W ILLIA M D.ED W A RD S,CPA. H odge Fire Protection D istrict#1 G eneralpurpose FinancialStatem ents Forthe Y earended A ugust31,2001

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1 H odge Fire Protection D istrict#1 G eneralpurpose FinancialStatem ents Forthe Y earended A ugust31,2001 W ILLIA M D.ED W A RD S,CPA A CO RPORATION 206 REYNOLDS D RIVE,SUITE G -2 RUSTO~I,LOUiSiANA 7 t2"/0

2 H odge Fire Protection D istrict#1 G eneralpurpose FinancialStatem ents Forthe Y ear Ended A ugust31,2001 TA BLE O F CON TEN TS IndependentA uditor'sr eport Balance Sheet Statem eut Page! Com bined Statem entof R evenues, ExpendituresA nd Changesin Fund Balances-Budgetand A ctual-ga AP Basis N otes to FinancialStatem ents B Schedule Page REQUIRED SUPPLEM ENTAL DATA IndependentA uditor'sr eporton Com pliance and o l InternalControlO verfinancialreporting Based O n an A uditof FinancialStatem entsperform ed in A ccordance w ith G overnm enta uditing Standards Schedule of Findingsand Questioned Costs Sum m ary of PriorY earfindings Correclive A ction Plan 10-1l

3 W ILL IA M D. E D W A R D S Certified Public A ccountant A ProfessionalAccounting Corporation M em ber: AICPA /Society of LCPA'S To the B oard M em bers H odge Fire Protection D istrict#1 Qtlilmat~,LA IND EPEN D EN T A U D ITO R 'S REPORT lhave audited the accom panying financialstatem entsof the H odge Fire Protection D istrict#1asof and for the year ended A ugust31,2001,as listed in the table of contents.these financialstatem ents are the responsibility of the district.m y responsibility isto expressan opinion on these financialstatem entsbased on m y audit. 1conducted nay auditin accordance w ith generally accepted auditing standards and generally accepted governnaentalauditing standards contained in the G overnm enta uditing Standards-StandardsforA uditof G ovennnentalo rganizations,program s,a ctivities,aud Functions,issued by the Com ptrollerg eneraloflhc U nited States. Those standardsrequire thatiplan and perform the auditto obtain reasonable assurance aboutwhetherthe financialstatem entsare free of m aterialm isstatem ent.a n auditincludesexam ining,on a lestbasis,evidence supporting the am ountsand disclosuresin the financialstatem ents. A n auditalso includesassessing the accounting principlesused and significantestim atesm ade by m anagem ent,asw ell asevaluating the overallfinancialstatem entpresentation.ibelieve thatnay auditprovidesa reasonable basis form y opinion. In m y opinion,the financialstatem entsreferred to above presentfairly,in m aterialrespects,the financial position of the H odge Fire Protection D istrict# 1asof A ugust31,2001,and the resultsof itsoperationsand January 31, Reynolds Drive ~ Suite G -2 Ruston,Louisiana ~ FAX: AntareslDrive Bastrop,Louisiana ~ FAX :318-28%3814

4 H odge Parish Fire D istricl#1 Colnbined B alance Sheet-A llfund Types and A ceounlg roups A s of A ugusl31,2001 Statem enta A SSET S C ash and equivalents A ceom lls receivable -fire fees O therassets G eneralfixed A ssets A m ounlavailable forrelirem ent of Iong-lerm debl TOTA L A SSETS I.IAlllI.ITIES & FUN I)F.Q U1TY l.iabiblies: A ccountspayable N olcspayable -Iong-lcnn debt lqm d l~quily: lnvcstm enlin generalfixed assels Fund balance: R eserved for den service U nreserved -tm designaled Totalfund equily G overnm ental Fur~d Type D ebt G eneral Service Fund Fund $19,295 $551 9, A ceotlnlg rouos G eneral G eneral Fixed I,ong-Telm (M em o) A ssets l)cbl Totals $108,864,28,48 _~8 L $55 $108,864, _ $2,122.~ 366._ 26,366 $108,864 $28,002 $28,002 $28,002 $19,846 9, ,864 28,002 $165,905 $2,122 28, ,864 $ , , ,781 TOTAl,13ABILIrI'II'~S AND FUND EQUITY $2 8,488._ $ '.551 $.108,86_4_..$28,00 _~2. $1 65, Sec accom panying audilor'sreportand notesto lhe financialstatem ents

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6 tiodge Fire Protection D istrict# 1 N otesto FinancialStatem ents Forthe Y ear Ended A ugust31,2001 IN T R O D U C TIO N Thel]odgeParish Fire District#1("District")wasorganized in April,1996 asapoliticalsubdivision of Jackson Parish to provide fire protection and service to the residentsof the D istrict. There are five board m em bersw ho are elected by the residentsof the district. The board m em bersarc com pensated forattending m eetings. There are rio em ployeesof the district. The accounting and reporting practicesof the D islrictconform to generally accepted accounting principles. The G ovennnentala ccounting Standards B oard prescribes generalaccepted accounting principles for govern m ents. The D istrict's accounting and reporting procedures also confom ato the reqtdrcm cnlsof Louisiana Revised Statue 24:517 and to the guides setforth in lhe "Louisiana M unicipala uditand A ccounting G uide",and to the industry auditguide,a uditsof State and LocalG overn m entalu nits. 1. SU M M A R Y O F SIG N IFIC A N T A C C O U N TIN G PO LIC IES A. BA SIS O F PR E SE N TA T IO N The accom panying generalpurpose financialstatem entsof the tlodge Parish Fire D istricti~lhave been prepared in conform ity with generally accepted accounting principles (GAAP) as applied to govern mentalunits.the GovermnentalAccounting StandardsBoard (GASB)isthe accepted standardsetting body for established govern m entalaccounting and financialreporting principles. B. FU ND A C C O U N TIN G The districtuses funds and accountgroups to reporton its finmacialposition and the rcstdls of its operations. Fnud accounting is designed to dem onstrate legal com pliance and to aid financial m anagem entby segregating transactionsrelaling to certain govern m entfunctionsoractivities. A fire d is a separate accounting entity w ith a self-balancing setof accounts. O n the otherhand,an accountgroup isa financialreporting device designed to provide accountability forcertain assetsand liabilitiesthatare notrecorded in the fundsbecause they do notdirectly affectnetexpendable available financialresources. Fundsof the districtare classified asgovernm entalfunds.g overnm entalfundsaccountforthe district's generalactivities,including the collection and disbursem entof specific orlegally restricted m onies,thc acquisition or construction of general fixexl assets,and the servicing of general long-term debt. G overnm entalfunds of the districtinch de: 1. G eneralfund-the generaloperating fund of the districtand accountsforallfinancialrcsourccs, exceptthose required to be accounted forin otherfunds.

7 H odge Fire Protection D istrict# 1 N otesto FinancialStatem ents Forthe Y earended A ugust31,2001 D ebtserviee fund -accountsfortransactionsrelating to resourcesretained and used forthe paym entof principaland intereston those long term generalobligationsrecorded in the general long-term debtaccountgroup. C. BA SIS O F A C C O U N T IN G The accounting and financialreporting treatm entapplied to a fund isdeterm ined by itsuaeasnrem ent focus.thegovem m entalfunds are accounted forusing a currentfinancialresourcesm casm'cm enlfocus. W ith thism easurem entfocus,only currentassetsand currentliabilitiesare generally included on the balance sheet.o perating statem entsof these tiandspresentincreasesand decreasesin netcurrentassets. The m odified accrualbasisof accounting isused by the govern m entalfunds.the governm entalfunds use the follow ing practicesin recording revenuesand expenditures: R evenues Revenuesare recognized w hen they becom e m easurable and available asnetcurrentassets.fire fees are considered "m easurable" w hen in the handsof collecting governm entsand are recognized as revenue atthattim e.a nticipated refundsof such taxesare recorded asliabilitiesand reductionsof revenue w hen they are m easurable and theirvalidity seem scertain. E xpenditures Expendituresare generally recognized underthe m odified accnaalbasisof accounting w hen the related fund liability is incurred.a s exception to this generalrule is principle and intereston long term debtis recognized w hen due. OtherFinancing Sources(Uses) Transfersbetween fundsthatare notexpected to be repaid (and any otherfinancing source/use)are accounted forasotherfinancing sources(uses). D. BU D G ETA R Y D A T A The districtusesthe follow ing budgetpractices The districtadopted abudgetforthe fiscalyearended A ugust31,2001fortheg eneralfund.thedistriel follow sthe follow ing proceduresin establishing the budgetary data reflected in the financialstatem ents. 1)uring the A ugustm eeting,the chairm au subm itted to the board m em bersa proposed opcraling budget forthe fiscalyearcom m encing the follow ing Septem ber 1. The operating budgetincludesproposed expendituresand the m eansof financing them. D uring the A ugustm eeting,the budgetw as legally enacted through passage of an ordinance. The public isinvited to attend allm eetings. The chairm an isauthorized to transferbudgeted am ountsbetw een departm entsw ithin any fund;how ever,any revisions thatalterthe totalexpendituresof any fund m ustbe approved by the board m em bers. Appropriations lapse atthe end of the year. There w asone am endm entto the originalbudget.

8 H odge Fire Protection D istrict#1 N otesto FinancialStatem ents Forthe Y earended A ugust31,2001 E. CASItAND CASH EQUIVALENTS F. FIX ED A SSETS Fixed assetsare recorded asexpendituresatthe tim e purchased o1constructed, and the related assets arc capilalized (reported)in the generalfixed assetsaccountgroup.public dom ain orinfi'astructuresare1ol capitalized.interestcostsincurred during construction are (are not)capitalized.no depreciation has been provided o lgeneralfixed assets, A llfixed assets are valued athistoricalcostsorestim ated cost if hisloricalcostisnotavailable. G. I.O N G -T ER M O B L IG A T IO N S 1t.FUND EQUITY R eserves Reserves represent those portions of fund equity not appropriable for expenditure or legally segregated for a specific future use. D esignated Fund B alances D esignated fund balancesrepresenttentative plansforfuture use of financialresources T O T A l.c O LU M N S O N ST A T EM EN T S

9 H ed ge Fire Protection D istrict# 1 N otesto FinancialStatem ents For the Y ear Ended A ugust31, C A SItA N D IN V ESTM EN TS AtAugust31,2001,the Districthascash and cash equivalents(book balances)totaling $19,846 asfollows D em and deposits Tim e deposits Total $19, $19,846 These depositsare stated atcost,w hich approxim atesm arket. Understate law,these deposits(orresuhing bankbalances)mustbesecured by fed eraldepositinsurance orthepledgeofsecuritiesowned by thcfiscal agentbank.the m arketvalue of the pledged securitiesplusthe federaldepositinsurance m ustatalltim es equalthe am ounto ldepositw ith the fiscalagent. These securitiesare held in the nam e of the pledging fiscalagentbank in a holding orcustodialbank thatism utually acceptable to both parties. A ta ugust31, 2001,theDistricthas$19,933in deposit(collected bank balances).thesedepositsaresecuredfiom risk by $19,933 of federaldepositinsurance held by the custodialbauk in the nam e of the fiscalagentbank. (GASB Category 3). Even though thepledged securitiesareconsidered uncolateralized (Category 3)undertheprovisionsof GA SB Statem entn o.3,louisiana Revised Statute 39:1229 im posesa statutory requircm cnton the custodial bank to advertise and sellthe pledged securitiesw ithin 10 daysof being notifled by the districtthatthe fiscal agenthasfailed to pay deposited fundsupon dem and. 3. PROPERTY,PLANT AND EQUIPM ENT A sum m ary of changesin generalfixed assetsfollow s Building and lot V ehicles Equipm ent Total A ugust31, 2000 $15,206 73, A dditions D eletions (3,500) A ugust $15,206 69, $ _!12,364 $0_ ($3,500) ~$108,864 _ 4. C ItA N G ES IN L O N G -T ER M O BLIG A TIO N S The follow ing isa sum m ary of long-term obligation transactionsduring the year D ebto utstanding ata ugust31,2000 A dditions R etirem ents D ebto ulslanding ata ugust31,2001 $44,861 (16,859) $28,002

10 H odge Fire Protection D istrict#1 N otesto FinancialStalem ents Forthe Y earended A ugust31,2001 The annualrequirem entsto reduce the debtoutstanding asof A ugust31,2001including intcrcslpaym ents of $6,472 are asfollow s: Y earending A ugust Total $19, SU M M A R Y D ISC L O SU R E O F SIG N IFIC A N T C O N TIN G EN C IES There are no pending orthreatened litigation atthistim e asadvised by the D istrict'sattorney

11 REQUIRED SUPPLEM ENTAL INFORM ATION

12 W IL L IA M D. E D W A R D S Certified Public A ccountant A ProfessionalAccounting Corporation M em ber: AICPA /Society of LCPA 'S R EPO R T O N C O M PLIAN C E A N D O N IN TERN A L CO N TR O L O V ER FIN A N CIA L R EPO R TIN G BA SED O N A N A U DIT O F FIN A N C IA L STA TEM EN T S PER FO R M ED IN A C C O R D A N C E W ITH G O VERN M EN T A UD ITIN G STA NDARD S To the B oard M em bers H odge Fire Protection D istrict#1 Quitman,LA lhavc audited the generalpurpose financialstatem entsof the H odge Fire Protection D istrict#1asof and forthe yearended A ugust31,2001,and have issued nay reportthereon dated January 31,2002.]conducted m y auditin accordance w ith generally accepted auditing standardsand the standardsapplicable to financial auditscontained in G overnm enta uditing Standards,issued by the Com ptrollerg eneraloftheu nited States. Cotnpliance A spartof obtaining reasonable assurance abou!w hetherh odge Fire Protection D istricl# 1'sgeneralpurpose financialstatem ents are free of m aterialm isstalem ent,iperform ed testsof its com pliance w ith certain provisionsof law s,regulations,contractsand grants,noncom pliance w ith w hich could have a directand m aterialeffecton the determ ination of financialstatem entam ounts. H ow ever,providing an opinion on compliance with thoseprovisionswasnotan objectiveof my auditand,accordingly,ido notexpresssuch at~opinion.the resultsof m y testsdisclosed no instancesof noncom pliance thatare required to be reported under G overnm enta uditing Standards'. tem alcontrolo ver FinancialR eoortinu In planning and perform ing m y audit,iconsidered H odge Fire Protection D istrict~t1's internalcontrolover financialreporting in orderto delennine m y auditing proceduresforthe purpose of expressing m y opinion on the genera]purpose financialstatem ents and notto provide assurance on the internalcontrolover financialreporting,ltow ever,1noted a certain m atterinvolving the internalcontroloverfinancialreporting and itsoperation thaticonsiderto be a reportable condition.r eportable conditionsinvolve m atters cotning to nay attention relating to significantdeficienciesin the design oroperation of the internalcontrolover financialreporting thai,in my judgment,could adversely affecthodgefireproteetion District#1'sability to record,process,sum m arize,and reportfinancialdata consistentw ith the assertionsofm anagem eniin the generalpuq~ose financialstatem ents.the reportable condition isdescribed in the accom panying schedule of findingsand questioned costsasitem 01-I. 206 ReynoldsDrive ~ Suite (3-2 Ruston,louisiana ~ FAX: Antare~ rive Bastrop,Louisiana FAX :

13 A m aterialw eakness isa condition in w hich the design oroperation of one orm ore of the internalcontrol componentsdoesnotreduce to a relatively low leveltherisk (hatmisstatementsin amountsthatwould be m alerialilrelation to the generalpurpose financialstatem entsbeing audited m ay occurand notbe detected w ithin a tim ely period by em ployees in tile nolm alcourse of performing their assigned functions. M y consideration of the intern alcontroloverfinancialreporting w ould notnecessarily disclose allm atters in the intern alcontrolthatm ightbe reportable conditionsand,accordingly,w ould notnecessarily disclose all reportable conditionsthatare also considered to be m aterialw eaknesses.h ow ever,ibelieve none of the reportable conditions described isa m aterialw eakness. Thisreportisintended forthe inform ation of the H odge Fire Protection D istrictill,the Legislative A uditor, and any interested state agenciesand isnotintended to be and should notbe used by anyone otherthan these specified parties. Ruston,Louisiana Janua~7 31,2002

14 1lodge Fire Protection D istrict#1 Schedule offindingsand Questioned Costs Forthe Y earended A ugust31,2001 Schedule 1 lhave audited the financialstatem entsof H odge Fire Protection D istrict#1asof and forthe yearended A ugust31,2001,and have issued m y reportthereon dated January 31, conducted m y auditin accordance w ith generally accepted auditing standards and the standards applicable to financialaudits contained in Governm entauditing Standards,issued by the Com ptrollerg eneralof the U nited States.M y auditof the financialstatem ents asof A ugust31,2001resulted in an unqualified opinion. A. Sum m ary of A uditresults 1. Reporton lnternalcontroland Com pliance M aterialto the FinancialStatem en~,s InternalC ontrol M aterialw eaknesses _ Y es X N o Reportable X Y es _ N o Com pliance Com pliance M aterialto FinancialStatem ents I Y es X N o 2. FederalA w ards InternalC ontrol M aterialw eaknesses _ Y es._ X _ N o R eportable _ Y es N" N o Type of Opinion O n Com pliance U nqualified _ ForM ajorprograms Disclaimer _ Qualified _ A dverse Are theirfindingsrequired to bereported in accordancewith CircularA-133,Section.510(a)? I Y es X N o 3. Identification of M ajorprograms CFDA Number(s) Name offederalprogram (orcluster) N /A Dollarthreshold used to distinguish between Type A and Typ e B Program s: $ 300,000 lsthe audited a "low -risk" audited,asdefined by O M B CircularA-133? _ Y es X N o

15 g FinancialStatem ents Findings Finding:The districtdoesnotcom ply w ith the approved tax proposition forbilling properly ow ners. The effectoflhis noncom pliance is a lack of intern alcontroloverbilling for fire fees. The cause of this issue is there is no listing of parcelow ners in the districl. The districthas utilized several differentsurrounding w ater districts,e911 districts,and tow ns lists to obtain it's custom er list. Periodically,the dislrictw illcallupon the parish assessorlo determ ine ira potentialland ow neris in il's district. R ec om m endation:1 recom m end the D istrict use allnecessary resources to research the legal description to delerm ine w ho ow nsproperty and billthem accordingly. R esponse:w e are doing ourbestlo lake care of thisproblem through ourboard and ourattorney. A s w e have stated before thatw e do notdepend alltogetheron E911,w aterdepartm ents, nor tow n lists forallof ourbilling,w e have a tax record from tbe tax office althe courthouse w hich has property descriptionson those w ho ow n property.som etim esthisrecord book hasm istakesin itand w e have m ailed a letterto allof ourresidentsasking them to please letusknow iflhey ow n the house orproperly. W e cannotgelthe people to answ erthe letterw hich leavesusup in the airas w ha!to do and w ho to bill.forthe tax w e had aboutone-third of the people in ourdistrictthatdid notvote for the lax,therefore,lhese are m ostly the ones thatgive us the m osttrouble. W e feelthat ourinternalpeople are in controlasnm ch asilcan possibly be. C. FederalAward Findingsand Questioned Costs N one

16 H odge Fire Protection D istrict#1 Sum m ary of PriorY earfindings For the Y ear]ended A ugust31,2001 Schedule 2 A. IN TERN A L CON TRO L A ND COM PLIA N CE M ATERIAL TO TH E FIN AN CIA L STA TEM EN TS Finding:Forthe yearended A ugust31,2000,the D istrictdid 1o1adopta budget. R ecom m endation: 1recom m end the D istrictform ally approve an annualbudgetand reflectlhal approvalin the m inutesof the board m eetings. Conclusion: Resolved Finding:The D istrictineorrectlybilled residentsand/orcom m ercialstructuresinstead of each parce Recom m endation:irecom m end the D istriclrequestfrom the Tax A ssessoran updaled listof the parcelow nerslocated in the fire districtand billfrom thatlist. Conclusion: R esolved B. INTERN A L CON TRO L A N D COM PLIAN CE M A TERIAL TO FED ER AL A W A RD S N one C. M AN A G EM EN T LETTER N one 14

17 H O D G E FIR E PR O T E C T IO N D IST R IC T #1 366 PIN E H IL L R O A D QUITM AN,LA CORRECTIV E A CTION PLAN Forthe Y earended A ugust31,2001 l:iodge Fire Protection D istrict# 1hereby subm itsthe follow ing corrective action plan regarding the findings in the auditforthe yearending A ugust31, See Schedule of Findingsand Questioned Costs-Section B 15

V ernon Parish Tax Agency Fund O f the V ernon Parish SchoolBoard Leesville,Louisiana. FinancialStatem ents A s of and for the Year Ended June 30,2002

V ernon Parish Tax Agency Fund Leesville,Louisiana FinancialStatem ents A s of and for the Year Ended June 30,2002 IND EPEND EN T A UD ITO R S'REPORT FIN AN CIAL STA TEM EN TS Statem entof A ssets and