J^eyy J. Miles, CPA SEP

Transcription

1 JAMES H. BUCHER, C.P.A. < ) JAMES G. BUCHER. C.P.A. ROBERT P. ESSNER. C.PJ. JEFFREY J. MILES. C.P.A. BUCHER, ESSNER AND MILES, LLC. CERTIFIED PUBLIC ACCOUNTANTS 205 West Maloe Ave Suite H P.O. Box 745 SIkesto, Missouri Telephoe (573) Fax (573) August 28,2012 STATE AUDITOR'S OFFICE Members of Ameiica Istitute ad Missouri Society of C.PA's Mr. Thomas A. Schweich Missouri State Auditor PO Box 869 Jefferso City, MO SEP Dear Mr. Schweich: Please fid eclosed a copy of the latest Aual Fiacial Report dated Jue 30,2012 for the Southeast Missouri DrugTask Force. It is our uderstadig that your office requires oe due to the fact that the Task Force received federal seizures. Pleasecall at your earliest coveiece, if you have ay questios. Sicerely, eclosure Jeyy J. Miles, CPA

2 1 i SIKESTON, MISSOURI ANNUAL FINANCIAL REPORT Jue 30, 2012 m r! PI Ft

3 SIKESTON, MISSOURI ANNUAL FINANCIAL REPORT Year Eded Jue 30, 2012 TABLE OF CONTENTS INTRODUCTORY SECTION Title Page Table of Cotets FINANCIAL SECTION Idepedet Auditor's Report Letterof Trasmittal Maagemet's Discussio ad Aalysis Maagemet's Discussio ad Aalysis Exhibit Page Statemet of Net Assets 1 12 Statemet of Activities 2 13 Balace Sheet Govermetal Fuds 3 14 Recociliatio of Balace Sheet to Statemet of Net Assets 4 15 Statemet of Reveues, Expeditures, ad Chages i Fud Balace Govermetal Fud Recociliatio of the Statemet of Reveues, Expeditures, ad Chages i Fud Balaces of Govermetal Fuds to the Statemet of Activities Notes to Fiacial Statemets 1823 Fiacial Statemets of Idividual Fuds: Schedule Geeral Fud: ps Govermetal Fuds Balace Sheet Statemet of Reveues, Expeditures, ad Chages i Fud Balace Budget (GAAP Basis) ad A1 24 Actual A2 2526

4 Special Reveue Fuds: Schedule Paoe EDICT Grat Fud Govermetal Fuds Balace Sheet B1 27 Statemet of Reveues, Expeditures, ad Chages i Fud Balace Budget (GAAP Basis) ad Actual B2 28 REPORTS r«!i ri fl Report o Iteral Cotrol over Fiacial Reportig ad o Compliace ad Other Matters based o a Audit of Fiacial Statemets Performed i Accordace with Govermet Auditig Stadards 2930 Idepedet Auditor's Report o Compliacewith Requiremets that couldhave a Direct ad Material Effect o Each Major Program ad o Iteral Cotrol over Compliace i Accordace with 0MB CircularA Schedule of Expeditures of Federal Awards 33 Schedule of Fidigs ad Questioed Costs 34

5 BUCHER, ESSNER AND MILES, L.L.C. CERTIFIED PUBLIC ACCOUNTANTS 205 West Maloe Ave Suite H P.O. Box 745 Sikesto, Missouri JES GBUChIr CPA Telephoe (573) rmirt p EsS r Fax (573) Members of JEFFREY ickdcv J. i" MILES. CO C.P.A. S a Missouri America Society Istitute of C.P.A.'s ad August 28,2012 INDEPENDENT AUDITOR'S REPORT r*i p Board ofdirectors ad Members Southeast Missouri Drug Task Force Sikesto, Missouri We have audited the accompayig fiacial statemets of the govermetal activities, the geeral fud ad special reveue fud ofthe Southeast Missouri Drug Task Force as ofad for the year eded Jue 30, 2012, which collectively comprises the Task Force's basic fiacial statemets as listed i the table of cotets. These fiacial statemets are the resposibility ofthe Southeast Missouri Drug Task Force maagemet. Our resposibility istoexpress a opiio o these fiacial statemets based o ouraudit. We coducted our audit i accordace with auditig stadards geerally accepted i the Uited States of America ad the stadards applicable to fiacial audits cotaied i Govermet Auditig Stadards, issued by the Comptroller Geeral ofthe Uited States. Those stadards require that we pla ad perform the audit to obtai reasoable assurace about whether the fiacial statemets are free of material p misstatemet. A audit icludes examiig, o a test basis, evidece supportig the amouts ad disclosures i the fiacial statemets. A audit also icludes assessig the accoutig priciples used ad sigificat estimates made by maagemet, as well as evaluatig the overall fiacial statemet presetatio. We believe that our audit provides areasoable basis for our opiio. I our opiio, the fiacial statemets referred to above preset fairly, i all material respects, the respective fiacial positio of the govermetal activities, the geeral fud ad special reveue fud of the Southeast Missouri Drug Task Force as of Jue 30, 2012, ad the respective chages i fiacial positio for the year the eded i coformity with accoutig priciples geerally accepted i the Uited States ofamerica. I accordace with Govermet Auditig Stadards, we have also issued our report dated August , o our cosideratio ofthe Southeast Missouri Drug Task Force's iteral cotrol over fiacial m. reportig ad our tests of its compliace with certai provisios of laws, regulatios, cotracts ad grats ad other matters. The purpose of that report is to describe the scope of our testig of iteral cotrol over fiacial reportig or o compliace. That report is a itegral part of a audit performed i accordace with Govermet Auditig Stadards ad importat for assessig the results ofour audit. Accoutig priciples geerally accepted i the Uited States of America require that the maagemet's discussio ad aalysis ad budgetary' compariso iformatio o schedules A2 ad B2, be preseted to supplemet the basic fiacial statemets. Such iformatio, although ot a part ofthe basic fiacial statemets, is required by the Govermetal Accoutig Stadards Board, who cosiders it to be a essetial part of the fiacial reportig for placig the basic fiacial statemets i a appropriate ] operatioal, ecoomic, or historic cotext. We have applied certai limited procedures to the required supplemetary iformatio i accordace with auditig stadards geerally accepted i the Uited States of America, which cosisted pricipally of iquiries of maagemet about the methods of preparig the r

6 iformatio ad comparig the iformatio for cosistecy with maagemet's resposes to our iquiries, the basic fiacial statemets, ad other kowledge we obtaied durig our audit of the basic fiacial statemets. We do ot express a opiio or provide ay assurace o the iformatio because the limited procedures do ot provide us with sufficiet evidece to express a opiio or provide assurace. Our audit was coducted for the purpose of formig a opiio o the fiacial statemets that collectively comprise the Southeast Missouri Drug Task Force's fiacial statemets as a whole. The idividual fud fiacial statemets ad schedules listed i the table of cotets are preseted for =i purposes of additioal aalysis ad are ot a required part of the basic fiacial statemets. The accompayig schedule ofexpeditures offederal awards is preseted for purposes ofadditioal aalysis as required by U.S. Office of Maagemet ad Budget Circular A133, Audits of States, Local Govermets, ad NoProfit Orgaizatios, ad is also ot a required part of the fiacial statemets. The idividual fud fiacial statemets ad the schedule of expeditures of federal awards are the resposibility ofmaagemet ad were derived from ad relate directly to the uderlyig accoutig ad other records used to prepare the fiacial statemets. The iformatio has bee subjected to the auditig procedures applied i the audit of the fiacial statemets ad certai additioal procedures, icludig comparig ad recocilig such iformatio directly to the uderlyig accoutig ad other records used to prepare the fiacial statemets or to the fiacial statemets themselves, ad other additioal procedures i accordace with auditig stadards geerally accepted i the Uited States ofamerica. I our opiio, the iformatio is fairly stated i all material respects i relatio to the fiacial statemets take as a whole. Respectfully submitted, Certified Public Accoutats pi

7 P.O. Box 1763 Sikesto, Missouri (573) Fax (573) MANAGEMENT'S DISCUSSION AND ANALYSIS The Southeast Missouri Drug Task Force adopted the ew reportig model as required by the Govermetal Accoutig Stadards Board for fiscal year 2004 ad beyod. The govemmetwide fiacial statemets iclude statemets ofet assets ad activities broke dow by govermetal activities. These statemets preset all assets, liabilities, reveues, expeses ad et assets o the accrual. However, the geeral fud ad special reveue fud fiacial statemets, primarily for budgetig purposes, preset oly curret assets, liabilities, reveues, "expeditures", other fiacig sources, ad fud balace o the modified accrual basis. The fud balace is recociled to et assets as show o thegovermet wide statemets uder the govermetal activities colum. FINANCIAL HIGHLIGHTS Net assets icreased by $127.3 thousad or 12.03% durig theyear. Capital Assets were acquired at a cost of$137.3 thousad durig the year. Seizure proceeds exceed budget by $88.3 thousad. Sgt. Mark McCledo August 28, 2012 PW PI pq psi

8 I r SIKESTON, MISSOURI MANAGEMENT'S DISCUSSION AND ANALYSIS As fiacial maagemet ofthe Southeast Missouri DrugTask Force, we offer readers of this fiacial statemet a overview ad aalysis of the fiacial activities ofthe Southeast Missouri Drug Task Force. This arrative is desiged to assist the reader i focusig o sigificat fiacial issues, idetify chages i thegovermet's fiacial positio, idetify ay material deviatios from the approved budget documets, ad idetify idividual fud issues or cocers. The Maagemet's Discussioad Aalysis (MD&A) is desiged to focus o the curret year's activities, resultig chagesad curretly kow facts. It should be read i cojuctio with the Letter of Trasmittal ad the fiacial statemets that begiwith Exhibit 1. m FINANCIAL HIGHLIGHTS Assets ofthe Southeast Missouri Drug Task Force exceeded its liabilities at the close of the most recet fiscal year by $1,185 thousad (et assets). This compares to the previous year whe assets exceeded liabilities by $1,058 thousad (et assets). Of this amout, $16,080 (urestricted et assets) may be used to meet the govermet's ogoig obligatios to citizes ad creditors. As ofthe close of the curret fiscal year, the Southeast Missouri DrugTask Force reported combied edig fud balaces of $940 thousad, a icrease of $70 thousad i compariso with the prior year. Of this amout, oly $4,000 is ospedable, $12,080 is uassiged, ad the remaiig balace of $924 thousad is restricted for activities to ehace future ivestigatios, law eforcemet traiig, laweforcemet equipmet adoperatios, detetio facilities, law eforcemet facilities ad equipmet. As Southeast Missouri Drug " Task Force's purpose is toprovide laweforcemet protectio agaist those who egage i the traffickig of arcotics, as a geeral rule, most expeditures may qualify for use ofthe restricted fuds. OVERVIEW OF THE FINANCIAL STATEMENTS " Maagemet's Discussio ad Aalysis itroduces the Southeast Missouri Drug Task Force's basic fiacial statemets. The basic fiacial statemets iclude; (1) govermetwide fiacial statemets, (2) fud fiacial statemets, ad (3) otes to the fiacial statemets. The Task Force also icludes i this report additioal iformatio to supplemet the basic fiacial statemets. 4

9 * m GovermetWide Fiacial Statemets The govermetwide fiacial statemets (see Exhibit 1 ad 2) are desiged to be similar to privatesector busiess i that all govermetal activities are cosolidated ito colums which add to a total for the primary govermet. These statemets combie govermetal fud's curret fiacial resources with capital assets ad logterm obligatios. The Statemet ofnet Assets (Exhibit 1) presets iformatio oall the govermet's assets ad liabilities, with the differece betwee the two reported as et assets. Over time, chages i et assets may serve as a useful idicator of whether the fiacial positio of the Southeast Missouri Drug Task Force is improvig ordeterioratig. p The Statemet of Activities (Exhibit 2) presets iformatio showig how the govermet's et assets chaged durig the most recet fiscal year. All chages i et assets are reported assoo asthe uderlyig evet givig rise to thechage occurs, regardless of the timig ofthe related cash flows. Thus, reveues ad expeses are reported i this statemet for some items thatwill oly resulti cash flows i fiiture fiscal periods. The focus ofthe Statemet of Activities is oboth the gross ad et costof various activities which are provided by the govermet's various grats ad other reveues. This is iteded to summarize iformatio ad simplify the user's aalysis of the cost ofvarious govermetal services. The govermetal activities reflect the Southeast Missouri Drug Task Force's basic purpose, which is to provide law eforcemet protectio agaist those who egage i the traffickig ofarcotics. Fud Fiacial Statemets Ffl f"! A fud is a groupig of relatedaccouts that is used to maitai cotrol over resources that have bee segregated for specific activities or objectives. Traditioal users of govermetal fiacial statemets will fid the fud fiacial statemets presetatio more familiar. The focus is ow o major fuds, rather tha geeric fud types. All fuds of the Task Force are cosidered to bemajor. Govermetal Fuds are used to accout for essetially the same fuctios reported as govermetal activities i the govermetwide fiacial statemets. The Govermetal Fuds (See Schedules Aad B) presetatio is preseted o a sources ad uses ofliquid resources basis. This isthe maer i which the fiacial pla istypically developed excludig certai timig differeces betwee the budget basis ad the geerally accepted accoutig priciple (GAAP) basis. Ulike the govermetwide fiacial statemets, govermetal fud fiacial statemets focus o earterm outflows ofspedable resources, as well as o balaces ofspedable resources available at the ed of the fiscal ("1

10 $ m cat w year. Such iformatio may be useful ievaluatig a govermet's curret fiacig requiremets. TheTask Force has preseted all fuds as major fuds. Notes to the Fiacial Statemets The otes provide additioal iformatio that is essetial toa fiill uderstadig ofthe data provided i the govemmetwide ad fud fiacial statemets. The otes to the fiacial statemets are a required part of the basic fiacial statemets ad ca befoud i this report. Other Iformatio PI Iadditio to the basic fiacial statemets ad accompayig otes, this report also icludes the Office of Maagemet ad Budget A133 Sigle Audit auditor reports, fidigs, ad schedules, icludig the 0MB DataCollectio Form. GovermetWide Fiacial Aalysis The followig table reflects the codesed Statemetof NetAssets for 2012 ad 2011: STATEMENT OF NET ASSETS Jue 30,2012 ad 2011 (i thousads) Assets: Curret ad Other Assets $ $ Capital Assets F!51 Total Assets $ 1,185.3 $ 1,065.4 Liabilities: P*! Curret Liabilities $ Net Assets: pl Ivestmet i Capital Assets, Net of Debt $ Restricted for Seizure $ Urestricted PI Total Net Assets S 1,185.3 $ 1,058.0 For more detailed iformatio see Exhibit 1, the Statemet of Net Assets.

11 NET ASSETS Capital Restricted Urestricted Assets r Approximately 20.7% of the Task Force's et assets as of Jue 30,2012, reflect the govermet's ivestmet i capital assets(office equipmet, ivestigatio equipmet, vehiclesad leasehold improvemets). This compares to 17.8% i the prior year. The TaskForce does ot have ay outstadig debt. The TaskForce uses these capital assets to provide law eforcemet protectio agaist those who egage i the traffickig of arcotics. Ofthe Task Force's et assets, 77.95% ad 81.80% for 2012 ad 2011, respectively, are subject to exteral restrictios to ehace future ivestigatios, law eforcemet traiig, law eforcemet equipmet ad operatios, detetio facilities, law eforcemet facilities ad equipmet. As Southeast Missouri DrugTask Force's purpose is to provide law eforcemet protectio agaist those who egagei the traffickig of arcotics, as a geeral rule, most expeditures may qualify for use ofthe restricted fuds.

12 The table below providesa summary of the chages i etassets for the year eded Jue 30,2012 ad 2011: CONDENSED STATEMENT OF CHANGES IN NET ASSETS For the Year Eded Jue 30,2012 ad 2011 (i thousads) Reveues: Program Reveue: Operatig Grats ad $ $ Cotributios Iterest Icome Loss o Sale ofassets (0.4) 1.8 Isurace Recovery Miscellaeous Icome 0.6 Discouts Eared Proceeds from Sale ofassets Expeses: Total Reveues $ $ Geeral $ 74.8 $ 73.6 HIDTA MOSMART COPS PI EDICT Total Expeses $ $ Icrease (Decrease) i Net Assets $ $ (29.0) Begiig Net Assets 1, ,087.0 p"! Edig Net Assets $ 1,185.3 $ 1,

13 Expeses (i thousads) i r Geeral HiDTA MOSMART COPS EDICT The Task Force's et assets icreased $133.2 thousad durig the curret fiscal year. Fiacial Aalysis of the Govermet's Fuds Govermetal Fuds: The focus ofthe Task Force's govermetal fuds is to provide iformatio o earterm iflows, outflows, ad balaces ofspedable resources. Such iformatio is useful i assessig the Task Force's fiacig requiremets. I particular, fimd balace may serve as a useful measure ofa govermet's et resources available for spedig at the ed ofthe fiscal year. As ofthe ed ofthe curret fiscal year, the primary govermet's govermetal fuds reported combied edig fud balaces of $940.0 thousad, a icrease of$70.0 thousad i compariso with the prior year. Of this amout, oly $4,000 is ospedable, $12,080 is uassiged, ad the remaiig balace ofs924 thousad is restricted for activities to ehace future ivestigatios, law eforcemet traiig, law eforcemet equipmet ad operatios, detetio facilities, law eforcemet facilities ad equipmet. As Southeast Missouri Drug Task Force's purpose is to provide law eforcemet protectio agaist those who egage i the traffickig ofarcotics, as a geeral rule, most expeditures may qualify for use of the restricted fuds.

14 Geeral Fud Budgetary Highlights The total differece betwee the origial geeral fud budget ad the fial ameded budget was a icrease i the HIDTA Grat budget of$76.7 thousad allocated maily to equipmet ad services lie items. Material differeces betwee the actual results ad budgeted amouts i the geeral fud are as follows: The seizure proceeds exceeded budget by $88.3 thousad. Timig ofreceipt of seizure proceeds depeds upo duratio oftrial, appeals ad processig by the Departmet ofjustice. As calculatio ofthe Task Force's share ofseized property is ot a simple process, the Task Force elects to record seizure proceeds whe received. The HIDTA, MOSMART ad COPS grats are o fiscal years differet tha the Task Force's edig fiscal year ofjue 30,2012. Thus budgeted items are o the grat's yeared versus the fiscal year of the Task Force. As these giats have several moths left to expiratio, it is reasoable for the budget to exceed actual due to the timig. The remaiig uspet budget for these grats, becomes the budget lie items of the ext fiscal year. Geeral expeditures for travel were uder budget by $14.1 thousad. fm (««i Geeral expeditures for persoel, overtime, traiig ad supplies ad operatios were over budgeted at $30.0 thousad, $23.0 thousad, $4.8 thousad ad $3.1 thousad asvery little ofthe budget was used. Capital Asset ad Debt Admiistratio Capital Assets: The Task Force's ivestmet i capital assets for its govermetal activities as ofjue 30,2012, amouts to $245.3 thousad (et of accumulated depreciatio). This ivestmet i capital assets icludes office equipmet, ivestigatio equipmet, leasehold improvemets, advehicles. The total icrease i the Task Force's ivestmet icapital assets for the curret fiscal year was 30.39% (et of accumulated depreciatio). Major capital asset evets durig the curret fiscal year icluded the followig: Purchase of $12,422 for 8 computers ad soft\vare. Purchase of$8,518 for telephoe system istallatio. Purchase of $ 14,706 to set up 14 officer workstatios. Purchase of $27,145 i various ivestigatio equipmet. Purchase of$73,258 for 13 digital radios ad vehicle chargers. 10

15 Capital Assets (Net ofdepreciatio) Jue 30,2012 ad 2011 (i thousads) f!, Office Equipmet Ivestigatio Equipmet Leasehold Improvemets $ Vehicles Total Assets $ Additioal iformatio o the Task Force's capital assets ca be foud i Note 4. Ecoomic Factors r«? The Task Force is reliat o fudig from the local govermetal uits participatig i the agecy i cojuctio with federal grat moies applied for each year. I additio, the Task Force is etitled by curret federal regulatios to receive a portio ofay moey seized or proceeds from the saleof property seized by it durig the course of a ivestigatio or arrest. Chages i the laws cocerig cooperative sharig ofseized property, availability offederal fuds or the ecoomy i thearea surroudig the govermetal uits could have a adverse effect o the Task Force. 11

16 SIKESTON, MISSOURI STATEMENT OF NET ASSETS Jue 30, 2012 EXHIBIT 1 Govermetal Activities ASSETS ASSETS Curret Assets; Cash Certificate of Deposit Travel Advaces Security Deposit MEMIC Due from COPS Due from State Due from Isurace Compay 260, , , , , , Total Curret Assets Nocurret Assets; Capital Assets Equipmet ad Other Capital Assets, et of Accumulated Depreciatio Total Assets $ 940, $ 1,185, LIABILITIES AND NET ASSETS fwl LIABILITIES Total Liabilities NET ASSETS Ivestmet i Capital Assets, et of related debt Restricted for Seizure Urestricted 245, , , Total Net Assets $ See Accompayig Notes to Fiacial Statemets 12

17 resi SIKESTON, MISSOURI STATEMENT OF ACTIVITIES Year Eded Jue 30, 2012 EXHIBIT 2 Fuctios/Programs Primary govermet: Govermetal Activities: Geeral HIDTA MOSMART COPS EDICT Expeses $ 224, Program Reveues Operatig Grats ad Cotributios 230, $ 242, , , , Net (Expese) Reveue 155, , (114.10) 27, ( ) Total Govermetal Activities S S 120, Geeral Reveues: Iterest Icome Gai o Sale ofassets Isurace Recovery Miscellaeous Icome Discouts Eared 5, (405.00) 1, Total Geeral Reveues $ 7, Chage i et assets $ 127, Net assets begiig 1,058, Net assets edig rr«see Accompayig Notes to Fiacial Statemets 13

18 SIKESTON, MISSOURI BALANCE SHEET GOVERNMENTAL FUNDS Jue 30, 2012 EXHIBIT 3 Govermetal Fud Types Special Geeral Reveue Totals (Memoradum Oly) ASSETS Cash Certificate of Deposit Travel Advaces Security Deposit MEMIC Due from Other Fuds Due from COPS Due from State Due from Isurace Compay 204, $ 590, , , , , , , $ 34, , , , , , , , Total Assets $ S S LIABILITIES AND FUND BALANCE Liabilities Due to Other Fuds $ S 89, $ 89, Total Liabilities $ $ 89, $ 89, PI Fud Balace Uasslged Nospedable Travel Advaces Restricted for: $ 12, $ 4, $ 12, , Seizure 923, , Total Fud Balace $ 940, $ $ Total Liabilities ad Fud Balace $ $ S See Accompayig Notes to Fiacial Statemets 14

19 SIKESTON, MISSOURI RECONCILIATION OF BALANCE SHEET TO STATEMENT OF NET ASSETS Jue 30,2012 Fud Balaces total govermetal fuds Amout reported for govermetal activities i the Statemet of Net Assets are differet because: EXHIBIT Capital assets used i govermetal activities are ot fiacial resources ad therefore are ot reported i govermetal fuds: Govermetal capital assets Less: accumulated depreciatio 1,035, (790,476.62) ci Net Assets of Govermetal Activities $ (1 fw! rm SeeAccompayig Notes to Fiacial Statemets 15

20 s SIKESTON, MISSOURI STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE GOVERNMENTAL FUND Year Eded Jue 30,2012 EXHIBIT 5 Special Geeral Reveue Totals REVENUES Federal Operatig Grats Cooperative Agecy Grats Grats from HIDTA Grats from MOSMART Grats from COPS State Seizure Proceeds Seizure Proceeds Reimbursemets from OCDETF Iterest Icome Isurace Recovery Miscellaeous Icome Discouts Eared $ 27, , , , , , , $ 293, $ 293, , , , , , , , , , Total Reveues $ $ s EXPENDITURES Geeral HIDTA MOSMART COPS EDICT Total Expeditures Excess (Deficiecy) of Reveues over Expeditures 35, , $ 92, $ s 92, , , , , $ $ $ 848, s $ ( ) $ 64, m OTHER FINANCING SOURCES fusesl Trasfer to Special Reveue Trasfer from Geeral Proceeds from Sale ofasset Total Other Fiacig Sources (Uses) Excess (Deficiecy) of Reveues ad Other Fiacig Sources over Expeditures ad Other Fiacig Uses $ (80,467.96) $ $ ( ) 80, , $ ( ) $ $ 5, $ 70, $ $ 70, R Fud Balace at begiig of the year 869, _ 869, Fud Balaceat ed of the year $ $ See Accompayig Notes to Fiacial Statemets 16

21 SIKESTON, MISSOURI RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Eded Jue 30, 2012 EXHIBITS Net Chage i Fud Balaces total govermetal fuds Amouts reported for govermetal activities i the Statemet of Activities are differet because: Govermetal fuds report capital outlays as expeditures. However, i the Statemet of Activities, the cost of those assets is depreciated over their estimated useful lives: 70, Expeditures for capital assets Less: curret year depreciatio 137, (74,124.93) 63, r=i Ithe statemet of activities, the gai (loss) o the sale of assets is reported, whereas i the govermetal fuds, the proceeds from the sale icrease fiacial resources. The chage i et assets differs fromthe chage i fud balace by the cost of the assets sold of $71,825.82, et of related accumulated depreciatio of $65, (6,000.00) Chage i Net Assets of Govemmetal Fuds p See Accompayig Notes to Fiacial Statemets 17

22 SIKESTON, MISSOURI NOTES TO FINANCIAL STATEMENTS " Jue 30,2012 (1) Summary of Sigificat Accoutig Policies PI i ' The Southeast Missouri Drug Task Force (the Task Force) was orgaized uder a iultijurisdictioal iteragecy agreemet through which several govermets ad law eforcemet agecies cooperate to more effectively provide law eforcemet protectio agaist those who egage i the traffickig of arcotics ad other dagerous drugs i the Southeast Missouri area. The Southeast Missouri Drug Task Force has adopted the ew reportig model as required by the Govermetal Accoutig Stadards Board. The accoutig policies of the Task Force coform to geerally accepted accoutig priciples as applicable to local govermets ad followig is a summary of the more sigificatpolicies: A. GovermetWide ad Fud Fiacial Statemets The govermetwide fiacial statemets iclude the statemet of et assets ad the statemet ofactivities. These statemets report fiacial iformatio for the Task Force as a whole. (H, The statemet of activities reports the expeses of a give fuctio offset by program reveues directly coected with the fuctioal program. A fuctio is a assembly of similar activities ad may iclude portios of a fud or summarized more tha oe fud to capture the expeses ad program reveues associated with a distict fuctioal activity. Program reveues iclude operatig grats ad cotributios which fiace aual operatig activities. Other reveue ot properly icluded with program reveues are reported as geeral reveues. Fud fiacial statemets are provided for govermetal fuds. cosidered major fuds. All fuds are B. Measuremet Focus. Basis ofaccoutig, ad Fiacial Statemet Presetatio The fiacial statemets of the Task Force are prepared i accordace with geerally accepted accoutig priciples (GAAP). The Task Force's reportig etity applies all relevat Govermetal Accoutig Stadards Board (GASH) prooucemets ad applicable Fiacial Accoutig Stadards Board (FASB) prooucemets ad Accoutig Priciples Board (APB) opiios issued o or before November 30, 1989, uless they coflict with GASB prooucemets. The govermetwide statemets report uses the ecoomic resources measuremet focus ad the accrual basis of accoutig geerally icludig the reclassificatio or elimiatio of iteral activity (betwee or withi fuds). Reveues are recorded whe eared ad expeses are recorded whe a liability is icurred, regardless of the timig of related cash flows. Grats are recogized whe grator eligibility requiremets are met. 18

23 (1) Summary ofsigificat Accoutig Policies Cotiued B. Measuremet Focus. Basis of Accoutig, ad Fiacial Statemet Presetatio Cotiued Govermetal fud fiacial statemets report uses the curret fiacial resources measuremet focus ad the modified accrual basis of accoutig. Reveues are recogized whe they are both measurable ad available. Available meas collectible withi the curret period or soo eough thereafter to pay curret liabilities. The Task Force cosiders reveues to be available if they are collected withi 60 days of the ed of the fiscal year. Expeditures are recorded whe the related fud liability is icurred. Major reveue sources susceptible to accrual iclude grats ad ivestmet icome. All grats are reimbursable grats, thus expeditures occur before the request ad receipt of grat icome. Whe both restricted ad urestricted resources are available for use, it is the Task Force's policyto use restricted resources first, the urestricted as eeded. C. Fud Balace Reportig The Govermetal Accoutig Stadards Board (GASB) has issued Statemet No. 54, Fud Balace Reportig ad Govermetal Fud Type Defiitios (GASB 54). This Statemet defies the differet types offud balaces that a govemmetal etity must use for fiacial reportig purposes. pp GASB 54 requires the fud balace amouts to be properly reported withi oe of the fud balace categories listed below: 1) Nospedable, such as fud balace associated with ivetories, prepaids, logterm loas ad otes receivable, adproperty held for resales, 2) Restricted fud balace category icludes amouts that ca be spet oly for the specific purposes stipulated by costitutio, exteral resource providers, or through eablig legislatio, 3) Committed fud balace classificatio icludes amouts that ca be used oly for the specific purposes determied byformal actio ofthe TaskForce'sBoard of Directors (thetask Force's highest level ofdecisio makig authority), 4) Assiged fud balace classificatio are iteded to be used by the govermet for specific purposes but do ot meet the criteria to be classified as restricted or committed, ad 5) Uassiged fud balace is the residual classificatio for the govermet's geeral fud ad icludes all spedable amouts ot cotaied i the otherclassificatios. Committed FudBalacePolicy The Task Force's Committed Fud Balace is fud balace reportig required by the Task Force Board ofdirectors due to motios that they have passed. rsi No such motios or commitmets were made as of Jue30,

24 (1) Summary of Sigificat Accoutig Policies Cotiued C. Fud Balace Reportig Cotiued Assiged Fud Balace Policy The Task Force's Assiged Fud Balace is fiid balace reportig occurrig by Maagemet ofthe Task Force. No such assigmets were made as ofjue 30,2012. Order offud BalaceSpedig Policy The Task Force's policy is to apply expeditures agaist ospedable fud balace, restricted fud balace, committed fud balace, assiged fud balace, ad uassiged fud balace at theed of the fiscal year. First ospedable fud balaces are determied. The restricted fud balaces pem for specific purposes are determied (ot icludig ospedable amouts). The ay remaiig fud balace amouts for the ogeeral fuds are classified as restricted fiid balace. m. It is possible for the ogeeral fuds to have egative uassiged fud balaces whe ospedable amouts plus the restricted fud balaces for specific purposes amouts exceed the positive fud balace for the ogeeral fud. D. Maagemet Estimates The preparatio of fiacial statemets i coformity with accoutig priciples geerally accepted i the Uited States requires maagemet to make estimates ad assumptios that affect the reported amouts of assets, liabilities, reveue ad expeditures. Accordigly, actual results could differ from those estimates. E. Capital Assets. Depreciatio, ad Amortizatio The Task Force's property ad equipmet with useful lives of more tha oe year are stated at historical cost ad comprehesively reported i the govermetwide fiacial statemets. Doated assets are stated at fair value o the date doated. The costs of ormal maiteace ad repairs that do ot add to the asset value ormaterially exted useful lives are ot capitalized. Capital assets are depreciated usig the straightlie method. Whe p? capital assets are disposed, the cost ad applicable accumulated depreciatio are removed from the respective accouts, ad the resultig gai or loss is recorded i operatios. rm Estimated useful lives, i years, for depreciable assets are as follows: Leasehold Improvemets S40 Office Equipmet 57 Ivestigative Equipmet 57 Vehicles 57 fi 20

25 $ (1) Summary ofsigificat Accoutig Policies Cotiued F. Budgets ad Budgetary Accoutig The Task Force follows these procedures i establishig the budgetary data reflected i the fiacial statemets: 1. Prior to commecemet of the fiscal year, the Board of Directors is preseted with a operatig budget for the ext fiscal year commecig July I. The operatig budget icludes proposed expeditures ad the meas of fiacig them. 2. Prior to the first meetig i the ew fiscal year, the budget isadopted for the agecy by vote ofthe Board of Directors. 3. The budget for the Special Reveue Fud is adopted o a basis cosistet with geerally accepted accoutig priciples (GAAP). (2) Stewardship Compliace ad Accoutability By its ature as a govermetal uit, the Task Force is subject to various federal, state, ad local laws ad cotractual regulatios. A. Deposit ad Ivestmet Laws ad Regulatios I accordace with Missouri Statute Chapter 110, deposits of public fuds i excess of FDIC isurace must be secured with collateral securities, as described i Missouri Statute Sectio Collateral securities ad ivestmets are geerally limited to bods or other obligatios issued by or guarateed by the Uited States, ad bods or obligatios ofthe State of Missouri or political subdivisios therei. (3) Cash Deposits ad Ivestmets A. Deposits The Task Force is govered by the deposit ad ivestmet limitatios of state law. The deposits ad ivestmets held at Jue 30,2012 are as follows: Ml #2 #3 Carryig Value Cash Deposits: Demad Deposits $ 290, $ S 260, Ivestmets: Certificates of Deposit 590, , S 880, $ $ $ 850,

26 (3) Cash Deposits ad Ivestmets Cotiued A. Deposits Cotiued Ivestmets made by the Task Force are summarized below. The ivestmets that represet specific idetifiable ivestmet securities are classified as to credit risk by the three categories described below: PI Category #1 Isured or registered, or securities held by the Task Force or its aget i the Task Force's ame. Category #2 Uisured ad uregistered, or securities held by the couterpart>'*s trust departmet or aget i the Task Force's ame. Category #3 Uisured ad uregistered, with securities held by the couter party, or by its trust departmet or aget but ot i the Task Force's ame. B. Custodial Credit Risk Deposits Deposits i fiacial istitutios, reported as compoets of cash, cash equivalets, ad ivestmets, had a bak balace of $880, at Jue 30, 2012, that was fully isured by depository isurace or secured with collateral held by the Task Force's aget i its ame. % C. Ivestmet Iterest Rate Risk The Task Force does ot have a formal ivestmet policy that limits ivestmets' maturities as a meas of maagig its exposure to fair value losses arisig from icreasig iterest rates. D. Ivestmet Credit Risk The Task Force has o ivestmet policy that limits its ivestmet choices other tha the limitatios ofstate law. P (4) Restricted Fud Balace The restricted balace of $923, represets uexpeded federal forfeitures that are limited to the followig permissible uses; activities to ehace future ivestigatios, law eforcemet traiig, law eforcemet equipmet ad operatios, detetio facilities, law eforcemet facilities ad equipmet, drug educatio ad awareess programs, pro rata fudig ad asset accoutig ad trackig. 22

27 (5) Capital Assets A summary ofthe chages i capital assets follows: Balace, July 1, 2011 Office EaulDmet 553, Ivestigatio Eauiomet $404, Leasehold Improv. 54, Vehicles 5507, Total 5970, Additios 26, , , , Deletios 7, , , , , Balace, Jue 30, 2012 $71, , , $454, ,035, Accumulated Depreciatio; Balace, July 1, , , , , $782, Additios 7, , , , Deletios 7, , , , , Balace, Jue 30, 2012 $36, $356, , $395, , Capital Assets, Net $35, $143, $7, , $245, fe) Retiremet Pla The Task Force has a SIMPLE Retiremet pla for employees. Uder the arragemet, employees ca elect to defer from their salary ad the Task Force will match up to 3%. The cost for curret fiscal year was $7, (7) Ecoomic Depedecy The Task Force is reliat o fudig from the local govermetal uits participatig i the agecy i cojuctio with federal grat moies applied for each year. I additio, the Task Force is etitled by curret federal regulatios to receive a portio of ay moey seized or proceedsfrom the sale of property seized by it durig the course ofa ivestigatio or arrest. Chages i the laws cocerigcooperative sharig of seized property, availability of federal fuds or the ecoomy i the area surroudig the govermetal uits could have a adverse effect o the Task Force. mi (8) Risk Maagemet The Task Force is exposed to various risks of loss related to torts; theft of, damage to, ad destructio of assets; errors ad omissios; ijuries to employees; ad atural disasters. The Task Force carries commercial isurace for all risks of loss. 23

28 SIKESTON, MISSOURI GENERAL FUND GOVERNMENTAL FUNDS BALANCE SHEET Jue 30, 2012 Schedule A1 ASSETS Cash Certificate of Deposit Travel Advaces Security Deposit MEMIC Due from Other Fuds Due from COPS Due from State Due from Isurace Compay , , , , , , m Total Assets LIABILITIES AND FUND BALANCE Liabilities Total Liabilities Fud Balace Uassiged Nospedable Restricted for: Travel Advaces Seizure 12, , , Total Fud Balace Total Liabilities ad Fud Balace 940, , F1 See Accompayig Notes to Fiacial Statemets 24

29 .. 10, , , , , , , $ SIKESTON, MISSOURI GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES INFUND BALANCE BUDGET (GAAPBASIS)AND ACTUAL Year Eded Jue 30,2012 Schedule A2 REVENUES Origial Revisios Revised Budget Actual Variace Favorable (Ufavorable! Cooperative Agecy Grats S S s S 27, $ State Seizure Proceeds Seizure Proceeds , , , Grats from HIDTA , , , (214,600.62) Grats from MOSMART Grats from COPS 378, Reimbursemets from OCDETF Iterest Icome Isurace Recovery Miscellaeous Icome Discouts Eared , (275,483.33) 3, , (526.08). 1, , (113.00) Total Reveues s 928, s 76, S 1,005, s 618, S (386,409.33). EXPENDITURES Geeral Persoel s $ S 30, s 30, Overtime 30, , , , iset Frige Beefits 5, , Equipmet 25, , Office Improvemet 20, , , Supplies ad Operatios 18, , , Travel 50, , , , Traiig 5, , pat Cotractual 20, , , , Total Geeral Expeditures s 203, s s 203, s 92, s 110, HIDTA Cotract Employee s S (920.00) S 113, s 38, $ 75, Persoel Overtime 70, , , Equipmet 22, , , , , Ivestigative/Operatioal 23, (9,837.03) 13, , , Facilities Office Ret 6, , , , p Supplies , , , , Travel , , , , Software Liceses , , , Services 125, , , , , Total HIDTAExpeditures s s 76, $ 456, s 242, s 214, See Accompayig Notes to Fiacial Statemets 25

30 SIKESTON, MISSOURI GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BAUNCE BUDGET (GAAP BASIS)AND ACTUAL Year Eded Jue 30,2012 Schedule A2 Cotiued EXPENDITURES Cotiued Origial Revisios Revised Budflet Actual Variace Favorable MOSMART Persoel Overtime Frige Beefits Other Costs $ 13, SOO.OO (17.50) S 13, , , S 13, , !~'1 Total MOSMART $ 35, $ 0.00 S 35, S 35, $. COPS ri Persoel Frige Beefits Overtime Equipmet Supplies & Operalios Travel Cotractual S 14, S 2, , , , , s 14, $ 2, , , , , , S 2, , , , (74.43) 246, , , , Total COPS S 378, S s 378, $ 103, $ 275, Total Expeditures S 997, S 76, $ 1,074, $ 473, S 600, Excess (Deficiecy) of Reveues over Expeditures s (69,140.00) S S (69,140.00) $ 144, $ rm OTHER FINANCING SOURCES fusesi Proceeds from Sale of Asset Operatig Trasfers s S ( ) S S (74,404.01) 5, $ ( ) 5, (6,063.95) 1 Total Other Fiacig Sources (Uses) s (74,404.01) S $ (74,404.01) S (74,872.96) $ (468.95) Excess (Deficiecy) of Reveues ad Other Fiacig Sources over Expeditures ad Other Fiacig Uses s ( ) S s (143,544.01) S 70, $ 213, pi Fud Balace at begiigof the year 869, , , Fud Balace at ed of the year s 726, S s 726, S 940, S 213, See Accompayig Notes to Fiacial Statemets 26

31 SIKESTON, MISSOURI EDICT GRANT FUND GOVERNMENTAL FUNDS BALANCE SHEET Jue 30,2012 Schedule B1 ASSETS Cash $ 55, Due from State 34, I ' Total Assets $ LIABILITIES AND FUND BALANCE Liabilities Due toother Fuds $ 89, ' Fud Balace Uassiged Total Liabilities ad Fud Balace $ r\ ri See Accompayig Notes to Fiacial Statemets 27

32 $.. s s s SIKESTON, MISSOURI EDICT GRANT FUND STATEMENT OF REVENUES. EXPENDITURES, ANDCHANGESIN FUND BALANCE BUDGET(GAAP BASIS) ANDACTUAL Year Eded Jue 30, 2012 Schedule B2 Origial Budget Revisios Revised Budget Actual Variace Favorable (Ufavorablel pi REVENUES Federal Operatig Grats S S 94, S 295, $ 293, S (2,026.65) Total Reveues s $ S $ 293, S (2,026.65) r» EXPENDITUfES Persoel $ s S 181, S 173, S 7, P"I Overtime , , , Frige Beefit , , , Travel ( ) 23, , (618.00) Supplies ad Operatios , , (10,434.28) Cotractual , , Total Expeditures s s 101, S 377, s 374, $ 2, Excess (Deficiecy)or Reveues over Expeditures s ( ) S (6,739.49) $ (81,143.50) $ ( ) S PI OTHER FINANCING SOURCES rusesi Trasfer I from Geeral $ $ 6, S 81, $ $ (675.54) Total Other Fiacig Sources (Uses) s s 6, S 81, s 80, $ (673.54) Excess (Deficiecy)of Reveues ad Other Fiacig Sources over Expeditures ad Other Fiacig Uses $ S S Fud Balace at begiig of the year. Fud Balace at ed of the year s s s _ f«p See Accompayig Notes to Fiacial Statemets 28

33 CKSSacPA"""'"" JEFFREY J.MILES. C.P.A. BUCHER, ESSNER AND MILES, LLC. CERTIFIED PUBLIC ACCOUNTANTS 205 West Maloe Ave Suite H P.O. Box 745 Sikesto. Missouri F»,=73,47,,,4 Missouri Society of C.PA's August 28, 2012 REPORTON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPMANrP. AND OTHER MATTRRS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITOslG STANDARDS Board ofdirectors ad Members Southeast Missouri DrugTaskForce Sikesto, Missouri p, We have audited the fiacial statemets of the govermetal activities, the geeral fud ad special reveue fud of the Southeast Missouri Drug Task Force, as of ad for the year eded Jue 30, 2012, which collectively comprise the Southeast Missouri Drug Task Force's basic fiacial statemets ad have issued our report thereo dated August 28, We coducted our audit i accordace with geerally accepted auditig stadards ad the stadards applicable to fiacial audits cotaied i Govermet Auditig Stadards, issued by the Comptroller Geeral of the Uited States. Iteral Cotrol Over Fiacial Reportig Maagemet ofthe Southeast Missouri Drug Task Force, is resposible for establishig ad maitaiig effective iteral cotrol over fiacial reportig. I plaig ad performig our audit, we cosidered Southeast Missouri Drug Task Force's iteral cotrol over fiacial reportig as a basis for desigig our auditig procedures for the purpose of expressig our opiio o the fiacial statemets, but ot for the purpose of expressig a opiio o the effectiveess ofthe Southeast Missouri Drug Task Force's iteral cotrol over fiacial reportig. Accordigly, we do ot express a opiio o the effectiveess ofsoutheast Missouri Drug Task Force's iteral cotrol over fiacial reportig. ' A deficiecy i iteral cotrol exists whe the desig or operatios of a cotrol does ot allow maagemet or employees, i the ormal course ofperformig their assiged fuctios, to prevet, detect ad correct misstatemets o a timely basis. A material weakess is a deficiecy, or combiatio of deficiecies, i iteral cotrol such that there is areasoable possibility that amaterial misstatemet of " the etity's fiacial statemets will ot be preveted, or detected ad corrected o atimely basis. Our cosideratio ofthe iteral cotrol over fiacial reportig was for the limited purpose described i the first paragraph of this sectio ad was ot desiged to idetiiy all deficiecies i iteral cotrol over fiacial reportig that might be deficiecies, sigificat deficiecies or material weakesses. Wedid ot idetify ay deficiecies i iteral cotrol over fiacial reportig that we cosider to be material weakesses, as defied above. Compliace ad Other Matters As part of obtaiig reasoable assurace about whether the Southeast Missouri Drug Task Force fiacial statemets are free ofmaterial misstatemet, we performed tests ofits compliace with certai provisios of laws, regulatios, cotracts, ad grat agreemets, ocompliace with which could have a direct ad material effect o the determiatio offiacial statemet amouts. However, providig a opiio o compliace with those provisios was ot a objective ofour audit, ad accordigly, we do ot express such a opiio. The results of our tests disclosed o istaces of ocompliace that are required to be reported uder Govemmem Auditig Stadards. 29

34 This report Is iteded solely for the iformatio ad use ofthe audit committee, maagemet ad federal awardig agecies ad is ot iteded to be ad should ot be used by ayoe other tha these specified parties. Respectfully submitted. Certified Public Accoutats f1 30

35 BUCHER, ESSNER AND MILES, L.L.C. CERTIFIED PUBLIC ACCOUNTANTS 205 West Maloe Ave Suite H P.O. Box 745 Ft ROBERT P. ESSNER. C.P.A. Fax (573) Members of JtREY JEFFREY J. MILES. CPA C.P.A. Missouri America Sociely Istitute of C.PA'8 ad August 28, 2012 INDEPENDENT AUDITOR'S REPORT ON COMPLlANrE WITH RKOiREMENTS THAT COULD HAVE ADIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM ANH QN INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH QMB CfRCl JI.AR AHt Board of Directors ad Members Southeast Missouri DrugTask Force Sikesto, Missouri Compliace We have audited the Southeast Missouri Drug Task Force's compliace with the types ofcompliace requiremets described i the US. Ojfice ofmaagemet ad Budget (0MB) Circular A133 Compliace Supplemet that could have adirect ad material effect o each ofsoutheast Missouri Drug Task Force's major federal programs for the year eded Jue 30, Southeast Missouri Drug Task Force's major federal programs are idetified i the summary of auditor's results sectio ofthe accompayig schedule offidigs ad questioed costs. Compliace with the requiremets of laws, regulatios, cotracts ad grats applicable to each of its major federal programs is the resposibility of Southeast Missouri Drug (1 Task Force's tyiaagemet. Our resposibility is to express a opiio o Southeast Missouri Drug Task Force's compliace based o our audit. p, We coducted our audit ofcompliace i accordace with auditig stadards geerally accepted i the Uited States ofamerica; the stadards applicable to fiacial audits cotaied i Govermet Auditig Stadards, issued by the Comptroller Geeral of the Uited States; ad OMB Circular A133, Audits of States, Local Govermets, ad NoProfit Orgaizatios. Those stadards ad OMB Circular A133 require that we pla ad perform the audit to obtai reasoable assurace about whether ocompliace with the types of compliace requiremets referred to above that could have a direct ad material effect o a major federal program occurred. A audit icludes examiig, o a test basis, evidece about the Southeast Missouri Drug Task Force's compliace with those requiremets ad performig such other procedures as we cosidered ecessary i the circumstaces. We believe that our audit provides a reasoable basis for our opiio. Our audit does ot provide a legal determiatio o the Southeast Missouri Drug Task Force's compliace with those requiremets. m I our opiio, Southeast Missouri Drug Task Force, complied, i all material respects, with the compliace requiremets referred to above that could have a direct ad material effect o each of its major federal programs for the year eded Jue 30,2012. m Iteral Cotrol Over Compliace Maagemet ofthe Southeast Missouri Drug Task Force is resposible for establishig ad maitaiig effective iteral cotrol over compliace with requiremets of laws, regulatios, cotracts ad grats applicable to federal programs. I plaig ad performig our audit, we cosidered the Southeast Missouri Drug Task Force's iteral cotrol over compliace with the requiremets that could have a direct ad material effect o a major program to determie the auditig procedures for the purpose of expressig our opiio o compliace ad to test ad report o iteral cotrol over compliace i 31