VILLAGE OF EAST H O DG E EastH odge,louisiana

Transcription

1 VILLAGE OF EAST H O DG E G eneralpurpose FinancialStatem ents W ith A ccountant's C om pilation Report And A greedu pon Procedures R eport As of an d For the Y ear Ended June 30,2003 W ith Supplem entalinform ation Schedules

2 V ILLA G E OF EA ST H OD G E G eneralpurpose FinancialStatem ents W ith A ccountant's C om pilation Report A nd A greedu pon Procedures Report A sof and Forthe Y earended June 30,2003 W ith Supplem entalinform ation Schedules C O N T E N T S Statem ent Page N o Accountant 's Com pilation R eport 3 G eneralpurpose FinancialStatem ents: Com bined Balance SheetA llfund Types and A ccountg roups G overnm entalfund Type: Statem entof Revenues,Expenditures and Changes in Fund Balan ces G overnm entalfund Type G eneralfund: Statem entof Revenues,Expenditu res, and Changesin Fund BalancesBudget (GAAP Basis)and Actual A B 6 C 7 Proprietary Fund Type W aterand Sew er Enterprise Fund Sta tem entof Revenues,Expenses, and Changes in Retained Earnings Statem entof Cash Flow s N otesto th e FinancialStatem ents Supplem entalinform ation Schedules: Schedule of Com pensation Paid A lderm en D 8 E 9 10 Schedule Page No 1 22

3 VILLA G E OF EA ST H OD G E Contents,June 30,2003 C O N T E N T S (CONTD.) SupplementalInform ation Schedules(Contd): Sum m ary Schedule of PriorY earfindings C orrective A ction Plan forcurrenty earfindings Accountant'sR eporton A pplying A greedu pon Procedures Louisiana Attestation Questionnaire Schedule Page No

4 C E R T IF IE D P U B L IC A C C O U N T A N T 369 D ONALDSO N R OAD ~ C ALHOUN,LOUISIANA T ELEPHONE 318/ A ccountant'sc om pilation R eport M A Y O R A N D BO A RD OF A LD ERM EN VILLA G E O F EA ST H O D G E Ihave com piled the accom panying generalpurpose financialstatem ents and supplem ent alinform ation schedules,aslisted in the foregoing table of contents,of the V illage of EastH odge asof June 30, 2003, and fortheyearthen ended,in accordancewith standardsestablished by Statementson Standardsfor Accounting and Review Services issued by th e A m erican Institute of Certified Public A ccountants. A com pilation islim ited to presenting in the form of financialstatem entsand schedulesinform ation that isth e representation of m anagem entof th e V illage of EastH odge. Ihave notaudited orreviewed the accom panying generalpurp ose fina ncialsta tem entsand schedules and, accordingly,do notexpress an opinion orany oth er form of assurance on them. In accordance w ith the Louisiana Governm entalauditguide and th e provisionsof state law, Ihave issued a reportdated D ecem ber 19,2003,on the resultsof m y agreedupon procedures. Calhoun,Louisiana D ecem ber 19, M EM BER OF THE A MERICAN INSTITUTE OFCERTIFIED PUBLIC A CCOUNTANTS M EM BER OF THE SOCIETY OF LOUISIANA CERTIFIED PUBLIC ACCOUNTANTS

5 G ENER A L PUR PO SE FIN AN C IAL STA TEM E N TS ~4

6 V ILLA G E O F EA ST H O D G E EastIlodge,Louisiana ALL FU ND TYPES AN D ACCO U NT GRO UP Statem enta Com bined Balance Sheet,June 30,2003 ASSETS C urrentassets: Cash Investm ents Receivables Totalcurrentassets W atersystem plantand equipm ent (netofaccumulated depreciation) Land,buildings,and equipm ent TOTA L A SSETS LIABILITIES AND FUND EQUITY Liabilities: Currentliabilities: Bank overdraft A ccountspayable Custom erm eterdeposits Totalcurrentliabilities Longterm liabilities revenue bondspayable TotalLiabilities Fund Equity: Investm entin generalfixed assets Contributed capital Retained earningsunreserved undesignated (defici0 Fund balance unreserved undesignated TotalFund Equity TOTAL LIABILITIES AND FUND EQUITY PROPRIETARY FUN D TYPE ACCOUNT GOVERNM ENTAL W ATER AN D GROUP FUND TYPE SEW ER GENERAL TOTAL GENERAL ENTERPRISE FIXED (M EM ORANDUM FUND FUND ASSETS ONLY) $2, $2,853 6,126 2~ ,834 N O N E $5,479 6,126 3~ , $3,928 $114 _..._.._ ~, 290 $844,024 $ $ $4 2,576 7, ,070 (28,352) N O N E N ON E $844,024 $4 3,253 7, , (28,352) , , ,993 $3,92._..~8 $114,290 $844,024 $962,242 See accom panying notesand accountant'scom pilation report 5

7 VILLAGE OF EA ST H OD GE GOVERNM ENTAL FU N D TYPE St~ em em B Com bined Statem entofrevenues,expenditures and Changesin Fund Balances Forthe Y earended June 30,2003 CAPITAL GENERAL PROJECTS TOTAL (M EM ORA NDUM FUND FUND ONLY) REV EN UES Taxes: A d valorem Sa~es Franchise Occupationallicenses Inkiergo~ernm em alre'~enues'. Federalgrant State grant Fin es U se of m oney and property rent O therrevenues Totalrevenues $790 2,504 3,326 4, ,332 $15, $790 2,504 3,326 4,102 15, , EXPENDITURES G eneralgovernm entcurrent: Personalservicesand related benefits Operating services M aterialsand supplies Facilitiesacquisition and construction Totalexpenditures 4,574 8,500 1, O2 15, ,574 9,402 1, EXCESS (Deficiency)O~ REVENUES OVER EXPENDITURES 414 (8). OTHER FINANCING SOURCES (USES) Operating transferin Operating transferout Totalotherfinancing sources(uses) 1,000 (946) ,075 (946) 129 EX CESS O F RE VENUES AND O THE R SO UR CES OVE R EXPEND ITURES AND O THE R U SES FUND BALANCES AT BEGINNING OF YEAR (67) FUND BALANCES AT END O F YEAR N O N E See accom panying notesand accountant'scom pilation report.

8 V ILLAG E O F EA ST H O D G E GO VERNM ENTA L FU ND TYPE GEN ERAL FU N D Statem entc Statem entof Revenues,Expenditures, and Chan gesin Fulad BalancesBudget (GAAP Basis)and Actual Forthe Y earended June 30,2003 VARIA NCE FAVORABLE (UNFAVORABLE) RE VENU ES Taxes: Ad valorem Sales Franchise Occupationallicenses Fines U se of m oney and property rent Or.herrevenues Totalrevenues $1,500 2,000 5,000 3, $790 2,504 3,326 4, ($710) 504 0,674) 702 4O EXPEND ITURE S Generalgovernm entcurrent: Personalservicesand related benefits Operating services M aterialsan d supplies Totalexpenditu res 4,800 5,950 3, ,574 8, (2,550) EXCESS (Deficiency)OF REVE NUES O VER EXPEND ITURES 1.400) OTHER FINANCING SOURCES (USES) Operating transferin Operating transferout Totalotherfinancing sources(uses) EXCESS (D eficiency)of RE VE NUES AND O THE R SO URCES O VE R EXPEND ITURES AND O THER USES FUND BALAN CES AT BEGINN IN G O F YEAR 1,000 (946) 54 (900) (946) (446) 1,368 (1,402) FUND BALAN CES AT END O F YEAR See accom panying notesand accountant's com pilation report.

9 VILLA G E OF EA ST H OD G E PRO PRIETARY FU N D TY PE W ATER A N D SEW ER ENTERPRI SE FU N D St~ em e~ D Statem entof R evenues,expenses, and Changesin Retained Earnings For the Y ear Ended June O PERA TIN G REV EN UES W aterand sew er fees OPERA TIN G EXPENSES Salaries Bank charges Supplies Telephone Utilities Repairsand m aintenance Insurance Fees Labor M iscellaneous D epreciation Totaloperating expenses 4, , ,378 1,550 5O 2,250 1,966 3,729 14, OPERA TING INCOM E (Loss) NONOPERA TING RE VENUE S (Expenses) Operating transfer in Operating transferout Interestincom e Interestexpense Netnonoperating revenues(expenses) NET INCOM E (Loss) Add depreciation on fixed assetsacquired w ith federalgrant NET DECRE ASE IN RETAINED EARN ING S (18,910) RE TAINED EARN INGS (Deficit)AT BEGINNING OF YEAR RE TAINED EARNINGS (Deficit)AT END OF YEAR See accom panying notesan d accountant'scom pilation report 8

10 V ILLA G E O F EA ST H O D G E PRO PRIETA RY FU N D TY PE W A TER A N D SEW ER EN TERPRI SE FU N D Statem ente Statem entof Cash Flow s For the Year Ended June CASH FLO W S FRO M O PERATIN G A CTIVITIES Operating Income (Loss) Adjustmentsto ReconcileOperating Income (Loss)to NetCash Provided (Used)by Operating Activities: Depreciation Increase in accountsreceivable Increase in accountspayable Totaladjustments N etcash provided by operating activities C ASH FLO W S FR O M C A PITA L AN D RELA TED FIN A N CIN G A CTIV ITIES Principalon longterm debt Intereston longterm debt Increase in investm ents Op erating transferin Operating transfer out Decrease in restricted assets N etcash used by capitaland related financing activities C ASH FLO W S FR O M IN V E STIN G A CTIV ITIES Interestearnings NET DECRE ASE IN C ASH CA SH A T BEG INN IN G O F YEA R 14,341 (134) 2A (4,940) (3,630) (131) 87l (1,ooo) 1,637 (7,193) 131 (5,969) CA SH A T EN D O F YEA R See accom panyin g notesand accountam 'scom pilation report

11 V ILLA G E OF EA ST H OD G E N otesto the FinancialStatem ents A sof and forthe Y earended June 30, SUM M A R Y O F SIG N IFICA N T A C CO UN TIN G PO LIC IES The V illage of EastH odge operatesundera M ayorboard of A lderm en form of governm ent.the m ayor and alderm en serve fouryearterm s. The village hasa parttim e clerk and Chief of Police. A. BA SIS O F PR ESEN TA TIO N The accom panying generalpurpose financial statem ents of the V illage of East H odge have been prepared in conform ity w ith generally accepted accounting principles (GAAP)asapplied to governm entalunits.the Governm entalaccounting StandardsBoard (GASB)istheaccepted standardsetting body forestablished governm entalaccounting and fin ancialreporting principles. B. RE PO R TIN G ENT ITY A sthe m unicipalgoverning authority,for reporting purp oses,the V illage of East H odge isconsidered a separate fina ncialreporting entity. The financialreporting entity consists of (a)the primary governm ent(the village),(b) organizations for which the prim ary governm entisfinancially accountable,and (c)otherorganizationsforwhich the na ture and significance oftheir relations hip w ith th e prim ary governm entare such that exclusion w ould cause th e reporting entity's f'm ancial statem ents to be m isleading or incom plete. Governm entalaccounting StandardsBoard (GASB)StatementNo.14 established criteria for determ ining w hich com ponentunitsshould be considered partof the V illage of East H odge for financial reporting purp oses. The basic criterion for including a potentialcomponentunitwithin the reporting entity isfinancialaccountability.the GASB hassetforth criteria to be considered in determ ining fin ancialaccounta bility.thiscriteria includes: 1 Appointing a voting majority ofan organization'sgoverning body and a The ability ofth e village to impose itswillon that organi zation and/or See accountant'scom pilation report 10

12 V ILLAG E OF EA ST H OD G E Notesto the FinancialStatements(Continued) b The potent ialforthe organization to provide specific financial benefits to or im pose specific financial burdens on th e village. 2 O rganizations for which the village does not appoint a voting majority butarefiscaly dependenton thevillage. O rganizations for which th e reporting entity financialstatem ents w ould be m isleading if data of the organization is not included because of th e nature orsignificance of the relationship. Based on the previous criteria, the village has determ ined that th ere are no com ponentunitsth atshould be cons idered aspartof th e village reporting entity. C. FUND A C CO UN TIN G The village usesfundsand accountgroupsto reporton itsfinancialposition and th e resultsof itsoperations.fund accounting isdesigned to dem ons trate legalcom pliance and to aid financialm an agem entby segregating transactions related to certain governm ent functionsoractivities. A fu nd is a separate accounting entity w ith a selfbalancing setof accounts. A n accountgroup,on th e other hand, is a financialreporting device designed to provide accountability forcertain assetsand liabilities(generalfixed assetsand generallongterm debt)thatare notrecorded in the fundsbecause they do notdirectly affectnetexpendable available financialresources. Fundsare classified into three categories;governm ental, proprietary,and fiduciary. Each category,in turn, isdivided into separate fund types. The fund classificationsand a description of each existing fund type follow : G overnm entalfunds See accounta nt 'scom pilation report 11

13 VILLA GE OF EA ST H OD GE Notesto the FinancialStatements(Continued) G eneralfund The General Fund is the general operating fund of the village. Itaccountsfor allfinancialresources,exceptthose required to be accounted forin otherfu nds. CapitalProjectsFunds The CapitalProjectsFundsaccountfor state and federal grants thatare used to constructor acquire capitalassets. Proprietary Funds Proprietary fundsare used to accountforactivitiessim ilar to those found in the private sector,w here the determ ination of netincom e isnecessary or usefu lto sound financialadm inistration. Proprietary funds differ from governm entalfunds in thatth eir focus is on incom e m easurem ent,w hich, together w ith the m aintenance of equity,isan im portantfinancialindicator. Proprieta ry fu nds include: W ater and Sewer Enterprise Fund The W aterand Sew er Enterprise Fund isused to accountfor the operationsof th e village'sw ater and sewer system. The use of enterp rise fundsisappropriate w here the intentof the village isthatthe cost(expenses,including depreciation)of providing service to th e generalpublic on a continuin g basis be financed orrecovered prim arily through user charges. D. BASIS OF ACCOUN TING The accountin g and financialreporting treatm entapplied to a fu nd isdeterm ined by its m easurem entfocus. A llgovernm ental fu nds are accounted for using a current financialresourcesm easurem entfocus. W ith thism easurem entfocus,only currentassets and currentliabilitiesgenerally are included on th e balance sheet. O perating statem ents ofthese fundspresentincreases(i.e.,revenuesand otherfinancing sources)and decreases (i.e.,expendituresand otherfinancing uses)in netcurrentassets.themodified accrual basisof accounting isused forreporting allgovernm entalfund types. The governm ental fu ndsuse th e follow ing practicesin recording revenuesand expenditures: See accountant's com pilation report 12

14 VILLA G E OF EA ST H O D G E Notesto the FinancialStatements(Continued) R evenues A d valorem taxes attach as an enforceable lien on property as of January 1 of each year. Taxes are levied by the village and billed to taxpayersin N ovem ber.billed taxesbecom e delinquenton January 1of the follow ing year. The taxes are norm ally collected in D ecem ber, January and February of the currentyear. Salestaxesare recognized asrevenue when collected by the Jackson Parish SalesTax C ollection A gency. Franchise taxes and intergovernm ent alrevenuesare recorded w hen the village isent itled to th e funds. Interestincom e on bank deposits is recorded w hen the interesthas been earned and the am ount isdeterm ina ble. Substa ntially allother revenuesare recorded w hen they are received by the village. Based on the above criteria,ad valorem taxes,salestaxes, franchise taxes,and intergovernm entalrevenueshave been treated assusceptible to accru al. Expenditures Expenditures are generally recognized under th e m odified accrual basisof accounting w hen th e related fu nd liability is incurred. OtherFinancing Sources(Uses) Transfersbetw een fu ndsw hich are notexpected to be repaid are accounted forasotherfinancing sources(uses)and arerecorded when the underlying events occur. The W ater and Sew er Enterprise Fund is account ed for on a flow of econom ic resourcesm easurem ent focusan d a determ ination of netincom e and capitalm aintenance. W ith th ism easurem entfocus, allassetsand allliabilitiesassociated w ith th e operation of the fund are included on the balance sheet. The W ater and Sew erenterprise Fund uses See accountant's com pilation report 13

15 VILLAGE OF EA ST H OD G E Notesto thefinancialstatements(continued) th e accrualbasis of accounting. Revenues are recognized w hen they are earned,and expensesare recognized w hen th ey are incurred. W aterand sew erfeesare recognized in the period th e service is provided to the custom er. Salaries and oth er expenses are recognized w hen incurred. E. BU D GET PRA CTICES A proposed budgetfor the G eneralfund,prepared on th e m odified accrualbasis of accounting,is presented to th e board of alderm en each year. The budgetis legally adopted by th e board of alderm en. Budgetsare established and controlled by the board at the object level of expenditure. Appropriations lapse at yearend and must be reappropriated forthe follow ing year to be expended. Form albudgetary integration is notem ployed as a m anagem ent controldevice during th e year. Budgeted am ounts included in the accom panying financialstatem ents include the originaladopted budgetam ountsand allsubsequentbudgetam endm ents. F. CA SH Cash includes am ounts in dem and deposits. U nder state law,the village m ay depositfundsin dem and deposits,interestbearing dem and deposits,or tim e depositsw ith state banksorganized underlouisiana law orany otherstate of th e U nited States,or under th e law sof th e U ni ted States. G. INV ESTM EN TS Investm ents are lim ited by Louisiana Revised Statute (R.S.)33:2955. If the originalm aturities of investm ents exceed 90 days, th ey are classified as investm ents; however, if the original m aturities are 90 days or less, they are classified as cash equivalents. A t June 30, 2003, the village's investm ents consist of nonnegotiable certificatesofdepositsw ith originalm atu ritiesthatexceed 90 daysthatare reported in th e accom panying financialstatem entsatcost. H. FIXED A SSETS Fixed assets of governm ent al flm ds are recorded as expenditu res at the tim e purchased orconstru cted,and the related assetsare capitalized (reported)in the general fixed assets accountgroup. H istorically,public dom ain or infrastructure generalfixed assets cons isting of roads,sidew alks,bridges,parking lots,and drainage system swere not See accountant'scom pilation report 14

16 VILLA G E O F EA ST H O D G E EastH od ge,louisiana Notesto the FinancialStatements(Continued) capitalized,as these assets are im m ovable and of value only to th e village. H owever, during the year ended June 30,2003,th e village capitalized streetim provem ents in th e amountof $15,593.Allpurchased fixed assetsare valued atcostwhere historicalrecords are available and at estim ated cost where no historical records are available. Approxim ately 98 percentof fixed assetsare valued atactualcost,w hile the rem aining 2 percentare valued atestim ated costbased on the actualcostof like item s. D onated fixed assets are valued attheir estim ated fair m arketvalue on the date received. N o depreciation hasbeen provided on generalfixed assets. The fixed assetsused in the proprietary fund type operations are included on the balance sheetof th e fu nd netof accum ulated depreciation.interestcostsincurred during construction are notcapitalized. D epreciation of allexhaustible fixed assetsused by th e proprietary fu nd type operations ischarged asan expense again stoperations.d epreciation iscom puted using th e straightline m ethod over the estim ated usefu llivesranging from 5 to 40 years. LO N G TER M D EBT Longterm liabilitiesexpected to be financed from enterprise fu nd operationsare accounted forin th e enterprise fund. J. C O N TR IBU TED CAPITAL Federalgrantsthatare restricted for the acquisition orconstruction of capitalassets are recorded as contributed capital. Contributed capital is am ortized based on the depreciation recognized on th atportion of th e assets acquired from such contributions. This depreciation is closed to th e contributed capital account and is reflected as an adjustmentto netincome. K. IN TER FU N D TR A N SA CTIO N S A ll interfund transactions, except quasiexternal transactions and reim bursem ents,are reported asoperating transfers. L. ESTIM A TES The preparation of financial statem ents in conform ity w ith generally accepted accounting principlesrequiresm anagem entto m ake estim atesand assum ptionsthataffect certain reported am ountsand disclosures. A ccordingly,actualresultscould differfrom See accountant'scom pilation report. 15

17 VILLA G E O F EA ST H O D G E Notesto the FinancialStatements(Continued) those estim ates M. TO TAL CO LUM N S O N TH E C O M BIN ED STATEM EN TS The totalcolum nson the com bined statem ents are captioned M em orandum O nly to indicate th atth ey are presented onl y to facilitate financialanalysis. D ata in these colum ns do notpresentfinancialposition nor results of operations in conform ity w ith generally accepted accounting principles. N eith er is such data com parable to a consolidation. Interfund elim inationshave notbeen m ade in the aggregation of th isdata. 2. DEPO SITS IN FIN AN C IA L IN STITUTIO N S AtJune 30,2003,the village hascash and investments(book balances)totaling $11,601(netof bank overdraftof$4),asfollows: C ash dem and deposits Certificate of deposit $5, Total These deposits are stated atcost,w hich approxim ates m arket. U nder state law,these deposits, orthe resulting bank balances,m ustbe secured by federaldepositinsurance or the pledge of securities owned by the fiscalagentbank. Depositbalances(bank balances)atjune 30,2003,total$12,007 and are fully secured by federaldepositinsurance. BUD G ETED EXPEN DITURES For th e year ended June 30,2003,the G eneralfund'sactualexpenditu resand oth erusesexceeded budgeted expendituresand otherusesby $1,964 or14%. 4. LEVIED TAX ES For th e year ended June 30,2003,th e village levied 6.39 m illson property w ith a taxable value of$299,360,forgeneraloperating purposes. 5. RECEIV ABLES The follow ing isa sum m ary of receivablesatjune 30,2003 See accountant'scom pilation report 16

18 VILLA G E OF EA ST H O D G E Notesto the FinancialStatements(Continued) Franchise taxes Salestax Occupationallicense Accounts A llow ance fordoubtfulaccounts Total G eneral Fund $ O0 N ON E W ater and Sew er Enterprise Fund $2,477 N O N E Total $ ,477 N O N E $1,302 $2~477 $3,779 The statem entsconta in no provision for doubtfulaccountsbecause the village isof th e opinion that allam ountsare fully collectible. The follow ing presentschanges in generalfixed assetsforthe yearended June 30, 2003 Land and buildings Im provem ents other than buildings Equipm ent Tota l Balan ce July 1, 2002 A dditions D eletions $138, , ,782 $828,431 $15,593 N O N E Balance June 30, 2003 $138, , $844,024 follow s A sum m ary of proprietary fu nd type property, plant,and equipm entatjune 30,2003 W ater system Sewerage system Total 7. REVENU E BO NDS PAYABLE Basis $125, A ccum ula~ d D epreciation ($114,783) (333,457) N etbook V alue $10, The liability for revenue bondsatjune 30, 2003 cons istsof W ater and Sew er System Revenue See accountant'scom pilation report. 17

19 VILLA GE OF EA ST H O D G E Notesto the FinancialStatements(Continued) Bonds sold by the village in 1971 in the amountof $129,000 to the United States Departmentof A griculture,farm ers H om e A dm inistration,under the W ater and W aste D isposalsystem s for Rural CommunitiesLoan Program (CFDA )to constructthe waterand sewersystem. The bondswere subsequently sold to G M A C Com ercialm ortgage Corporation. The bondsbearinterestat6 percent annually.interestpaym entsare due M arch 1and Septem ber1and principalpaym entsare due Septem ber 1through Septem ber1,2011and are m ade solely from revenuesderived from operation of the waterand sew ersystem The follow ing isa sum m ary of revenue bondspayable transactionsforthe year ended June 30 Revenue bondspayable atjuly 1,2002 A dditions Retirem ents Revenue bondspayable atjune 30,2003 $61,940 N ON E (4~940) $57, CO N TR IBU TED C APIT AL During the yearsended June 30,1998 and 1999,the village received a granttotaling $96,347 from the U nited StatesD epartm entof H ousing and U rban D evelopm entto finance 100 per centof sew er system im provem ents. The total cost of th e sewer system im provem ents is reported as a fixed asset and contributed capitalin the W aterand Sew ersystem Enterp rise Fund. The contributed capitalam ountis reduced each yearby the am ountof depreciation expense recogni zed on th e fixed assetsconstructed w ith the grantfunds. AtJune 30,2003,accumulated depreciation on th ese assetswas$21, DEFIC IT IN RETA INED EA RN IN G S A tjune 30,2003,the W aterand Sewer Enterp rise Fund had a deficitin unreservedundesignated retained earningsin the amountof$28,352.in September2003,the village increased itswaterand sewer ratesto help alleviate the deficit. 10. LITIGATION AND CLAIM S The village is notinvolved in any litigation atjune 30,2003,nor is itaw are of any unasserted claim s. The village m ainta inscom ercialin surance to provide protection against lossesresulting from the dam age ordestru ction of property orliability claim s againstth e village. There w ere no significant reductionsin in surance coverage during the year ended June 30,2003.The village did notincurany costs resulting from a claim during the year ended June 30,2003. See accountant'scom pilation report 18

20 VILLA G E OF EA ST H O D G E Notesto the FinancialStatements(Continued) 11. FEDERAL G RAN T CO N TIN G EN CIES D uring the year ended June 30,2003,the V illage of EastH odge received federalgrantfunds totaling $15,593.Thesegrantfundsaresubjectto auditby agentsofthegranting authorities,thepurpose of which isto ensure com pliance w ith th e conditionsof th e grant. A ny liability forreim bursem entw hich m ay arise asthe resultof th ese auditsisnotbelieved to be m aterial. See accountant'scom pilation report 19

21 SU PPLEM EN TAL IN FO RM A TIO N SCH ED U LE S See accountant'scom pilation report 20

22 VILLA GE OF EA ST H OD GE EastH ed ge,louisiana SU PPLEM EN TA L IN FORM A TION SCH ED U LE A sof and For the Y earended June 30,2003 C O M PEN SATIO N PAID ALD ERM EN The schedule of com pensation paid alderm en ispresented in com pliance w ith H ouse C oncurrent Resolution N o.54 of th e 1979 Session of the Louisiana Legislature. In accordance w ith Louisiana Revised Statute 33:405,alderm en receive $50 foreach meeting they attend.compensation ofaldermen isincluded in personalservices and related benefitsexpenditu res of the G eneralfund. PR IO R Y EA R FIN D IN G S The follow up and corrective action taken on allprioryearfindingsispresented in th e sum m ary schedule ofprioryearfindings(schedule 2). CU R RE N T YEA R FIN D IN G S The corrective action plan for currentyearfindin gs ispresented in Schedule 3 See accountant's com pilation report. 21

23 V ILLA G E O F EA ST H O D G E Schedule 1 Schedule of Com pensation Paid A lderm en Forthe Y earended June 30,2003 Oren Leonard Johnny M atthew s W.C.W ilson $27O Total See accountant'scom pilation report

24 VILLA G E OF EA ST H O D G E Schedule 2 Sum m ary Schedule of Prior Y ear Findings For the Y earended June Reference Num ber Fiscal Y ear Finding Initially Occurred D escriotion of Findin~ Corrective A ction Taken A dditional Exolanation Procedure G eneralfund BudgetA doption N ot Recorded in M inutes Yes N /A Procedure G eneralfund BudgetN otam ended A srequired N o Procedure 8(a) 1999 DisbursementsNotProperly Supported No See procedure 7 in currentyear findings. See procedure 8(a)in currentyearfindings, N eed to M aintain Bond Reserve 1997 A ccounts N o See in current year findings N eed to Reconcile Bank A ccounts N o See in current year findings. See accountant'scom pilation report 23

25 V ILLA G E O F EA ST H O D G E Schedule 3 Corrective A ction Plan For CurrentY earfindings Forthe Year Ended June 30,2003 Reference Num ber Corrective A ction Planned N am e of ContactPerson Anticipated Com pletion D ate The G eneralfund budgetw as not The proposed General Fund budgetforth e year ending June 30,2004,w as Procedure adopted priorto July 1, adopted priorto July 1, H arry M im s, M ayor N /A The village did not The village w illproperly am end itsg eneralfund am end its budgetforthe Procedure budgetwhen required to yearendin g June 30, 7 do so H arry M im s, M ayor June 2004 A llfuture disbursem ents Two outof six selected w illbe properly supported Procedure disbursem ents w ere not by originalinvoice or 8 (a) properly supported, otherdocumentation. Hary M ims,m ayor June 2004 Three outof six selected disbursem ents w ere not Procedure properly posted to th e 8 (b) accounting records. In th e fu ture,all disbursem entsw illbe properly posted to the accounting records. H arry M ire s,m ayor June 2004 Tw o outof six selected disbursem ents did not contain tw o signatures on th e checksasis Pr ocedur e required forproper A llfu ture checksw ill contain the required tw o signaturesasevidence of 8 (c) approval, approval. Harry M ims,m ayor June2004 See accountant'scom pilation report 24

26 Schedule 3 V ILLA G E O F EA ST H O D G E Corrective Action Plan ForCurrentYear Findings Forthe Year Ended June 30,2003 Reference Num ber Corrective A ction Planned N am e of ContactPerson A nticipated Com pletion D ate The village did not advertise orpostnotices of board m eetingsat Procedure least24 hoursprior to 9 th e m eeting. The village did not m aintain bond reserve accounts as required by the bond resolution. In th e future,th e village w illposta notice forboard m eetingsatthe tow n hall atleast24 hoursprior to the m eeting. H arry M ire s,m ayor January 2004 The village w illfund bond reserve account s when sufficientfu ndsare available. H arry M inas,m ayor June 2004 The village did not reconcile itsbank The bank account sw illbe accountson a m onthly reconciled on a m onth ly basis, basis. H ar ry M ire s,m ayor June 2004 The village needsto The village w illm aint ain m aint ain a com plete set com plete account in g of accounting records, records. H arry M im s,m ayor January 2004 The village needsto im prove int erna l controlsovercash receipts. The village w illim prove its interna lcontrolsover cash receipts. H arry M im s,m ayor January 2004 See accountant'scom pilation report 25

27 IndependentAccountant'sReporton Applying A greedu pon Procedures The follow ing independentaccountant'sreporton applying agreed upon proceduresispresented in com pliance w ith the requirem ents of the Louisiana Governm entalaudit Guide and th e Louisiana Attestation Questionnaire,issued by the Society oflouisiana Certified Public Accountants and the Louisiana Legislative A uditor, 26

28 C E R T IF IE D P U B L IC A C C O U N T A N T 369 D ONALDSON R OAD ~ C ALHO UN,L OUISIANA ~ T ELEPHONB 3 18/ IndependentA ccountant's R eport O n A pplying A greedu pon Procedures M A Y OR A N D BO A RD OF A LD ERM EN VILLA G E OF EA ST H O D G E Ihave perform ed the procedures included in the Louisiana Governm entalauditguide and enum erated below,which were agreed upon by th e m anagem entof the V illage of EastH odge and the Legislative Auditor,State of Louisiana,solely to assistth e users in evaluating m anagem ent's assertions aboutthe V illage of EastH odge'scom pliance w ith certain law sand regulationsduring the year ended June 30,2003 included in the accompanying Louisiana A testation Questionnaire. This agreedupon procedures engagem entw asperform ed in accordance w ith standardsestablished by the A m erican Institute of Certified Public A ccountants. The sufficiency of the proceduresissolely the responsibility of the specified users of the report. Consequently, I m ake no representation regarding the suficiency of the procedures described below eith erfor th e purpose forw hich th isreporthasbeen requested orforany oth er purpose. Public Bid Law Selectallexpendituresm ade during the yearformaterialsand suppliesexceeding $15,000,or public works exceeding $100,000, and determ ine whether such purchases were made in accordance with LSARS 38: (the public bid law). A review w asm ade of alldisbursem entsfor the year. There w ere no disbursem entsfor m aterials and suppliesexceeding $15,000 nordisbursementsforpublic worksexceeding $100,000 made during the year. Code of Ethicsfor Public O fi cialsand Public Em ployees 2 Obtain from m anagem enta listof the im m ediate fam ily m em bersof each board m em ber asdefined by LSARS 42: (the code ofethics),and a listofoutside businessinterests of allboard m em bersand em ployees,as w ellastheir im m ediate fam ilies. M anagem entprovided m e w ith the required listincluding th e noted inform ation 27 M EM BER OF THE A MERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS M EMBER OF THE SOCIETY OF LOUISIANA CERTIFIED PUBLIC ACCOUNTANTS

29 V illage of EastH odge IndependentAccountant'sReporton A pplying A greedu pon Procedures June 30, "Obtain from m anagem enta listing of allem ployeespaid during the period underexam ination. M anagem entprovided m e w ith th e required list 4 D eterm ine w hether any of th e em ployees included in th e listing obtained from m anagem entin procedure num ber 3 above were also included in the listing obtained from m anagem ent in procedure num ber2 above asim m ediate fam ily m em bers. Budgeting N o em ployeesw ere included in the listing of im m ediate fam ily m em bers 5. Obtain a copy of the legally adopted budgetand allam endm ents Iobta ined a copy of th e originalgeneralfund budgetfor th e yearended June 30, 2003 and one budgetam endm ent. 6. Trace th e budgetadoption and am endm entsto th e m in ute book The G eneral Fund budget w as adopted at th e July 9, 2002, board m eeting and th e budget am endm entw asadopted atth e August13,2002,boar d m eeting. 7 Com pare th e revenues and expendituresof th e finalbudgetto actu alrevenuesand expenditu res to determ ine if actu alrevenuesor expenditu resexceed budgeted am ountsby 5 % orm ore. Actual revenues and oth er sources exceeded budgeted revenues and oth er sources. A ctual expendituresand otherusesexceeded budgeted expendituresand otherusesby $1,964 or14%. A ccounting and Reporting 8. Random ly select6 disbursem ents m ade during th e period underexam ination and (a) (b) (c) trace payments to supporting documentation asto correctamountan d payee determ ine ifpaymentswere properly coded to the correctfund and generalledgeraccount determine whetherpaymentsreceived approvalfrom properauthorities 28

30 Village of EastH odge IndependentA ccountant'sreporton A pplying AgreedUpon Procedures June 30,2003 A n exam ination of six random ly selected disbursem entsdisclosed the follow ing (a) (b) (c) Two ofthe six selected disbursementswere notsupported by adequate documentation Three of the six selected paymentswere notproperly posted to the accounting records Two of th e six selected paymentsdid notcontain documentation ofapprovalfrom the properauth orities. M e tings 9 Exam ine evidence indicating thatagendasfor m eetingsrecorded in the m inute book w ere posted D ebt oradvertised asrequired by LSARS 42:112 (the opening meetingslaw). The village did notadvertise orpostthe noticesforboard m eetingsatleast24 hoursprior to the m eeting. 10. Exam in e bank depositsfor the period under exam ination and determ in e w heth er any such deposits appear to be proceedsof bank loans,bonds,orlike indebtedness. Iins pected copiesof alldepositslipsforthe period under exam ination and noted no depositsw hich appeared to be proce dsof bank loans,bonds,orlik e indebtedness. A dvances and Bonuses 11. Exam ine payrollrecordsand m inutesforth e year to determ ine wheth er any paym entshave been m ade to em ployeesw hich m ay constitute bonuses, advances,or gifts. A reading of the m inutesof the board m eetingsand an exam ination of payrollrecordsindicated no paym entsw hich m ay constitu te bonuses,advances,orgifts. Iwasnotengaged to,and did not,perform an examination,the objective ofwhich would be the expression of an opinion on m anagem ent'sassertions. A ccordingly,ido notexpress such an opin ion. H ad Iperform ed additionalprocedures,otherm attersm ighthave com e to m y attention th atw ould have been reported to you.

31 V illage of EastH odge IndependentAccountant'sReporton Applying AgreedU pon Procedures June 30,2003 Thisreportisintended solely forthe use of m anagem entof th e V illage of EastH odge and th e Legislative Auditor,State of Louisiana,and should notbe used by th ose w ho have notagreed to th e proced uresand taken responsibility forthe sufficiency of th e proceduresfortheir purposes. Calhoun,Louisiana D ecem ber

32 Louisiana Attestation Questionnaire The accompanying Louisiana A testation Questionnairehasbeen completed by managementand isincluded in thisreportasrequired by the Louisiana Governm entalauditguide. 31

33 M.Carleen D um as Certified Public A ccountant 369 D onaldson Rd. Calhoun,La M rs.dum as In connection w ith your com pilation of th e financialstatem entsof the V illage of EastH odge asof June 30,2003 and for the yearthen ended,and asrequired by Louisiana Revised Statute 24:513 and th e Louisiana Governm entalauditguide,w e m ake th e follow ing representationsto you. W e acceptfull responsibility for our com pliance w ith th e follow ing law s and regulations and the internalcontrols over com pliance w ith such law s and regulations. W e have evaluated our com pliance w ith th e follow ing law sand regulationsprior to m aking these representations. These representationsare based on inform ation available to usasof PU BLIC BID LAW It is true th at we have com plied w ith the public bid law, LSA RS Title 38:2212, and, w here applicable,th e regulations of the D ivision of A dm inistration,state Purchasing O ffice. Yes[/ No[]N/A[] CODE OF ETH ICS FOR PUBLIC OFFICIALS AND PUB LIC EM PLOYEES Itis tru e th atno em ployees or officials have accepted an yth ing of value,w hether in the form of a service,loan,or prom ise,from anyone thatw ould constitu te a violation of LSARS 42: Yes["l/No [ ] N/A [ ] Itistrue thatno m em berof the im m ediate fam ily of any m em ber of the governing auth ority,orthe chief executive of th e governm entalentity,hasbeen em ployed by the governm entalentity afterapril 1,1980 under circum stancesthatw ould constitute a violation of LSA RS 42:1119. Yes[/fNo[ ]N/A[]

34 BU D G ETIN G W ehave complied with the statebudgeting requirementsofthe LocalGovernmentBudgetAct(LSA RS 39:130114)orthe budgetrequirementsof LSARS 39:34. A CCO UN TIN G A N D R EPO R TIN G Yes[/]/N o [ ] N/A [ ] A llnonexem ptgovernm entalrecordsare available as a public record and have been retained for at leastthree years,asrequired by LSA RS 44:1,44:7,44:31,and 44:36. YesIq/N o [ ] N/A [ ] W e have filed ourannualfinancialstatem entsin accordance w ith LSA RS 24:514, LSA RS 33:463 and/or LSA R S 39:92,as applicable. YesI/I/N o [ ] N/A [ ] W e have had ourfin ancialstatem entsaudited or com piled in accordance w ith LSA RS 24:513 Yes[~./qo [] N/A [] M EETIN G S W e have com plied w ith th e provisionsof the Opening M eetingslaw, provided in LSA RS 42:112 Yes[,']/No [ ] N/A [] D EBT Itistrue thatw e have notincurred any indebtedness, oth er than creditfor 90 days or lessto m ake purchases in th e ordinary course of adm inistration, nor have we entered into any leasepur chase agreem ents,w ithoutthe approvalof the Sta te Bond Com m ission, asprovided by A rticle V II,Section 8 of the 1974 Louisiana Constitution,A rticle VI, Section 33 of the 1974 Louisiana Constitution, and LSA R S 39: ADV A N CES A N D BO N U SES Yes[.,] /N o [ ] N/A [ ] Itistrue th atwe have notadvanced wagesorsalaries to em ployeesorpaid bonuses in violation of A rticle V II,Section 14 of th e 1974 Louisiana Constitu tion, LSA RS 14:138,and A G opinion / Yes[./]No[]N/A []

35 W e have disclosed to you allknow n noncom pliance of the foregoing law sand regulations, aswellas any contradictionsto th e foregoing representations. W e have m ade available to you docum entation relating to the foregoing law sand regulations. W e have provided you w ith any com m unicationsfrom regulatory agenciesor oth ersourcesconcerning any possible noncom pliance w ith th e foregoing law sand regulations, including any com m unications re~ceived betw een the end of th e period under exam ination and the issuance of th is report. W e acknow ledge our responsibility to disclose to you any know n noncom pliance w hich m ay occur subsequentto the issuance of yourreport. M ayor