal Service Funds 40 1 — — — — 2 43
Municipal Finance Programs — — — 2,076 — 1,654 — 3,730
Nonmajor Enterprise Funds — — — — — — 38 38
Nonmajor Governmental Funds — 4,155 29 — — — 751 4,935
State Special Revenue (1) 4,340 627 464 — 280 754 — 6,465
Total $ 4,380 $ 13,627 $ 2,533 $ 2,076 $ 14,666 $ 2,408 $ 12,395 $ 52,085
(1)
Total due from other funds to the state special revenue fund on the fund financial statement is reported as $16.2 million. The difference of $9.8 million
between the amount reported above and the amount reported in the fund financial statement relates to long-term receivables. The receivables are
reported on the fund financial statement, and the long-term liabilities are reported on the government-wide statement.
(2)
Total due to other funds from the nonmajor enterprise funds on the fund financial statement is reported as $14.9 million. The difference of $221.0
thousand between the amount reported above and the amount reported on the fund financial statement relates to loans payable. The receivables are
reported on the government-wide statement, and the liabilities are reported on the fund financial statement.
B. Interfund Loans Receivable/Payable
Montana statutes include a provision for interfund loans when the expenditure of an appropriation is
necessary, and the cash balance in the account from which the appropriation was made is insufficient to
pay the expenditure. Interfund loans receivable/payable are expected to be repaid within one year from
the date of origination.
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Interfund loans receivable/payable at June 30, 2021, consisted of the following (in thousands):
Interfund Loans Payable
Coal Federal Internal Nonmajor Nonmajor State
Severance Special Service Governmental Enterprise Special Land
Tax Revenue Funds Funds Funds Revenue Grant Total
Interfund Loans
Receivable
General Fund $ 1,593 $ 87,928 $ 662 $ 335 $ 2,700 $ 4,921 $ — $ 98,139
Nonmajor Enterprise
Funds — 140 — — — 75 — 215
Federal Special Revenue — — — — — 5 — 5
State Special Revenue — 78,309 26 — — — 2 78,337
Total $ 1,593 $ 166,377 $ 688 $ 335 $ 2,700 $ 5,001 $ 2 $ 176,696
C. Advances To/From Other Funds
Advances to/from other funds represent the portion of interfund loans that are not expected to be repaid
within one year from the date of origination. Advances to/from other funds also include the noncurrent
portion of balances related to amounts loaned by the Municipal Finance Programs to other funds, under
the Board of Investments' INTERCAP loan program. For more information on the INTERCAP loan
program, refer to Note 11.
Advances to/from other funds at June 30, 2021, consisted of the following (in thousands):
Advances from Other Funds
Federal Internal Nonmajor State
Special Service Governmental Special
Revenue Funds Funds Revenue Total
Advances to Other Funds
General Fund $ 355 $ — $ — $ — $ 355
Municipal Finance Programs — 7,027 162 — 7,189
Nonmajor Governmental Funds — — — 5,328 5,328
State Special Revenue 36,524 — 1,599 — 38,123
Total $ 36,879 $ 7,027 $ 1,761 $ 5,328 $ 50,995
Additional detail for certain advance balances at June 30, 2021, follows (in thousands):
Advances from the Municipal Finance Programs
under the INTERCAP Loan Program
Departmental Function Balance
Natural Resources and Conservation $ 1,465
Public Safety 309
Transportation 5,415
Total $ 7,189
D. Interfund Transfers
Routine transfers between funds are recorded to (1) transfer revenues from the fund legally required to
receive the revenue to the fund authorized to expend the revenue, (2) transfer resources from the
General Fund and special revenue funds to debt service funds to support principal and interest payments,
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(3) transfer resources from enterprise funds to the General Fund to finance general government
expenditures, and (4) provide operating subsidies.
Interfund transfers for the year ended June 30, 2021, consisted of the following (in thousands):
Transfers Out
Coal Federal Internal Nonmajor Nonmajor State
Severance Special General Service Land Enterprise Governmental Special
Tax Revenue Fund (1) Funds (2) Grant Funds (3)
Funds Revenue Total
Transfers In
Coal Severance Tax $ — $ — $ — $ — $ — $ — $ 167 $ — $ 167
Federal Special Revenue — — 2 — — — — 2,057 2,059
General Fund (1) 15,967 147 — — 6 54,087 — 14,879 85,086
Internal Service Funds — — 1,213 — — — — 807 2,020
Land Grant — — — — — — — 94 94
Nonmajor Enterprise Funds — — — — — — — 26 26
Nonmajor Governmental Funds 471 16,290 246,538 160 1,570 — 735 54,195 319,959
State Special Revenue 16,772 9,164 83,240 86 65,264 10,633 27,042 — 212,201
Unemployment Insurance — 203,571 — — — — — — 203,571
Total $ 33,210 $ 229,172 $330,993 $ 246 $ 66,840 $ 64,720 $ 27,944 $ 72,058 $825,183
(1)
$1.1 million was transferred from the General Fund to the Budget Stabilization Reserve Fund; however, those funds are combined for reporting
purposes. Therefore the transfer is not accounted for in the above table as both the transfer-in and the respective transfer-out have been eliminated
as required for proper financial reporting.
(2)
Total transfers-out for internal service funds on the fund financial statements is reported as $5.1 million. The difference of $4.8 million between the
amount reported above of $246.5 thousand and the amount reported on the fund financial statements relates to the transfer of capital assets
between a governmental fund type and the internal service fund type. When capital assets are transferred between these fund types, the transferring
fund reports the net book value of the capital asset as a transfer-out, and the receiving fund reports the net book value of the capital asset as a
capital contribution.
(3)
Total transfers-out for nonmajor enterprise funds on the fund financial statements is reported as $64.8 million. The difference of $67.8 thousand
between the amount reported above of $64.7 million and the amount reported on the fund financial statements relates to the transfer of capital assets
between a governmental fund type and the nonmajor enterprise fund type. When capital assets are transferred between these fund types, the
transferring fund reports the net book value of the capital asset as a transfer-out, and the receiving fund reports the net book value of the capital
asset as a capital contribution.
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NOTE 13. FUND EQUITY DEFICITS
The following funds have a deficit net position remaining at June 30, 2021, as follows (in thousands):
Fund Type/Fund Deficit
Governmental Funds
Federal Special Revenue (2) $ (11,321)
Federal/Private Construction Grants (3) (1,012)
Internal Service Funds (1)
Information Tech Services $ (15,267)
Building and Grounds (1,010)
Admin Central Services (1,841)
Labor Central Services (6,763)
Commerce Central Services (1,559)
OPI Central Services (2,257)
DEQ Indirect Cost Pool (3,730)
Payroll Processing (1,509)
Investment Division (2,080)
Aircraft Operation (552)
Justice Legal Services (977)
Personnel Training (173)
Other Internal Services (244)
SABHRS Finance & Budget Bureau (535)
Enterprise Fund (1)
State Lottery $ (2,219)
Subsequent Injury (791)
(1)
The allocation of net pension liability and total OPEB liability
is a significant factor in creating these deficits. For more detail
related to these liabilities, see Notes 6 and 7, respectively.
(2)
Delayed fire season federally reimbursable costs, which are
currently reported as unavailable revenues within deferred
inflow of resources, is a significant factor creating this deficit.
(3)
A nonmajor capital projects fund.
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NOTE 14. MAJOR PURPOSE PRESENTATION
Special Revenue and Fund Balances Classifications by Purpose – In the governmental fund financial
statements, classifications of special revenue fund revenues and fund balances are presented in the
aggregate. The tables presented below further display the special revenue fund revenues and fund
balances by major purpose for the year ending June 30, 2021.
State Special Revenue By Source (in thousands)
Health and
General Public Human Natural
Government Safety Transportation Services Education Resources Total
Licenses/permits $ 122,053 $ 51,533 $ 25,824 $ 2,514 $ 165 $ 96,946 $ 299,035
Taxes 231,006 6,313 274,431 — — 19,114 530,864
Charges for services 27,193 20,953 9,183 58,004 3,179 32,857 151,369
Investment earnings 368 2,292 82 86 302 6,614 9,744
Securities lending income — 17 — — 2 28 47
Sale of documents/
merchandise/property 530 4,237 118 52 1 4,123 9,061
Rentals/leases/royalties 256 17 667 48 5 261 1,254
Contributions/premiums 29,602 10 — 4,871 — 609 35,092
Grants/contracts/donations 1,303 2,845 590 3,693 2,311 4,728 15,470
Federal 3,479 — — 5,504 3 10 8,996
Federal indirect cost
recoveries 1 — 51,830 47 — 4,671 56,549
Other revenues 1,814 543 257 358 84 707 3,763
Transfers in 42,103 8,801 1,683 16,113 1,958 141,543 212,201
Total State Special
Revenue $ 459,708 $ 97,561 $ 364,665 $ 91,290 $ 8,010 $ 312,211 $ 1,333,445
Federal Special Revenue By Source (in thousands)
Health and
General Public Human Natural
Government Safety Transportation Services Education Resources Total
Charges for services $ 852 $ 59 $ — $ 6,805 $ 209 $ — $ 7,925
Investment earnings 544 7 — — 5 16 572
Grants/contracts/donations — — — 9 35 — 44
Federal 1,428,286 18,183 535,970 2,363,474 249,852 96,493 4,692,258
Federal indirect cost
recoveries — — — 96,740 113 1,354 98,207
Other revenues — 6 — 1,326 1 2 1,335
Transfers in 2 1,591 — 466 — — 2,059
Total Federal Special
Revenue $ 1,429,684 $ 19,846 $ 535,970 $ 2,468,820 $ 250,215 $ 97,865 $ 4,802,400
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Governmental Fund Balance By Function, June 30, 2021
(in thousands)
Special Revenue Permanent
Coal
Severance Land
General State Federal Tax Grant Nonmajor Total
Fund balances:
Nonspendable
Inventory $ 4,087 $ 21,669 $ — $ — $ — $ — $ 25,756
Permanent fund principal — 500 — 664,992 871,681 414,009 1,951,182
Long-term notes/receivables 355 — — — — — 355
Prepaid expense 729 461 151 — — — 1,341
Total nonspendable 5,171 22,630 151 664,992 871,681 414,009 1,978,634
Restricted
General government — 30,253 — — — 22,941 53,194
Public safety — 179,901 — — — 1 179,902
Transportation — 152,946 — — — — 152,946
Health and human services — 24,414 — — — 673 25,087
Education — 15,029 — — — 13 15,042
Natural resources — 794,536 — — — 10,601 805,137
Total restricted — 1,197,079 — — — 34,229 1,231,308
Committed
General government 114,199 162,803 — 564,068 — 262,669 1,103,739
Public safety — 71,674 — — — — 71,674
Transportation — 21,450 — — — — 21,450
Health and human services — 69,725 — — — 12 69,737
Education — 26,216 — — — — 26,216
Natural resources — 405,668 — — — 30,877 436,545
Total committed 114,199 757,536 — 564,068 — 293,558 1,729,361
Assigned
General government — 1,121 — — — 66 1,187
Public safety — — — — — 185 185
Health and human service — 772 — — — — 772
Education — 20 — — — — 20
Natural resources — 40 — — — — 40
General Fund spend down 75,000 — — — — — 75,000
Encumbrance 20,387 — — — — — 20,387
Total assigned 95,387 1,953 — — — 251 97,591
Unassigned 641,543 — (11,472) — — (1,012) 629,059
Total fund balance $ 856,300 $ 1,979,198 $ (11,321) $ 1,229,060 $ 871,681 $ 741,035 $ 5,665,953
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NOTE 15. RELATED PARTY TRANSACTIONS
The Montana School for the Deaf and Blind is associated with a foundation, which is a nonprofit
organization outside of state government. The school’s foundation is governed by a board of directors that
annually approves a budget for the financial support to be provided to the school. This budget defines the
allowable expense categories for the year. A school employee is the person approving the expenses to be
paid by the foundation based on its budget. The employee submits the approved invoices to the
foundation’s bookkeeper, who then prepares the checks and submits them to a board member who
reviews backup documentation and signs the checks.
The Department of Labor and Industry Workforce Services Division rents space in Libby, MT from Mineral
Plaza, LLC, in which one of the owners is a local job service manager. The term of the lease is July 1,
2013, and ending June 30, 2022. The annual lease amount is currently set at $21.3 thousand.
The Department of Labor and Industry Workforce Services Division rents space in Cut Bank, MT from
Glacier Community Health Center, Inc., in which one of the active board members is a local job service
manager. The term of the lease is July 1, 2019, and ending June 30, 2022. The annual lease amount is
currently set at $35.0 thousand.
The relative of a member of Montana Department of Transportation’s (MDT) management team is part
owner of a business that holds a State term contract for supplies. A term contract is a contract in which a
source for supplies is established for a specific period of time at a predetermined unit price. The term
contracts are issued by the State Procurement Bureau of the Department of Administration (DOA) and
state agencies are required to use the DOA issued term contracts for such supplies. MDT purchased
supplies from this business in the amount of $98.4 thousand for the fiscal year ended June 30, 2021.
A relative of a member of MDT's Management Team is part owner of a business which has been granted
the right by the local airport to operate and provide related services. There is only one such operator at
this airport. Given this exclusivity, MDT had transactions with this business. MDT purchased services in
the amount of $100.9 thousand for the fiscal year ended June 30, 2021.
Per Section 85-1-617 and 85-1-624, MCA, Renewable Resource Grant and Loan Program, the
Department of Natural Resources and Conservation (DNRC) is eligible to issue General Obligation (GO)
bonds for the purpose of making private sale loans. DNRC has applied and received “recycled loan funds”
from the State Revolving Fund (SRF) program for the non-point source private loan program. The loans
are GO private sale bonds. The balances for loans in repayment for fiscal year 2021 was $1.6 million. The
loans have interest rates of 2.5% and are repaid over 15 years. These loans are presented as Advances
to Other Funds on the balance sheets.
Per Administrative Rules of Montana 17.58.101, the Montana Petroleum Tank Release Compensation
Board (Board) is an independent board that is attached to Department of Environmental Quality (DEQ) for
administrative purposes only. Board members are required to follow Montana's code of ethics, which
includes recusing oneself in matters related to a conflict of interest. DEQ is required to go through a
competitive bidding process to ensure this State law is followed. Four Board members were identified as
having related party transactions with DEQ. These relationships include members who are: 1) an
employee of a company that had a release and is receiving funds; 2) an agent for an insurer that covered
a station tank release and is receiving funds; 3) an officer in a bank that receives funds; and 4) a
contractor for DEQ, that is responsible for clean-up oversight, and is also a shareholder of a separate
company that receives funds. A DEQ employee's spouse is an elected City Commissioner for the City of
Helena which was awarded $25.5 thousand in VW Settlement funds for three electric charging stations by
DEQ. Total payments to all related parties were direct payments to the contractors in the amount of
$312.6 thousand and indirect payments to the bank and the insurance company in the amount of $402.0
thousand and $42.1 thousand, respectively, for the fiscal year ended June 30, 2021.
All lotteries that offer multi-state games transact with the Multi-State Lottery Association (MUSL), which
requires the lottery directors from each of the states to be on the MUSL board of directors. The former
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Director of the Montana Lottery was on the MUSL board until January 1, 2021, and served as the
Secretary of its board of directors. As such, the former Director of the Montana Lottery was in a
management position for both MUSL and the Montana Lottery, which have significant transactions
between each other. The Montana Lottery has prize reserves with MUSL in the amounts of $1.1 million for
the fiscal year ended June 30, 2021. The prize reserve monies are assets of the Montana Lottery and
would be returned if the Montana Lottery were to quit any of the multi-state games. Weekly, MUSL
collects each state’s share of prize expenses to go towards respective jackpots. If a state has a large
enough prize amount or number of winners for any particular draw, MUSL would then reimburse any state
for the excess prize payments. The Montana Lottery paid MUSL $7.7 million for its share of prizes and
received reimbursements for prizes in the amount of $750.0 thousand for the fiscal year ended June 30,
2021.
There are campus-affiliated foundations within the Montana University System (MUS) identified in the
Montana Board of Regents of Higher Education Policy 901.9 – Campus-Affiliated Foundations; Montana
University System Foundation. The private foundations affiliated with campuses of the MUS provide
support to their respective campuses, consistent with the mission and priorities of such campuses.
Transactions occur between the Commissioner of Higher Education and said foundations as
reimbursements for hosting MUS constituents and other related events and gatherings. These
transactions do not affect the financial statements in any way; however, the total such transactions were
$1.7 thousand for the fiscal year ended June 30, 2021.
In addition, the MUS Group Insurance Program offers insurance coverage and receives insurance
premiums from other related parties such as the campus-affiliated foundations and the community
colleges. This premium revenue for campus-affiliated foundations and community colleges approximately
amounts to $6.7 million for the fiscal year ended June 30, 2021. Beginning January 1, 2022, campus-
affiliated foundations will cease to be covered by the MUS Group Insurance Program.
Montana Higher Education Student Assistance Corporation (MHESAC) has no employees, and the
Student Assistance Foundation (SAF) manages its business operations. A Board of Regents board
member is also an MHESAC Board of Directors member, an Office of the Commissioner of Higher
Education OCHE staff member is an MHESAC officer, and the Commissioner of Higher Education is an
Ex-officio member of the board.
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NOTE 16. CONTINGENCIES
Litigation
The State is party to legal proceedings, which normally occur in government operations. The legal
proceedings are not, in the opinion of the State's legal counsel and the Department of Administration,
likely to have a material adverse impact on the State's financial position, except where listed below.
PPL v. Montana involves ownership of sections of riverbed on the Missouri, Clark Fork, and Madison
rivers. The case originated in 2003, when a group of parents of school-age children sued Petitioner PPL
Montana, LLC (PPL), in Federal Court, alleging that the company must pay rent for the use of state-
owned riverbeds to generate hydroelectric power. After the Federal Court dismissed the case for lack of
jurisdiction, PPL filed an action in state district court seeking a declaration that the state could not charge
them rent for the use of the riverbeds at issue. The State intervened in the case and counterclaimed for a
declaration that PPL and its co-plaintiffs unlawfully occupied state lands and must compensate the State
Land Trust on behalf of its public beneficiaries for the use of those lands. The legal test for ownership of
the riverbeds is whether the rivers at issue were navigable at the time of statehood. Based upon the
historical record, the District Court granted the State summary judgment on the question of navigability,
and the case proceeded to trial on the issue of compensation for the use of trust lands. In June of 2008,
the Court issued its ruling and ordered that PPL owed the State almost $41.0 million for past use of the
riverbeds.
PPL appealed the decision to the Montana Supreme Court. The case was briefed and argued before the
Court. In March of 2010, the Montana Supreme Court issued a decision upholding the district court’s
finding of navigability and determination of compensation.
PPL appealed the case to the United States Supreme Court. The case was briefed and argued, and in
February of 2012, the Court reversed the Montana Supreme Court’s decision. The United States
Supreme Court concluded that the Montana courts had applied an incorrect legal standard for
determining a river’s navigability. The Court clarified that navigability had to be determined on a segment-
by-segment basis. The Court remanded the case for further proceedings, and the case currently is
pending in the Montana First Judicial District, Lewis and Clark County, Judge Michael McMahon
presiding. The cause number is CDV 2004-846. Additional detail is provided below as the case has been
remanded to the United States District Court, District of Montana, Helena Division.
The most obvious impact of the Supreme Court’s decision is that the State is no longer entitled to the
$41.0 million judgment. The monetary amount that the State may be entitled to depends on the
navigability of the rivers, which will have to be determined under the Supreme Court’s segment-by-
segment approach. Going forward, the litigation will focus on applying the Supreme Court’s segmentation
approach to determine the navigable reaches of the Madison, Clark Fork, and Missouri Rivers. At this
stage, it is difficult to predict an outcome of this litigation.
A less obvious financial impact is the bill of costs that PPL submitted to the district court following the
remand. PPL requested that the district court tax the State of Montana with $1.2 million for PPL’s costs
relating to the appellate proceedings. All, but approximately $31.0 thousand, relate to premiums that PPL
paid for a supersedeas bond in support of staying the $41.0 million judgment. In May 2012, the State filed
its response to PPL’s bill of costs and agreed to costs for $31.3 thousand. However, the State moved the
court to deny PPL’s request for costs related to the supersedeas bond. The parties stipulated to hold this
issue in abeyance until the court rules on all remaining matters in the case. Counsel for the State has
agreed to release the supersedeas bond. In the opinion of counsel, there are good legal arguments that
support the State’s position that it should not be required to pay the supersedeas bond premiums;
however, legal and procedural uncertainties exist that make an adverse determination reasonably
possible.
This case, now known as State of Montana v. Talen Montana, LLC et al. (Cause No. CV 16-35-H-DLC-
JCL), was scheduled for a bench trial without a jury from January 3 through January 19, 2022. No
decision was made by the Judge. Rather, the parties are required to submit amended proposed findings
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of fact and conclusions of law by mid-April 2022. Thereafter the Court will render a decision, probably no
earlier than July 2022. All Defendants have answered the State's amended complaint, including the
recently added Defendant United States. The State's expert witnesses have been disclosed and
Defendants' expert witnesses were required to be disclosed in February 2021. Discovery closed May 21,
2021. The State's claims against the utilities remain unchanged and the State still holds the opinion that
no further potential liability to the State is expected relative to this action and no additional updates are
necessary in regard to the outstanding litigation.
Diaz et al. v. Blue Cross and Blue Shield of Montana et al. (Diaz) was a lawsuit filed in the Montana First
Judicial District Court, Lewis and Clark County, Cause No. BVD-2008-956, in October 2008, by plaintiffs
Jeanette Diaz, Leah Hoffman-Bernhardt, and Rachel Laudon, individually, and on behalf of others
similarly situated, naming Blue Cross and Blue Shield of Montana (BCBS), New West Health Services
(New West), Montana Comprehensive Health Association, and the State of Montana (State) as
defendants. The complaint alleges that the defendants have violated the made-whole laws of Montana
and illegally given themselves subrogation rights.
On June 12, 2009, the Plaintiffs filed with the District Court a motion for class certification. The District
Court Judge denied the Plaintiffs’ motion for class certification on December 16, 2009. The Plaintiffs
appealed this decision to the Montana Supreme Court. As part of the review of the underlying decision
denying class certification, the Montana Supreme Court remanded the case to the District Court to
determine the question of whether the made-whole laws, codified in Section 2-18-902 and Section
33-30-1102, MCA, apply to the various types of third-party administrators (TPAs) at issue in Diaz. The
District Court held that these laws do not apply to TPAs. The Plaintiffs appealed this decision.
On December 21, 2011, the Supreme Court issued its decision, holding that the District Court abused its
discretion in denying a class action and that BCBS and New West, as TPAs of the State’s health plan, are
not subject to the made-whole laws as “insurers” under Section 2-18-901 to 902, MCA, or under a third-
party beneficiary theory.
On June 20, 2012, the District Court ruled on the State’s summary judgment motion seeking an order
from the court that the State has not violated the made-whole laws in the administration of its health plan.
The court denied the State’s motion, ruling that the State is an insurer for the purposes of the made-whole
laws and that it must conduct a made-whole analysis before exercising and subrogation/coordination of
benefits rights. The State filed with the District Court a motion requesting that the court certify its decision
to the Montana Supreme Court. The District Court granted the motion, and the Montana Supreme Court,
over Plaintiffs’ objection, ultimately agreed in a November 27, 2012, Order to hear this issue. The Plaintiffs
also appealed to the Montana Supreme Court, the District Court’s definition of the class action.
On August 6, 2013, the Montana Supreme Court issued its opinion, affirming the Montana First Judicial
District Court’s decision defining the class action to include only those State benefit plan members who
had timely filed claims for covered benefits for services that took place no earlier than eight years before
the filing of the Plaintiffs’ complaint, which was October 23, 2008.
On November 6, 2013, the Montana Supreme Court issued its opinion, affirming the District Court’s June
20, 2012 Decision that the applicable made-whole laws apply to the State benefit plan.
On September 8, 2014, the District Court issued an order ruling on several motions that the parties had
filed. The principal rulings were: (i) the Court authorized Plaintiffs to proceed with additional discovery to
determine if the class definition should be altered or amended; (ii) given its order to allow additional
discovery, the Court held in abeyance its decision on the State’s Motion for Summary Judgment
requesting that the class be limited to those who timely filed claims within the one-year filing restriction
contained in the State’s policy; (iii) the Court granted the Plaintiffs’ motions asking the Court to require the
State to conform its health plans, procedures, notices, and practices to comply with the Montana
Supreme Court’s rulings in this case and to pay covered medical expenses, await the resolution of claims
against liability carriers, and then conduct a made-whole determination before it can exercise subrogation
or accept reimbursements from its members or providers; and (iv) the Court ordered the parties to
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develop a class notice to be sent to past and current plan members dated back to eight years before this
suit was filed. The State and Plaintiffs’ counsel developed the notice that has been sent to class
members.
On April 13, 2015, the District Court issued an Order on Interest to Be Paid, requiring the State to include
in the payments ultimately made to class members' interest at the rate of 10.0% per annum. For claims
arising before December 24, 2009, interest would begin 30 days following the Montana Supreme Court’s
decision in Blue Cross and Blue Shield of Montana, Inc. v. Montana State Auditor. For any claims arising
after December 24, 2009, interest would begin starting on the day the underlying medical expenses were
incurred.
On October 5, 2015, the Plaintiffs filed with the District Court a motion directing the State to pay attorney
fees arising from the class action suit. On November 9, 2015, the District Court issued an order denying
Plaintiffs’ motion for attorney fees.
On December 14, 2015, the District Court issued an order certifying that its orders concerning interest
and attorney fees were final for purposes of an appeal to the Montana Supreme Court. On January 12,
2016, the Plaintiffs filed a Notice of Appeal with the Montana Supreme Court, appealing the interest and
attorney fee orders.
Pursuant to the Montana Supreme Court’s mandatory mediation process, the parties reached a
settlement on attorney fee payments; however, the parties did not reach agreement on the interest issue.
On October 25, 2016, the Montana Supreme Court issued its ruling on the interest issue, finding that
November 14, 2009, is the date that interest commences; and, for claims arising after November 14,
2009, interest will begin starting on the day the underlying medical expenses were incurred.
On April 28, 2017, the District Court appointed a Special Master to consider and resolve issues regarding
expanding the class to persons with unsubmitted claims; whether to include claims after 2009; whether
the State must identify members from third party administrators other than Blue Cross/Blue Shield;
whether, if at all, the State must reform its systematic practices; supervising the payment and notice
process; which party or parties should pay the Special Master for her time and expenses; whether the
District Court should approve a partial payment of attorney fees; setting a time frame for making claims;
setting a time for ending the class action; determining payment of residual funds; and any other issues as
necessary to facilitate the swift and equitable resolution of the case.
As of June 30, 2017, the State paid Plaintiffs $1.4 million in based payments plus interest.
On June 21, 2017, the Special Master issued a report and recommended order regarding the partial
payment of the Plaintiffs’ counsels’ attorney fees. This recommendation was based on a stipulation the
State and the Plaintiffs’ counsel had reached, agreeing that the State would pay counsel $400.8 thousand
for claims made by individuals that could be documented. The State has paid this amount to class
counsel.
The Special Master issued a second report and recommended order expanding the class on August 8,
2018. The principal findings of this recommendation were to expand the class definition to include those
individuals who did not submit claims to the State for processing; to expand the class to end June 30,
2016; and to redefine the class as (a) employees, employee dependents, retirees, and retiree dependents
who participate or participated in the State of Montana’s health benefit plan(s), administered or operated
by the State and/or the third party administrators whose claims for covered benefits took place no earlier
than eight years prior to the filing of the complaint in this action, which was October 23, 2008; (b) who
were injured through the legal fault of persons who have legal obligations to compensate them for all
damages sustained; and (c) who have not been made whole for their damages (or for whom the State
and TPAs conducted no made-whole analysis) because the State and the third party administrators
programmatically failed to pay benefits for their covered medical costs. On October 29, 2018, the District
Court Judge issued an Order Adopting the Special Master's Report Expanding the Class.
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As of June 30, 2018, the State paid Plaintiffs $1.7 million in based payments plus interest.
On April 23, 2019, the District Court Judge approved the parties' motion for a process to identify and
distribute residual funds for known class members on the master list for Blue Cross Blue Shield of
Montana claims. On May 2, 2019, the State issued payment of $122.0 thousand to the Hunt Law Firm for
the residual funds and interest thereon.
On May 1, 2019, the parties filed the Notice to Special Master of Agreement on Notice Procedure.
Pursuant to that notice, the State distributed notices to all former and current State employees enrolled in
the State health plan between January 1, 2010, through June 30, 2016. Notice was distributed through
email and first-class mail. The initial distribution of notices was May 23, 2019. The deadline for a claimant
to return a claim to the State was November 30, 2019.
As of June 30, 2019, the State paid Plaintiffs $2.0 million, including the payment for residual funds and
interest.
As of June 30, 2020, the State paid Plaintiffs $2.9 million for claim payments, interest, and attorney fees
for Plaintiffs' counsel.
As of February 28, 2021, the state paid Plaintiffs a cumulative $3.0 million for claim payments, interest,
and Plaintiffs' attorney fees.
On March 23, 2021, Plaintiffs filed a motion to enforce an October 29, 2018 Order to address first party
medical payments coverage in casualty insurance policies (the “Med-pay Claims”). Plaintiffs contend that
the Med-pay Claims should be paid. On July 23, 2021, Special Master held a hearing on Plaintiffs’ motion.
As of June 30, 2021, the amount State paid Plaintiffs for claim payments, interest, and attorney fees for
Plaintiffs’ counsel was unchanged from February 28, 2021.
Since the case is ongoing, the State does not have sufficient information to determine the ultimate cost to
the State.
Disability Rights Montana v. Gootkin and Salmonsen (Cause # CV-15-22) is a civil rights case filed by the
ACLU of Montana on behalf of Plaintiff, alleging deliberate indifference in the provision of mental health
care to seriously mentally ill inmates at Montana State Prison. Plaintiff sought only declaratory and
injunctive relief and later amended its complaint, seeking similar relief under Section 1983 of Title 42 of
the United States Code, the Civil Action for Deprivation of Rights. The District Court had dismissed the
case for failure to state a claim, which order was appealed by Plaintiffs to the Ninth Circuit Court of
Appeals. The Ninth Circuit Court of Appeals overturned the district court’s ruling and remanded the case
back to the district court in front of a new judge. As a result, the Department of Corrections (Department)
has participated in on-going discovery, with the aid of outside expert witnesses and the defense of the
case through outside legal counsel. The parties had previously exchanged settlement proposals without
success. Because of legislation enacted during the 2019 legislative session, the Department implemented
significant changes in the use of restrictive housing, especially as related to seriously mentally ill inmates.
The Plaintiff seeks only prospective injunctive and declaratory relief, as well as reasonable attorneys fees,
litigation expenses and costs, which could likely exceed $1.0 million. At this time, the Department
continues to be unable to specify an anticipated amount of financial obligation imposed either by
settlement or by judgment. It is reasonably possible that there could be an unfavorable outcome in this
case.
Cascade County v. State of Montana, Montana and Department of Corrections (Department) (Cause #
CDV-2019-1181) is a case filed by Cascade County, suing for breach of contract, unjust enrichment and
breach of implied covenant of good faith and fair dealing, seeking over $766.0 thousand in unpaid jail
reimbursement costs plus interest at 10.0% per annum. This case involved interpretation of contract and
statutory language. This matter was referred to the Department of Justice Agency Legal Services for
representation of the Department. The matter was resolved prior to June 30, 2021, by settlement and
dismissal at no cost to the State or Department.
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Vincent, Benner, and Hoch v. DPHHS (CDV-19-0314, Eighth Judicial District Court, Cascade County) was
filed on May 17, 2019, by Montana Optometric Association members seeking class certification of all
licensed Montana optometrists who are participating providers in Montana Medicaid. The named plaintiffs
claim the Department’s Medicaid rate structure discriminates against them because they are paid less
than physicians (doctors of medicine or doctors of osteopathy) for performing the same services. They
cite Section 37-10-104, MCA, as the basis of the discrimination claim. They seek declaratory relief and
permanent injunctive relief in their claims of discrimination, violations of MAPA, breach of contract, and
implied covenant of good faith. They request damages, interests, costs, and attorney fees, which would
amount to more than $1 million. A motion for class certification has been fully briefed, but remains
pending.
William and Ellen Solem v. State of Montana (CDV-10-073 (D)) is a case that the Solems filed a motion
for class certification in the Eleventh Judicial District Court, Flathead County, challenging their land value,
primarily arguing that the water influence used by the Department leads to improperly inflated values. The
District Court granted class certification. The class certified is “all lakefront property owners in
Neighborhood 800 who have timely paid under protest any portion of their property taxes since the last
assessment cycle beginning in 2009”. Neighborhood 800 is the Lakeside-Somers area in which the
Solems’ property is located. Between 2009 and 2015, approximately 200 taxpayers in Neighborhood 800
paid property taxes under protest. A four-day trial on liability was held in March 2019. On October 15,
2019, the District Court issued its Findings of Fact, Conclusions of Law, and Order finding the Department
liable. The District Court concluded that the Department employed a non-uniform method of appraisal,
failed to value similar properties in a like manner, and failed to appraise the subject properties in a
manner that is fair to all taxpayers. The matter has now moved to the damages phase. Motions relating to
damages were filed and the District Court granted Solems’ motions on the calculation of damages and
whether Solems are entitled to attorney fees and costs. The District Court denied Solems’ motion to
expand the class definition to include taxpayers who did not pay under protest. The District Court denied
the Department’s motion to decertify the class. The Department recently received invoices of Solems’
legal fees and costs (between $400.0 thousand and $600.0 thousand) and is reviewing them. The
Department intends to appeal this matter to the Montana Supreme Court upon issuance of a final
judgment.
S.W v. State of Montana (DDV-13-813, Eighth Judicial District Court, Cascade County) is a case filed in
2013 by the guardian of a minor against the State Department of Public Health and Human Services (the
Department). The Plaintiff contended that the Department was negligent per se as a matter of law
involving a child abuse incident caused by the birth father’s girlfriend that permanently harmed SW. The
perpetrator was subsequently convicted and imprisoned for thirty years. On February 18, 2020, the
District Court judge issued an order granting partial summary judgment to plaintiff, determining that the
Department had a duty to SW, that a violation of the statutory and administrative regulations constitutes
negligence per se, that the Department is not entitled to immunity, and that the statutory damages cap in
Section 2-9-108(1), MCA does not apply. A jury trial, limited to the issue of damages, was held on
November 16-17, 2021. The jury awarded damages of $16.7 million which included damages for loss of
future earning capacity, past personal care assistance, future care costs, mental and emotional suffering,
and impairment of capacity to pursue an established course of life. A judgment was issued on November
18, 2021. The Department will be appealing the matter to the Montana Supreme Court and expects a
decision sometime in late 2022. As the matter will be on appeal, the Department is unable to assess the
degree of probability of an unfavorable final outcome or the associated loss until the Montana Supreme
Court issues a decision.
The Public Employee Retirement Board (PERB) has three items of outstanding litigation in relation to the
Sheriffs’ Retirement System (SRS) and the Montana Public Employee's Retirement Administration
(MPERA). Refer to Note 6, section J, for additional disclosure in relation to this legal proceeding.
The Montana State Fund, a discretely presented component unit of the State. Refer to Note 18, section
O, for additional disclosure in relation to these legal proceedings.
Federal Contingencies
Federal Grants - The State receives significant financial assistance from the Federal government in the
form of grants and entitlements, including several non-cash programs (which are not included in the basic
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financial statements). Receipt of grants is generally conditioned upon compliance with terms and
conditions of the grant agreements and applicable Federal regulations, including the expenditure of
resources for eligible purposes. Substantially all grants are subject to either the Federal Single Audit Act
or financial and compliance audits by the granter agencies of the Federal government or their designees.
Disallowances and sanctions as a result of these audits may become liabilities of the State. The State is
currently involved in administrative and legal proceedings, with certain federal agencies, contesting
various disallowances and sanctions related to federal assistance programs for $131.7 thousand at June
30, 2021. The State's management believes ultimate disallowances and sanctions, if any, will not have a
material effect on the basic financial statements.
Food Distribution Program – The amount reported for Food Distribution programs (ALN #10.555, #10.565,
#10.567, #10.569, and #93.053) represents the dollar value of food commodities distributed to eligible
recipients during the year. The U.S. Department of Agriculture provides the current value of the
commodities used by the State to compute the amount reported. The amount of funds received to
administer the program is also included in the reported amount. The State also distributes food
commodities to other states in the western region of the United States, the value of which is excluded
from the reported amounts. During fiscal year 2021, the State distributed $479.8 thousand of food
commodities under ALN #10.567 to other states.
The State distributed $10.8 million in commodities in fiscal year 2021. The value at June 30, 2021, of
commodities stored at the State’s warehouse, is $5.8 million, for which the State is liable in the event of
loss. The State has insurance to cover this liability.
Miscellaneous Contingencies
Loan Enhancements – As of June 30, 2021, the Board of Investments (BOI) had provided loan
guarantees from the Coal Severance Tax Permanent Fund to the Municipal Finance Programs and the
Facility Finance Authority (a component unit of the State of Montana), totaling $190.8 million. The BOI’s
exposure to bond issues of the Municipal Finance Programs was $90.6 million, while exposure to bond
issues, surety bonds, and designated loans of the Facility Finance Authority were $100.2 million. The BOI
has not been held responsible for any loan guarantee in the past.
Gain Contingencies – Certain natural resource and corporate tax assessments are not reported on the
State's financial statements because they are being protested administratively. As of June 30, 2021, the
following assessments (by fund type) were outstanding (in thousands):
Taxes General Fund
Corporate Tax $ 14,668
The collectability of these contingencies is dependent upon the decisions of the court, other authorities, or
agreed upon settlements. The corporate tax assessments include material estimates that could result in a
significant reduction of the tax assessed once actual numbers are provided. Interest related to corporate
tax assessments is distributed to the General Fund and is included in the assessment total above.
Loss Contingencies – Certain corporations have requested refunds that are not reported on the State’s
financial statements as of June 30, 2021. The corporations have appealed the Department of Revenue's
decision to deny or adjust the refund. As of June 30, 2021, these include $11.7 million of General Fund
corporate tax refunds. It is estimated that most of these corporation tax refunds would consist primarily of
tax and could be significantly reduced or eliminated due to audits and appeals currently in process.
Certain companies have protested property taxes that have been included as revenue on the State’s
financial statements as of June 30, 2021. As of June 30, 2021, these include $19.2 thousand of protested
property taxes recorded in the General Fund and $21.8 thousand recorded in the State Special Revenue
Fund.
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NOTE 17. SUBSEQUENT EVENTS
Investment Related Issues
Since June 30, 2021, the Board of Investments (BOI) made additional commitments to fund loans from
the INTERCAP loan program in the amount of over $16.1 million.
Since June 30, 2021, BOI has committed an additional $109.0 million within the Real Estate Pension
Asset Class and $100.0 million within the Real Assets Pension Asset Class, and $210.0 million within the
Private Investments Pension Asset Class of Consolidated Asset Pension Plan (CAPP), and $50.0 million
within Real Estate of the Trust Fund.
Since June 30, 2021, BOI has reserved $5.5 million, committed $1.7 million, and funded $7.4 million of
additional funds to Montana lenders from the Coal Severance Tax Permanent Fund’s In-State Loan
Program. Of the commitments in effect as of June 30, 2021, $10.0 million have since expired. Additional
reservations in the amount of $4.9 million were made for the Veterans' Home Loan Program (VHLM)
residential mortgage purchases.
On November 30, 2021, BOI adopted Resolution No. 249 entitled: “Resolution of the Board of
Investments of the State of Montana relating to its annual adjustable rate Municipal Finance Consolidation
Act Extendable Bond (INTERCAP Loan Program), Taxable Series 2022, fixing the terms and conditions of
the INTERCAP Bond, and authorizing the sale and issuance of the INTERCAP Bond to the Unified
Investment Program.” All outstanding tax-exempt series bonds were defeased on January 25, 2022, in the
amount of $90.6 million and were redeemed on March 1, 2022. The Taxable Series 2022 bonds were
issued on January 25, 2022, in the amount of $68.7 million.
Other Subsequent Events
On November 17, 2021, Department of Natural Resources & Conversation (DNRC) paid off the Coal
Severance Tax series 2020M bond in full for $2.3 million principal and $20.5 thousand in interest.
On November 19, 2021, DNRC withdrew an additional $1.5 million in proceeds from the previously
authorized Drinking Water series 2020N bond anticipation note (BAN); drawing the entire authorized
amount of $3.2 million.
On December 1, 2021, DNRC prepaid $700.0 thousand in principal to the Coal Severance Tax series
2020L bond.
On December 14, 2021, the Board of Examiners authorized the following:
• $3.9 million series 2021A general obligation bond anticipation notes, and
• $3.8 million series 2021B general obligation bond anticipation notes.
On December 17, 2021, DNRC issued new general obligation BANs from BOI. The Drinking Water State
Revolving Fund issued series 2021A for $3.9 million, and the Water Pollution Control State Revolving
Fund issued series 2021B for $3.8 million. Both bonds will be used for new loans within the programs.
The Montana Department of Transportation (MDT) was issued notice from the Federal Motor Carrier
Safety Administration (FMCSA) of possible sanctions regarding the Entry Level Driver Training (ELDT)
requirements for commercial driver’s licenses (CDL). These new training standards must be implemented
by the compliance date of February 7, 2022. House Bill 608 (HB608) was introduced to the 2021
legislature to implement ELDT regulations. HB608 did not pass. States that are not compliant with the
ELDT requirements by the compliance date will be subject to decertification of their CDL programs and/or
withholding of up to 4 percent of the National Highway Performance Program and the Motor Carrier
Safety Assistance Program (MCSAP) funding that would otherwise be apportioned. The potential for
sanctions is high since HB608 did not pass. The consequences of the State’s non-compliance with CDL
regulations may result in up to 4 percent of the State’s Federal Aid Highway apportionment for fiscal year
2022, or $15.0 million; and 8 percent in fiscal year 2023 and subsequent years of approximately $31.0
million per year. MDT could lose MCSAP grant eligibility resulting in FMCSA withholding up to $6.5 million
annually.
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The State of Montana was allocated $1.6 billion from the American Rescue Plan Act (ARPA) during fiscal
year 2021. The legislature has appropriated approximately $1.2 billion and enacted laws to allow
appropriations to continue into the 2023 and 2025 bienniums. The programs designated by the legislature
for ARPA funding are infrastructure, communications, economic transformation and stabilization,
workforce development, and health. ARPA funds spent before June 30, 2021, totaled $58.4 million, and
since June 30, 2021, another $116.0 million has been spent. Montana plans to spend all funds received
by June 30, 2026.
In January 2022, the State received $78.6 million from National Indemnity Company as the result of
asbestos litigation.
On February 25, 2022, Montana Attorney General announced that the State will receive $80.0 million in
the final approval of the multi-state settlement holding the nation’s three major pharmaceutical distributors
accountable for their roles in fueling the national opioid epidemic and the harm it has caused. The
settlement will be used to combat the opioid crisis. The settlement will be paid incrementally over several
years. The first disbursement of the settlement is unknown.
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NOTE 18. COMPONENT UNITS
A. Condensed Financial Statements
Below are the condensed financial statements of the component units for the State of Montana as of June
30, 2021 (in thousands):
Condensed Statement of Net Position
Component Units
Montana Facility Montana Montana University Total
Board of Finance State State of Component
Housing Authority Fund (1) University Montana Units
Assets:
Cash, investments and other assets $ 667,494 $ 8,988 $ 1,743,509 $ 743,495 $ 683,433 $ 3,846,919
Due from primary government — — — 636 1,683 2,319
Due from component units — — — — 289 289
Capital assets (net) (Note 18C) 11 1 49,379 587,258 383,748 1,020,397
Total assets 667,505 8,989 1,792,888 1,331,389 1,069,153 4,869,924
Deferred Outflows of Resources 1,073 141 6,360 74,982 57,906 140,462
Liabilities:
Accounts payable and other liabilities 10,238 22 79,831 66,684 65,325 222,100
Due to primary government — — — 1,953 45 1,998
Due to component units — — — 289 — 289
Advances from primary government (2) (3) — — — 15,108 2,946 18,054
Long-term liabilities (Note 18I) 498,028 403 1,044,845 376,962 321,739 2,241,977
Total liabilities 508,266 425 1,124,676 460,996 390,055 2,484,418
Deferred Inflows of Resources 204 25 2,753 25,152 29,895 58,029
Net Position:
Net investment in capital assets 3 1 49,379 402,916 259,661 711,960
Restricted 160,105 — — 394,375 413,041 967,521
Unrestricted — 8,679 622,440 122,932 34,407 788,458
Total net position $ 160,108 $ 8,680 $ 671,819 $ 920,223 $ 707,109 $ 2,467,939
(1)
Montana State Fund reports their financial statements on a calendar-year basis. The information provided is for the year ended December 31, 2020.
(2)
Loans from the Coal Severance Tax Permanent Fund make up $4.4 million and $2.9 million of these balances for Montana State University and
University of Montana, respectively.
(3)
Loans from the Board of Investment's INTERCAP and the Department of Environmental Quality's energy conversation loan programs make up $8.5
million and $2.2 million, respectively, of the balance for Montana State University.
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Condensed Statement of Activities
Component Units
Montana Facility Montana Montana University Total
Board of Finance State State of Component
Housing Authority Fund (1) University Montana Units
Expenses $ 21,820 $ 538 $ 171,042 $ 646,557 $ 464,845 $ 1,304,802
Program Revenues:
Charges for services 2,612 821 148,625 273,506 148,670 574,234
Operating grants and contributions 18,908 112 — 320,508 240,803 580,331
Capital grants and contributions — — — 11,663 336 11,999
Total program revenues 21,520 933 148,625 605,677 389,809 1,166,564
Net (expense) program revenues (300) 395 (22,417) (40,880) (75,036) (138,238)
General Revenues:
Unrestricted grants and contributions — — — 4 — 4
Unrestricted investment earnings — — 113,980 14,585 10,286 138,851
Transfer from primary government (2) 501 — — 147,703 108,740 256,944
Gain (loss) on sale of capital assets — — (55) 41 — (14)
Miscellaneous — — 2,002 — — 2,002
Contributions to term and permanent
endowments — — — 30 29,477 29,507
Total general revenues and contributions 501 — 115,927 162,363 148,503 427,294
Change in net position 201 395 93,510 121,483 73,467 289,056
Total net position – July 1 – as previously
reported 159,914 8,285 578,092 798,709 633,642 2,178,642
Adjustments to beginning net position (7) — 217 31 — 241
Total net position – July 1 – as restated 159,907 8,285 578,309 798,740 633,642 2,178,883
Total net position – June 30 $ 160,108 $ 8,680 $ 671,819 $ 920,223 $ 707,109 $ 2,467,939
(1)
Montana State Fund reports their financial statements on a calendar-year basis. The information provided is for the year ended December 31, 2020.
(2)
Transfers to both Montana State University and the University of Montana are appropriated by the State legislature to assist with higher education
related costs.
B. Cash/Cash Equivalents and Investments
Due to the integration of funds and combined financial information, component unit cash and cash
equivalents, equity in pooled investments, and investments are included with the primary government in
Note 3. For more detail on investments held outside of the Montana Board of Investments, refer to the
entity's respective separately issued financial statements.
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C. Capital Assets
The following table summarizes net capital assets reported by the discretely presented component units
(in thousands). All component units, other than higher education units, are included under the “Other”
caption for this schedule:
Montana
State University of
University Montana Other Total
Capital assets not being depreciated:
Land $ 8,203 $ 8,306 $ 1,139 $ 17,648
Construction work in progress 52,951 11,018 19,176 83,145
Capitalized collections 9,931 28,108 — 38,039
Livestock for educational purposes 4,249 — — 4,249
Total capital assets not being depreciated 75,334 47,432 20,315 143,081
Capital assets being depreciated:
Infrastructure 45,122 9,904 — 55,026
Land improvements 35,109 16,468 — 51,577
Buildings/Improvements 804,575 669,670 27,942 1,502,187
Equipment 178,153 110,786 7,358 296,297
Livestock — 255 — 255
Library books 67,412 62,731 — 130,143
Leasehold improvements 8,668 — — 8,668
Right-to-use leased buildings (1) — — 5,261 5,261
(1)
Right-to-use leased equipment — — 78 78
Total capital assets being depreciated 1,139,039 869,814 40,639 2,049,492
Total accumulated depreciation (652,850) (537,071) (11,663) (1,201,584)
Total capital assets being depreciated, net 486,189 332,743 28,976 847,908
Intangible assets 614 1,139 100 1,853
MSU Component Unit capital assets, net 25,121 — — 25,121
UM Component Unit capital assets, net — 2,434 — 2,434
Discretely Presented Component Units
capital assets, net $ 587,258 $ 383,748 $ 49,391 $ 1,020,397
(1)
Montana State Fund early implemented GASB Statement No. 87, for the calendar year ended December 31, 2020, and
created the right-to-use lease assets.
D. Other Postemployment Benefits (OPEB)
Non-university component units are included in the State of Montana benefit plan, whereas the Office of
the Commissioner of Higher Education (included in the primary government otherwise) is included in the
Montana University System benefit plan. For these reasons, component unit OPEB information is
included in Note 7.
E. Risk Management
Montana State Fund (MSF or New Fund) is the only component unit risk pool. Unpaid claims and claim
adjustment expenses are estimated based on the ultimate cost of settling the claims, including the effects
of inflation and other societal/economic factors. There are no significant reductions in insurance coverage
from the prior year, nor any insurance settlements exceeding insurance coverage for the last three years
for MSF. This fund uses the accrual basis of accounting. Montana State Fund investments are recorded at
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fair value, and the premiums and discounts are amortized using the scientific interest method over the life
of the securities.
(1) Montana State Fund (MSF) – This fund provides liability coverage to employers for injured
employees who are insured under the Workers Compensation and Occupational Disease Acts of
Montana and workers compensation claims occurring on or after July 1, 1990. MSF is a self-supporting,
competitive State fund, and functions as the guaranteed market. At December 31, 2020, approximately
23,300 employers were insured with MSF. Anticipated investment income is considered for computing a
premium deficiency, and employers must pay premiums to MSF within specified time frames.
An actuarial study prepared by Willis Towers Watson, as of December 31, 2020, estimated the cost of
settling claims that have been reported but not settled and claims that have been incurred but not
reported. Due to the fact that actual claim costs depend on complex factors such as inflation and changes
in the law, claim liabilities are recomputed periodically using a variety of actuarial and statistical
techniques. These techniques are used to produce current estimates that reflect recent settlements, claim
frequency, and other economic and societal factors.
A provision for inflation is implicit in the calculation of estimated future claim costs because reliance is
placed both on actual historical data that reflect past inflation and on other factors that are considered to
be appropriate modifiers of past experience. As of December 31, 2020, $940.2 million of unpaid claims
and claim adjustment expenses were presented at face value.
Section 39-71-2311, MCA, requires MSF to set premiums, at least annually, at a level sufficient to ensure
adequate funding of the insurance program during the period the rates will be in effect. It also requires
MSF to establish a minimum surplus above risk-based capital requirements to support MSF against risks
inherent in the business of insurance.
For the year ended December 31, 2020, MSF ceded premiums to other reinsurance companies to limit
the exposure arising from large losses. These arrangements consist of excess of loss contracts that
protect against individual occurrences over stipulated amounts, and an aggregate stop-loss contract
which protects MSF against the potential that aggregate losses will exceed expected levels expressed as
a percentage of premium. The excess of loss contract provides coverage for occurrences up to $100.0
million; however, MSF retains the first $10.0 million of coverage. The excess of loss protection applies to
an individual occurrence with a maximum of $10.0 million on any one life.
The aggregate stop-loss contract provides coverage based on MSF’s premium levels not to exceed
15.0% of the subject net earned premium. In the event reinsurers are unable to meet their obligations,
under either the excess of loss contracts or the aggregate stop loss contract, MSF would remain liable for
all losses, as the reinsurance agreements do not discharge MSF from its primary liability to the
policyholders.
Premium revenue was reduced by premiums paid for reinsurance coverage of $8.9 million during the year
ended December 31, 2020.
Estimated claim reserves were reduced by $290.4 thousand as of December 31, 2020, for the amount of
reinsurance estimated to be ultimately recoverable on incurred losses due to the excess of loss
reinsurance contract. There were no estimated recoverables due to the aggregate stop-loss contract.
(2) Changes in Claims Liabilities for the Past Two Years – As indicated above, this fund establishes
liabilities for both reported and unreported insured events, including estimates of future payments of
losses and related claim adjustment expenses. The following table presents changes (in thousands) in
the aggregate liabilities for Montana State Fund net of estimated reinsurance recoverable. The
information presented is at face value and has not been discounted.
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Year Ended Year Ended
December 31, 2020 December 31, 2019
Unpaid claims and claim adjustments expenses
at beginning of year $ 956,594 $ 941,638
Incurred claims and claim adjustment expenses:
Provision for insured event of the current year 125,599 129,455
Increase (decrease) in provision for insured
events of prior years (27,224) (9,466)
Total incurred claims and claim adjustment
expenses 98,375 119,989
Payments:
Claims and claim adjustment expenses
attributable to insured events of the
current year (23,890) (24,965)
Claims and claim adjustment expenses
attributable to insured events of prior years (90,918) (80,068)
Total payments (114,808) (105,033)
Total unpaid claims and claim adjustment
expenses at end of year $ 940,161 $ 956,594
F. Capital Leases/Installment Purchases/Right-To-Use Leases
Obligations under capital leases/installment purchases at June 30, 2021, were as follows (in thousands):
Capital Leases/Installment Purchases Discretely Presented
Fiscal Year Ending June 30: Component Units(1)
2022 $ 145
2023 105
2024 55
2025 47
2026 17
Thereafter —
Total minimum payments 369
Less: interest (29)
Present value of minimum payments $ 340
Right-To-Use Leases
Fiscal Year Ending June 30: Principal Interest Total(1)
2022 $ 265 $ 112 $ 377
2023 250 105 355
2024 222 99 321
2025 221 94 315
2026 226 89 315
2027-2031 1,208 367 1,575
2032-2036 1,349 226 1,575
2037-2041 1,192 68 1,260
Total $ 4,933 $ 1,160 $ 6,093
(1)
For the calender year 2020, Montana State Fund early-adopted GASB Statement No. 87, Leases. Accordingly, for all of its long-term leases, a intangible
right-to-use lease asset and lease liability were created. The assets are amortized over the term of the lease, while the liabilities are reduced as scheduled
lease payments are made. Montana State Fund's total amount of lease assets and accumulated amortization is disclosed in Note 18, section C. Capital
Assets as right-to-use lease assets.
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G. Operating Leases
Future rental payments under operating leases at June 30, 2021, are as follows (in thousands):
Discretely Presented
Fiscal Year Ending June 30: Component Units
2022 $ 4,607
2023 4,283
2024 3,502
2025 3,484
2026 2,684
Thereafter 11,961
Total future rental payments $ 30,521
(1)
For the calender year 2020, MSF early-adopted GASB Statement No. 87, Leases. Accordingly, for all of its long-term leases, MSF will no longer be
reporting leases as a operating lease and instead has created a intangible right-to-use lease asset.
H. Debt Service Requirements
Debt service requirements of discretely presented component units at June 30, 2021, were as follows (in
thousands):
Montana State University
Year Montana Board of Housing Montana State University Direct Placement University of Montana
Ended
June 30: Principal Interest Principal Interest Principal Interest Principal Interest
2022 16,820 15,299 10,360 6,908 433 442 3,010 5,466
2023 17,745 14,937 6,275 6,570 446 429 3,130 5,348
2024 18,510 14,525 6,580 6,286 459 416 3,255 5,224
2025 18,590 14,085 6,770 5,981 472 402 3,380 5,096
2026 21,775 13,619 7,155 7,299 486 388 3,515 4,962
2027 - 2031 104,065 58,732 29,465 22,301 2,654 1,718 20,195 22,189
2032 - 2036 101,050 41,375 30,970 15,152 3,069 1,304 25,000 17,383
2037 - 2041 84,458 25,340 23,325 9,434 3,547 826 29,345 13,048
2042 - 2046 65,305 11,619 22,225 3,315 3,663 273 34,400 7,974
2047 - 2051 35,520 2,613 5,700 194 31,810 2,093
Total $ 483,838 $ 212,144 $ 148,825 $ 83,440 $ 15,229 $ 6,198 $ 157,040 $ 88,783
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I. Summary of Changes in Long-term Liabilities Payable
Long-term liability activity of discretely presented component units for the year ended June 30, 2021, was
as follows (in thousands):
Amounts
Amounts Due In More
Beginning Ending Due Within Than One
Balance (2) Additions Reductions Balance One Year Year
Discretely presented component units
Bonds/notes payable
Montana Board of Housing 531,282 73,710 111,030 493,962 16,820 477,142
Montana State University (MSU) 167,355 98 11,617 155,836 10,478 145,358
MSU Direct Placement 15,649 — 420 15,229 433 14,796
University of Montana (UM) 168,235 — 3,370 164,865 3,010 161,855
Total bonds/notes payable (1) 882,521 73,808 126,437 829,892 30,741 799,151
Other liabilities
Capital lease/installment purchase/right-
to-use lease payable 426 5,050 203 5,273 398 4,875
Compensated absences payable 69,640 26,430 23,310 72,760 27,876 44,884
Arbitrage rebate tax payable 1,121 234 594 761 521 240
Estimated insurance claims 956,594 98,375 114,808 940,161 111,878 828,283
Due to federal government 27,257 17,267 20,615 23,909 — 23,909
Derivative instrument liability 5,499 — 3,580 1,919 — 1,919
Reinsurance funds withheld 56,754 8,524 — 65,278 — 65,278
Unearned compensation 391 136 39 488 — 488
Net pension liability 186,395 70,046 18,660 237,781 — 237,781
Total OPEB liability 27,460 47,907 17,243 58,124 — 58,124
Total other liabilities 1,331,537 273,969 199,052 1,406,454 140,673 1,265,781
2,214,058 347,777 325,489 2,236,346 171,414 2,064,932
Long-term liabilities of Montana University System component units (3) 517 5,114
Total discretely presented component units’ long-term liabilities $ 171,931 $ 2,070,046
(1)
When applicable, this amount includes unamortized discounts and unamortized premiums.
(2)
Beginning balances are taken from component unit financial statements, which may have been adjusted from the prior year's ending balances.
(3)
Inter-entity transaction eliminations between Montana University System component units for debt shown in the component unit information can cause
negative balances in component unit information.
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J. Refunded and Early Retired Debt
Refunded Debt
On March 31, 2021, the Montana Board of Housing issued $43.4 million of Single Family Mortgage
Bonds, Series 2021A (1977 Single Family I Indenture, amended and restated as of May 1, 1997). Bond
proceeds of $13.4 million were used as a replacement refunding of the 2011B/2009C Series to reduce
debt service payments over the remaining life of the original series. The refunding was a current
refunding, thus no economic gain or loss has been calculated.
Defeased Debt Outstanding
The University of Montana has defeased certain bond issues by placing the proceeds of new bonds in an
irrevocable trust. The proceeds, together with interest earned thereon, will be sufficient for future debt
service payments on the refunded issues. Accordingly, the trust account assets and the liability for the
defeased bonds are not included in the University's consolidated financial statements. As of June 30,
2021, $111.5 million of bonds outstanding were considered defeased.
K. No-Commitment Debt
Information is presented below for financing authorities participating in debt issues. The State has no
obligation for this debt. Accordingly, these bonds and notes are not reflected in the accompanying
financial statements.
Facility Finance Authority (FFA)
FFA is authorized to issue bonds and notes to finance projects for qualifying health care and other
community-based service providers. The revenue bonds are payable solely from loan repayments to be
made by eligible facilities pursuant to loan agreements, and further, from the funds created by the
indentures and investment earnings thereon. The notes are payable solely from loan repayments
pursuant to loan agreements. The revenue bonds and notes payable issued by FFA do not constitute a
debt, liability, obligation, or pledge of faith and credit of the State of Montana, with the exception of the
Montana State Hospital Project included in Note 11. At June 30, 2021, revenue bonds and notes
outstanding aggregated $1.1 billion.
The Board of Investments and FFA have entered into a capital reserve account agreement for certain
bond issues. See Note 11 for more information.
Montana Board of Housing (MBOH)
MBOH is authorized to issue bonds and make mortgage loans in order to finance affordable housing for
Montana residents. The bonds are special limited obligations, payable solely from pledged revenues and
assets of the borrower, not general obligations of MBOH. These bonds issued by MBOH do not constitute
a debt, liability, obligation, or pledge of faith and credit of the State of Montana. At June 30, 2021, bonds
outstanding aggregated $177.6 million.
L. Non-Exchange Financial Guarantee
BOI provides loan guarantees from the Coal Severance Tax Fund to the Facility Finance Authority (FFA).
BOI exposure to bond issues, surety bonds, and designated loans of the FFA totaled $100.2 million as of
June 30, 2021. FFA is a discretely presented component unit of the State of Montana. FFA guarantee
requests are submitted to BOI for review and approval. BOI’s participation, either duration or any other
consideration, to either purchase bonds or loans or to lend money for deposit into FFA’s statutorily
allowed capital reserve account is explicitly limited by statute, which requires BOI to act prudently. The
guarantee requests from FFA pertain to bonds issued by FFA with a term of up to 40 years. BOI and FFA
have entered into an agreement detailing repayment to BOI. BOI has not had to perform on any loan
guarantee in the past.
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The following schedule summarizes the activity related to the non-exchange financial guarantee during
the year ended June 30, 2021 (in thousands):
Beginning Ending
Balance Additions Reductions Balance
$ 88,346 $ 33,465 $ 21,563 $ 100,248
M. Derivative Instrument Transactions Related to Long-term Debt
Montana State University (MSU) has two interest rate swaps as of June 30, 2021. Interest rate swaps are
classified as hedging derivative instruments if the instruments meet the criteria of paragraphs 27 (a) and
(b) of GASB Statement No. 53 – Accounting and Financial Reporting for Derivative Instruments (GASB
53), or as investment derivative instruments if they do not. The following table summarizes the interest
rate swaps outstanding as of June 30, 2021:
Derivative Instrument Trade Effective Termination
Description Date Date Date Terms Counterparty
25.75 million fixed payer swap 3/10/2005 7/21/2005 11/15/2035 Pay 3.953%, Receive Deutsche Bank AG
SIFMA1
25.25 million basis swap 12/19/2006 11/15/2007 11/15/2035 Pay SIFMA, Receive Morgan Stanley Capital
86.8% of 10-year SIFMA Services Inc.
1 Securities Industry and Financial Markets Association (SIFMA)
As of June 30, 2021, the fixed payer swap is classified as a hedging derivative instrument under GASB
53, whereas the basis swap is an investment derivative instrument because there is no identified financial
risk being hedged by the basis swap that can be expressed in terms of exposure to adverse changes in
cash flows or fair values. GASB 53 includes four methods for evaluating hedge effectiveness; a
governmental entity may use any of the evaluation methods outlined in GASB 53 and is not limited to
using the same method from period to period. The four methods described in GASB 53 are: consistent
critical terms, synthetic instrument, dollar-offset, and regression analysis. In addition, GASB 53 permits a
governmental entity to use other quantitative methods that are based on “established principles of
financial economic theory.” The fixed payer swap passes the established criteria using the regression
analysis methodology.
The fair values of the interest rate swaps were estimated using the zero-coupon method. This method
calculates the future net settlement payments required by the swap, assuming that the current forward
rates implied by the yield curve correctly anticipate future spot interest rates. These payments are then
discounted using the spot rates implied by the current yield curve for hypothetical zero-coupon bonds due
on the date of each future net settlement on the swaps. To measure non-performance risk for a derivative
instrument liability, credit spreads implied by the credit rating for debt issues by entities with similar credit
characteristics were used. This is the best method available under current market conditions since MSU
has no credit default swaps that actively trade in the marketplace. For a derivative instrument asset, the
adjustment for non-performance risk of counterparties was determined by analyzing counterparty-specific
credit default swaps, if available. If not available, credit default swaps in the market for entities of similar
type and rating were used, along with information found in various public and private information services.
This analysis is used to construct a credit curve that is applied to the discount curve on the net settlement
payments of the derivative instrument.
The counterparty to the fixed payer swap had the right to terminate the swap at $0 on December 14, 2016
(a European option); this option was not exercised. As of the trade date, the option’s value included
intrinsic value and time value. The option’s intrinsic value (calculated as the difference between the at-
market rate of 4.11% and the off-market rate of 3.953%) is accounted for as a loan receivable and is
repaid by the off-market portion of each swap payment. On September 10, 2010, the Series J bonds were
converted to index bonds. On September 4, 2018, the original Series J bonds were refunded in full with
proceeds from the Series F 2018 bonds, which were issued in a "SIFMA Index Rate" mode. While in the
SIFMA Index Rate, and through the Index Interest Rate Period, which spans from September 4, 2018,
through and including September 1, 2023, the interest rate is reset weekly at a rate of the SIFMA rate plus
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a fixed spread. The spread is based on the long-term, unenhanced rating assigned to MSU with the
current spread as of June 30, 2021, was 0.45%. The dependent variable in the regression is the interest
rates of the hedged cash flows; the independent variable is the floating rates due under the hedging
derivative instrument.
The fair value of the fixed payer swap liability as of June 30, 2021, is at fair value level 2 and was based
on forward SIFMA rates using the three-month Libor Zero Curve, and the BMA Swaption Volatility on the
AA Rated Muni Revenue Curve. The fair value of the nonhedging derivative instrument investment is also
at level 2 and was based on forward SIFMA rates using the 10-year forward BMA constant maturity swap,
the three-month Libor Zero Curve, and the BMA Swaption Volatility on the counterparty’s credit default
swap.
The following table summarizes the reported balances as of, and the derivative instrument activity during,
the year ended June 30, 2021, (in thousands):
Activity During 2021 Fair Values at June 30, 2021
Cash flow hedges: Notional Classification Amount Classification Amount
Cash flow hedge –
Pay fixed interest rate swap 17,450 Interest expense 19 Loan receivable 175
Derivative instrument
Investment income — liability 1,919
Derivative instrument
Deferred outflow 1,125 borrowing 2,196
Investment derivative instrument–
Basis swap Investment Investment (excluding
17,450 revenue 19 interest accrued) 1
The objective and terms of MSU’s hedging derivative instrument outstanding as of June 30, 2021, is as
follows (in thousands):
Notional Termination Cash (Paid)/
Type Objective amount Effective Date Date Received Terms
Pay fixed, cancelable Hedge interest rate risk Pay 3.953%
interest rate swap on Series F 2018 Bonds $ 17,450 7/21/2005 11/15/2035 $ — Receive SIFMA
Credit Risk
It is MSU’s policy to enter into derivative instrument agreements with highly rated counterparties. As of
June 30, 2021, counterparty ratings were A2 by Moody’s and BBB+ by Standard and Poor’s (S&P). MSU
manages credit risk by requiring its counterparties to post collateral in certain events. MSU is entitled to
collateral from its fixed payer swap counterparty if the interest rate swap’s fair value is greater than $5.0
million, and the counterparty is rated A+ or A by S&P, or A1 or A2 by Moody’s. If the counterparty to the
fixed payer swap is rated A- or below, by S&P, or A3 or below by Moody’s, MSU is entitled to collateral up
to 100% of the swap’s fair value. MSU is not required to post collateral. MSU will continue to monitor
counterparty credit risk.
MSU enters into derivative instrument agreements with multiple counterparties to limit the concentration
of credit risk. Currently, MSU has interest rate swaps with two different counterparties, and each
counterparty accounts for approximately 50% of outstanding notional. MSU monitors counterparty credit
risk on an ongoing basis.
Interest Rate Risk
Interest payments on variable rate debt will typically increase as interest rates increase. MSU believes it
has significantly reduced interest rate risk by entering into a pay-fixed, receive floating interest rate swap.
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As interest rates increase, net swap payments decrease so that changes in hedged variable-rate debt
interest payments, attributable to SIFMA, are largely offset by the net swap payments.
Basis Risk
The variable-rate cash flows being hedged by the pay-fixed swap will increase or decrease as SIFMA
rates increase or decrease. Because the hedged cash flows are SIFMA based and the floating receipts of
the pay-fixed swap are SIFMA based, there is no basis risk.
Termination Risk
MSU or its counterparties may terminate a derivative instrument if the other party fails to perform under
the terms of the contract. In addition, MSU’s fixed payer swap counterparty has the right to terminate the
derivative instrument if the credit rating of MSU’s unenhanced long-term revenue bond rating is
withdrawn, suspended, or reduced below BBB-, in the case of S&P, or below Baa3 in the case of
Moody’s. If such an event occurs, MSU could be forced to terminate the fixed payer swap in a liability
position. As of June 30, 2021, MSU’s unenhanced long-term revenue bond rating was Aa3 by Moody’s
and A+ by S&P.
Foreign Currency Risk
All hedging derivative instruments are denominated in U.S. Dollars, and therefore MSU is not exposed to
foreign currency risk.
Market Access Risk
Market access risk is the risk that MSU will not be able to enter credit markets or that credit will become
more costly. For example, to complete a derivative instrument’s objective, an issuance of refunding bonds
may be planned in the future. If at that time MSU is unable to enter credit market, expected cost savings
may not be realized.
N. Related Party Transactions
Private nonprofit organizations with relations to the University of Montana (UM) include the Alumni
Association, the Montana Technology Enterprise Center (MonTEC), the Montana Tech Booster Club, and
the Montana Tech Alumni Association. The associations and booster club operate exclusively to
encourage, promote, and support educational programs, research, scholarly pursuits, and athletics at, or
in connection with, UM. No transfers for scholarships and construction projects were made by the
Montana Tech Booster Club for the year ended June 30, 2021. In exchange, UM provides the
associations and booster club with office space, staff, and some related office expenses.
MonTEC was established as a nonprofit 501(c)3 corporation in fiscal year 2001 as a result of an
agreement between UM and the Missoula Area Economic Development Foundation (MAEDF). MonTEC
provides low-cost lease space and business consulting to local “start-up” companies. The corporation’s
board of directors is comprised of four members. Two members of the board of directors are UM
employees, and two are non-UM employees. UM does not provide office space or other services to
MonTEC.
Private nonprofit organizations affiliated with Montana State University (MSU) include the MSU-Bozeman
Bookstore, Friends of KUSM, and Friends of KEMC. MSU-Bozeman leased certain office space from the
MSU Foundation’s wholly owned subsidiary, Advanced Technology Inc. (ATI). Rental and other payments
to ATI totaled $429.2 thousand. Friends of Montana Public Television provided $1.8 million and Friends of
KEMC Public Radio provided $1.2 million in support of the University’s television and radio stations.
O. Litigation Contingencies
As of June 30, 2021, there are no matters that will have a material adverse financial impact.
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P. Subsequent Events
On July 1, 2021, Stockman Bank transferred the servicing of 589 loans to the Montana Board of Housing
(MBOH), with a total outstanding balance at the time of transfer of $54.0 million.
On August 1, 2021, MBOH issued direction for a full optional redemption of the series 1999A-1 multifamily
bonds in the amount of $4.1 million.
On August 31, 2021, MBOH closed on 2021 series B single family mortgage bonds in the amount of
$32.0 million.
On November 22, 2021, the MBOH closed on a multifamily housing revenue series 2021 conduit bond for
the Castlebar Apartment Development in the amount of $13.5 million.
The American Rescue Plan Act (ARPA) has provided funds to be used for a homeowner assistance fund
(HAF) to prevent mortgage delinquencies and defaults, foreclosures, loss of utilities or home energy
services, displacement of homeowner's insurance, utility payments, and for other specified purposes.
On February 17, 2022, the MBOH closed on single family mortgage bonds Series 2022A, in the amount
of $32.0 million.
On July 14, 2021, the Montana Facility Finance Authority (FFA) issued bonds Series 2021A of $56.8
million and bonds Series 2021B of $36.2 million to the Bozeman Deaconess Hospital to create new tax-
exempt debt for buildings and equipment and create new taxable debt to purchase the EPIC electronic
health records information system.
On July 27, 2021, the FFA issued bonds Series 2021B of $100.0 million to Benefis Health System to fund
construction of a new Helena Ambulatory Center, a new osteopathic medical school facility, and
equipment upgrades across the campus.
On August 12, 2021, the FFA issued bonds Series 2021A of $8.0 million and Series 2021B of $18.6
million to Community Hospital of Anaconda to finance the Hospital’s Infusion/Oncology Center project and
to refinance existing taxable debt incurred to expand and renovate the facility.
On August 31, 2021, the FFA issued bonds of $15.1 million to Beartooth Billings Clinic to refinance a
direct loan from USDA Rural Development, the Series 2009A bonds USDA Guarantee and Series 2009B
bonds unsecured. The original purpose of the 2009AB Series bonds was for the costs of design and
construction of the new hospital in the Red Lodge, Montana.
On September 1, 2021, the FFA issued a trust fund loan of $1.5 million to Rimrock Foundation to
reimburse the purchase of land in Billings to consolidate services and create a central campus.
On October 20, 2021, the FFA issued Series 2021 A bonds of $27.0 million and Series B bonds of $10.0
million to Marcus Daly Memorial Hospital in Hamilton to fund renovation and expansion projects as well
as refinance existing taxable and tax-exempt debt.
On November 15, 2021, the FFA issued Series 2021 A bonds to Billings Clinics of $150.0 million to be
used as a capital expansion to broaden the clinic's service lines and market reach.
On August 30, 2021, Montana State University (MSU) announced a $101.0 million philanthropic gift to the
College of Nursing from Mark and Robyn Jones to address healthcare access to rural communities. This
gift, the largest in MSU history, will provide funding for new nursing education facilities across Montana in
addition to scholarships and endowed professorships.
On October 19, 2021, MSU issued new debt and restructured portions of existing debt, non-taxable series
G 2021 ($45.6 million) and taxable series H 2021 ($72.2 million). With the proceeds, $40.3 million of new
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debt will go towards the construction of the upcoming Student Wellness Center and the remainder being a
refunding of series' 2012N, 2012O, 2013A, and 2016C. This transaction also enabled MSU to adopt and
to operate under an Amended and Restated Indenture of Trust, 2021, that modernizes and broadens the
MSU revenue pledge to include auxiliary facility gross pledged revenues, land grant income, indirect cost
recovery payments, and all other unrestricted revenues of the University except tuition, student
association-controlled activity fees, ad valor em property taxes, and State grants and appropriations.
On December 31, 2021, the MSU-Northern Foundation received a charitable gift of 42.969 acres of real
property valued at $1.9 million. The gift is for the Foundation to leverage the property to assist MSU-
Northern in executing the build out of a proposed equine center.
On February 25, 2022, MSU announced a $50 million philanthropic gift from the Gianforte Family
Foundation. The gift is dedicated to constructing a new building to house the Gianforte School of
Computing and computing-related fields such as cybersecurity, optics and photonics, electrical and
computer engineering, and creative industries. The gift ties for the second largest in the university’s
history and is one of the largest philanthropic gifts in the history of Montana.
On March 12, 2021, Montana State Fund's board declared $20.0 million dividend to be distributed in May
2021 to eligible policyholders for the 2018 policy year.
In March 2020 when the COVID-19 outbreak was declared a global pandemic, the University of Montana
(UM) responded to the health crisis by moving to remote deliver of its courses. Remote delivery was
continued in fiscal year 2021. This contributed to a decline in tuition and fees revenue of $8.1 million, or
approximately 8.0 percent, and a decline in excess of $12.9 million in sales and service and auxiliary
revenues, or over 23.0 percent. While UM received funding through the Coronavirus Aid, Relief, and
Economic Security (CARES) Act, it was not sufficient to offset all mitigation costs and loss of operation
revenues. At the start of fiscal year 2022, UM returned to delivery of courses face-to-face and resumed
normal operations for a majority of operating activities.
Q. Commitments
Montana State Fund (MSF or New Fund) is in a multi-year project to replace its legacy policy
management system. Implementation of the core policy management and billing transaction systems, as
well as the supporting digital portals, is expected to begin in 2021 and total expenditures are estimated to
be $39.2M. The total project cost through December 31, 2020 was $33.3M. The next phase to develop
remaining enhancement features will be planned and arranged with consulting services towards the end
of 2021. Costs during the application development phase are being capitalized and recorded as
construction work in process until the system is deployed.
As of June 30, 2021, Montana State University (MSU) had issued purchase orders committing the
expenditure of approximately $23.1 million for equipment, supplies, and services which had not yet been
received.
As of June 30, 2021, MSU had remaining budget authority on significant capital construction and
renovation projects underway of approximately $41.1 million. These projects include projects that are
administered by the State Architecture and Engineering Division (A & E) and non A & E managed projects.
Select projects are funded wholly or partially by the State’s Long Range Building Program, and do not
represent a commitment of funds on the part of MSU.
As of June 30, 2021, the University of Montana (UM) has spent $16.1 million of $48.6 million in budget
authorizations for capital and maintenance projects.
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NOTE 19. MATERIAL VIOLATIONS OF FINANCE-RELATED LEGAL PROVISIONS
Constitutionality of Retirement Plan Funding
The Montana Constitution, Article VIII, Section 15, states that public retirement systems shall be funded
on an actuarially sound basis. Public pension plans are considered actuarially sound if the unfunded
accrued actuarial liability amortization period is within 30 years. As of June 30, 2021, the Game Warden &
Peace Officers’ Retirement System (GWPORS) was not in compliance and did not amortize within 30
years. The unfunded liabilities in the other state retirement systems amortized in 30 years or less as of
the fiscal year ended June 30, 2021.
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BUDGETARY COMPARISON SCHEDULE
GENERAL AND MAJOR SPECIAL REVENUE FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
(amounts expressed in thousands)
GENERAL FUND
ORIGINAL FINAL
BUDGET BUDGET ACTUAL VARIANCE
REVENUES
Licenses/permits $ 142,964 $ 142,964 $ 142,810 $ (154)
Taxes:
Natural resource 73,910 73,910 68,068 (5,842)
Individual income 1,464,438 1,464,438 1,734,627 270,189
Corporate income 167,209 167,209 263,869 96,660
Property 310,394 310,394 309,495 (899)
Fuel — — — —
Other 255,740 255,740 253,940 (1,800)
Charges for services/fines/forfeits/settlements 46,638 46,638 45,488 (1,150)
Investment earnings — — 5,093 5,093
Sale of documents/merchandise/property 302 302 251 (51)
Rentals/leases/royalties 10 10 8 (2)
Contributions/premiums (274) (274) — 274
Grants/contracts/donations 21 21 13,665 13,644
Federal 21,117 21,117 10,767 (10,350)
Federal indirect cost recoveries 38 38 164 126
Other revenues 127 127 379 252
Total revenues 2,482,634 2,482,634 2,848,624 365,990
EXPENDITURES
Current:
General government 409,511 409,511 385,619 23,892
Public safety 346,427 346,427 310,373 36,054
Transportation 213 213 174 39
Health and human services 566,288 566,288 490,805 75,483
Education 1,132,486 1,132,486 1,119,344 13,142
Natural resources 43,782 43,782 38,226 5,556
Debt service (Note RSI-1):
Principal retirement — — 295 (295)
Interest/fiscal charges — — 247 (247)
Capital outlay (Note RSI-1) — — 7,436 (7,436)
Total expenditures 2,498,707 2,498,707 2,352,519 146,188
Excess of revenue over (under) expenditures (16,073) (16,073) 496,105 512,178
OTHER FINANCING SOURCES (USES)
Insurance proceeds — — — —
General capital asset sale proceeds 107 107 119 12
Refunding bond issued — — — —
Payment to refunding bond escrow agent — — — —
Bond premium — — — —
Bond proceeds — — — —
Energy conservation loans — — — —
Transfers in (Note 12) 81,943 81,943 85,085 3,142
Transfers out (Note 12) (279,411) (279,411) (330,993) (51,582)
Total other financing sources (uses) (197,361) (197,361) (245,789) (48,428)
Net change in fund balances
(Budgetary basis) (213,434) (213,434) 250,316 463,750
RECONCILIATION OF BUDGETARY/GAAP REPORTING
1. Securities lending income — — 39 39
2. Securities lending costs — — (10) (10)
3. Inception of lease/installment contract — — 193 193
4. Adjustments for nonbudgeted activity — — — —
(GAAP basis) (213,434) (213,434) 250,538 463,972
Fund balance - July 1 — — 592,810 592,810
Prior period adjustments — — 13,335 13,335
Increase (decrease) in inventories — — (384) (384)
Fund balances - June 30 $ (213,434) $ (213,434) $ 856,299 $ 1,069,733
The notes to the required supplementary information are an integral part of this schedule.
Budgetary data is not broken down to the same account level as actual financial statement data, which accounts for some of the larger variances.
The original and final budget figures reflect adjustments to the original budget for various reasons, including legislative and executive changes.
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STATE SPECIAL REVENUE FUND FEDERAL SPECIAL REVENUE FUND
ORIGINAL FINAL ORIGINAL FINAL
BUDGET BUDGET ACTUAL VARIANCE BUDGET BUDGET ACTUAL VARIANCE
$ 302,717 $ 302,717 $ 299,019 $ (3,698) $ — $ — $ — $ —
82,709 82,709 64,910 (17,799) — — — —
— — — — — — — —
20 20 11 (9) — — — —
20,266 20,266 20,066 (200) — — — —
264,819 264,819 274,417 9,598 — — — —
170,675 170,675 171,436 761 2 2 — (2)
130,282 130,282 134,556 4,274 7,741 7,741 7,925 184
— — 5,167 5,167 — — 572 572
9,927 9,927 8,967 (960) 15 15 — (15)
1,637 1,637 1,120 (517) — — — —
34,164 34,164 35,092 928 — — — —
8,200 8,200 6,580 (1,620) 100 100 44 (56)
9,449 9,449 6,079 (3,370) 5,942,744 5,942,744 4,692,258 (1,250,486)
4,697 4,697 56,502 51,805 97,487 97,487 98,207 720
3,914 3,914 3,302 (612) 1,341 1,341 1,335 (6)
1,043,476 1,043,476 1,087,224 43,748 6,049,430 6,049,430 4,800,341 (1,249,089)
352,348 352,244 195,503 156,741 4,016,179 4,016,179 834,438 3,181,741
103,448 103,448 85,732 17,716 82,003 82,003 58,076 23,927
353,920 353,920 254,862 99,058 739,242 739,242 129,320 609,922
257,915 257,915 217,830 40,085 3,482,647 3,482,647 2,710,754 771,893
89,955 89,955 85,051 4,904 922,666 922,666 289,715 632,951
415,748 415,748 216,845 198,903 229,238 229,238 128,353 100,885
— — 2,994 (2,994) — — 135 (135)
— — 1,230 (1,230) — — 11 (11)
— — 88,961 (88,961) — — 427,568 (427,568)
1,573,334 1,573,230 1,149,008 424,222 9,471,975 9,471,975 4,578,370 4,893,605
(529,858) (529,754) (61,784) 467,970 (3,422,545) (3,422,545) 221,971 3,644,516
50 50 437 387 — — — —
556 556 617 61 — — — —
24,875 24,875 24,896 21 — — — —
— — (23,935) (23,935) — — — —
— — 8,799 8,799 — — — —
65,724 65,724 56,904 (8,820) — — — —
— — 149 149 — — — —
323,874 323,874 209,877 (113,997) 1,683,884 1,683,884 2,058 (1,681,826)
(100,956) (100,956) (63,008) 37,948 (2,877,747) (2,877,747) (229,171) 2,648,576
314,123 314,123 214,736 (99,387) (1,193,863) (1,193,863) (227,113) 966,750
(215,735) (215,631) 152,952 368,583 (4,616,408) (4,616,408) (5,142) 4,611,266
— — 47 47 — — — —
— — (10) (10) — — — —
— — 4,137 4,137 — — 57 57
— — (11,899) (11,899) — — — —
(215,735) (215,631) 145,227 360,858 (4,616,408) (4,616,408) (5,085) 4,611,323
— — 1,836,115 1,836,115 — —
0
(6,799) (6,799)
— — (591) (591) — — 564 564
— — (1,551) (1,551) — — — —
$ (215,735) $ (215,631) $ 1,979,200 $ 2,194,831 $ (4,616,408) $ (4,616,408) $ (11,320) $ 4,605,088
A-164
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
NOTE RSI – 1. BUDGETARY REPORTING
A. State Budget Process
The Montana Legislature meets in the odd-numbered years to prepare annual budgets for the next
biennium. The Constitution requires that legislative appropriations not exceed available revenues. The
Legislature uses revenue estimates in the budgetary process to establish appropriation levels.
Expenditures may not legally exceed budget appropriations at the fund level. In addition, the State
Constitution prohibits borrowing to cover deficits incurred because appropriations exceeded anticipated
revenues. State law requires an appropriation for disbursements from the general, special revenue and
capital projects funds, except for those special revenue funds from non-state and non-federal sources
restricted by law or by the terms of an agreement. The level of budgetary control is established by fund
type, except capital project funds, which are at project level. Budgets may be established in other funds
for administrative purposes.
Agency budget requests are submitted to the Governor, and the Legislative Fiscal Division receives a
copy. The Office of Budget and Program Planning (OBPP) and the Governor analyze the requests,
establish priorities, and develop the requests into the executive budget request submitted to the
Legislature. Joint appropriations subcommittee hearings are held, and an omnibus appropriation bill is
reported in the House and subsequently sent to the Senate. The Legislature generally enacts one bill to
establish the majority of appropriations for the next two fiscal years. OBPP establishes appropriations for
each program by accounting entity (fund) within an agency. The Legislature enacts other appropriations,
but only within the available revenue. Agencies must prepare and submit to the budget director
operational plans showing the allocation of operating budgets by expenditure category (i.e., personal
services, operating expenses, equipment, etc.). The budget director or other statutorily designated
approving authority may authorize changes among expenditure categories and transfers between
program appropriations.
Appropriations may not be increased by amendment in the General Fund. However, a department,
institution, or agency of the executive branch desiring authorization to make expenditures from the
General Fund during the first fiscal year of the biennium from appropriations for the second fiscal year of
the biennium may apply for authorization from the Governor through the budget director. In the second
year of the biennium, during the legislative session, the Legislature may authorize supplemental
appropriations. The Governor, or designee, may approve budget amendments for non-general fund
monies not available for consideration by the Legislature and for emergencies. In the accompanying
financial schedule, original and final budget amounts are reported. There were no expenditures in excess
of total authorized appropriations in the State's budgeted funds for the fiscal year.
Appropriations for debt service activities are continuing through statutory authority until the obligation is
extinguished. Because these non-operating budgets primarily serve a management control purpose, and
related appropriations are continuing in nature, no comparison between budgeted and actual amounts for
funds budgeted on this basis is provided. Appropriations for capital projects funds are not made on an
annual basis, but are adopted on a project-length basis. Because these non-operating budgets primarily
serve a management control purpose, and related appropriations are continuing in nature, no comparison
between budgeted and actual amounts for funds budgeted on this basis is provided.
Appropriations may be continued into the next fiscal year when authorized by the Legislature or the
Governor's Office. After fiscal year-end, appropriations that are not continued are reverted. The reverted
appropriations remain available for one fiscal year for expenditures that exceed the amount accrued or
encumbered. Fund balances are not reserved for reverted appropriations. For fiscal year 2021, reverted
governmental fund appropriations were as follows: $96.6 million in the General Fund, $260.7 million in the
State Special Revenue Fund, and $332.0 million in the Federal Special Revenue Fund. Agencies are
allowed to carry forward 30.0% of their reverted operating appropriations into the next two fiscal years.
This amount can be used for new expenditures at the request of the agency and upon approval of OBPP.
B. Budget Basis
The Legislature's legal authorization ("appropriations") to incur obligations is enacted on a basis
inconsistent with Generally Accepted Accounting Principles (GAAP). The budget basis differs from GAAP
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for encumbrances outstanding at fiscal year-end, compensated absences, capital assets and inventories
purchased in proprietary funds, certain loans from governmental funds, and other miscellaneous n on-
budgeted activity.
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REQUIRED SUPPLEMENTARY INFORMATION
NOTE RSI – 2. PENSION PLAN INFORMATION
Required Supplementary Information
State of Montana as an Employer Entity
Judges’ Retirement System
Schedule of Changes in Net Pension Liability/(Asset) and Related Ratios ˡ
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Total Pension Liability (TPL)
Service costs $ 1,748 $ 1,772 $ 1,664 $ 1,628 $ 1,578 $ 1,653 $ 1,594
Interest 4,842 4,458 4,503 4,044 3,986 3,934 3,824
Differences between expected and actual experience (262) 2,743 (2,901) 862 (1,341) (1,032) —
Changes of assumptions 1,912 — — 3,865 — — —
Refunds of contributions — — (149) — — — —
Benefit payments (4,038) (3,846) (3,723) (3,554) (3,416) (3,041) (3,023)
Net change in total pension liability 4,202 5,127 (606) 6,845 807 1,514 2,395
Total pension liability – beginning 65,319 60,192 60,798 53,953 53,146 51,632 49,237
Total pension liability – ending $ 69,521 $ 65,319 $ 60,192 $ 60,798 $ 53,953 $ 53,146 $ 51,632
Plan Fiduciary Net Position
Contributions – employer $ 1,988 $ — $ 1,085 $ 1,800 $ 1,806 $ 1,684 $ 1,651
Contributions – member 560 517 575 488 729 534 481
Net investment income 2,827 5,687 8,467 10,368 1,779 3,843 12,421
Refunds of contributions — — (149) — — — —
Benefit payments (4,038) (3,846) (3,723) (3,554) (3,416) (3,041) (3,023)
Administrative expense (157) (123) (264) (254) (197) (136) (100)
Other — — 7 — (3) — —
Net change in plan fiduciary net position 1,180 2,235 5,998 8,848 698 2,884 11,430
Plan fiduciary net position - beginning 104,886 102,651 96,653 87,805 87,107 84,223 72,793
Plan fiduciary net position - ending $ 106,066 $ 104,886 $ 102,651 $ 96,653 $ 87,805 $ 87,107 $ 84,223
Net Pension (Asset) – Beginning $ (39,567) $ (42,459) $ (35,855) $ (33,852) $ (33,961) $ (32,591) $ (23,556)
Net Pension (Asset) – Ending $ (36,545) $ (39,567) $ (42,459) $ (35,855) $ (33,852) $ (33,961) $ (32,591)
Plan fiduciary net position as a percentage of TPL 152.57% 160.58% 170.54% 158.97% 162.74% 163.90% 163.12%
Covered payroll $ 8,001 $ 7,382 $ 7,291 $ 6,974 $ 6,920 $ 6,525 $ 6,355
Net pension (asset) as a percentage of covered payroll (456.76)% (535.99)% (582.35)% (514.12)% (489.19)% (521.00)% (513.00)%
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
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Schedule of Employer Contributions ˡ
For the Fiscal Year Ended June 30
(in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 2,138 $ 1,988 $ — $ 1,085 $ 1,800 $ 1,786 $ 1,684
Contributions made in relation to the
contractually required contributions 2,138 1,988 — 1,085 1,800 1,786 1,684
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
Covered payroll $ 8,282 $ 8,001 $ 7,382 $ 7,291 $ 6,974 $ 6,920 $ 6,525
Contributions as a percentage of
covered payroll 25.82% 24.85% 0.00% 14.88% 25.81% 26.00% 26.00%
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Judges’ Retirement System
Notes to Required Supplementary Information
For the Year Ended June 30, 2021
Method and assumptions used in calculations of contractually determined contributions: The
contractually required contribution rates are determined on an annual basis for the fiscal year beginning
July 1, 2020, determined as of June 30, 2020.
The following key methods and assumptions were used to determine the contractual contribution rates
reported in that schedule:
Actuarial cost method Entry age normal
Amortization method Level percentage of pay, open
Asset valuation method 4-year smoothed market
Wage inflation 3.50%
Merit increases 0%
Total salary increases 3.50%, including inflation
Inflation 2.40%
Investment rate of return 7.34%, net of pension plan investment expense, including
inflation
Mortality (healthy) RP-2000 Combined employee and annuitant mortality table
projected to 2020 using scale BB, males set back 1 year
Mortality (disabled) RP-2000 Combined employee and annuitant mortality table
Admin expense as a % of payroll 0.08%
Changes of assumptions: The discount rate was lowered from 7.65% to 7.34%. The investment rate of
return was lowered from 7.65% to 7.34%. The inflation rate was reduced from 2.75% to 2.40%.
A-168
Required Supplementary Information
State of Montana as an Employer Entity
Highway Patrol Officers’ Retirement System
Schedule of Changes in Net Pension Liability and Related Ratios ˡ
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Total Pension Liability (TPL)
Service costs $ 3,337 $ 3,453 $ 3,643 $ 3,665 $ 3,799 $ 3,598 $ 3,464
Interest 17,688 16,926 16,294 15,121 14,545 14,113 13,518
Changes in benefits — — — — — 1,856 —
Difference between expected and actual experience (993) 2,413 590 2,774 18 267 —
Changes of assumptions 141,055 — — 7,892 — — —
Benefit payments (12,685) (12,063) (11,546) (11,037) (10,482) (10,001) (9,443)
Refunds of contributions (331) (582) (322) (245) (94) — —
Net change in total pension liability 148,071 10,147 8,659 18,170 7,786 9,833 7,539
Total pension liability – beginning 237,728 227,581 218,922 200,752 192,966 183,133 175,594
Total pension liability – ending $ 385,799 $ 237,728 $ 227,581 $ 218,922 $ 200,752 $ 192,966 $ 183,133
Plan Fiduciary Net Position
Contributions – employer $ 6,003 $ 5,845 $ 5,858 $ 5,782 $ 5,916 $ 5,840 $ 5,736
Contributions – non-employer 226 233 250 263 243 — —
Contributions – member 2,170 2,002 2,387 1,950 1,917 1,624 1,458
Net investment income 4,101 8,269 12,283 15,099 2,605 5,738 18,677
Benefit payments (12,685) (12,063) (11,546) (11,037) (10,482) (10,001) (9,443)
Administrative expense (163) (127) (256) (248) (197) (144) (109)
Refunds of contributions (331) (582) (322) (245) (94) — —
Other (131) 2 8 — (2) — —
Net change in plan fiduciary net position (810) 3,579 8,662 11,564 (94) 3,057 16,319
Plan fiduciary net position – beginning 152,778 149,199 140,537 128,973 129,067 126,010 109,691
Plan fiduciary net position – ending $ 151,968 $ 152,778 $ 149,199 $ 140,537 $ 128,973 $ 129,067 $ 126,010
Net Pension Liability – Beginning $ 84,950 $ 78,382 $ 78,385 $ 71,779 $ 63,899 $ 57,123 $ 65,903
Net Pension Liability – Ending $ 233,831 $ 84,950 $ 78,382 $ 78,385 $ 71,779 $ 63,899 $ 57,123
Plan fiduciary net position as a percentage of TPL 39.39% 64.27% 65.56% 64.20% 64.24% 67.00% 69.00%
Covered payroll $ 15,608 $ 15,178 $ 15,251 $ 14,779 $ 15,276 $ 14,549 $ 14,149
Net pension liability as a percentage of covered payroll 1498.15% 559.69% 513.95% 530.38% 469.88% 439.00% 404.00%
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
A-169
Schedule of Employer Contributions ˡ
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 6,599 $ 6,209 $ 6,051 $ 5,843 $ 5,706 $ 6,161 $ 5,782
Contributions in relation to the
contractually required contributions 6,599 6,209 6,051 5,843 5,706 6,161 5,782
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
Covered payroll $ 16,631 $ 15,608 $ 15,178 $ 15,251 $ 14,779 $ 15,276 $ 14,549
Contributions as a percentage of
covered payroll 39.68% 39.78% 39.87% 38.31% 38.61% 40.00% 40.00%
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Notes to Required Supplementary Information
Highway Patrol Officers’ Retirement System
For the Year Ended June 30, 2021
Method and assumptions used in calculations of contractually determined contributions: The
contractually required contribution rates are determined on an annual basis for the fiscal year beginning
July 1, 2020, determined as of June 30, 2020.
The following key methods and assumptions were used to determine the contractual contribution rates
reported in that schedule:
Actuarial cost method Entry age normal
Amortization method Level percentage of pay, open
Asset valuation method 4-year smoothed market
Wage inflation 3.50%
Merit increases 0% to 6.30%
Total salary increases 3.50% to 10.02%, including inflation
Inflation 2.40%
Investment rate of return 7.34%, net of pension plan investment expense, including
inflation
Mortality (healthy) RP-2000 Combined employee and annuitant mortality table
projected to 2020 using scale BB, males set back 1 year
Mortality (disabled) RP-2000 Combined employee and annuitant mortality table
Admin expense as a % of payroll 0.18%
Changes of assumptions: The discount rate was lowered from 7.65% to 4.43%. The investment rate of
return was lowered from 7.65% to 7.34%. The inflation rate was reduced from 2.75% to 2.40%.
A-170
Required Supplementary Information
State of Montana as an Employer Entity
Game Wardens’ and Peace Officers’ Retirement System
Schedule of Changes in Net Pension Liability and Related Ratios ˡ
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Total Pension Liability (TPL)
Service costs $ 8,029 $ 8,004 $ 8,098 $ 8,623 $ 8,403 $ 8,008 $ 7,850
Interest 18,535 17,618 16,018 14,269 12,911 12,398 11,258
Difference between expected and actual experience (2,027) (4,728) 4,781 3,743 2,705 731 —
Changes of assumptions 85,967 — — 5,878 — — —
Benefit payments (8,247) (7,350) (6,523) (5,810) (5,068) (5,352) (5,229)
Refunds of contributions (1,200) (1,001) (1,105) (1,036) (1,066) — —
Net change in total pension liability 101,057 12,543 21,269 25,667 17,885 15,785 13,879
Total pension liability – beginning 247,013 234,470 213,201 187,534 169,649 153,864 139,985
Total pension liability – ending $ 348,070 $ 247,013 $ 234,470 $ 213,201 $ 187,534 $ 169,649 $ 153,864
Plan Fiduciary Net Position
Contributions - employer $ 4,868 $ 4,686 $ 4,613 $ 4,464 $ 4,278 $ 4,088 $ 3,762
Contributions - member 5,803 5,566 5,512 5,278 5,036 4,924 4,462
Net investment income 5,583 11,125 15,573 18,590 3,167 6,435 20,069
Benefit payments (8,247) (7,350) (6,523) (5,810) (5,068) (5,352) (5,229)
Administrative expense (241) (202) (369) (329) (269) (200) (162)
Refunds of contributions (1,200) (1,001) (1,105) (1,036) (1,066) — —
Other (4) 1 (19) (1) (31) — —
Net change in plan fiduciary net position 6,562 12,825 17,682 21,156 6,047 9,895 22,902
Plan fiduciary net position – beginning 206,348 193,523 175,841 154,685 148,638 138,743 115,841
Plan fiduciary net position – ending $ 212,910 $ 206,348 $ 193,523 $ 175,841 $ 154,685 $ 148,638 $ 138,743
Net Pension Liability – Beginning $ 40,665 $ 40,947 $ 37,360 $ 32,849 $ 21,011 $ 15,121 $ 24,144
Net Pension Liability – Ending $ 135,160 $ 40,665 $ 40,947 $ 37,360 $ 32,849 $ 21,011 $ 15,121
Plan fiduciary net position as a percentage of TPL 61.17% 83.54% 82.54% 82.48% 82.48% 87.00% 90.00%
Covered payroll $ 53,825 $ 51,677 $ 50,823 $ 49,381 $ 47,108 $ 44,885 $ 41,637
Net pension liability as a percentage of covered payroll 251.11% 78.69% 80.57% 75.66% 69.73% 47.00% 36.00%
Schedule of Employer Contributions 1
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 5,394 $ 4,837 $ 4,644 $ 4,574 $ 4,447 $ 4,240 $ 4,040
Contributions in relation to the
contractually required contributions 5,394 4,837 4,644 4,574 4,447 4,240 4,040
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
Covered payroll $ 60,023 $ 53,825 $ 51,677 $ 50,823 $ 49,381 $ 47,108 $ 44,885
Contributions as a percentage of
covered payroll 8.99% 8.99% 8.99% 9.00% 9.01% 9.00% 9.00%
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
A-171
Notes to Required Supplementary Information
Game Wardens’ and Peace Officers’ Retirement System
For the Year Ended June 30, 2021
Method and assumptions used in calculations of contractually determined contributions: The
contractually required contribution rates are determined on an annual basis for the fiscal year beginning
July 1, 2020, determined as of June 30, 2020.
The following key methods and assumptions were used to determine the contractual contribution rates
reported in that schedule:
Actuarial cost method Entry age normal
Amortization method Level percentage of pay, open
Asset valuation method 4-year smoothed market
Wage inflation 3.50%
Merit increases 0% to 6.30%
Total salary increases 3.50% to 10.02%, including inflation
Inflation 2.40%
Investment rate of return 7.34%, net of pension plan investment expense, including
inflation
Mortality (healthy) RP-2000 Combined employee and annuitant mortality table
projected to 2020 using scale BB, males set back 1 year
Mortality (disabled) RP-2000 Combined employee and annuitant mortality table
Admin expense as a % of payroll 0.16%
Changes of assumptions: The discount rate was lowered from 7.65% to 5.65%. The investment rate of
return was lowered from 7.65% to 7.34%. The inflation rate was reduced from 2.75% to 2.40%.
A-172
Required Supplementary Information
State of Montana as an Employer Entity
Public Employees’ Retirement System-Defined Benefit Retirement System
Schedule of Proportionate Share of the Net Pension Liability ˡ
For the Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Employer’s proportion of the net pension liability 48.997235% 39.140686% 39.546272% 53.049189% 53.241100% 53.611080% 53.223780%
Employer’s proportionate share of the net pension
liability $ 1,292,651 $ 818,162 $ 825,387 $ 1,033,200 $ 906,880 $ 749,414 $ 663,174
Employer’s covered payroll $ 654,193 $ 638,674 $ 640,177 $ 648,671 $ 621,755 $ 620,286 $ 597,083
Employer ’s proportionate share of the net pension
liability as a percentage of its covered payroll 197.59% 128.10% 128.93% 159.28% 145.86% 120.82% 111.07%
Plan fiduciary net position as a percentage of the total
pension liability 68.90% 73.85% 73.47% 74.00% 75.00% 78.00% 80.00%
Schedule of Employer Contributions ˡ
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 78,878 $ 58,504 $ 56,183 $ 54,844 $ 56,256 $ 59,073 $ 58,575
Contributions in relation to the contractually required
contributions 78,878 58,504 56,183 54,844 56,256 59,073 58,575
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
Covered payroll $ 715,875 $ 654,193 $ 638,674 $ 640,177 $ 648,671 $ 621,755 $ 620,286
Contributions as a percentage of covered payroll 11.02% 8.94% 8.80% 8.57% 8.67% 9.50% 9.44%
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Notes to Required Supplementary Information
For the Year Ended June 30, 2021
Method and assumptions used in calculations of contractually determined contributions: The
contractually required contribution rates are determined on an annual basis for the fiscal year beginning
July 1, 2020, determined as of June 30, 2020.
The following actuarial methods and assumptions were used to determine contractual contribution rates
reported in that schedule:
Actuarial cost method Entry age normal
Amortization method Level percentage of payroll, open
Asset valuation method 4-year smoothed market
Wage inflation 3.50%
Merit increases 0% to 4.80%
Total salary increases 3.50% to 8.47%, including inflation
Inflation 2.40%
Investment rate of return 7.34%, includes inflation
Mortality (healthy) RP-2000 Combined employee and annuitant mortality table
projected to 2020 using scale BB, males set back 1 year
Mortality (disabled) RP-2000 Combined employee and annuitant mortality table
Admin expense as a % of payroll 0.30%
Changes of assumptions: The discount rate was lowered from 7.65% to 7.34%. The investment rate of
return was lowered from 7.65% to 7.34%. The inflation rate was reduced from 2.75% to 2.40%.
A-173
Required Supplementary Information
State of Montana as a Nonemployer Entity
Public Employees’ Retirement System-Defined Benefit Retirement System
Schedule of Proportionate Share of the Net Pension Liability ˡ
For the Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Nonemployer’s proportion of the net pension liability 14.215404% 24.411533% 24.917247% 1.007464% 0.956169% 0.956090% 0.961287%
Nonemployer’s proportionate share of the net pension
liability $ 375,032 $ 510,277 $ 520,058 $ 19,622 $ 16,287 $ 13,365 $ 11,978
Plan fiduciary net position as a percentage of the total
pension liability 68.90% 73.85% 73.47% 74.00% 75.00% 78.00% 80.00%
Schedule of Nonemployer Contributions 1
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 21,180 $ 35,008 $ 34,642 $ 34,706 $ 28,763 $ 30,800 $ 32,397
Contributions in relation to the contractually required
contributions 21,180 35,008 34,642 34,706 28,763 30,800 32,397
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Notes to Required Supplementary Information
For the Year Ended June 30, 2021
Method and assumptions used in calculations of contractually determined contributions: The
contractually determined contribution rates are set forth by the Legislature and are contained within the
Montana Code Annotated (MCA). The amounts used for the valuation as of the year ended June 30,
2020, are as follows:
Special Funding
The State contributes 0.1% of member compensation on behalf of local government entities per
Section 19-3-319, MCA.
The State contributes 0.37% of member compensation on behalf of school district entities per
Section 19-3-319, MCA.
The State contributes a statutory appropriation from General Fund per Section 19-3-320, MCA.
Changes of assumptions: The discount rate was lowered from 7.65% to 7.34%. The investment rate of
return was lowered from 7.65% to 7.34%. The inflation rate was reduced from 2.75% to 2.40%.
A-174
Required Supplementary Information
State of Montana as an Employer Entity
Sheriffs’ Retirement System
Schedule of Proportionate Share of the Net Pension Liability ˡ
For the Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Employer’s proportion of the net pension liability 4.758893% 4.876949% 4.872800% 4.856692% 5.454386% 5.637055% 5.535000%
Employer’s proportionate share of the net pension
liability $ 5,800 $ 4,067 $ 3,663 $ 3,696 $ 9,582 $ 5,434 $ 2,304
Employer’s covered payroll $ 4,041 $ 3,915 $ 3,781 $ 3,634 $ 3,850 $ 3,836 $ 3,580
Employer ’s proportionate share of the net pension
liability as a percentage of its covered payroll 143.53% 103.88% 96.88% 101.71% 248.88% 141.66% 64.36%
Plan fiduciary net position as a percentage of the total
pension liability 75.92% 81.89% 82.68% 81.00% 63.00% 75.00% 87.00%
Schedule of Employer Contributions 1
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 607 $ 530 $ 513 $ 496 $ 368 $ 389 $ 388
Contributions in relation to the contractually required
contributions 607 530 513 496 368 389 388
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
Covered payroll $ 4,628 $ 4,041 $ 3,915 $ 3,781 $ 3,634 $ 3,850 $ 3,836
Contributions as a percentage of covered payroll 13.12% 13.12% 13.10% 13.12% 10.13% 10.10% 10.11%
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Notes to Required Supplementary Information
For the Year ended June 30, 2021
Method and assumptions used in calculations of contractually determined contributions: The
contractually required contribution rates are determined on an annual basis for the fiscal year beginning
July 1, 2020, determined as of June 30, 2020. The following actuarial methods and assumptions were
used to determine contractual contribution rates reported in that schedule:
Actuarial cost method Entry age normal
Amortization method Level percentage of payroll, open
Asset valuation method 4-year smoothed market
Wage Inflation 3.50%
Merit increases 0% to 6.30%
Total salary increases 3.50% to 10.02%, including inflation
Inflation 2.40%
Investment rate of return 7.34%, includes inflation
Mortality (healthy) RP-2000 Combined employee and annuitant mortality table
projected to 2020 using scale BB, set back 1 year for males
Mortality (disabled) RP-2000 Combined employee and annuitant mortality table
Admin expense as a % of payroll 0.16%
Changes of assumptions: The discount rate was lowered from 7.65% to 7.34%. The investment rate of
return was lowered from 7.65% to 7.34%. The inflation rate was reduced from 2.75% to 2.40%.
A-175
Required Supplementary Information
State of Montana as a Nonemployer Contributing Entity
Municipal Peace Officers’ Retirement System
Schedule of Proportionate Share of the Net Pension Liability ˡ
For the Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Nonemployer’s proportion of the net pension liability 66.853347% 67.063878% 67.124706% 67.085433% 66.499650% 66.954111% 66.888728%
Nonemployer’s proportionate share of the net pension
liability $ 163,514 $ 133,487 $ 114,956 $ 119,354 $ 119,708 $ 110,756 $ 105,106
Plan fiduciary net position as a percentage of the total
pension liability 64.84% 68.84% 70.95% 68.00% 66.00% 67.00% 67.00%
Schedule of Nonemployer Contributions ˡ
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 17,395 $ 16,677 $ 15,941 $ 15,283 $ 13,215 $ 13,752 $ 13,433
Contributions in relation to the contractually required
contributions 17,395 16,677 15,941 15,283 13,215 13,752 13,433
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Notes to Required Supplementary Information
For the Year Ended June 30, 2021
Method and assumptions used in calculations of contractually determined contributions: The
contractually determined contribution rates are set forth by the Legislature and are contained within the
Montana Code Annotated (MCA). The amounts used for the valuation as of the year ended June 30,
2020, are as follows:
The State contributes 29.37% of member compensation on behalf of all employer entities per
Section 19-9-702, MCA.
Changes of assumptions: The discount rate was lowered from 7.65% to 7.34%. The investment rate of
return was lowered from 7.65% to 7.34%. The inflation rate was reduced from 2.75% to 2.40%.
A-176
Required Supplementary Information
State of Montana as an Employer Entity
Firefighters’ Unified Retirement System
Schedule of Proportionate Share of the Net Pension Liability ˡ
For the Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Employer’s proportion of the net pension liability 2.378643% 2.013129% 2.300917% 2.233929% 2.261523% 2.399255% 1.850026%
Employer’s proportionate share of the net pension
liability $ 3,722 $ 2,309 $ 2,650 $ 2,525 $ 2,583 $ 2,454 $ 1,806
Employer’s covered payroll $ 1,276 $ 1,051 $ 1,103 $ 1,022 $ 974 $ 986 $ 735
Employer ’s proportionate share of the net pension
liability as a percentage of its covered payroll 291.69% 219.70% 240.25% 247.06% 265.20% 249.00% 245.00%
Plan fiduciary net position as a percentage of the total
pension liability 75.34% 80.08% 79.03% 78.00% 75.00% 77.00% 77.00%
Schedule of Employer Contributions ˡ
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 665 $ 599 $ 494 $ 518 $ 472 $ 475 $ 142
Contributions in relation to the contractually required
contributions 665 599 494 518 472 475 142
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
Covered payroll $ 1,415 $ 1,276 $ 1,051 $ 1,103 $ 1,022 $ 974 $ 986
Contributions as a percentage of covered payroll 47.00% 46.94% 47.00% 46.96% 46.18% 49.00% 14.40%
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Notes to Required Supplementary Information
For the Year Ended June 30, 2021
Method and assumptions used in calculations of contractually determined contributions: The
contractually required contribution rates are determined on an annual basis for the fiscal year beginning
July 1, 2020, determined as of June 30, 2020. The following actuarial methods and assumptions were
used to determine contractual contribution rates reported in that schedule:
Actuarial cost method Entry age normal
Amortization method Level percentage of payroll, open
Asset valuation method 4-year smoothed market
Wage inflation 3.50%
Merit increases 0% to 6.30%
Total salary increases 3.50% to 10.02%, including inflation
Inflation 2.40%
Investment rate of return 7.34%, including inflation
Mortality (healthy) RP-2000 Combined employee and annuitant mortality table
projected to 2020 using scale BB, males set back 1 year
Mortality (disabled) RP-2000 Combined employee and annuitant mortality table
Admin as a % of payroll 0.13%
Changes of assumptions: The discount rate was lowered from 7.65% to 7.34%. The investment rate of
return was lowered from 7.65% to 7.34%. The inflation rate was reduced from 2.75% to 2.40%.
A-177
Required Supplementary Information
State of Montana as a Nonemployer Contributing Entity
Firefighters’ Unified Retirement System
Schedule of Proportionate Share of the Net Pension Liability ˡ
For the Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Nonemployer’s proportion of the net pension liability 67.656380% 69.323577% 67.972164% 67.876338% 67.809541% 67.358196% 68.005182%
Nonemployer’s proportionate share of the net pension
liability $ 105,867 $ 79,524 $ 78,285 $ 76,724 $ 77,448 $ 68,892 $ 66,384
Plan fiduciary net position as a percentage of the total
pension liability 75.34% 80.08% 79.03% 78.00% 75.00% 77.00% 77.00%
Schedule of Nonemployer Contributions ˡ
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 17,897 $ 17,147 $ 16,209 $ 15,272 $ 14,042 $ 13,635 $ 13,573
Contributions in relation to the contractually required
contributions 17,897 17,147 16,209 15,272 14,042 13,635 13,573
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Notes to Required Supplementary Information
For the Year Ended June 30, 2021
Method and assumptions used in calculations of statutorily determined contributions: The
statutorily determined contribution rates are set forth by the Legislature and are contained within the
Montana Code Annotated (MCA). The amounts used for the valuation as of the year ended June 30,
2020, are as follows:
The State contributes 32.61% of member compensation on behalf of all employer entities per
Section 19-13-604, MCA.
Changes of assumptions: The discount rate was lowered from 7.65% to 7.34%. The investment rate of
return was lowered from 7.65% to 7.34%. The inflation rate was reduced from 2.75% to 2.40%.
A-178
Required Supplementary Information
State of Montana as a Nonemployer Contributing Entity
Volunteer Firefighters’ Compensation Act
Schedule of Proportionate Share of the Net Pension Liability ˡ
For the Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Nonemployer’s proportion of the net pension liability 100% 100% 100% 100% 100% 100% 100%
Nonemployer’s proportionate share of the net pension
liability $ 9,106 $ 6,907 $ 7,667 $ 10,087 $ 10,599 $ 10,504 $ 5,089
Plan fiduciary net position as a percentage of the total
pension liability 81.42% 85.23% 83.48% 78.00% 76.00% 76.00% 87.00%
Schedule of Nonemployer Contributions ˡ
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 2,578 $ 2,475 $ 2,361 $ 2,207 $ 2,054 $ 2,024 $ 1,913
Contributions in relation to the contractually required
contributions 2,578 2,475 2,361 2,207 2,054 2,024 1,913
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Notes to Required Supplementary Information
For the Year Ended June 30, 2021
Method and assumptions used in calculations of actuarially determined contributions: The
statutorily determined contribution rates are set forth by the Legislature and are contained within the
Montana Code Annotated (MCA). The amounts used for the valuation as of the year ended June 30,
2020, are as follows:
The State contributes 5% of certain fire tax insurance premiums paid per Section 19-17-301,
MCA.
Changes of assumptions: The discount rate was lowered from 7.65% to 7.34%. The investment rate of
return was lowered from 7.65% to 7.34%. The inflation rate was reduced from 2.75% to 2.40%.
A-179
Required Supplementary Information
State of Montana as an Employer Entity
Teachers’ Retirement System
Schedule of Proportionate Share of the Net Pension Liability ˡ
For the Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Employer’s proportion of the net pension liability 2.303331% 2.411113% 2.554088% 2.860298% 3.121008% 3.422388% 4.689747%
Employer’s proportionate share of the net pension
liability $ 51,812 $ 46,493 $ 47,407 $ 48,227 $ 57,016 $ 56,230 $ 72,168
Employer’s covered payroll $ 22,384 $ 23,250 $ 24,275 $ 26,944 $ 28,915 $ 31,252 $ 32,937
Employer ’s proportionate share of the net pension
liability as a percentage of its covered payroll 231.47% 199.97% 195.29% 178.99% 197.18% 179.00% 219.00%
Plan fiduciary net position as a percentage of the total
pension liability 64.95% 68.64% 69.09% 70.00% 67.00% 69.00% 70.00%
Schedule of Employer Contributions ˡ
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 16,103 $ 16,686 $ 16,538 $ 17,298 $ 17,396 $ 16,946 $ 16,234
Contributions in relation to the contractually required
contributions 16,103 16,686 16,538 17,298 17,396 16,946 16,234
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
Covered payroll $ 21,776 $ 22,384 $ 23,250 $ 24,275 $ 26,944 $ 28,915 $ 31,252
Contributions as a percentage of covered payroll 73.95% 74.54% 71.13% 71.26% 64.56% 58.00% 52.00%
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Notes to Required Supplementary Information
For the Year Ended June 30, 2021
Method and assumptions used in calculations of actuarially determined contributions: The
actuarially determined contribution rates are determined on an annual basis for the fiscal year beginning
July 1, 2020, determined as of June 30, 2020. The following actuarial methods and assumptions were
used to determine actuarial contribution rates reported in that schedule:
Actuarial cost method Entry age
Amortization method Level percentage of pay, open
Asset valuation method 4-year smoothed market
Wage inflation 3.25%
Merit increase 0 to 4.51% for non-university members and
1.00% for university members
Total salary increases 3.25% to 7.76% for non-university members and
4.25% for university members, including inflation
Inflation 2.40%
Investment rate of return 7.34%, net of pension plan investment expense, and
including inflation
Mortality (healthy) RP-2000 Healthy Combined mortality table projected to 2022
adjusted for partial credibility setback for 2 years
Mortality (disabled) RP-2000 Disabled mortality table for males set back 3 years, for
females set forward 2 years
Admin as a % of payroll 0.45%
A-180
Changes of assumptions: The discount rate was lowered from 7.50% to 7.34%. The investment rate of
return was lowered from 7.50% to 7.34%. The inflation rate was reduced from 2.50% to 2.40%.
Required Supplementary Information
State of Montana as a Nonemployer Contributing Entity
Teachers’ Retirement System
Schedule of Proportionate Share of the Net Pension Liability ˡ
For the Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Nonemployer’s proportion of the net pension liability
36.554642% 37.112880% 37.735743% 38.133267% 38.729473% 39.384625% 38.777294%
Nonemployer’s proportionate share of the net pension
liability $ 822,282 $ 715,637 $ 700,417 $ 642,958 $ 707,527 $ 647,092 $ 596,724
Plan fiduciary net position as a percentage of the total
pension liability 64.95% 68.64% 69.09% 70.00% 67.00% 69.00% 70.00%
Schedule of Nonemployer Contributions ˡ
For the Fiscal Year Ended June 30
(dollars in thousands)
2021 2020 2019 2018 2017 2016 2015
Contractually required contributions $ 46,701 $ 44,841 $ 44,333 $ 43,718 $ 43,028 $ 42,400 $ 42,806
Contributions in relation to the contractually required
contributions 46,701 44,841 44,333 43,718 43,028 42,400 42,806
Contribution deficiency/(excess) $ — $ — $ — $ — $ — $ — $ —
ˡ Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Notes to Required Supplementary Information
For the Year Ended June 30, 2021
Method and assumptions used in calculations of contractually determined contributions: The
contractually required contribution rates are set forth by the Legislature and are contained within the
Montana Code Annotated (MCA). The amounts used for the valuation as of the year ended June 30,
2020, are as follows:
The State contributes 0.11% of the compensation of members participating per Section
19-20-604, MCA.
The State contributes 2.38% of member compensation on behalf of school district and community
college entities per Section 19-20-607, MCA.
The State contributes a $25.0 million payment from the General Fund per Section 19-20-607,
MCA.
Changes of assumptions: The discount rate was lowered from 7.50% to 7.34%. The investment rate of
return was lowered from 7.50% to 7.34%. The inflation rate was reduced from 2.50% to 2.40%.
A-181
REQUIRED SUPPLEMENTARY INFORMATION
NOTE RSI – 3. OTHER POSTEMPLOYMENT BENEFITS PLAN INFORMATION (OPEB)
The State of Montana and MUS OPEB plans allow retirees to participate, as a group, at a rate that does
not cover all of the related costs. This results in the reporting of the Total OPEB Liability in the related
financial statements and note disclosures.
In accordance with GASB 75, the following information is presented to reflect the funding progress of the
Other Postemployment Benefits Plans for the State of Montana OPEB plan.
Total OPEB Liability and Related Ratios
Last 10 Fiscal Years (1)
(in thousands)
Total
OPEB
Liability 2021 2020 2019 2018
Service cost $ 1,734 $ 1,946 $ 2,062 $ 1,889
Interest 1,333 1,586 1,990 2,014
Difference between expected (6,137) (9,409) — (4,723)
and actual experience
Changes of assumptions or other 104,439 (1,877) 2,895 (295)
inputs
Benefit payments (1,196) (601) (1,709) 1,705
Net change in Total OPEB 100,173 (8,355) 5,238 590
Liability
Total OPEB Liability -
Beginning 47,342 55,697 50,459 49,869
Total OPEB Liability -
Ending $ 147,515 $ 47,342 $ 55,697 $ 50,459
State and discretely presented
component units' proportion of
the collective Total OPEB
Liability 100 % 100 % 100 % 100 %
Covered employee payroll $ 689,871 $ 690,563 $ 702,688 $ 675,661
Total OPEB Liability as a
percentage of covered employee 21.38 % 6.86 % 7.93 % 7.47%
payroll
(1)
Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
Note to Schedule: No assets are accumulated in a trust that meets the criteria of GASB 75.
Factors that significantly affect trends in the amounts reported:
A-182
Changes in Actuarial Assumptions and Methods
June 30, 2021: Changes in assumptions for 2021 were due to no retiree contribution increase
and a decrease in the discount rate from 2.75% to 2.23%.
June 30, 2020: Changes in actuarial assumptions include a participation rate reduction from 55%
to 40% based on recent experience study, a revision to rates per the Retirement System pension
valuations as of July 1, 2019, and the interest/discount rate was based on the average of multiple
March 31, 2020 municipal bond rate sources.
June 30, 2019: Changes in actuarial assumptions include interest rate based upon March 31,
2019, 20-year municipal bond index per GASB 75 requirements.
June 30, 2018: Changes in actuarial methods include adjustments to the amortization period and
actuarial cost method to conform with GASB 75 requirements. Changes in actuarial assumptions
include revised rates per the retirement system pension valuations as of July 1, 2017 and interest
rate based upon the March 31, 2018, 20-year municipal bond index per GASB 75 requirements.
Other changes include revised rates based on actual data and projected trend and updated
projected healthcare trend rates to follow the Getzen model.
Changes in Benefit Terms
June 30, 2021: None
June 30, 2020: None
June 30, 2019: None
June 30, 2018: Medical plans moved from Cigna to Allegiance as of January 1, 2016, the State
implemented reference-based pricing hospital contracts effective July 1, 2016 and pharmacy
moved from URx to Navitus as of January 1, 2017. The State implemented an Employer Group
Waiver Program for Medicare retirees effective January 1, 2017.
A-183
In accordance with GASB 75, the following information is presented to reflect the funding progress of the
Other Postemployment Benefits Plans for MUS plan.
Total OPEB Liability and Related Ratios
Last 10 Fiscal Years (1)
(in thousands)
Total
OPEB
Liability 2021 2020 2019 2018
Service cost $ 1,412 $ 1,736 $ 1,952 $ 1,954
Interest 777 1,130 1,495 1,410
Difference between expected and (17,388) (15,015) — (1,323)
actual experience
Changes of assumptions or other 45,674 (1,791) 1,351 (182)
inputs
Benefit payments (13) 1,441 (888) (679)
Net change in Total OPEB 30,462 (12,499) 3,910
Liability 1,180
Total OPEB Liability - 26,849 39,348 35,438 34,258
Beginning
Total OPEB Liability - Ending
$ 57,311 $ 26,849 $ 39,348 $ 35,438
State and discretely presented
component units' proportion of the
collective Total OPEB Liability
95.18 % 94.92 % 95.59 % 95.62 %
Covered employee payroll (2) $ 415,074 $ 418,193 $ 451,613 $ 434,243
Total OPEB Liability as a
percentage of covered employee 13.81 % 6.42 % 9.11 % 8.53 %
payroll
(1)
Schedules are intended to present information for 10 years. Additional years will be displayed as they become available.
(2)
Amount reported is for the whole MUS plan for 2018 and 2019. Community Colleges were included due to lack of ability to separate covered
employee payroll for those years.
Note to Schedule: No assets are accumulated in a trust that meets the criteria of GASB 75.
A-184
Factors that significantly affect trends in the amounts reported:
Changes in Actuarial Assumptions and Methods
June 30, 2021: Changes in assumptions for 2021 were due to no retiree contribution increase
and a decrease in the discount rate from 2.75% to 2.23%.
June 30, 2020: Changes in actuarial assumptions include a participation rate reduction from 55%
to 40% based on recent experience study, a revision to rates per the Retirement System pension
valuations as of July 1, 2019, and the interest/discount rate was based on the average of multiple
March 31, 2020 municipal bond rate sources.
June 30, 2019: Changes in actuarial assumptions include interest rate based upon March 31,
2019, 20-year municipal bond index per GASB 75 requirements.
June 30, 2018: Changes in actuarial methods include adjustments to the amortization period and
actuarial cost method to conform with GASB 75 requirements. Changes in actuarial assumptions
include revised rates per the retirement system pension valuations as of July 1, 2017 and interest
rate based upon the March 31, 2018, 20-year municipal bond index per GASB 75 requirements,
lapse rates were removed to reflect a return to standard retiree contribution levels, added
employees covered by the MUS-RP, changes in revised rates based on actual data and projected
trend and updated projected healthcare trend rates to follow the Getzen model.
Changes of Benefit Terms
June 30, 2021: Carrier options reduced to one.
June 30, 2020: Changes in benefit terms include increased annual deductible and out-of-pocket
maximums.
June 30, 2019: None
June 30, 2018: Increased deductible, increased out-of-pocket limits for Medica and RX, increased
visit copays, pharmacy moved from URx to Navitus as of July 1, 2017, employer group waiver
program for Medicare retirees became effective July 1, 2017, adopted combined annual visit max
of 30 for multiple therapy services and massage therapy moved into rehabilitation benefit.
A-185
REQUIRED SUPPLEMENTARY INFORMATION
NOTE RSI – 4. RISK MANAGEMENT TREND INFORMATION
The following tables present risk management trend information for the Hail Insurance Fund and the MUS
Group Benefits Fund. The Hail Insurance Fund pays claims within a calendar year cycle that parallels the
growing season from spring planting to fall harvesting; therefore, it has no development cycle. The MUS
Group Benefits Fund has a three to five-year development cycle.
The tables illustrate how the earned revenues (net of reinsurance) of the funds and their investment
income compare to related costs of loss (net of loss assumed by reinsurers) and other expenses
assumed by the funds as of the end of the fiscal year (in thousands). Section 3 shows the funds’ incurred
claims and allocated claim adjustment expense (both paid and accrued) as originally reported at the end
of the first year in which the event that triggered coverage under the contract occurred. Section 4 shows
the cumulative amounts paid as of the end of successive years for each policy year. Section 6 shows how
each policy year's incurred claims increased or decreased as of the end of successive years. This annual
re-estimation results from new information received on known claims, reevaluation of existing information
on known claims, as well as emergence of new claims not previously known. Section 7 compares the
latest re-estimated incurred claims amount to the amount originally established (Section 3) and shows
whether this latest estimate of claims cost is greater or less than originally thought. As data for individual
policy years mature, the correlation between original estimates and re-estimated amounts is commonly
used to evaluate the accuracy of incurred claims currently recognized in less mature policy years. This
table will be revised as data for successive policy years develops.
A-186
State of Montana Hail Insurance Program
Claims Development Information
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
1. Premiums and investment revenue
Earned $ 1,846 $ 3,701 $ 4,836 $ 4,320 $ 5,918 $ 7,446 $ 8,309 $ 8,029 $ 7,101 $ 7,034
Ceded 2,250 3,170 3,605 3,255 4,771 6,346 2,049 — — —
Net earned (404) 531 1,231 1,065 1,147 1,100 6,260 8,029 7,101 7,034
2. Unallocated expenses including
overhead $ 359 $ 384 $ 412 $ 448 $ 455 $ 424 $ 1,124 $ 1,033 $ 3,562 $ 2,308
3. Estimated losses and expenses end of $ 520 $ 793 $ 422 $ 120 $ 819 $ 324 $ 6,660 $ 13,511 $ 2,221 $ 4,608
accident year
4. Net paid (cumulative) as of:
End of policy year $ 444 $ 782 $ 405 $ 85 $ 817 $ 189 $ 6,643 $ 13,285 $ 1,881 $ 3,857
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Eight years later
Nine years later
5. Re-estimated ceded losses and
expenses $ — $ — $ — $ — $ — $ — $ — $ — $ — $ —
6. Re-estimated net incurred losses and
expense:
End of policy year $ 520 $ 793 $ 422 $ 120 $ 819 $ 324 $ 6,660 $ 13,511 $ 2,221 $ 4,608
One year later
Two years later
Three years later
Four years later
Five years later
Six years later
Seven years later
Eight years later
Nine years later
7. Increase (decrease) in estimated net
incurred losses and expenses from
end of policy year $ — $ — $ — $ — $ — $ — $ — $ — $ — $ —
Montana University System – Medical, Dental, Vision, Rx Claims
Claims Development Information
2021 2020 2019 2018 2017 2016 2015 2014 2013 2012
1. Premiums and investment Revenue $ 95,150 $ 98,599 $ 98,885 $ 99,369 $ 100,693 $ 84,297 $ 80,764 $ 79,257 $ 76,505 $ 75,911
2. Unallocated expenses including $ 4,617 $ 4,691 $ 5,150 $ 5,111 $ 5,196 $ 5,129 $ 5,198 $ 4,787 $ 3,938 $ 4,063
overhead
3. Estimated losses and expenses end of $ 103,924 $ 96,326 $ 93,392 $ 90,427 $ 85,802 $ 87,233 $ 87,353 $ 71,877 $ 69,325 $ 64,331
accident year
4. Net paid (cumulative) as of:
End of policy year $ 93,363 $ 83,896 $ 82,211 $ 80,393 $ 75,601 $ 76,400 $ 79,388 $ 63,317 $ 61,964 $ 56,981
One year later 93,665 91,306 89,050 84,575 85,796 88,943 69,073 67,988 62,937
Two years later 91,453 89,140 84,729 85,894 89,261 69,074 68,024 62,968
Three years later 89,161 84,738 86,002 89,264 69,076 68,024 62,974
Four years later 84,740 86,038 89,271 69,076 68,024 62,974
Five years later 86,121 89,283 69,076 68,024 62,974
Six years later 89,283 69,076 68,024 62,974
Seven years later 69,076 68,024 62,974
Eight years later 68,024 62,974
Nine years later 62,974
5. Re-estimated ceded losses and
expenses $ — $ — $ — $ — $ — $ — $ — $ — $ — $ —
6. Re-estimated net incurred losses
and expense:
End of policy year $ 103,924 $ 96,326 $ 93,392 $ 90,427 $ 85,802 $ 87,233 $ 87,353 $ 71,877 $ 69,325 $ 64,331
One year later 95,730 93,028 89,036 84,567 86,148 88,824 71,700 68,349 63,446
Two years later 91,453 89,140 84,729 85,894 89,261 69,074 68,024 62,968
Three years later 89,161 84,738 86,002 89,264 69,076 68,024 62,974
Four years later 84,740 86,038 89,271 69,076 68,024 62,974
Five years later 86,121 89,283 69,076 68,024 62,974
Six years later 89,283 69,076 68,024 62,974
Seven years later 69,076 68,024 62,974
Eight years later 68,024 62,974
Nine years later 62,974
7. Increase (decrease) in estimated net
incurred losses and expenses from
end of policy year $ — $ (597) $ (1,940) $ (1,265) $ (1,063) $ (1,112) $ 1,931 $ (2,800) $ (1,302) $ (1,357)
A-187
State of Montana A-188
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
CORPORATION FOR NATIONAL & COMMUNITY SERVICE
94.003 State Commissions $217,660
94.006 AmeriCorps $3,311,790 $3,566,883
94.009 Training and Technical Assistance $147,663
94.013 Volunteers in Service to America $561,415
94.027 AmeriCorps VISTA Recruitment Support $9,857
TOTAL $4,503,478
CORPORATION FOR NATIONAL & COMMUNITY SERVICE TOTAL $4,503,478
DEPARTMENT OF AGRICULTURE
10.001 Agricultural Research Basic and Applied Research $18,581
eXtension Foundation SA-2021-61 $11,802
10.025 Plant and Animal Disease, Pest Control, and Animal Care $1,069,586
10.093 Voluntary Public Access and Habitat Incentive Program $103,078
10.156 Federal-State Marketing Improvement Program $20,771
10.162 Inspection Grading and Standardization $25,839
10.163 Market Protection and Promotion $92,308
10.170 Specialty Crop Block Grant Program - Farm Bill $457,962 $1,943,705
10.175 Farmers Market and Local Food Promotion Program
National Center for Appropriate Technology 810361047 $254
10.310 Agriculture and Food Research Initiative (AFRI) $4,083
University of Idaho AD 1865-884868 $14,964
10.433 Rural Housing Preservation Grants ($34,807)
10.435 State Mediation Grants $2,529
10.475 Cooperative Agreements with States for Intrastate Meat and Poultry Inspection $1,061,879
10.500 Cooperative Extension Service $51,140 $578,521
Kansas State University A00-0983-S075 $3,077
Kansas State University A00-0983-S069 $2,910
University of Missouri C00059381-8 ($5,960)
University of Missouri C00067296-3 $28,913
Washington State University 134191 G004011 $5,760
10.536 CACFP Training Grants $14,602
10.541 Child Nutrition-Technology Innovation Grant $179,599
10.542 COVID-19 - Pandemic EBT Food Benefits $27,514,501
10.557 COVID-19 - WIC Special Supplemental Nutrition Program for Women, Infants, and Children $1,240,105
10.557 WIC Special Supplemental Nutrition Program for Women, Infants, and Children $3,628,609 $10,033,656
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
10.558 COVID-19 - Child and Adult Care Food Program $468,657
10.558 Child and Adult Care Food Program $7,625,149
10.560 State Administrative Expenses for Child Nutrition $1,275,070
10.567 Food Distribution Program on Indian Reservations $1,967,828 $4,164,416
10.572 WIC Farmers' Market Nutrition Program (FMNP) $40,708
10.574 Team Nutrition Grants $336,407
10.575 Farm to School Grant Program $35,085 $89,693
10.576 Senior Farmers Market Nutrition Program $66,200
10.578 WIC Grants To States (WGS) $612
10.582 Fresh Fruit and Vegetable Program $1,426,013 $1,510,792
10.652 Forestry Research $388,173
Arthur Carhart National Wilderness Training Center 18-CS-11132466-125 $2,373
10.664 Cooperative Forestry Assistance $2,472,632 $4,697,882
Gallatin County 2018-578 $22,346
Gallatin County 2018-579 $21,843
10.674 Wood Utilization Assistance $29,236
10.676 Forest Legacy Program $3,211,557
10.678 Forest Stewardship Program $274
10.680 Forest Health Protection $45,900 $74,394
National Wilderness Stewardship Alliance WI2021 $34
10.684 International Forestry Programs $3,344
10.689 Community Forest and Open Space Conservation Program (CFP) $28,259
10.691 Good Neighbor Authority $362,815
10.697 State & Private Forestry Hazardous Fuel Reduction Program $192,953 $192,953
10.698 State & Private Forestry Cooperative Fire Assistance $11,057
10.699 Partnership Agreements $79,189
10.902 Soil and Water Conservation $62,702 $313,506
10.912 Environmental Quality Incentives Program $69,654
10.924 Conservation Stewardship Program $108,659
10.931 Agricultural Conservation Easement Program $108,659
10.UXX Miscellaneous Non-Major Grants $73,914
TOTAL $69,308,081
Child Nutrition Cluster
10.553 School Breakfast Program $1,448,530 $1,529,562
10.555 National School Lunch Program $6,836,019 $7,012,109
10.556 Special Milk Program for Children $4,437 $4,437
The accompanying notes are an integral part of this schedule.
A-189
State of Montana A-190
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
10.559 COVID-19 - Summer Food Service Program for Children $29,000,000 $29,000,000
10.559 Summer Food Service Program for Children $34,643,315 $35,033,089
10.579 Child Nutrition Discretionary Grants Limited Availability $69,576 $660,894
TOTAL $73,240,091
Food Distribution Cluster
10.565 Commodity Supplemental Food Program $286,459 $2,086,088
10.568 COVID-19 - Emergency Food Assistance Program (Administrative Costs) $52,986 $81,032
10.569 Emergency Food Assistance Program (Food Commodities) $394,711 $4,476,773
TOTAL $6,643,893
Forest Service Schools and Roads Cluster
10.665 Schools and Roads - Grants to States $12,197,140 $12,200,420
TOTAL $12,200,420
SNAP Cluster
10.551 Supplemental Nutrition Assistance Program $229,517,522
10.561 COVID-19 - State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $155,412
10.561 State Administrative Matching Grants for the Supplemental Nutrition Assistance Program $288,060 $13,736,630
TOTAL $243,409,564
DEPARTMENT OF AGRICULTURE TOTAL $404,802,049
DEPARTMENT OF COMMERCE
11.303 Economic Development Technical Assistance $161,352
11.550 Public Telecommunications Facilities Planning and Construction
Corporation for Public Broadcasting 1492 $222,618
11.611 COVID-19 - Manufacturing Extension Partnership $175,013
11.611 Manufacturing Extension Partnership $37,738 $878,237
Hawaii Technology Development $84,127
Oregon Manufacturing Extension $3,061
TOTAL $1,524,408
Economic Development Cluster
11.307 Economic Adjustment Assistance $3,400 $84,292
11.307 Economic Adjustment Assistance 05-19-02445 $318,254
11.307 Economic Adjustment Assistance 05-79-73005 $3,082,439
TOTAL $3,484,985
DEPARTMENT OF COMMERCE TOTAL $5,009,393
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
DEPARTMENT OF DEFENSE
12.002 Procurement Technical Assistance For Business Firms
Big Sky Economic Development Corporation SP4800-20-2-2022 $68,569
Big Sky Economic Development Corporation SP4800-19-2-1922 $8,401
12.005 Conservation and Rehabilitation of Natural Resources on Military Installations $386,457
12.110 Planning Assistance to States $330,257
12.112 Payments to States in Lieu of Real Estate Taxes $2,914
12.357 ROTC Language and Culture Training Grants
Institute of International Education, Inc. PG01801-UMT-16-PGO-051-PO6 $98,191
Institute of International Education, Inc. PGO1801-UMT-16-PGO-051-PO4 ($5,365)
12.400 Military Construction, National Guard $6,651,295
12.401 National Guard Military Operations and Maintenance (O&M) Projects $23,903,602
12.404 National Guard ChalleNGe Program $4,762,158
12.579 Language Training Center
Institute of International Education, Inc. PG1801-UMT-16-LTC-052-PO5 $4,738,324
Institute of International Education, Inc. PGO1801-UMT-16-LTC-052-PO3 $175,489
Institute of International Education, Inc. PGO1801-UMT-16-LTC-052-P07 $497,018
12.620 Troops to Teachers Grant Program $698,646
12.630 Basic, Applied, and Advanced Research in Science and Engineering
National Science Teachers Association #21-871-010 $23,167
Technology Student Association $36,557
12.903 GenCyber Grants Program $5,657
12.UXX Miscellaneous Non-Major Grants $5,947 $426,381
Pacific States Marine Fisheries Commission 20-144P $177,685
Pacific States Marine Fisheries Commission 21-129P $558,736
Pacific States Marine Fisheries Commission 20-105P $1,334,112
Pacific States Marine Fisheries Commission 21-179P $40,847
TOTAL $44,919,098
DEPARTMENT OF DEFENSE TOTAL $44,919,098
DEPARTMENT OF EDUCATION
84.002 Adult Education - Basic Grants to States $1,114,639 $1,436,128
84.010 Title I Grants to Local Educational Agencies $46,504,595 $47,820,710
84.011 Migrant Education State Grant Program $1,315,315 $1,494,359
84.013 Title I State Agency Program for Neglected and Delinquent Children and Youth $207,749
84.016 Undergraduate International Studies and Foreign Language Programs $4,974 $27,628
84.031 Higher Education Institutional Aid $749,824
The accompanying notes are an integral part of this schedule.
A-191
State of Montana A-192
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
84.048 Career and Technical Education -- Basic Grants to States $3,775,459 $5,618,818
84.126 Rehabilitation Services Vocational Rehabilitation Grants to States $9,274,285
84.144 Migrant Education Coordination Program $59,288 $59,288
84.177 Rehabilitation Services Independent Living Services for Older Individuals Who are Blind $250,541
84.181 Special Education-Grants for Infants and Families $360,964 $1,307,155
84.184 School Safety National Activities $90,000 $963,320
84.187 Supported Employment Services for Individuals with the Most Significant Disabilities $355,127
84.196 Education for Homeless Children and Youth $227,373 $276,282
84.287 Twenty-First Century Community Learning Centers $5,129,993 $5,463,197
84.299 Indian Education -- Special Programs for Indian Children
Aaniiih Nakoda College S299B180009 $20,143
Blackfeet Community College TCTC#2-386-1-5107 $105,078
Blackfeet Community College TCTC#2-3861-5104 $140,277
Blackfeet Community College S299B160026 $7,559
Fort Peck Community College S299B130018 $5,485
Fort Peck Community College ED-GRANTS-061418-001 $3,827
84.323 Special Education - State Personnel Development $156,094 $615,636
84.325 Special Education - Personnel Development to Improve Services and Results for Children with Disabilities $98,663
84.326 Special Education Technical Assistance and Dissemination to Improve Services and Results for Children with Disabilities $135,920
Helen Keller National Center 2021-116 $57,289
Helen Keller National Center 2020-190 $13,758
84.334 Gaining Early Awareness and Readiness for Undergraduate Programs $1,944,752 $4,041,704
84.358 Rural Education $930,252 $970,411
84.365 English Language Acquisition State Grants $307,238 $973,236
84.367 Supporting Effective Instruction State Grants $9,114,419 $9,588,436
84.369 Grants for State Assessments and Related Activities $4,069,233
84.371 Comprehensive Literacy Development $11,654,504 $12,022,247
84.372 Statewide Longitudinal Data Systems $911,101
84.377 School Improvement Grants $89,884 $425,457
84.411 Education Innovation and Research (formerly Investing in Innovation (i3) Fund)
North American Native Research and Education Foundation 1001R $163,070
84.419 Preschool Development Grants $396,771 $396,771
84.424 Student Support and Academic Enrichment Program $5,159,135 $5,391,236
84.998 American Printing House for the Blind $6,421
84.UXX Miscellaneous Non-Major Grants $97,230
TOTAL $115,564,599
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
Education Stabilization Fund
84.425C COVID-19 - Governor’s Emergency Education Relief (GEER) Fund $789,359 $8,342,112
84.425D COVID-19 - Elementary and Secondary School Emergency Relief (ESSER) Fund $26,805,123 $27,217,106
84.425E COVID-19 - Higher Education Emergency Relief Fund (HEERF) Student Aid Portion $17,641,529
84.425F COVID-19 - HEERF Institutional Portion $40,471,569
84.425L COVID-19 - HEERF Minority Serving Institutions (MSIs) $35,628
84.425M COVID-19 - HEERF Strengthening Institutions Program (SIP) $801,056
COVID-19 - Coronavirus Response and Relief Supplemental Appropriations Act, 2021 – Emergency Assistance for Non-
84.425R $13,394
Public Schools (CRRSA EANS) program
TOTAL $94,522,394
Special Education Cluster (IDEA)
84.027 Special Education Grants to States $35,663,761 $38,963,898
84.173 Special Education Preschool Grants $1,186,785 $1,189,761
TOTAL $40,153,659
Student Financial Assistance Cluster
84.007 COVID-19 - Federal Supplemental Educational Opportunity Grants $2,000
84.007 Federal Supplemental Educational Opportunity Grants $1,719,057
84.033 Federal Work-Study Program $1,634,018
84.038 Federal Perkins Loan Program - Federal Capital Contributions $23,678,953
84.063 Federal Pell Grant Program $36,026,968
84.268 Federal Direct Student Loans $141,309,606
84.379 Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) $3,962
TOTAL $204,374,564
TRIO Cluster
84.042 TRIO Student Support Services $2,197,866
84.044 TRIO Talent Search $8,936 $1,335,152
84.047 TRIO Upward Bound $1,870,167
TOTAL $5,403,185
DEPARTMENT OF EDUCATION TOTAL $460,018,402
DEPARTMENT OF ENERGY
81.041 State Energy Program $375,718
81.042 Weatherization Assistance for Low-Income Persons $2,416,826 $3,444,301
81.086 Conservation Research and Development
Utah Clean Cities DOE-FOA-0002014 $2,455
81.119 State Energy Program Special Projects
State of Utah EE0008610 $5,748
The accompanying notes are an integral part of this schedule.
A-193
State of Montana A-194
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
81.121 Nuclear Energy Research, Development and Demonstration $15,000
Los Alamos National Security, LLC 577352 $23,676
81.138 State Heating Oil and Propane Program $9,452
81.UXX Miscellaneous Non-Major Grants $185,905
Pacific States Marine Fisheries Commission 20-18G $25,917
Pacific States Marine Fisheries Commission 21-066G $67,557
TOTAL $4,155,729
DEPARTMENT OF ENERGY TOTAL $4,155,729
DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.041 Special Programs for the Aging, Title VII, Chapter 3, Programs for Prevention of Elder Abuse, Neglect, and Exploitation $24,127
COVID-19 - Special Programs for the Aging, Title VII, Chapter 2, Long Term Care Ombudsman Services for Older
93.042 $19,200 $19,243
Individuals
93.042 Special Programs for the Aging, Title VII, Chapter 2, Long Term Care Ombudsman Services for Older Individuals $94,519 $100,972
93.043 Special Programs for the Aging, Title III, Part D, Disease Prevention and Health Promotion Services $139,237 $139,378
93.048 COVID-19 - Special Programs for the Aging, Title IV, and Title II, Discretionary Projects $1,454
93.051 Alzheimer's Disease Demonstration Grants to States $191,856
93.052 COVID-19 - National Family Caregiver Support, Title III, Part E $357,458 $358,170
93.052 National Family Caregiver Support, Title III, Part E $930,675 $995,352
93.068 Chronic Diseases: Research, Control, and Prevention
National Association of Chronic Disease Directors (NACDD) 3192019 $16,225
93.069 Public Health Emergency Preparedness $2,399,793 $5,272,893
93.070 Environmental Public Health and Emergency Response $43,915 $573,533
93.071 Medicare Enrollment Assistance Program $127,804 $131,513
93.072 Lifespan Respite Care Program $245,666
Cooperative Agreements to Promote Adolescent Health through School-Based HIV/STD Prevention and School-Based
93.079 $107,019
Surveillance
93.090 Guardianship Assistance $2,757,765
93.092 Affordable Care Act (ACA) Personal Responsibility Education Program $250,328
93.103 Food and Drug Administration Research $250,959
93.104 Comprehensive Community Mental Health Services for Children with Serious Emotional Disturbances (SED) $84,090 $1,333,398
93.107 COVID-19 - Area Health Education Centers $50,671 $89,488
93.110 Maternal and Child Health Federal Consolidated Programs $2,361,709
Family Voices, Inc. 2020-429 $14,964
Texas Health Institute UH7MC30776 $2,400
Utah State University PO463210-E $8,698
93.116 Project Grants and Cooperative Agreements for Tuberculosis Control Programs $178,560
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
93.127 Emergency Medical Services for Children $151,315
93.130 Cooperative Agreements to States/Territories for the Coordination and Development of Primary Care Offices $139,318
93.136 Injury Prevention and Control Research and State and Community Based Programs $374,466 $2,246,888
93.150 Projects for Assistance in Transition from Homelessness (PATH) $367,602 $441,515
93.155 Rural Health Research Centers
National Rural Health Association 2020 STATE RURAL HEALTH ASSOCI $3,340
National Rural Health Association 2021 SRHA TECHNICAL ASSISTANCE $2,572
93.165 Grants to States for Loan Repayment Program $150,114
93.178 Nursing Workforce Diversity $2
93.184 Disabilities Prevention $450,178
University of Alabama NU27DD001157 $15,291
93.217 Family Planning Services $750,738 $2,074,422
93.235 Title V State Sexual Risk Avoidance Education (Title V State SRAE) Program $106,680
93.236 Grants to States to Support Oral Health Workforce Activities $104,251 $417,321
93.240 State Capacity Building $308,674
93.241 State Rural Hospital Flexibility Program $814,026 $855,037
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance $2,209,385 $5,004,998
93.251 Universal Newborn Hearing Screening $140,643
93.262 Occupational Safety and Health Program $248,206
93.268 COVID-19 - Immunization Cooperative Agreements $2,994,586 $3,942,598
93.268 Immunization Cooperative Agreements $378,120 $12,432,900
93.270 Viral Hepatitis Prevention and Control $116,249
93.297 Teenage Pregnancy Prevention Program ($104,690)
93.300 National Center for Health Workforce Analysis
University of California, San Francisco 11723SC $17,113
93.301 COVID-19 - Small Rural Hospital Improvement Grant Program $843,162 $927,478
PPHF 2018: Office of Smoking and Health-National State-Based Tobacco Control Programs-Financed in part by 2018
93.305 $239,341 $1,312,395
Prevention and Public Health funds (PPHF)
93.307 Minority Health and Health Disparities Research $9,375,000
93.323 COVID-19 - Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) $35,848,347
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) ($634,279)
93.324 State Health Insurance Assistance Program $416,857 $516,832
93.336 Behavioral Risk Factor Surveillance System $363,276
The accompanying notes are an integral part of this schedule.
A-195
State of Montana A-196
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
COVID-19 - Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis
93.354 $1,261,947 $1,648,162
Response
93.354 Public Health Emergency Response: Cooperative Agreement for Emergency Response: Public Health Crisis Response ($8,764)
93.359 COVID-19 - Nurse Education, Practice Quality and Retention Grants $7,800 $58,840
93.369 ACL Independent Living State Grants $316,228 $334,714
The Institute for Rehabilitation and Research 2021-YR1-SILC-UMONTANA $24,877
Strengthening Public Health Systems and Services through National Partnerships to Improve and Protect the Nation’s
93.421
Health
Association of University Centers on Disabilities 32-21-8814 $57,867
93.423 1332 State Innovation Waivers $242,310
Improving the Health of Americans through Prevention and Management of Diabetes and Heart Disease and Stroke-
93.426 $321,211 $1,932,596
Financed in part by 2018 Prevention and Public Health Funds
93.432 ACL Centers for Independent Living
The Institute for Rehabilitation and Research 2021-YR1-CIL-UMONTANA $99,510
93.433 ACL National Institute on Disability, Independent Living, and Rehabilitation Research $133,131 $490,873
Meeting the Challenge, Inc. $3,736
Shepherd Center SHEP-19-0013 $80,688
University of Massachusetts B00125545 $5,774
93.434 Every Student Succeeds Act/Preschool Development Grants ($745)
93.435 Innovative State and Local Public Health Strategies to prevent and Manage Diabetes and Heart Disease and Stroke- $241,364 $1,233,910
93.448 Food Safety and Security Monitoring Project $178,714
93.449 Ruminant Feed Ban Support Project $13,403
93.464 ACL Assistive Technology $898,593
93.469 Assistive Technology Alternative Financing Program $462,500 $516,832
93.470 Alzheimer’s Disease Program Initiative (ADPI) $182,223
93.471 Title IV-E Kinship Navigator Program $252,917
93.498 COVID-19 - Provider Relief Fund $3,583,539
93.500 Pregnancy Assistance Fund Program $191,004
93.504 Family to Family Health Information Centers $91,223
93.516 Public Health Training Centers Program
University of Colorado FY21.641.004 $8,140
University of Colorado Denver FY19.641.005 $9,943
93.526 Grants for Capital Development in Health Centers $221,940 $240,530
93.556 Promoting Safe and Stable Families $347 $890,929
93.558 Temporary Assistance for Needy Families $626,584 $18,589,156
93.563 Child Support Enforcement $13,217,983
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
93.566 Refugee and Entrant Assistance State/Replacement Designee Administered Programs $197,209 $327,998
93.568 COVID-19 - Low-Income Home Energy Assistance $281,646 $355,126
93.568 Low-Income Home Energy Assistance $5,233,256 $18,827,043
93.569 COVID-19 - Community Services Block Grant $580,428 $583,981
93.569 Community Services Block Grant $2,835,170 $3,437,877
93.586 State Court Improvement Program $199,654
93.590 Community-Based Child Abuse Prevention Grants $226,284
93.597 Grants to States for Access and Visitation Programs $103,770
93.599 Chafee Education and Training Vouchers Program (ETV) $332,116
93.603 Adoption and Legal Guardianship Incentive Payments $309,022
93.630 Developmental Disabilities Basic Support and Advocacy Grants $504,046 $512,400
93.632 University Centers for Excellence in Developmental Disabilities Education, Research, and Service $42,448 $612,648
93.636 ACA - Reinvestment of Civil Money Penalties to Benefit Nursing Home Residents $152,284 $226,991
93.643 Children's Justice Grants to States $63,561
93.645 Stephanie Tubbs Jones Child Welfare Services Program $682,215
93.658 Foster Care Title IV-E $1,199,329 $17,927,637
University of Denver SC37941-03-00 / P0167077 $51,172
University of Denver SC37941-03-01/PO169707 $85,298
93.659 Adoption Assistance $14,062,252
93.665 COVID-19 - Emergency Grants to Address Mental and Substance Use Disorders During COVID-19 $450,085 $652,798
93.667 Social Services Block Grant $156,504 $7,597,190
93.669 Child Abuse and Neglect State Grants $60,320
93.671 COVID-19 - Family Violence Prevention and Services/Domestic Violence Shelter and Supportive Services $94,613
93.671 Family Violence Prevention and Services/Domestic Violence Shelter and Supportive Services $857,791
93.674 Chafee Foster Care Independence Program $400,789 $1,257,003
93.732 Mental and Behavioral Health Education and Training Grants $34,019 $1,639,197
93.747 COVID-19 - Elder Abuse Prevention Interventions Program $1,761
93.747 Elder Abuse Prevention Interventions Program $510,093
Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations financed in part by Prevention
93.752 $90,019 $344,079
and Public Health Funds
93.758 Preventive Health and Health Services Block Grant funded solely with Prevention and Public Health Funds (PPHF) $157,150 $1,081,075
93.767 COVID-19 - Children's Health Insurance Program $4,190,112
93.767 Children's Health Insurance Program $71,643,053
93.788 Opioid STR $3,137,018 $4,475,539
93.791 Money Follows the Person Rebalancing Demonstration $394,377
The accompanying notes are an integral part of this schedule.
A-197
State of Montana A-198
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
93.800 Organized Approaches to Increase Colorectal Cancer Screening $53,490
93.817 Hospital Preparedness Program (HPP) Ebola Preparedness and Response Activities ($107)
93.822 Health Careers Opportunity Program $539,405
93.870 Maternal, Infant and Early Childhood Home Visiting Grant Program $3,617,521 $3,822,889
93.884 Grants for Primary Care Training and Enhancement $10,481 $315,340
93.889 COVID-19 - National Bioterrorism Hospital Preparedness Program $988,721
93.889 National Bioterrorism Hospital Preparedness Program $1,836,581 $1,112,619
93.898 Cancer Prevention and Control Programs for State, Territorial and Tribal Organizations $418,064 $2,168,121
Rural Health Care Services Outreach, Rural Health Network Development and Small Health Care Provider Quality
93.912 $70,934 $454,326
Improvement Program
Montana Health Research & Education Foundation RCORP.MORH.01.2019-2020 $91,867
93.913 Grants to States for Operation of State Offices of Rural Health $5,201
93.917 COVID-19 - HIV Care Formula Grants $40,156
93.917 HIV Care Formula Grants $2,180,714
93.940 HIV Prevention Activities Health Department Based $925,036
93.946 Cooperative Agreements to Support State-Based Safe Motherhood and Infant Health Initiative Programs $200,408
93.958 Block Grants for Community Mental Health Services $1,323,490 $2,054,541
93.959 Block Grants for Prevention and Treatment of Substance Abuse $2,629,073 $6,071,423
93.969 PPHF Geriatric Education Centers $271,051 $840,641
93.970 Health Professions Recruitment Program for Indians $470,414
93.977 Sexually Transmitted Diseases (STD) Prevention and Control Grants $288,882
93.982 Mental Health Disaster Assistance and Emergency Mental Health $430,384 $596,108
93.994 Maternal and Child Health Services Block Grant to the States $637,269 $2,318,115
93.UXX Miscellaneous Non-Major Grants $106,258 $171,714
American Association on Health & Disability $7,239
TOTAL $316,808,189
Aging Cluster
93.044 COVID-19 - Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers $698,409 $699,571
93.044 Special Programs for the Aging, Title III, Part B, Grants for Supportive Services and Senior Centers $1,836,895 $2,304,841
93.045 COVID-19 - Special Programs for the Aging, Title III, Part C, Nutrition Services $1,850,329 $1,943,566
93.045 Special Programs for the Aging, Title III, Part C, Nutrition Services $3,499,662 $3,889,303
93.053 Nutrition Services Incentive Program $963,960 $1,111,507
TOTAL $9,948,788
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
CCDF Cluster
93.575 COVID-19 - Child Care and Development Block Grant $3,455,686
93.575 Child Care and Development Block Grant $7,996,060 $26,599,885
93.596 Child Care Mandatory and Matching Funds of the Child Care and Development Fund $9,131,661
TOTAL $39,187,232
Head Start Cluster
93.600 Head Start $117,104
Stone Child College 90YT000038-01-00 $69,747
TOTAL $186,851
Medicaid Cluster
93.775 State Medicaid Fraud Control Units $617,953
93.777 COVID-19 - State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare $342,493
93.777 State Survey and Certification of Health Care Providers and Suppliers (Title XVIII) Medicare $2,488,557
93.778 COVID-19 - Medical Assistance Program $69,994,744
93.778 Medical Assistance Program $418,616 $1,738,478,194
TOTAL $1,811,921,941
Student Financial Assistance Cluster
93.264 Nurse Faculty Loan Program (NFLP) $6,062
93.342 Health Professions Student Loans, Including Primary Care Loans/Loans for Disadvantaged Students $276,427
93.364 Nursing Student Loans $2,767,378
93.925 Scholarships for Health Professions Students from Disadvantaged Backgrounds $325,318
TOTAL $3,375,185
DEPARTMENT OF HEALTH AND HUMAN SERVICES TOTAL $2,181,428,186
DEPARTMENT OF HOMELAND SECURITY
97.008 Non-Profit Security Program $49,761 $49,761
97.012 Boating Safety Financial Assistance $979,572
97.023 Community Assistance Program State Support Services Element (CAP-SSSE) $234,474
97.029 Flood Mitigation Assistance $15,588 $15,588
97.033 Disaster Legal Services $20,000
97.036 COVID-19 - Disaster Grants - Public Assistance (Presidentially Declared Disasters) $7,770,286 $42,045,221
97.036 Disaster Grants - Public Assistance (Presidentially Declared Disasters) $1,277,382 $1,306,822
97.039 Hazard Mitigation Grant $178,930 $247,779
97.041 National Dam Safety Program $195,910
97.042 Emergency Management Performance Grants $1,746,377 $3,380,265
97.044 Assistance to Firefighters Grant $220,604
97.045 Cooperating Technical Partners $7,629,969
The accompanying notes are an integral part of this schedule.
A-199
State of Montana A-200
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
97.046 Fire Management Assistance Grant $10,025,175
97.047 Pre-Disaster Mitigation $1,294,068 $1,295,361
97.050 COVID-19 - Presidential Declared Disaster Assistance to Individuals and Households - Other Needs $46,572,237
97.067 Homeland Security Grant Program $5,333,017 $6,112,515
Kalispell Sheriff's Office 19-SPWSPW-12-008 VO $7,899
97.082 Earthquake Consortium $49,193
TOTAL $120,388,345
DEPARTMENT OF HOMELAND SECURITY TOTAL $120,388,345
DEPARTMENT OF HOUSING & URBAN DEVELOPMENT
14.228 COVID-19 - Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii $4,291
14.228 Community Development Block Grants/State's program and Non-Entitlement Grants in Hawaii $5,835,637 $5,889,264
14.231 COVID-19 - Emergency Solutions Grant Program $2,547,680 $2,551,796
14.231 Emergency Solutions Grant Program $140,125 $376,520
14.239 Home Investment Partnerships Program $4,694,332 $5,036,104
14.241 COVID-19 - Housing Opportunities for Persons with AIDS $160,592 $160,592
14.241 Housing Opportunities for Persons with AIDS $895,428 $923,709
14.275 Housing Trust Fund $8,840,838 $9,075,210
Project Rental Assistance Demonstration (PRA Demo) Program of Section 811 Supportive Housing for Persons with
14.326
Disabilities $178,123
TOTAL $24,195,609
Housing Voucher Cluster
14.871 COVID-19 - Section 8 Housing Choice Vouchers $99,493 $100,342
14.871 Section 8 Housing Choice Vouchers $23,741,610
14.879 Mainstream Vouchers $10,345
TOTAL $23,852,297
Section 8 Project-Based Cluster
14.195 Section 8 Housing Assistance Payments Program $25,570,407
14.856 Lower Income Housing Assistance Program Section 8 Moderate Rehabilitation $1,812,682
TOTAL $27,383,089
DEPARTMENT OF HOUSING & URBAN DEVELOPMENT TOTAL $75,430,995
DEPARTMENT OF JUSTICE
16.017 Sexual Assault Services Formula Program $309,637 $336,891
16.034 COVID-19 - Coronavirus Emergency Supplemental Funding Program $1,754,634 $2,108,937
16.528 Enhanced Training and Services to End Violence and Abuse of Women Later in Life $238 $60,500
16.540 Juvenile Justice and Delinquency Prevention $375,025 $424,619
16.543 Missing Children's Assistance $279,220
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
16.548 Title V Delinquency Prevention Program $2,568
16.550 State Justice Statistics Program for Statistical Analysis Centers $121
16.554 National Criminal History Improvement Program (NCHIP) $422,902
16.560 National Institute of Justice Research, Evaluation, and Development Project Grants $15,274
16.571 Public Safety Officers' Benefits Program $48,678
16.575 Crime Victim Assistance $6,743,208 $7,677,648
16.576 Crime Victim Compensation $462,000
16.582 Crime Victim Assistance/Discretionary Grants $265,894
16.585 Drug Court Discretionary Grant Program $743,240
Tribal Law and Policy Institute $387,995
16.588 Violence Against Women Formula Grants $830,281 $885,964
16.589 Rural Domestic Violence, Dating Violence, Sexual Assault, and Stalking Assistance Program
County of Missoula 2015-WR-AX-0013 $18,424
16.590 Grants to Encourage Arrest Policies and Enforcement of Protection Orders Program $69,400 $118,148
16.593 Residential Substance Abuse Treatment for State Prisoners $89,022 $95,887
16.609 Project Safe Neighborhoods $28,509 $32,633
16.710 Public Safety Partnership and Community Policing Grants $249,813
16.726 Juvenile Mentoring Program
National 4-H Council 4H NMP-10: 2019-MU-FX-0002 $60,272
National 4-H Council 4H NMP-9: 2018-JU-FX-0005 $1,256
16.738 Edward Byrne Memorial Justice Assistance Grant Program $690,033 $880,281
16.741 DNA Backlog Reduction Program $345,857
16.742 Paul Coverdell Forensic Sciences Improvement Grant Program $211,495
16.745 Criminal and Juvenile Justice and Mental Health Collaboration Program $60,043 $60,043
16.750 Support for Adam Walsh Act Implementation Grant Program $119,253
16.758 Improving the Investigation and Prosecution of Child Abuse and the Regional and Local Children's Advocacy Centers $86,416
16.816 John R. Justice Prosecutors and Defenders Incentive Act $16,080
16.818 Children Exposed to Violence $42,455
16.827 Justice Reinvestment Initiative
Council of State Governments 19-SA-161-2690 $87,051
16.831 Children of Incarcerated Parents $90,406
16.833 National Sexual Assault Kit Initiative $8,881 $329,103
16.838 Comprehensive Opioid Abuse Site-Based Program $9,265
16.839 STOP School Violence $389,906
TOTAL $17,366,495
DEPARTMENT OF JUSTICE TOTAL $17,366,495
The accompanying notes are an integral part of this schedule.
A-201
State of Montana A-202
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
DEPARTMENT OF LABOR
17.002 Labor Force Statistics $734,876
17.005 Compensation and Working Conditions $92,853
17.201 Registered Apprenticeship $49,064 $299,422
17.225 COVID-19 - Unemployment Insurance $565,892,687
17.225 Unemployment Insurance $192,462,498
17.235 Senior Community Service Employment Program $455,526 $475,626
17.245 Trade Adjustment Assistance $154,536
17.268 H-1B Job Training Grants
Northern Wyoming Community College 011717-1 $259,833
17.271 Work Opportunity Tax Credit Program (WOTC) $85,766
17.273 Temporary Labor Certification for Foreign Workers $366,960
17.277 COVID-19 - WIOA National Dislocated Worker Grants / WIA National Emergency Grants $50,000 $154,227
17.277 WIOA National Dislocated Worker Grants / WIA National Emergency Grants $177,323 $307,619
17.504 Consultation Agreements $535,876
17.600 Mine Health and Safety Grants $387,756
TOTAL $762,210,535
Employment Service Cluster
17.207 Employment Service/Wagner-Peyser Funded Activities $5,609,105
17.801 Disabled Veterans' Outreach Program (DVOP) $713,982
TOTAL $6,323,087
WIOA Cluster
17.258 WIOA Adult Program $334,331 $2,155,659
17.259 WIOA Youth Activities $1,500,517 $2,047,520
17.278 WIOA Dislocated Worker Formula Grants $1,428,637
TOTAL $5,631,816
DEPARTMENT OF LABOR TOTAL $774,165,438
DEPARTMENT OF STATE
19.009 Academic Exchange Programs - Undergraduate Programs $21,364 $249,057
World Learning CBPSA19-MSUB01 $7,087
19.010 Academic Exchange Programs - Hubert H. Humphrey Fellowship Program
Institute of International Education, Inc. 3000208789 $85,016
19.040 Public Diplomacy Programs $28,604
19.401 Academic Exchange Programs - Scholars $237,410 $547,437
19.408 Academic Exchange Programs - Teachers
International Research & Exchanges Board FY20-FTEA-MSU-02 $21,664
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
19.415 Professional and Cultural Exchange Programs - Citizen Exchanges $5,250 $150,136
American Councils for International Education S-ECAGD-20-CA-0043 $31,935
Aspen Institute SI_UOM1_SUBR_2020 $36,735
19.600 Bureau of Near Eastern Affairs
Georgetown University MSU-20200710 $134,313
Georgetown University $6,331
TOTAL $1,298,315
DEPARTMENT OF STATE TOTAL $1,298,315
DEPARTMENT OF THE INTERIOR
15.025 Services to Indian Children, Elderly and Families $11,975
15.034 Agriculture on Indian Lands
Fort Belknap Community Council A10AV00583 $57,455
15.130 Indian Education Assistance to Schools $1,812
15.159 Cultural Resources Management $9,529
15.225 Recreation and Visitor Services $46,977
15.228 BLM Wildland Urban Interface Community Fire Assistance $18,719
15.230 Invasive and Noxious Plant Management $29,953
15.231 Fish, Wildlife and Plant Conservation Resource Management $302,749
15.233 Forests and Woodlands Resource Management $75,650
15.236 Environmental Quality and Protection $790,541
15.244 Fisheries and Aquatic Resources Management $70,814
15.247 Wildlife Resource Management $213,753
15.250 Regulation of Surface Coal Mining and Surface Effects of Underground Coal Mining $2,129,812
15.252 Abandoned Mine Land Reclamation (AMLR) $1,976,483
15.427 Federal Oil and Gas Royalty Management State and Tribal Coordination $500,252
15.517 Fish and Wildlife Coordination Act $273,813
15.524 Recreation Resources Management $80,813
15.608 Fish and Wildlife Management Assistance $66,849
15.628 Multistate Conservation Grant
North Carolina State University 2018-0319-06 $526
15.634 State Wildlife Grants $3,218 $573,799
15.637 Migratory Bird Joint Ventures $19,622 $19,622
15.657 Endangered Species Conservation – Recovery Implementation Funds $592,816
15.660 Endangered Species - Candidate Conservation Action Funds $28,346
State of Utah 186103 $5,036
15.663 National Fish and Wildlife Foundation $13,893
The accompanying notes are an integral part of this schedule.
A-203
State of Montana A-204
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
15.666 Endangered Species Conservation-Wolf Livestock Loss Compensation and Prevention $80,000 $115,000
15.670 Adaptive Science $131,887
15.904 Historic Preservation Fund Grants-In-Aid $246,646 $1,059,242
15.916 Outdoor Recreation Acquisition, Development and Planning $131,929 $172,247
15.945 Cooperative Research and Training Programs – Resources of the National Park System $22,984
15.954 National Park Service Conservation, Protection, Outreach, and Education $27,943
15.959 Education Program Management
Cherokee School $3,310
Paschal Sherman Indian School $11,710
15.UXX Miscellaneous Non-Major Grants $97,939
TOTAL $9,534,249
Fish and Wildlife Cluster
15.605 Sport Fish Restoration $11,448,490
15.611 Wildlife Restoration and Basic Hunter Education $223,550 $15,775,797
15.626 Enhanced Hunter Education and Safety $77,462
TOTAL $27,301,749
DEPARTMENT OF THE INTERIOR TOTAL $36,835,998
DEPARTMENT OF TRANSPORTATION
20.106 COVID-19 - Airport Improvement Program $396,524
20.106 Airport Improvement Program $624,098
20.215 Highway Training and Education $150,000
20.232 Commercial Driver's License Program Implementation Grant $57,037
20.505 Metropolitan Transportation Planning and State and Non-Metropolitan Planning and Research $413,702 $458,309
20.509 COVID-19 - Formula Grants for Rural Areas $17,302,826 $17,448,893
20.509 Formula Grants for Rural Areas $3,201,305 $4,206,804
20.608 Minimum Penalties for Repeat Offenders for Driving While Intoxicated $119,112 $332,354
20.614 National Highway Traffic Safety Administration (NHTSA) Discretionary Safety Grants and Cooperative Agreements $80,997
20.700 Pipeline Safety Program State Base Grant $130,470
20.703 Interagency Hazardous Materials Public Sector Training and Planning Grants $54,187 $59,317
20.725 PHMSA Pipeline Safety Underground Natural Gas Storage Grant $4,187
20.933 National Infrastructure Investments $2,209,484
City of Kalispell UPN#2038/032 - 022NH15(32) $4,708,432
TOTAL $30,866,906
Federal Transit Cluster
20.526 Bus and Bus Facilities Formula Program $2,449,771 $2,449,771
TOTAL $2,449,771
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
FMCSA Cluster
20.218 Motor Carrier Safety Assistance $3,265,397
20.237 Motor Carrier Safety Assistance High Priority Activities Grants and Cooperative Agreements $459,860
$3,725,257
Highway Planning and Construction Cluster
20.205 Highway Planning and Construction $2,372,305 $490,190,383
20.219 Recreational Trails Program $1,601,256 $1,713,045
20.224 Federal Lands Access Program $4,125,387
TOTAL $496,028,815
Highway Safety Cluster
20.600 State and Community Highway Safety $228,799 $1,750,922
20.616 National Priority Safety Programs $534,250 $2,754,837
TOTAL $4,505,759
Transit Services Programs Cluster
20.513 Enhanced Mobility of Seniors and Individuals with Disabilities $362,101 $463,941
TOTAL $463,941
DEPARTMENT OF TRANSPORTATION TOTAL $538,040,449
DEPARTMENT OF TREASURY
21.019 COVID-19 - Coronavirus Relief Fund $719,734,982 $1,136,022,390
Butte-Silver Bow MT21-114 ($3,417)
MonTECH UM#2021-160 $75,735
MonTECH 2021-244 $5,729
MonTECH 2021-085 $8,611
21.023 COVID-19 - Emergency Rental Assistance Program $10,442,585
21.027 COVID-19 - Coronavirus State Fiscal Recovery Fund (CSFRF) $15,053,295
21.UXX Miscellaneous Non-Major Grants $4,465
TOTAL $1,161,609,393
DEPARTMENT OF TREASURY TOTAL $1,161,609,393
DEPARTMENT OF VETERANS AFFAIRS
64.005 Grants to States for Construction of State Home Facilities $2,703,868
64.015 COVID-19 - Veterans State Nursing Home Care $213,048
64.015 Veterans State Nursing Home Care $5,529,282
64.041 VHA Outpatient Specialty Care $180,691
The accompanying notes are an integral part of this schedule.
A-205
State of Montana A-206
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
64.124 All-Volunteer Force Educational Assistance $80,576
64.203 Veterans Cemetery Grants Program $901,118
TOTAL $9,608,583
DEPARTMENT OF VETERANS AFFAIRS TOTAL $9,608,583
ELECTION ASSISTANCE COMMISSION
90.404 COVID-19 - 2018 HAVA Election Security Grants $178,598 $222,373
90.404 2018 HAVA Election Security Grants $322,760 $580,407
TOTAL $802,780
ELECTION ASSISTANCE COMMISSION TOTAL $802,780
ENVIRONMENTAL PROTECTION AGENCY
66.034 Surveys, Studies, Research, Investigations, Demonstrations, and Special Purpose Activities Relating to the Clean Air Act $293,031
66.040 State Clean Diesel Grant Program $505,790
66.202 Congressionally Mandated Projects
66.204 Multipurpose Grants to States and Tribes $21,700
66.419 Water Pollution Control State, Interstate, and Tribal Program Support $132,348
66.433 State Underground Water Source Protection $26,750
66.444 Lead Testing in School and Child Care Program Drinking Water (SDWA 1464(d)) $62,097
66.454 Water Quality Management Planning $86,652
66.460 Nonpoint Source Implementation Grants $2,337,388
66.461 Regional Wetland Program Development Grants $82,206
66.466 Chesapeake Bay Program
National Fish and Wildlife Foundation 0602.18.062653 $309,455
66.605 Performance Partnership Grants $5,193,795
66.608 Environmental Information Exchange Network Grant Program and Related Assistance $423,035
66.708 Pollution Prevention Grants Program $288,728
66.716 Research, Development, Monitoring, Public Education, Outreach, Training, Demonstrations, and Studies
eXtension Foundation SA-2020-59 $8,882
66.717 Source Reduction Assistance $49,707
66.802 Superfund State, Political Subdivision, and Indian Tribe Site-Specific Cooperative Agreements $1,937,138
66.804 Underground Storage Tank Prevention, Detection and Compliance Program $382,068
66.805 Leaking Underground Storage Tank Trust Fund Corrective Action Program $538,962
66.809 Superfund State and Indian Tribe Core Program Cooperative Agreements $210,409
66.817 State and Tribal Response Program Grants $738,889
TOTAL $13,629,030
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
Clean Water State Revolving Fund Cluster
66.458 Capitalization Grants for Clean Water State Revolving Funds $308,516,238
TOTAL $308,516,238
Drinking Water State Revolving Fund Cluster
66.468 Capitalization Grants for Drinking Water State Revolving Funds $180,962,795
TOTAL $180,962,795
ENVIRONMENTAL PROTECTION AGENCY TOTAL $503,108,063
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
30.001 Employment Discrimination Title VII of the Civil Rights Act of 1964 $79,042
TOTAL $79,042
EQUAL EMPLOYMENT OPPORTUNITY COMMISSION TOTAL $79,042
EXECUTIVE OFFICE OF THE PRESIDENT
95.001 High Intensity Drug Trafficking Areas Program $31,749
TOTAL $31,749
EXECUTIVE OFFICE OF THE PRESIDENT TOTAL $31,749
FEDERAL COMMUNICATIONS COMMISSION
32.004 Universal Service Fund - Schools and Libraries $16,829
TOTAL $16,829
FEDERAL COMMUNICATIONS COMMISSION TOTAL $16,829
GENERAL SERVICES ADMINISTRATION
39.003 Donation of Federal Surplus Personal Property $164,080
39.011 Election Reform Payments $8,058
TOTAL $172,138
GENERAL SERVICES ADMINISTRATION TOTAL $172,138
INSTITUTE OF MUSEUM AND LIBRARY SERVICES
45.310 COVID-19 - Grants to States $3,121
45.310 Grants to States $1,476,913
45.312 National Leadership Grants $77,999
TOTAL $1,558,033
INSTITUTE OF MUSEUM AND LIBRARY SERVICES TOTAL $1,558,033
The accompanying notes are an integral part of this schedule.
A-207
State of Montana A-208
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
LIBRARY OF CONGRESS
42.UXX Miscellaneous Non-Major Grants $8,273
TOTAL $8,273
LIBRARY OF CONGRESS TOTAL $8,273
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
43.001 Science $44,805
University of Washington UWSC8987 $31,270
43.008 Education $1
Sciencenter 2016-01-UMT/NNX16AM22G $6,439
TOTAL $82,515
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION TOTAL $82,515
NATIONAL ARCHIVES AND RECORDS ADMINISTRATION
89.003 National Historical Publications and Records Grants $11,805
TOTAL $11,805
NATIONAL ARCHIVES AND RECORDS ADMINISTRATION TOTAL $11,805
NATIONAL ENDOWMENT FOR THE ARTS
45.024 Promotion of the Arts Grants to Organizations and Individuals $16,392
Arts Midwest AM CASE #00023805 $6
Arts Midwest CASE # 00026553 $13,680
45.025 COVID-19 - Promotion of the Arts Partnership Agreements $424,400 $424,400
45.025 Promotion of the Arts Partnership Agreements $430,523 $795,099
TOTAL $1,249,577
NATIONAL ENDOWMENT FOR THE ARTS TOTAL $1,249,577
NATIONAL ENDOWMENT FOR THE HUMANITIES
45.129 Promotion of the Humanities Federal/State Partnership
Humanities Montana 20R005 $1
Humanities Montana 20C065 $5,000
Humanities Montana $3,887
45.149 Promotion of the Humanities Division of Preservation and Access $25,428
National Endowment for the Humanities 18R048 $416
45.160 Promotion of the Humanities Fellowships and Stipends $3,191
45.162 Promotion of the Humanities Teaching and Learning Resources and Curriculum Development $51,326
TOTAL $89,249
NATIONAL ENDOWMENT FOR THE HUMANITIES TOTAL $89,249
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Amount to Subrecipients Expenditures
PEACE CORPS
45.400 Peace Corps’ Global Health and PEPFAR Initiative Program $22,601
TOTAL $22,601
PEACE CORPS TOTAL $22,601
SMALL BUSINESS ADMINISTRATION
59.037 COVID-19 - Small Business Development Centers $655,569
59.037 Small Business Development Centers $785,952
MonTECH 2019-518 $51,538
59.043 Women's Business Ownership Assistance
Prospera Business Network $15,300
59.058 Federal and State Technology Partnership Program $120,703
59.061 State Trade Expansion $342,436
TOTAL $1,971,498
SMALL BUSINESS ADMINISTRATION TOTAL $1,971,498
SOCIAL SECURITY ADMINISTRATION
96.008 Social Security - Work Incentives Planning and Assistance Program $65,064 $195,100
TOTAL $195,100
Disability Insurance/SSI Cluster
96.001 Social Security Disability Insurance $6,203,256
TOTAL $6,203,256
SOCIAL SECURITY ADMINISTRATION TOTAL $6,398,356
The accompanying notes are an integral part of this schedule.
A-209
State of Montana A-210
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
AGENCY FOR INTERNATIONAL DEVELOPMENT
98.001 USAID Foreign Assistance for Programs Overseas
Rutgers, The State University of New Jersey S19050: PO#1137707 $36,253
AGENCY FOR INTERNATIONAL DEVELOPMENT TOTAL $36,253
DEPARTMENT OF AGRICULTURE
Agricultural Research Service
10.001 Agricultural Research Basic and Applied Research $578,873
Animal and Plant Health Inspection Service
10.025 Plant and Animal Disease, Pest Control, and Animal Care $538,670
State of Iowa 21CRDWBTHARM,-0001 $3,090
Utah State University 200592-390 $2,216
Economic Research Service
10.250 COVID-19 - Agricultural and Rural Economic Research, Cooperative Agreements and Collaborations $4,725
Foreign Agricultural Service
10.610 Export Guarantee Program $25,309
Forest Service
10.652 Forestry Research $3,418 $2,420,467
Arthur Carhart National Wilderness Training Center 17-CS-11132466-344 $156,712
Hydrosolutions Inc MSA 2017-TO1 ($826)
National Wilderness Stewardship Alliance WI2020 $14,482
NatureServe MT-027-FY20 $1,412
Tall Timbers Research UM-2021-046 $21,573
Tall Timbers Research UM-2020-288 $24,482
University of Vermont 29034SUB52911 $4,375
10.664 Cooperative Forestry Assistance $107,168
10.680 Forest Health Protection $8,000 $68,095
10.682 National Forest Foundation $21,371
10.684 International Forestry Programs $123,794
10.699 Partnership Agreements $34,331
University of Maine UMS-1216 $28,718
10.707 Research Joint Venture and Cost Reimbursable Agreements $210,703
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
Miscellaneous
10.RD Miscellaneous Research and Development $6,040,926
Bravo 2 Whiskey, LLC $47,814
Duke University 313-0873 $48,465
Duke University SUBCONTRACT NUMBER 313-0742 $259,657
Nutronics, Inc. SUBK-MSU-VDHWFS2-01-012720 $151,635
S2 Corp S2-1025-19-01 $52,367
Tufts University ARM212-MSU/ PO# EP0166321 $5,479
University of California, Davis A17-0837-S001 $14,031
University of Maryland 31236-Z8409102 $23
National Institute of Food and Agriculture
10.200 Grants for Agricultural Research, Special Research Grants
North Dakota State University FAR0031981 $12,283
University of California, Davis A20-3947-S001 $11,457
University of Idaho AP4292-870300 $7,015
University of Idaho AP1008-SB1-870848/P0057780 $1
10.202 Cooperative Forestry Research $746,984
10.203 Payments to Agricultural Experiment Stations Under the Hatch Act $3,199,156
10.207 Animal Health and Disease Research $24,166
10.215 Sustainable Agriculture Research and Education $2,253,550 $3,331,566
South Dakota State University 3TC473 $7,079
Utah State University 200592-395 $30,938 $96,199
Utah State University 201207-554 $26,925
Utah State University 200592-390 $21,465
Utah State University 201207-597 $16,991
Utah State University 201207-587 $8
Utah State University 200592-384 $4,241
10.217 Higher Education - Institution Challenge Grants Program $102,418 $126,319
10.226 Secondary and Two-Year Postsecondary Agriculture Education Challenge Grants $111,303 $288,951
10.227 1994 Institutions Research Program
Aaniiih Nakoda College MSU-27076 $8,801
Fort Peck Community College FPCC-092018-001 ($20)
Little Big Horn College USDA NIFA TO LBHC TO MSU ($3,096)
The accompanying notes are an integral part of this schedule.
A-211
State of Montana A-212
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
Salish Kootenai College UM-18-01 $3,444
Salish Kootenai College 2 $6,874
Salish Kootenai College MSU#1: 2017-38424-27077 $30,171
10.304 Homeland Security Agricultural
Kansas State University A00-0280-S002-A03 (S17045.03) $52,478
10.307 Organic Agriculture Research and Extension Initiative $110,707 $415,816
Utah State University 202524-663 $36,365
10.309 Specialty Crop Research Initiative $481,480 $752,632
Colorado State University G-1363-04 $8,011
University of Idaho AN4829-846776 $46,427
10.310 Agriculture and Food Research Initiative (AFRI) $88,658 $1,367,622
Kansas State University A21-0417-S002 $143
Kansas State University S15184 ($69)
North Dakota State University FAR0033228 $5,647
University of California, Davis 201603566-08 $202,701
University of Illinois Urbana-Champaign 078891-1539 $3,327
University of New Hampshire L0015 $49,007
University of Vermont 29034SUB51753 $1,628
10.312 Biomass Research and Development Initiative Competitive Grants Program (BRDI) $31,433 $127,769
10.318 Women and Minorities in Science, Technology, Engineering, and Mathematics Fields $16,831
10.329 Crop Protection and Pest Management Competitive Grants Program $28,399 $351,407
10.330 Alfalfa and Forage Research Program $1,590 $65,684
University of California, Davis A18-0619-S003 $1,861
10.500 Cooperative Extension Service $2,632,548
Washington State University 134194 G004012 $12
10.525 Farm and Ranch Stress Assistance Network Competitive Grants Program
Washington State University 139244 G004270 $62,861
Natural Resources Conservation Service
10.902 Soil and Water Conservation $181,626
Nature Conservancy MTBU122118_JB ($91)
Pheasants Forever, Inc. WLRW 2021-02 $156,408
Pheasants Forever, Inc. 68-3A75-16-736 $117,956
10.903 Soil Survey $143,779
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
10.912 Environmental Quality Incentives Program $40,753
University of Illinois Urbana-Champaign 103926-18435 $41,613
Risk Management Agency
10.460 Risk Management Education Partnerships $51
Rural Business Cooperative Service
10.350 Technical Assistance to Cooperatives
National Association of Development Organizations 484.01 $539
National Association of Development Organizations $5,380
National Association of Development Organizations 483.01 $29,128
National Association of Development Organizations 482.01 $63,245
National Association of Development Organizations #481 800.01 $153,212
DEPARTMENT OF AGRICULTURE TOTAL $26,111,424
DEPARTMENT OF COMMERCE
Economic Development Administration
11.020 Cluster Grants $26,905 $244,418
National Institute of Standards and Technology
11.609 Measurement and Engineering Research and Standards $1,046
National Oceanic and Atmospheric Administration
11.431 Climate and Atmospheric Research $444,527
University Corporation for Atmospheric Research SUBAWD000858 $135,947
11.438 Pacific Coast Salmon Recovery Pacific Salmon Treaty Program
Alaska Department of Fish and Game AKSSF-53005 $2,627
11.459 Weather and Air Quality Research $117,913
11.467 Meteorologic and Hydrologic Modernization Development
University Corporation for Atmospheric Research SUBAWD002072 $14,979
11.472 Unallied Science Program
North Pacific Research Board 1718B ($10)
U.S. Census Bureau
11.016 Statistical, Research, and Methodology Assistance $144
DEPARTMENT OF COMMERCE TOTAL $961,591
The accompanying notes are an integral part of this schedule.
A-213
State of Montana A-214
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
DEPARTMENT OF DEFENSE
Advanced Research Projects Agency
12.910 Research and Technology Development $1,382,778 $2,119,148
North Carolina State University 2016-2896-04 $167,638
Department of the Air Force
12.800 Air Force Defense Research Sciences Program $170,449 $22,592,266
S2 Corp $386,822
S2 Corp #S2-1954-19-01F (3A) $540,528
S2 Corp #S2-1954-19-01A (3B) $663,918
Department of the Army
12.005 Conservation and Rehabilitation of Natural Resources on Military Installations $37,444 $388,975
12.420 Military Medical Research and Development $186,513 $364,481
Baylor College 7000001103 $23,211
University of California, Davis A19-0382-S001 $38,267
University of Texas at Austin UTA20-000476 $6,417
12.431 Basic Scientific Research $79,006 $7,248,066
University of Maryland 92951-Z8310202 $1,544,118
Department of the Navy
12.300 Basic and Applied Scientific Research $142,085 $2,386,097
Pennsylvania State University S000044-ONR $50,862
TPS Associates, Inc. PO MSU-7971/3002 ($386)
Miscellaneous
12.RD Miscellaneous Research and Development $172,256 $1,988,606
Charles River Analytics SC1812501 $85,090
Office of the Secretary of Defense
12.630 Basic, Applied, and Advanced Research in Science and Engineering $82,896
12.632 Legacy Resource Management Program $190
DEPARTMENT OF DEFENSE TOTAL $40,677,210
DEPARTMENT OF EDUCATION
Institute of Education Sciences
84.305 Education Research, Development and Dissemination
University of Missouri C00064217-1 $135,935
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
Office of Elementary and Secondary Education
84.299 Indian Education -- Special Programs for Indian Children $24,130
Office of Innovation and Improvement
84.336 Teacher Quality Partnership Grants $548,101
Office of Postsecondary Education
84.217 TRIO McNair Post-Baccalaureate Achievement $275,565
DEPARTMENT OF EDUCATION TOTAL $983,731
DEPARTMENT OF ENERGY
81.121 Nuclear Energy Research, Development and Demonstration $158,280
81.049 Office of Science Financial Assistance Program $162,912 $1,963,112
Bonneville Power Administration IAA 82184 $113
Bonneville Power Administration 72725 $8,513
Impossible Sensing LLC $6,156
Montana Emergent Technologies $21
University of Wyoming DE-SC0012671 $8,054
Washington State University 134124-G003968 $25,171
Washington State University 132345 SPC001690 $298,800
Yale University GR104542 (CON-80001480) $299,437
81.086 Conservation Research and Development $80,501 $2,776,998
81.087 Renewable Energy Research and Development $230,877 $668,640
Bridger Photonics $130,523
Clemson University 2107-219-2023054 $67,969
Michigan State University RC107739 $104,379
University of Toledo F-2019-14 $312,969
81.089 Fossil Energy Research and Development $46,010
New Mexico Institute of Mining P0019650 $144,802
81.135 Advanced Research Projects Agency - Energy
Cornell University 84185-11060 $31,964
Miscellaneous
81.RD Miscellaneous Research and Development
Navarro Research and Engineering, Inc. LMCP7514 $14,986
Sandia National Laboratories 1663302 $1,726
Sandia National Laboratories 2183707 $51,420
The accompanying notes are an integral part of this schedule.
A-215
State of Montana A-216
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
Sandia National Laboratories 1922244 $23,786
Sandia National Laboratories 2151826 $29,563
DEPARTMENT OF ENERGY TOTAL $7,173,392
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
93.670 Child Abuse and Neglect Discretionary Activities
Futures Without Violence 3075 $30,249
Administration for Community Living
93.433 ACL National Institute on Disability, Independent Living, and Rehabilitation Research $27,446 $783,855
The Institute for Rehabilitation and Research 2020-YR4-UMONTANA-SCIMS $13,617
The Institute for Rehabilitation and Research 2021-Y5-017-UMONTANA-SCIMS $30,889
University of Kansas FY2017-048-M5 $36,429 $147,249
University of Kansas FY2017-048-M3 A3 $57,068 $104,707
Centers for Disease Control and Prevention
93.136 COVID-19 - Injury Prevention and Control Research and State and Community Based Programs $473,957
93.262 Occupational Safety and Health Program $94,185
University of Colorado FY18.347.004 $5,832
Utah State University 202633-668 $13,696
Utah State University 203193-715 $34,096
Food and Drug Administration
93.103 Food and Drug Administration Research $14,764
Health Resources and Services Administration
93.107 Area Health Education Centers $360,156 $660,001
93.155 Rural Health Research Centers
National Rural Health Association NRHA 2020 $3,200
93.247 Advanced Nursing Education Workforce Grant Program $704,447
93.300 National Center for Health Workforce Analysis
University at Albany, State University of New York 3-86321 $55,200
93.301 Small Rural Hospital Improvement Grant Program $478,691 $550,495
93.359 Nurse Education, Practice Quality and Retention Grants $170,000 $835,581
93.913 Grants to States for Operation of State Offices of Rural Health $215,461
93.969 PPHF Geriatric Education Centers $30,225 $87,127
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
Miscellaneous
93.RD Miscellaneous Research and Development $4,048,874 $8,599,352
Boston Children's Hospital GENFD0001583403 $663,544
National Institutes of Health
93.113 Environmental Health $208,018 $714,219
Michigan State University RC107307MON $124,110
University of New Mexico 3RY74 PILOT PROJECT ($1,897)
University of New Mexico 3RY74 $1,153
University of Rochester 417656G/UR FAO GR510992 $126,850
University of Rochester R0AES030940-01 $213,313
93.121 Oral Diseases and Disorders Research $101,428
93.172 Human Genome Research
Institute for Systems Biology 2018.0008 $173,582
Southcentral Foundation 2018-201 $19,278
University of Colorado FY21.1078.001 $40,697
93.173 Research Related to Deafness and Communication Disorders
Massachusetts General Hospital 300315 $187,215
Promiliad Biopharma Incorporated 2R42DC017641-02A1 $139,879
93.233 National Center on Sleep Disorders Research $120,040
93.242 Mental Health Research Grants $92,231
Advanced Medical Electronics Corporation AME19_ANIMALHEADSTAGE-07 $25,003
University of Washington UWSC10191 (BPO28076)
93.273 Alcohol Research Programs $91,712 $365,504
93.279 Drug Abuse and Addiction Research Programs $9,129
93.286 Discovery and Applied Research for Technological Innovations to Improve Human Health $178,103 $1,368,892
93.307 Minority Health and Health Disparities Research $340,100 $655,205
University of Arizona 575638 (UA 3036150 REQ 611244) $12,105
University of New Mexico 3RJN7 $35,197
University of New Mexico Health Sciences Center 3RJN7 / PO $22,003
93.310 COVID-19 - Trans-NIH Research Support $247,447 $381,056
93.310 Trans-NIH Research Support $300,575
University of Arkansas 54005-VDORA $87,654
93.350 National Center for Advancing Translational Sciences $56,731
University of Washington UWSC9979/BPO26008 $4,882
The accompanying notes are an integral part of this schedule.
A-217
State of Montana A-218
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
University of Washington BPO26008 / UWSC9979 $24,346
93.351 Research Infrastructure Programs $599,278
DermaXon 1R41RT003929 $4,920
93.361 Nursing Research
Medical College of Wisconsin PO: 6166576 $15,608
University of Florida UFDSP00012150 $150,075
93.393 Cancer Cause and Prevention Research $447,053
93.838 Lung Diseases Research $200,708
93.846 Arthritis, Musculoskeletal and Skin Diseases Research $16,032 $385,136
93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research $243,417 $1,124,669
University of Utah 10053831-01 $280,174
Yale University CON-80003000(GR112885) $21,823
93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders $71,416 $977,184
University of Washington UWSC10752/ BP034774 $39,959
Yale University M17A12590-GR104248 (80001410) $1,273
93.855 Allergy and Infectious Diseases Research $1,362,683 $5,718,196
Albert Einstein College of Medicine P0819131 (SUB NO: 31194A) $32,230
Arrevus Inc. $25,769
Emory University A156367 $70,879
Mayo Clinic MSU-272768/PO#67660374 $22,584
Michigan State University RC110226MSU $38,037
Oregon Health Sciences University 1016853_UMT $56,692
Promiliad Biopharma Incorporated R42AI118104 $100,138
University of Kentucky 7800005601 $689
University of Kentucky PO7800004770/3200002108-19-191 $1,277
University of Louisville Research Foundation ULRF 17-0750-01 ($5,293)
University of Louisville Research Foundation ULRF-17-0750A-01 $94,440
University of Notre Dame 202953MSU $178,894
93.859 COVID-19 - Biomedical Research and Research Training $13
93.859 Biomedical Research and Research Training $2,265,696 $16,934,084
City of Missoula $32,440
Meadowlark Science and Education, LLC UM-OD01 $13,858
Meadowlark Science and Education, LLC UM_GEN01 $34,250
Northwest Indian College NWIC-SA24226-MSU $46,570
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
Oklahoma State University 5-554009 $20,646
Rutgers, The State University of New Jersey PO# 663268/ SUBAWARD #0222 $182,824
University of Alaska UAA 20-0113 $3,821
University of Nevada, Las Vegas GR11257 MSU-08-03-PILOT-BECKER $31,767
University of Nevada, Las Vegas GR11265-CP3 $112,948
University of Nevada, Las Vegas GR11265-CEO $88,647
University of Nevada, Las Vegas GR11265-BERD $38,644
University of Nevada, Las Vegas GR11257 | MSU-08-01-BERD $26,730
University of Nevada, Las Vegas GR11257 | MSU-08-02-CEO $14,351
University of Nevada, Las Vegas GR09462 UMT-07-01-CP3 $632
University of Nevada, Las Vegas TASK MSU-07-02-CEO (GR09456) ($4)
University of Nevada, Las Vegas GR09462 UMT-07-01-CEO $517
University of New Mexico 3REV9 $67,404
University of New Mexico Health Sciences Center 3REV9 $40,159
University of Utah 10047369-S2 $41,679
University of Utah PO U000148335 / 10047369-S2 $63,476
University of Washington UWSC9319 $84,675
Virtici, LLC GM130166 $81,450
93.865 Child Health and Human Development Extramural Research $2,178 $497,792
University of Arkansas 51460 PO#G190121109 ($1,244)
Washington University WU-20-478 $19,185
93.866 Aging Research $53,183
Johns Hopkins University 2003050472 $20,403
Michigan State University RC108877UM $13,203
University of Maryland 1000004418 $15,242
University of Washington UWSC10030/BPO26347 $111,809
93.867 Vision Research $78,966 $273,003
University of California, Berkeley SUBAWARD NO. 00010266 $42,079
93.879 Medical Library Assistance
Augusta University Research Institute, Inc. 32242-1 $7,707
Baylor College of Medicine 7000000701 $15,334
National Network of Libraries NNLM PNR TECHNOLOGY IMPROVEMEN $5,034
The accompanying notes are an integral part of this schedule.
A-219
State of Montana A-220
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
Substance Abuse and Mental Health Services Administration
93.243 Substance Abuse and Mental Health Services Projects of Regional and National Significance
Browning Schools 2586-001 $48,009
93.276 Drug-Free Communities Support Program Grants
Washakie County $34,686
DEPARTMENT OF HEALTH AND HUMAN SERVICES TOTAL $49,221,282
DEPARTMENT OF JUSTICE
Office of Justice Programs
16.560 National Institute of Justice Research, Evaluation, and Development Project Grants $117,651
DEPARTMENT OF JUSTICE TOTAL $117,651
DEPARTMENT OF STATE
Bureau of Educational and Cultural Affairs
19.408 Academic Exchange Programs - Teachers
International Research & Exchanges Board FY20-FTEA-MSU-01 $262,273
DEPARTMENT OF STATE TOTAL $262,273
DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs and Bureau of Indian Education
15.035 Forestry on Indian Lands
Salish Kootenai College NBR-19-01 ($238)
15.043 Indian Child and Family Education ($21,846)
Bureau of Land Management
15.224 Cultural and Paleontological Resources Management $190,288
15.230 Invasive and Noxious Plant Management $406,545
15.231 Fish, Wildlife and Plant Conservation Resource Management $252,830
15.232 Wildland Fire Research and Studies $32,128
15.236 Environmental Quality and Protection $73,694
15.247 Wildlife Resource Management $407,600
15.248 National Landscape Conservation System $102
Miscellaneous
15.RD Miscellaneous Research and Development $446,381 $1,426,796
Colorado State University G-63747-01 $60,935
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
NatureServe MT-026-FY19 $20,000
Oregon State University L0233A-A $288,222
Oregon State University L02226A-A $24,862
Oregon State University L0205A-A $880
Oregon State University L02312A-A $22,371
Oregon State University L0212A-A $550,899
Otak, Inc. 33172.003 $31,896
PG Environmental, LLC 50002.001 ($1,434)
PG Environmental, LLC 50002/001 140L0620F0455 $41,074
PG Environmental, LLC 50002.006 TO 4 $44,755
PG Environmental, LLC 50002/001 $162,898
Portland State University 100006 ($1,460)
Portland State University 1361 100182 $48,256
Portland State University 1362 $108,056
Portland State University 100145 $161,908
Portland State University 100130 $189,347
RRC Associates 33172.007 $39,775
RRC Associates 33172.01 $19,095
RRC Associates 33172.005 $11,403
RRC Associates 33172.002 $34,464
National Park Service
15.915 Technical Preservation Services $5,333
15.926 American Battlefield Protection $1,449
15.945 Cooperative Research and Training Programs – Resources of the National Park System $43,588 $1,182,609
University of California, Santa Cruz A20-0484-S001 $2,481
University of Wyoming 1004490-UM $4,997
15.954 National Park Service Conservation, Protection, Outreach, and Education $125,665
U.S. Fish and Wildlife Service
15.605 Sport Fish Restoration
Wyoming Game and Fish Department 002822 $48,020
15.608 Fish and Wildlife Management Assistance $161,865
15.611 Wildlife Restoration and Basic Hunter Education $18,469 $1,578,195
Colorado Parks and Wildlife 220-IGA-142182 $12,864
Idaho Department of Fish and Game IDFG-FY19-516 $455
The accompanying notes are an integral part of this schedule.
A-221
State of Montana A-222
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
Idaho Department of Fish and Game IDFA-MA-20151029 $3,635
Idaho Department of Fish and Game IDFG-FY20-509 / 2021-038 $31,334
Idaho Department of Fish and Game IDFG-MA-20151029 $59,192
Missouri Department of Conservation 369-B $25,000 $51,884
Missouri Department of Conservation CA-472 $5,932
Missouri Department of Conservation 377-B $66,160
North Dakota Game and Fish Department $112,311
North Dakota Game and Fish Department W-68-R-3 $265,772
State of South Dakota 19CS06W008 $23,065
State of South Dakota 19CS06W012 $230,513
15.615 Cooperative Endangered Species Conservation Fund ($1,242)
Washington State Department of Natural Resources 93-099848 $6,901
15.631 Partners for Fish and Wildlife
Blackfoot Challenge 2019-37 $4,659
15.634 State Wildlife Grants
Alaska Department of Fish and Game 19-145 $45,573
Wyoming Game and Fish Department 003033 $58,582
15.637 Migratory Bird Joint Ventures $30,239
15.654 National Wildlife Refuge System Enhancements $30,609
15.655 Migratory Bird Monitoring, Assessment and Conservation $126,846
15.657 Endangered Species Conservation – Recovery Implementation Funds $459,834
South Dakota Department of Game, Fish, and Parks 19-0600-048-01 $356,247
15.660 Endangered Species - Candidate Conservation Action Funds $12,780
15.664 Fish and Wildlife Coordination and Assistance $100,585
15.665 National Wetlands Inventory $11,252
15.678 Cooperative Ecosystem Studies Units $951,174
U.S. Geological Survey
15.805 Assistance to State Water Resources Research Institutes $107,314
15.807 Earthquake Hazards Program Assistance $58,912
15.808 U.S. Geological Survey Research and Data Collection $323,931
15.810 National Cooperative Geologic Mapping $481,290
15.812 Cooperative Research Units $447,530
15.814 National Geological and Geophysical Data Preservation $62,785
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
15.815 National Land Remote Sensing Education Outreach and Research
AmericaView AV18-MT-01 $22,409
15.820 National and Regional Climate Adaptation Science Centers
University of Colorado 1559603 $6,900
University of Colorado Boulder 1559947 PO 1001445221 $8,009
University of Colorado Boulder PO 1001362655/1559255 $28,763
University of Washington UWSC10097 BPO49075 $36,587
University of Washington UWSC10097 BPO49076 $37,146
University of Washington UWSC10097 BP046197 $20,261
University of Washington UWSC100967/BP041681 $7,273
University of Washington UWSC10097 BPO46197 $22,267
University of Washington UWSC100967/BP041680 $9,105
15.980 National Ground-Water Monitoring Network $27,433
DEPARTMENT OF THE INTERIOR TOTAL $12,501,786
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
20.109 Air Transportation Centers of Excellence $127,571
Federal Highway Administration
20.200 Highway Research and Development Program $237,321 $735,513
Cadmus Group 4652FHWA-MTI-1 $54,907
California Department of Transportation 65A0772 $26,321
California Department of Transportation 65A0770 $39,893
Idaho Department of Transportation 2016-01 ($131)
Minnesota Department of Transportation 1003322 WORK ORDER NO. 4 $178
Minnesota Department of Transportation 1044527 $20,084
Minnesota Department of Transportation 1003322 WORK ORDER NO. 5 $42,671
Nevada Department of Transportation P701-18-803 TASK 06 $67,425
Nevada Department of Transportation P701-18-803 TASK 04 $19,592
Nevada Department of Transportation P701-18-803 TASK 02 $36,280
Nevada Department of Transportation P701-18-803 TASK 01 $23,634
Nevada Department of Transportation P701-18-803 TASK 07 $204
Nevada Department of Transportation P701-18-803 TASK 05 $24,943 $35,918
South Dakota Department of Transportation 311280 SD2016-03 $2,438
The accompanying notes are an integral part of this schedule.
A-223
State of Montana A-224
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
Washington State Department of Transportation T6737 TASK 12 $22
Washington State Department of Transportation T6737 TASK 14 $17,756
Washington State Department of Transportation T6737 TASK 13 $24,017
20.205 Highway Planning and Construction $22,000 $651,601
Center for Large Landscape Conservation $267
Iowa Department of Transportation TPF-5(435) $19,042
Iowa Department of Transportation TPF-5(290) $19,994
Kentucky Transportation Cabinet $3,979
Maryland Department of Transportation P01814 X-1 $27,957 $31,174
Minnesota Department of Transportation 1002306 ($1)
State of Wyoming RS06219 $42,634
Vermont Agency of Transportation GR1477 $9,817
20.215 Highway Training and Education $8,869
Battelle Memorial Institute US001-0000804612 LINE 1 $6,486
Battelle Memorial Institute US001-0000806715 $52,087
Battelle Memorial Institute US001-0000804612 $57,662
Federal Transit Administration
20.514 Public Transportation Research, Technical Assistance, and Training
ICF International 19SSSK0091 $1,659
National Highway Traffic Safety Administration
20.600 State and Community Highway Safety
National Academies of Science BTS-15 UNIT 913 SUB0001557 $5,658 $103,949
North Dakota Department of Transportation 12191245 $4,153
National Highway Traffic Safety Administration (NHTSA) Discretionary Safety Grants and
20.614 $168,971
Cooperative Agreements
20.616 National Priority Safety Programs
Washington Traffic Safety Commission PROJECT # 2021-SUB-GRANTS-4353 $5,719
Washington Traffic Safety Commission 20-VENDOR CONTRACT-4004 VC4196 $53,116
Washington Traffic Safety Commission 2021-SUBGRANTS- 4268 $11,520
Washington Traffic Safety Commission 2020-AG-3688 $2,549
Washington Traffic Safety Commission 2020-VENDOR CONTRACT-4004 $1,071
Washington Traffic Safety Commission 2021-SUB-GRANTS-4350 $10,750
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
Office of the Secretary
20.701 University Transportation Centers Program $909,211 $1,458,680
DEPARTMENT OF TRANSPORTATION TOTAL $4,000,041
DEPARTMENT OF TREASURY
Community Development Financial Institutions
21.020 Community Development Financial Institutions Program $13,189
DEPARTMENT OF TREASURY TOTAL $13,189
DEPARTMENT OF VETERANS AFFAIRS
VA Health Administration Center
64.054 Research and Development $731,758
DEPARTMENT OF VETERANS AFFAIRS TOTAL $731,758
ENVIRONMENTAL PROTECTION AGENCY
66.202 Congressionally Mandated Projects
Idaho Department of Environmental Quality S613 $20,927
Idaho Department of Environmental Quality 5574 $44,485
66.461 Regional Wetland Program Development Grants $169,921
66.509 Science To Achieve Results (STAR) Research Program
University of New Mexico 3RAW5 / 83615701 $21,119
66.516 P3 Award: National Student Design Competition for Sustainability $8,540
Research, Development, Monitoring, Public Education, Outreach, Training, Demonstrations, and
66.716 $26,547
Studies
66.802 Superfund State, Political Subdivision, and Indian Tribe Site-Specific Cooperative Agreements
Dine' College 1819-16-513 $23,671
66.808 Solid Waste Management Assistance Grants $17,083
66.951 Environmental Education Grants $24,057
Arizona State University ASUB00000207 $225
66.962 Columbia River Basin Restoration (CRBR) Program $17,259
ENVIRONMENTAL PROTECTION AGENCY TOTAL $373,834
The accompanying notes are an integral part of this schedule.
A-225
State of Montana A-226
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
GENERAL SERVICES ADMINISTRATION
39.003 Donation of Federal Surplus Personal Property $5,415
GENERAL SERVICES DIVISION TOTAL $5,415
INSTITUTE OF MUSEUM AND LIBRARY SERVICES
45.312 National Leadership Grants $2,842 $8,809
45.313 Laura Bush 21st Century Librarian Program $102,487
Drexel University 950022-P | PO: U0212121 $4
INSTITUTE OF MUSEUM AND LIBRARY SERVICES TOTAL $111,300
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
43.012 Space Technology $102,153 $298,261
43.001 Science $741,103 $4,738,531
Association of Universities for Research in Astronomy $7,584
Astrophysical Research Consortium SSP538 $87,244
Bowling Green State University 10010205-UMT $30,967
California Institute of Technology, Jet Propulsion Laboratory 1649019 $6,852
Dartmouth College R1148 $27,169
Dartmouth College R1060 $477,327
Georgia Institute of Technology AWD-000545-G1 $1,559
Georgia Institute of Technology RH809-03 $111,362
Lockheed Martin Corporation 8100002702 $448,004
Predictive Science Inc. $36,031
Princeton University SUB0000396 $15,639
SETI Institute SC 3118 $3,175
Smithsonian Astrophysical Observatory GO8-19069X ($1,793)
Smithsonian Astrophysical Observatory GO7-18086A ($423)
Smithsonian Astrophysical Observatory G09-20094X $52,004
Smithsonian Astrophysical Observatory SV9-89001 $157,963
Southwest Research Institute K99081KJ $90,312
Space Telescope Science Institute HST-GO-14251.004-A $4,115
Space Telescope Science Institute HST-GO-15607.001.A $54,004
Space Telescope Science Institute HST-GO-13943.007-A $1,957
Stone Aerospace/PSC, Inc. $28,999
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
Stottler Henke Associates, Inc. DIS-MAESTRO2 MSU $128,573
Sustainable Bioproducts $85,929
University Corporation For Atmospheric Research SUBAWD002290 $19,802
University of Alaska UAF 18-0082 $46,799
University of Colorado Denver PO1001469105/1560348 $582
University of Colorado Denver 1552610 / NNA15BB02A $59,343
University of Colorado Denver 1557527 (PO1001165441) $47,882
University of Maryland 3TB432 $33,448
University of Massachusetts 20-010961 A $84,812
University of Minnesota A007438701 $17,540
University of Washington UWSC12794 BPO 56293 $7,046
University of Washington UWSC8879/BPA13182 $10,139
University of Washington UWSC8879/BPO13182 $76,851
43.008 Education $28,583 $1,373,250
Stottler Henke Associates, Inc. $28,477
43.009 Cross Agency Support $43,019
Miscellaneous
43.RD Miscellaneous Research and Development
California Institute of Technology, Jet Propulsion Laboratory 1422120 $178,744
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION TOTAL $8,919,079
NATIONAL ENDOWMENT FOR THE HUMANITIES
45.129 Promotion of the Humanities Federal/State Partnership
Humanities Montana 20R039 $3,741
NATIONAL ENDOWMENT FOR THE HUMANITIES TOTAL $3,741
NATIONAL SCIENCE FOUNDATION
47.041 Engineering Grants $33,331 $1,851,223
Case Western Reserve University RES514053 $13,666
Integrative Economics, LLC INTEGRATIVE ECONMICS MSU STTR $4,101
University of Michigan SUBK00011355 $51,144
47.049 Mathematical and Physical Sciences $477,798 $3,027,565
Association of Universities for Research in Astronomy N87463C $25,964
University Wisconsin-Milwaukee 2034045458 (1534055370) $93,495
The accompanying notes are an integral part of this schedule.
A-227
State of Montana A-228
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
47.050 Geosciences $231,955 $2,301,463
George Washington University 14-S17 $6,359
Lehigh University/Global Villa 543851-78002 $14,640
University of Colorado 1555555 PO 1000879023 $10,617
University of Colorado 1555338 - PO 1000856931 $30,094
University of Colorado Denver 1555337/PO#1000855308 $140,891
University of Hawaii at Manoa MA 1391 $27,727
47.070 Computer and Information Science and Engineering $759,906
University of North Texas GF30041-1 ($703)
47.074 Biological Sciences $253,831 $8,288,717
Cary Institute of Ecosystem Studies 3340-200201873 $31,865
USDA Rocky Mountain Research Station 16-JV-11221633-029 $37,662
47.075 Social, Behavioral, and Economic Sciences $253,972 $623,845
Bentley University 2313-02 $4,088
47.076 COVID-19 - Education and Human Resources $88,343 $135,490
47.076 Education and Human Resources $8,654 $2,419,699
Aaniiih Nakoda College MSU-3753 $138,992
Chief Dull Knife College $890
Colorado State University 96702-5 $33,405
Mathematical Association of America MAA 3-8-710-891 $17,664
Michigan State University RC104101MONTANA $63,090
Murray State University MOA No. 2020-075 $15,719
Salish Kootenai College SKC-19-UOM-003 $1,700
Salish Kootenai College HRD 1826637 $61,565
Washington State University 131202 G004100 $8,893
Washington State University 131202 G004098 $9,517
47.078 Polar Programs $12,937 $303,187
47.079 Office of International Science and Engineering $6,348
47.083 Office of Integrative Activities $1,368,883 $6,369,568
North Carolina State University 2019-3154-01 $32,275
South Dakota School of Mines SDSMT-MSU-20-10 $218,933
South Dakota School of Mines SDSMT-MSU 18-04 $447,326
Trustees of Dartmouth College R896/R897/1632738 $129,705
The accompanying notes are an integral part of this schedule.
State of Montana
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2021
Research and Development Cluster Amount to Subrecipients Expenditures
University of Alaska Fairbanks 539392 $1,899
University of Alaska Fairbanks P0547157 $3,314
University of Nebraska 25-6222-0984-050 $10,811 $419,006
University of Wyoming 1004809-UM $36,861
NATIONAL SCIENCE FOUNDATION TOTAL $28,219,375
SOCIAL SECURITY ADMINISTRATION
96.007 Social Security Research and Demonstration
University of Wisconsin-Madison 0000000424 $28,842
University of Wisconsin-Madison 0000001149 $75,453
University of Wisconsin-Madison 0000000670 $113,035
SOCIAL SECURITY ADMINISTRATION TOTAL $217,330
RESEARCH AND DEVELOPMENT CLUSTER TOTAL $180,641,655
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS TOTAL $6,535,824,509
The accompanying notes are an integral part of this schedule.
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A-230
STATE OF MONTANA
NOTES TO THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Note 1. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying Schedule of Expenditures of Federal Awards includes the federal
award activity of the state of Montana under programs of the federal government for the
fiscal year ended June 30, 2021. The information in this schedule is presented in
accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200,
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for
Federal Awards (referred to as the “Uniform Guidance”).
Because this schedule presents only a selected portion of the operations of the state of
Montana, it is not intended to, and does not present, the financial positions, change in net
position, or, where applicable, its cash flows for the fiscal year ended June 30, 2021.
Significant Accounting Policies
Expenditures shown on the Schedule of Expenditures of Federal Awards are reported on
the modified accrual basis of accounting, except as noted below. Under the modified
accrual basis of accounting, expenditures are generally recorded in the accounting period
in which the liability is incurred. However, there are some payments, such as
compensated absences, that are only recorded when the payment is due.
Such expenditures are recognized following the cost principles contained in the Uniform
Guidance wherein certain types of expenditures are not allowed or are limited as to
reimbursement. Negative amounts shown on the schedule represent adjustments or
credits made in the normal course of business to amounts reported as expenditures in
prior years.
The Montana University System uses full accrual accounting to report campus federal
expenditure activity such as the Student Financial Assistance, Education and Stabilization
Funds, and Research and Development programs. Certain other programs of the state,
such as the Unemployment Insurance, Section 8 Voucher, and Section 8 Project-Based
programs, also use the full accrual basis of accounting. Under the full accrual basis of
accounting, expenditures are recorded when a liability is incurred, regardless of the timing
of the related cash flows.
Loan and Loan Guarantee Programs (Note 2), Federal Excess Personal Property (Note
7), and the Department of Defense Firefighting Property (Note 8) are presented using the
basis of accounting described in each note. The Books for the Blind and Physically
A-231
Handicapped Program (Note 9) is not presented on the Schedule of Expenditures of
Federal Awards but is provided as additional information regarding the types of donations
received by the state as part of this federal program.
The state of Montana did not elect to use the 10% de minimis indirect cost rate allowed
under the Uniform Guidance.
Coronavirus Relief Programs
The state of Montana expended $2,124,534,188 under the various Coronavirus relief
programs in fiscal year 2021. These programs are indicated by a “COVID-19” reference
in front of the federal program name on the fiscal year 2021 Schedule of Expenditures of
Federal Awards.
A summary of the federal programs that received funding under the various Coronavirus
relief programs is shown on the following page:
FY 2021
A-232 ALN# Coronavirus Relief Programs
Expenditures
Agricultural and Rural Economic Research, Cooperative Agreements and
10.250 $4,725
Collaborations
10.542 Pandemic EBT Food Benefits $27,514,501
WIC Special Supplemental Nutrition Program for Women, Infants, and
10.557 $1,240,105
Children
10.558 Child and Adult Care Food Program $468,657
10.559 Summer Food Service Program for Children $29,000,000
State Administrative Matching Grants for the Supplemental Nutrition
10.561 $155,412
Assistance Program
10.568 Emergency Food Assistance Program (Administrative Costs) $81,032
11.611 Manufacturing Extension Partnership $175,013
Community Development Block Grants/State's program and Non-
14.228 $4,291
Entitlement Grants in Hawaii
14.231 Emergency Solutions Grant Program $2,551,796
14.241 Housing Opportunities for Persons with AIDS $160,592
14.871 Section 8 Housing Choice Vouchers $100,342
16.034 Coronavirus Emergency Supplemental Funding Program $2,108,937
17.225 Unemployment Insurance $565,892,687
17.277 WIOA National Dislocated Worker Grants / WIA National Emergency Grants $154,227
20.106 Airport Improvement Program $396,524
20.509 Formula Grants for Rural Areas $17,448,893
21.019 Coronavirus Relief Fund $1,136,109,048
21.023 Emergency Rental Assistance Program $10,442,585
21.027 Coronavirus State Fiscal Recovery Fund (CSFRF) $15,053,295
45.025 Promotion of the Arts Partnership Agreements $424,400
45.310 Grants to States $3,121
47.076 Education and Human Resources $135,490
59.037 Small Business Development Centers $655,569
64.015 Veterans State Nursing Home Care $213,048
84.007 Federal Supplemental Educational Opportunity Grants $2,000
84.425 Education Stabilization Fund $94,522,394
90.404 2018 HAVA Election Security Grants $222,373
Special Programs for the Aging, Title VII, Chapter 2, Long Term Care
93.042 $19,243
Ombudsman Services for Older Individuals
Special Programs for the Aging, Title III, Part B, Grants for Supportive
93.044 $699,571
Services and Senior Centers
93.045 Special Programs for the Aging, Title III, Part C, Nutrition Services $1,943,566
93.048 Special Programs for the Aging, Title IV, and Title II, Discretionary Projects $1,454
93.052 National Family Caregiver Support, Title III, Part E $358,170
93.107 Area Health Education Centers $89,488
Injury Prevention and Control Research and State and Community Based
93.136 $473,957
Programs
93.268 Immunization Cooperative Agreements $3,942,598
93.301 Small Rural Hospital Improvement Grant Program $927,478
93.310 Trans-NIH Research Support $381,056
93.323 Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) $35,848,347
Public Health Emergency Response: Cooperative Agreement for
93.354 $1,648,162
Emergency Response: Public Health Crisis Response
93.359 Nurse Education, Practice Quality and Retention Grants $58,840
93.498 Provider Relief Fund $3,583,539
93.568 Low-Income Home Energy Assistance $355,126
93.569 Community Services Block Grant $583,981
93.575 Child Care and Development Block Grant $3,455,686
Emergency Grants to Address Mental and Substance Use Disorders During
93.665 $652,798
COVID-19
Family Violence Prevention and Services/Domestic Violence Shelter and
93.671 $94,613
Supportive Services
93.747 Elder Abuse Prevention Interventions Program $1,761
93.767 Children's Health Insurance Program $4,190,112
State Survey and Certification of Health Care Providers and Suppliers (Title
93.777 $342,493
XVIII) Medicare
93.778 Medical Assistance Program $69,994,744
93.859 Biomedical Research and Research Training $13
93.889 National Bioterrorism Hospital Preparedness Program $988,721
93.917 HIV Care Formula Grants $40,156
97.036 Disaster Grants - Public Assistance (Presidentially Declared Disasters) $42,045,221
Presidential Declared Disaster Assistance to Individuals and Households -
97.050 $46,572,237
Other Needs
Total Cornavirus Relief Programs $2,124,534,188
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The state also received $6,936,454 in donated supplies and equipment under Assistance
Listing Number (ALN - formerly CFDA Number) #97.036, Disaster Grants - Public
Assistance (Presidentially Declared Disasters). Of this amount, $4,087,031 was
distributed to non-state entities. These amounts are not shown on the Schedule of
Expenditures of Federal Awards.
Families First Coronavirus Response Act
Section 6008 of the Families First Coronavirus Response Act provided a temporary 6.2
percentage point increase to each qualifying state and territory’s Federal Medical
Assistance Percentage (FMAP) under section 1905(b) of the Social Security Act. In fiscal
year 2021, the state paid an additional $69,994,744 for the Medical Assistance Program
(ALN #93.778).
Food Distribution Program
The amount reported for Food Distribution programs (ALN #10.555, #10.565, #10.567,
#10.569, and #93.053) represents the dollar value of food commodities distributed to
eligible recipients during the year. The U.S. Department of Agriculture provides the
current value of the commodities used by the state to compute the amount reported. The
amount of funds received to administer the program is also included in the reported
amount. Montana also distributes food commodities to other states in the western region
of the United States. During fiscal year 2021, Montana distributed $479,752 of food
commodities under ALN #10.567 to other states.
The state of Montana distributed $10,754,862 in commodities in fiscal year 2021. The
June 30, 2021 value of commodities stored at the state’s warehouse is $5,752,070, for
which the state is liable in the event of loss. The state has insurance to cover this liability.
Minority Health and Health Disparities Research
The amount reported for the Minority Health and Health Disparities Research Program
(ALN #93.307) includes endowment funds of $9,375,000, along with interest earned on
the endowment. The entire endowment amount is reported as expended each year, as
the funds are restricted for the life of the endowment.
Immunization Cooperative Agreements
The amount reported for the Immunization Cooperative Agreements (ALN #93.268)
includes the dollar value of vaccine doses received during fiscal year 2021. The state
used the Centers for Disease Control’s price list to calculate the value of doses received.
During fiscal year 2021, Montana received 188,102 vaccine doses valued at $10,680,679.
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Note 2. Loan and Loan Guarantee Programs
The following loan and loan guarantee programs are reported on the Schedule of
Expenditures of Federal Awards at their July 1, 2020 beginning loan balance plus the
amount of any interest subsidy, cash, or administrative cost allowance received during
fiscal year 2021:
Federal Loan/Loan Guarantee Program FY 2021 Ending
ALN #
State Revolving Loans Balance
66.458 Capitalization Grants for Clean Water State Revolving Funds $ 319,274,382
66.468 Capitalization Grants for Drinking Water State Revolving Funds $ 182,779,058
Total State Revolving Loan Programs $ 502,053,440
Federal Loan/Loan Guarantee Program FY 2021 Ending
ALN #
Student Financial Assistance Balance
University Loans
84.038 Federal Perkins Loan Program_Federal Capital Contributions $19,262,938
93.264 Nurse Faculty Loan Program (NFLP) $3,331
Health Professions Student Loans, Including Primary Care
93.342 $258,273
Loans/Loans for Disadvantaged Students
93.364 Nursing Student Loans $2,350,002
Total Student Financial Assistance Programs $21,874,544
Perkins Loan Programs
Under the Perkins Loan Extension Act of 2015, universities participating in this program
are no longer permitted to make Perkins Loan disbursements after June 30, 2018.
Institutions may choose to continue servicing their existing Perkins Loans until such time
the institution’s outstanding loans have been paid in full or otherwise retired. Both
Montana State University and the University of Montana have chosen to continue to
service their current loans.
Economic Adjustment Assistance Program
The Economic Adjustment Assistance Program (ALN #11.307) consists of two separate
awards, which are reported on the Schedule of Expenditures of Federal Awards at the
June 30, 2021 ending loan balances.
A-235
The amount of loans outstanding as of June 30, 2021 is $318,254 for award number 05-
19-02445 and $3,082,439 for award number 05-79-73005. The calculation for each of
these loan balances is as follows:
Award Number: 05-19-02445
State Name = EDA Revolving Loan
Federal Grantor = US Department of Commerce
Federal Program Name = Title IX SSED Revolving Loan Fund
Federal Catalog Number = 11.307
RLF Loan Balance FYE 2021 $ 262,407
Cash & Investments FYE 2021 $ 185,838
FY 2020 Admin paid out of RLF Income $ -
Unpaid Principal of loans written of during FY $ -
$ 448,245
Federal Percentage 71%
Federal Share of Revolving Loan Fund $ 318,254
Award Number: 05-79-73005
State Name = EDA Revolving Loan
Federal Grantor = US Department of Commerce
Federal Program Name = Economic Adjustment Assistance
Federal Catalog Number = 11.307
RLF Loan Balance FYE 2021 $ 5,050,071
Cash & Investments FYE 2021 $ 1,089,475
FY 2021 Admin paid out of RLF Income $ 25,332
Unpaid Principal of loans written of during FY $ -
$ 6,164,878
Federal Percentage 50%
Federal Share of Revolving Loan Fund $ 3,082,439
Other Federal Loans
The following loans, originally funded through federal programs, do not have any
continuing federal compliance requirements imposed on the state, other than the loan
A-236
repayments. These loans are not reported on the Schedule of Expenditures of Federal
Awards:
Tongue River –Northern Cheyenne Tribal Loan
The Northern Cheyenne Tribe and the Department of Natural Resources and
Conservation entered into an agreement on July 1, 1994 in which the tribe agreed to loan
the state of Montana $11,300,000 of federal funds appropriated as part of the Northern
Cheyenne Indian Reserved Water Rights Settlement. The loan is to assist the state in
financing costs of the Tongue River Dam project. No expenditures of tribal loan funds
were incurred on project costs during fiscal year 2021. The amount of the loan
outstanding as of June 30, 2021 is $4,925,641.
Middle Creek Dam Rehabilitation Project Loan
The Department of Natural Resources and Conservation and the U.S Department of the
Interior, Bureau of Reclamation (BOR), entered into an agreement on September 21,
1990. The BOR agreed to loan the state of Montana “…a sum of money not to exceed
the lesser of (1) $3,023,925 plus reimbursable interest during construction, or (2) the
actual cost of the project, including reimbursable interest during construction...” The total
loan repayable is $2,990,129, and reimbursable interest during construction is $281,857.
As of June 30, 2021, the loan outstanding is $1,600,735, and reimbursable interest during
construction is $158,293.
Note 3. Type A Federal Programs
The state of Montana issues a biennial single audit report. The Montana Single Audit
report for the two fiscal years ended June 30, 2021 will be issued by May 31, 2022.
The Type A program threshold will be determined based on actual expenditures incurred
during the two fiscal years ended June 30, 2021.
Note 4. Assistance Listing Number
The Assistance Listing Number (formerly CFDA number) is a unique number assigned to
identify a federal assistance listing.
The complete Assistance Listing Number is a five-digit number, where the first two digits
represent the federal agency and the second three digits represent the program.
Programs with an unknown ALN number were assigned a number in the format **.UXX or
**. RD. Also refer to Note 13.
A-237
Note 5. Program Clusters
As defined by 2 CFR section 200.1, a cluster of programs is a grouping of closely related
programs that share common compliance requirements. Except for the Student
Financial Assistance Cluster, clusters of programs are presented on the Schedule of
Expenditures of Federal Awards either within their respective federal agency (for non-
research and development programs) or by federal agency and major subdivision (for
research and development programs.
Student Financial Assistance Cluster
Amounts reported for the Student Financial Assistance Cluster include programs
administered by both the Department of Education and the Department of Health and
Human Services. These clusters are shown separately, within their respective federal
agencies, on the Schedule of Expenditures of Federal Awards.
The combined Student Financial Assistance Cluster includes the following programs:
FY 21
ALN # Student Financial Assistance Cluster
Expenditures
84.007 Federal Supplemental Educational Opportunity Grants $1,721,057
84.033 Federal Work-Study Program $1,634,018
84.038 Federal Perkins Loan Program_Federal Capital Contributions $23,678,953
84.063 Federal Pell Grant Program $36,026,968
84.268 Federal Direct Student Loans $141,309,606
Teacher Education Assistance for College and Higher Education Grants
84.379 $3,962
(TEACH Grants)
93.264 Nurse Faculty Loan Program (NFLP) $6,062
Health Professions Student Loans, Including Primary Care Loans/Loans for
93.342 $276,427
Disadvantaged Students
93.364 Nursing Student Loans $2,767,378
Scholarships for Health Professions Students From Disadvantaged
93.925 $325,318
Backgrounds - Scholarships for Disadvantaged Students (SDS)
Total Student Financial Assistance Cluster $207,749,749
Note 6. Research and Development Grants
Research and Development includes all research activities, both basic and applied, and
all development activities that are performed by a non-federal entity. Research is defined
as a systematic study directed toward fuller scientific knowledge or understanding of the
subject studied. The term research also includes activities involving the training of
individuals in research techniques, where such activities utilize the same facilities as other
research and development activities, and where such activities are not included in the
instruction function.
A-238
Development is the systematic use of knowledge and understanding gained from
research directed toward the production of useful materials, devices, systems, or
methods, including design and development of prototypes and processes. Federal
awards that meet the research and development criteria are listed in the Research and
Development Cluster.
Note 7. Federal Excess Personal Property
The state of Montana receives Federal Excess Personal Property (FEPP). The title to
this property remains with the federal agency. In accordance with General Services
Administration guidelines, the amounts are presented at fair market value at the time of
receipt by the state, which is determined to be 23.34% of the original acquisition cost of
the property.
Property received under ALN #81.UXX, Miscellaneous Non-major Grants, is shown at its
fair market value at the time of receipt.
The following is a list of the FEPP received by the state of Montana during fiscal year
2021. The negative amount reflects property sold (title transferred at public sale) or other
disposition.
ALN # Program FY 21 FY 21 Ending
Amount Inventory
10.203 Payments to Agricultural Experiment Stations $5,415 $129,993
Under the Hatch Act
10.500 Cooperative Extension Service $0 $3,157
10.664 Cooperative Forestry Assistance ($4,517) $4,483,019
10.UXX Miscellaneous – Non-major Grants $0 $136,426
15.UXX Miscellaneous – Non-major Grants $0 $3,553
39.003 Donation of Federal Surplus Personal Property $164,080 $357,884
81.UXX Miscellaneous – Non-major Grants $0 $2,370
43.UXX Miscellaneous – Non-major Grants ($4,376) $660,814
47.UXX Miscellaneous – Non-major Grants ($7,877) $114,737
Note 8. Department of Defense Firefighting Property
The Department of Natural Resources and Conservation (DNRC) receives Department of
Defense Firefighting Property (FFP). The title to this property is transferred to the DNRC.
In accordance with General Services Administration guidelines, the amounts are
presented at fair market value at the time of receipt by DNRC, which is determined to be
23.34% of the original acquisition cost of the property. The following is the value of FFP
received by the state of Montana during fiscal year 2021:
ALN # Program FY 21 FY 21 Ending
Amount Inventory
12.UXX Miscellaneous – Non-major Grants $140,212 $3,360,350
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Note 9. Books for the Blind and Physically Handicapped
The Montana State Library receives “talking book” machines, cassette books,
accessories, and magazines from the federal government under the Books for the Blind
and Physically Handicapped Program (ALN #42.001). These items are then distributed to
provide library services to blind and physically handicapped individuals. The federal
government retains title to these items. The approximate value of the items in inventory
(not distributed to individuals) on June 30, 2021 was $929,210.
Since this program is considered a federal “use of equipment” agreement, the
accompanying Schedule of Expenditures of Federal Awards does not include this
amount.
Note 10. Unemployment Benefits
The unemployment compensation system is a federal-state partnership. State
unemployment insurance laws must conform to certain provisions of the federal law.
Federal funds are expended for administrative costs. State unemployment taxes must be
deposited into a state account in the Federal Unemployment Trust Fund and are used
only to pay benefits. State Unemployment Insurance (UI) funds, as well as federal funds,
are included on the Schedule of Expenditures of Federal Awards.
The following schedule provides a breakdown of the state and federal portions of the total
expenditures recorded for the Unemployment Insurance Program (ALN #17.225).
State UI Expenditures $ 180,116,013
Federal UI Expenditures 578,239,171
Total $ 758,355,184
Note 11. Subgrants to State Agencies
Federal assistance transferred from one Montana state agency to another Montana state
agency is shown only once on the Schedule of Expenditures of Federal Awards.
Federal assistance received from non-state sources, which are considered subgrants by
the awarding agency, are treated as pass-through grants to the state. These pass-
through awards are listed below the direct federal awards reported on the Schedule of
Expenditures of Federal Awards. Pass-through grant numbers are included for those
awards that were assigned an identifying number.
Note 12. Subgrants to Non-State Agencies
Federal assistance transferred from a Montana state agency or university to a non-state
agency, such as a city, county, tribal government, or nonprofit organization, is identified in
the Amount to Subrecipients column shown in the Schedule of Expenditures of Federal
Awards. These amounts are included in the expenditure totals shown on the report.
A-240
The Amounts to Subrecipients includes federal assistance transferred from a Montana
state agency or university that was originally received as a subgrant from another
Montana state agency or university. These amounts are not included in the expenditure
totals shown on the report, since the original award is only shown once on the Schedule
of Expenditures of Federal Awards, as described in Note 11 above.
A summary of amounts that were subgranted to a non-state agency, such as a city,
county, tribal government, or nonprofit organization, which were made from awards
originally received from another Montana state agency or university, is shown below:
Amount to
ALN# Federal Program Subrecipients
Non Research and Development
10.170 Specialty Crop Block Grant Program - Farm Bill $9,615
16.833 National Sexual Assault Kit Initiative $8,881
21.019 Coronavirus Relief Fund $719,734,982
84.048 Career and Technical Education -- Basic Grants to States $3,140,770
93.667 Social Services Block Grant $156,504
93.788 Opioid STR $317,970
Disaster Grants - Public Assistance (Presidentially Declared
97.036 $332,918
Disasters)
Total - Non Research and Development $723,701,640
Research and Development Cluster
15.611 Wildlife Restoration and Basic Hunter Education $18,469
20.205 Highway Planning and Construction $22,000
93.859 Medical Assistance Program $2,700
Total Research and Development Cluster $43,169
Note 13. Federal Awards Not Having an Assistance Listing Number
The following schedules contain contract or grant numbers associated with awards that
did not have an Assistance Listing Number and were assigned either a **.UXX or **.RD
number in the Schedule of Expenditures of Federal Awards. Not all **.UXX or **.RD
awards reported on the SEFA had a grant or contract number. Also refer to Note 4.
Schedule of Unknown Federal Assistance Listing Numbers for Research and Development Awards (XX.RD)
A-241
Federal Agency State Agency Contract or Grant Number Amount
DEPARTMENT OF AGRICULTURE
10.RD Montana State University - Bozeman 17-CS-11010200-019 $870
17-CS-11011100-012 $5,525
17-JV-11221636-068 $264
18-CS-11011800-017 $5,446
19-CS-11011100-031 $2,983
2021-21031900002 $31,911
31236-Z8409102 $23
313-0873 $48,465
59-0206-5-003 $7
59-0206-5-004 ($70)
669618 $200,000
70RSAT19TPIA00001 / CPO#0001 $1,837,607
70RSAT19TPIA00001 / CPO#0002 $975,685
70RSAT19TPIA00001 / CPO#0003 $285,843
75N91019P00691 $6,509
A17-0837-S001 $14,031
AG-3151-C-17-0012 $76,132
ARM212-MSU/ PO# EP0166321 $5,479
FA701418C5000 $200,813
FA701418C5004 $193,831
G19AC00047 $27,726
M67854-18-3-1330 $2,163,509
MSU-ARF ORBC MOU $5,010
S2-1025-19-01 $52,367
SUBCONTRACT NUMBER 313-0742 $259,657
SUBK-MSU-VDHWFS2-01-012720 $151,635
W912HZ-18-2-0010 $13,298
Unknown $55,841
DEPARTMENT OF DEFENSE
12.RD University of Montana - Missoula N62473-19-2-0005 $146,206
SC1812501 $85,090
W911KB-19-2-1500 $750,344
W911KB-19-2-1501 $3,918
W9126G-19-2-0035 $18,901
W9126G-20-2-0016 $146,346
W9128F20F0402 $516,999
W9128F20P0030 $81,277
Montana State University - Bozeman FA701420C0048 $216,964
FA701420C0045 $107,651
DEPARTMENT OF ENERGY
81.RD Montana Technological University 1663302 $1,726
1922244 $23,786
2151826 $29,563
2183707 $51,420
University of Montana - Missoula LMCP7514 $14,986
DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.RD University of Montana - Missoula 75N3019C00045 Mod #4 $480,490
75N93019C00045 COVID $85,173
75N93019C0045 $1,743,497
75N93020C00039 $1,128,244
GENFD0001583403 $663,544
HHSN272201400050C $1,442,521
HHSN272201800048C $3,595,434
Department of Public Health and Human Services HHS283201600001C $123,993
DEPARTMENT OF THE INTERIOR
15.RD University of Montana - Missoula 100006 ($1,460)
100130 $189,347
100145 $161,908
1361 100182 $48,256
1362 $108,056
140B0619F0343 $4,704
140F0619C0021 ($1,014)
140F0619P0068 $26,315
140F0619P0069 ($878)
140L0618F0380 ($1,328)
140L0619F0248 $43,009
140L0619F0249 $195,859
A-242
Schedule of Unknown Federal Assistance Listing Numbers for Research and Development Awards (XX.RD)
Federal Agency State Agency Contract or Grant Number Amount
140L0619F0291 $6,742
140L0619F0292 $256,525
140L0619F0301 $418,065
140L0619F0302 $6,237
140L0619F0342 $6,170
140L0619F0359 $48,942
140L0619F0360 $11,506
140L0619F0361 $7,252
140L0619F0378 $12,320
140L0620F0263 $104,769
140L0620F0364 $28,217
140L0620F0399 $71,484
140L0620F0500 $44,839
140L0620F0505 $159
140L0620F0519 $2,643
140L0620F0527 $17,650
140L619F0285 $115,047
33172.002 $34,464
33172.003 $31,896
33172.005 $11,403
33172.007 $39,775
33172.01 $19,095
50002.001 ($1,434)
50002.006 TO 4 $44,755
50002/001 $162,898
50002/001 140L0620F0455 $41,074
G-63747-01 $60,935
L0205A-A $880
L0212A-A $550,899
L02226A-A $24,862
L02312A-A $22,371
L0233A-A $288,222
MT-026-FY19 $20,000
Unknown $1,562
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
43.RD University of Montana - Missoula 1422120 $178,744
A-243
Schedule of Unknown Federal Assistance Listing Numbers (**.UXX)
Federal Agency State Agency Contract or Grant Number Amount
DEPARTMENT OF AGRICULTURE
10.U03 Department of Natural Resources and Conservation 16-FI-11010200-019 $5,231
10.U06 16-FI-11011500-026 $362
10.U07 17-FI-11011600-013 $6,774
10.U08 17-FI-11015200-003 $21,875
10.U09 18-FI-11011600-026 $12,775
10.U10 18-FI-11015200-008 $14,746
10.U12 DNRC-BLM-18-001 $393
10.U13 Montana State University - Bozeman 19-CS-11015600-018 $258
10.U14 Montana Technological University 17-CS-11015600-005 $2,500
10.U15 Department of Fish, Wildlife and Parks 12034320P0030 $9,000
DEPARTMENT OF DEFENSE
12.U02 University of Montana - Missoula W9128F-17-2-0028 $5,947
12.U05 Department of Fish, Wildlife and Parks 20-105P $1,334,112
12.U06 20-144P $177,685
12.U08 W9128F-20-D-0025 $186,775
12.U11 Department of Natural Resources and Conservation Unknown $140,212
12.U12 Department of Fish, Wildlife and Parks 21-129P $558,736
12.U13 21-179P $40,847
12.U14 W9128D-20-D-0025 $93,447
DEPARTMENT OF EDUCATION
84.U01 Office of Public Instruction Contract # ED-IES-14-C-0086 $97,230
DEPARTMENT OF ENERGY
81.U02 Department of Fish, Wildlife and Parks 20-18G $25,917
81.U03 00-UGPR-34 $152,134
81.U05 21-066G $67,557
81.U06 Department of Natural Resources and Conservation 0201.20.068676 $33,771
DEPARTMENT OF HEALTH AND HUMAN SERVICES
93.U02 Department of Public Health and Human Services HHSF223201810079C $171,714
93.U03 University of Montana - Missoula Unknown $7,239
DEPARTMENT OF THE INTERIOR
15.U01 Department of Fish, Wildlife and Parks 140G0219P0131 $89,950
15.U02 140L3620P0006 $5,000
15.U03 140P1321P0027 $2,989
DEPARTMENT OF TREASURY
21.U01 Department of Administration Unknown $4,465
LIBRARY OF CONGRESS
42.U02 Montana Historical Society FED 19-016 $8,273
State of Montana
State Responses
B-1
B-2
B-3
B-4
RECEIVED
March 25, 2022
LEGISLATIVE AUDIT DIV.
B-5
MONTANA
Department of Public Health and Human Services
Director's Office ♦ PO Box 4210 ♦ Helena, MT 59620 ♦ (406) 444-5622 ♦ Fax: (406) 444-1970
https://dphhs.mt.gov
l frnltliy Pcopl.:. Healthy Com,mmitics.
Greg Gianforte, Governor
Adam Meier, Director
Date: March 21, 2022
Angus Maciver, Legislative Auditor RECEIVED
Legislative Audit Division March 28, 2022
Room 160, State Capitol LEGISLATIVE AUDIT DIV.
PO Box 201075
Helena, MT 59620-1705
RE: Statewide Audit-Internal Control Over Financial Reporting (P-EBT)
Dear Mr. Maciver:
The Department of Public Health and Human Services has reviewed the State of Montana Financial
Audit for the fiscal year ended June 30,2021.
The Department of Public Health and Human Services' response to the item reported on Internal Control
Over Financial Reporting is as follows:
The department continues to strengthen internal controls related to financial reporting. The department
agrees that reporting program expenditures in the incorrect federal assistance listing in the SEFA
increases the risk of improper identification of major federal programs requiring audit attention under
the Single Audit Act of 1996 and Uniform guidance. The department has corrected the error by creating
a new fund and submitting a correction to the state's SEFA. To address this risk the department is
implementing the following additional internal control:
• Revision of procedure and forms associated with the creation of chartfields in the department.
The updated form requires a program submit the associated CFDA number anytime a new
accounting project is requested.
We thank you for your work on this audit and appreciate the opportunity to ad further comment on the
audit findings.
Sincerely, ;f ..
.
Adam Meier,
Director, DPHHS
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