O~ JtJN 22 AH i1:09 RECEIVED FINA N CIA L STA TEM ENTS LEGISLATIVE AUDITOR

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Arnold Greene
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1 RECEIVED LEGISLATIVE AUDITOR O~ JtJN 22 AH i1:09 LO U ISIA NA M U N IC IPA L A DV ISO RY A N D TEC H N ICA L S ERV IC ES BU REA U C O RPO RA TIO N FINA N CIA L STA TEM ENTS D EC EM BER 3 1,2003

2 R~C~VE~ LEGSI~,.~TtVE AUDITOR 01~JI,IN 22 AMII:09 LO UISIANA M UNICIPAL AD VISO RY AND TECH N ICA L SERVICES BU R EA U C O R PO RA TIO N FIN A N CIA L STA TEM EN TS 31

3 L O UISIA N A M UN ICIPA L A DV ISO R Y A ND TECH N ICA L SER V ICE S B 0 TA BLE O F C O N TEN T S Pa~e IndependentA uditors'rep ort 1 FinancialStatem ents Balance Sheets Statem entsof Operations Statem ents of Chan ges in Stockholder's Equity Statem entsof Cash Flow s N otes to Finan cialsta tem ents Reporton Com pliance and on Intern alcontrolover Fin ancialreporting Based on an A uditof Finan cial Statem entsperform ed in A ccordan ce w ith Governm entauditing Standards

4 Postlethw aite & N etterville A ProtesslonolAccounti~g Corporation Associaled O ficesinprincipalcitiesoftheunitedstates IND EPEND EN T AU D IT O R S'R EPO R T O fficers and Trustees Louisiana M unicipala dvisory and TechnicalServices Bureau Corporation W e have audited the accom pan ying balance sheetsof Louisiana M unicipala dvisory and Techn icalservices Bureau Corporation (a wholy-owned subsidiary oflouisian a M unicipalassociation)asof December31, 2003 and 2002,and the related statem entsof operations,changesin stockholder'sequity,and cash flow sfor the years then en ded. These financial statem ents are the responsibility of the m anagem entof Louisiana M unicipaladvisory and Techn icalservicesbur eau Corp oration, Ourresponsibility isto expressan opinion on these financialstatem entsbased on our audits. W e conducted ouraudits in accordance with auditing stan dards generally accepted in the U nited States of A m erica an d w ith Governm entauditing Standards,issued by the Com ptroller G eneralof the U nited States. Those standardsrequire th atw e plan and perform the audits to obtain reasonable assuran ce aboutwhetherthe finan cialstatem entsare free of m aterialm isstatem ent.an auditincludesexam ining,on a testbasis,evidence supporting the am oun ts an d disclosures in the financialstatem en ts. An auditalso includes assessing th e accounting principlesused an d significan testim atesm ade by m anagem en t,asw ellasevaluatin g the overall finan cialstatem en tpresenta tion. W e believe th atour audits provi de a reasonable basis for our opinion. In accordan ce w ith GovernmentAuditing Standards,w e have also issued a report,dated M ay 6,2004,on our consider ation of th e Company'sinternalcontrolover financialreporting and ourtestsof itsen mpliance with certain provi sionsof law s,regulations,contractsand gran ts. In our opinion,the finan cialstatem entsreferred to above presentfairly,in allm aterialrespects,th e finan cial position of Louisiana M unicipala dvisory an d TechnicalServices Bur eau Corporation as of D ecem ber 31, 2003 and 2002,an d th e results of its operationsan d itscash flow sfor the year sth en en ded,in conform ity wi th accoun ting principles generally accepted in the United States of Am erica. Baton Rouge,Louisian a M ay 6,2004 / 8550 United PlazaBlvd,Suite 1001 Baton Rouge,LA Tel: Fax:

5 L O U ISIAN A M U N ICIPA L AD VISO R Y A N D TE C H NIC AL SER VI CE S BALA N CE SH EE TS D EC EM BER A N D 2002 Currentassets: Cash Incom e taxes receivable A ccounts receivable Totalcurrentassets ,910 11,240 1, , ,145 Furniture and equipm ent,net 11,838 16,474 Totalassets $ 182,763 $ 241,619 LIABIL ITIE S A ND STO CK H O LD ER 'S EO UITY Currentliabilities: A ccountspayable D ue to afi liate $ 31,335 34,944 $ 81,084 34,944

6 LO U ISIAN A M U N ICIPA L A D V ISO R Y A N D TE CH NICAL SER VICE S STA TEM EN TS O F O PER A TIO N S YE AR S END ED D EC EM BER A ND 2002 Revenues: Program adm inistration fees Interestincom e ,775 6,333 $ 253, Totalrevenues Expenses: A dm inistrative fees A ccounting fees A dvertising Auditfees Bank charges D epreciation Legalfees Rent Public inform ation O ffice supplies Professionalservices Taxes Telephone O ther Totalexpenses Net(loss)income before income taxes Income tax benefit(expense) 229, ,950 3,600 1,470 2,500 5,537 4,636 18,202 3, ,890 (13,782) 4, , ,700 3,600 3,590 2,100 4,983 2,482 22,197 3, ,434 4, ,480 83,041 (20,000)

7 LO UISIA N A M U N ICIPAL AD VISO R Y AND TECH N IC AL SER VICES BUR EA U C O R PO RA TIO N ST A TEM E N TS O F CHA N G ES IN STO C K H O LD ER 'S E O U ITY AN D 2002 Com Inon Stock R etained Earn ings Total Balance,D ecem ber 31, ,000 $ 11,550 $ 62,550 N etincom e 63,041 63,041 Balan ce,d ecem ber 31,2002 N etloss Balance,D ecem ber 31, ,000 74, ,591 (9,107) (9,107) $ 51,000 $ 65,484 $ 116,484

8 LO UISIA N A M U N ICIPA L A DV ISO R Y A ND TECH NICA L SER VIC ES BU RE A U CO RPO RA TIO N STA " YEA R S EN D ED DECEM BER 31,2003 A ND 2002 CA SH FLO W Net(loss)income Adjustmentsto reconcilenet(loss)incometo netcash (used in)provided by operating activities: D epreciation Changesin operating assetsand liabilities: A ccountsand otherreceivables A ccountspayable and due to affiliate Netcash (used in)provided by ope rating activities $ (9,107) $ 63,041 4,636 (12,865) (49,749) 2,482 2, ,013 Purchas esof equipm ent A (9,022) N etcash used in investing activities N etchange in cash Cash,beginning of year Cas h,end of year (67,085) 224, ,910 (9,022) 98, $ 224,995

9 LO UISIAN A M UNICIPAL ADVISO RY AND TECH NICAL SERVICES BUR EA U C O R PO R A TIO N STA ' 1. SIG N IFICA N T A C C O U N TIN G PO LICIE S (a) Organization Background Louisiana M unicipal Advisory and Technical Services Bureau Corporation (LaM ats), a Louisianacorp oration,isa wholy-owned subsidiary of Louisiana M unicipalassociation (LM A). LM A is an association for the m unicipalities of Louisian a and is incorporated as a non-profit corporation un der the law s of th e State of Louisian a. LaM ats was incorp orated in 1998 for the purp ose of providin g various advisory and technicalservices to th e m em ber ship of the LM A. (b) Depreciation D epreciation is com puted using the straight-line m eth od over the estim ated usefullives of the assets.lives of the assetsare asfollow s: O ffice equipm entand furniture Com puter equipm entan d softw are 5-7 years 3 year s (c) Use of Estimates For the purp ose of th e statem entof cash flow s,cash includesin cash in dem and accounts with ban ks. (e) Basisof Accounting LaM ats uses th e accrual m eth od of accoun ting. LaM ats applies all applicable FA SB pronouncem entson or before N ovem ber 30,1989 in accoun ting for itsoperations unless those pr onoun cem entsconflictw ith or contradictg A SB pronoun cem en ts. (/) Administrative Revenue LaM atsreceives adm inistrative feesrelated to the insuran ce prem ium taxes collected on behalf of th e m un icipalitiesparticipating in the program.lam atsreceivesan adm inistrative fee 0f3% in 2003 and 4% in 2002 of the insurance prem ium taxes collected on behalf of th e m unicipality. A dm inistrative fees ar e considered earn ed an d recognized as revenues when en llected from th e insurance com panies. (g) Income taxes LaM ats is consider ed a for-profit service organization tax able en tity by th e InternalReven ue Service and filesa sep ar ate C-Corp oration incom e tax return

10 LO UISIA NA M UNICIPA L ADV ISORY AND TECH NICAL SERVICES BU R EA U C O RPO R A TIO N O TES TO FIN AN CIA L STA TEM E N TS No federaltaxeswere rem itted or due in 2003.Income tax benefitof $4,675 is as a resultof loss carryback from the previousyear. LaM ats recognizes incom e tax liabilities using the liability m ethod. During 2002,LaM atsutilized allnetoperating losscarry forwardsin 2002 and paid $20,000 in federal incom e taxes. 3. R ELA TE D PA R TY TR AN SA C TIO N S LaM atspayslm A accounting fees for servicesperform ed on their behalf. The totalaccoun ting fees were $3,600 forboth 2003 and In addition,lam ats owes LM A $34,944 for costsincurred during the start-up of the Com pany. LaM atspaysrisk M anagement,inc.(rm I)rentforthe spaceitconductsitsoperations.rm Iisalso a wholly owned subsidiary oflm A.LaM atspaid RM Ia totalof $3,360 forrentforboth 2003 and AD M INISTRA TIV E CO N TR A CT LaM atscontracts the Palm ergroup,based outof Tallahasse,Florida,to perform billing,collecting an d adm inistrating duties w ith the insurance prem ium tax program. LaM ats'board of D irectorsapproves the contractw ith th e Palm er Group on a yearly basisfor servicesrendered. For 2003 an d 2002,the Palm er Group was contracted to be paid approximately and $16,800 an d $10,800 per month or $201,950 and $129,700 forthe yearsended December31,2003 and 2002,respectively.

11 Postlethw aite & N etterville A ProfessionalAccounting Corporotion Associated O ficesinprincipalcitiesoftheunitedstates R enorton C om nliance and on InternalC ontrolo ver Financial R eporting B ased on an A uditof FinancialStatem ents Perform ed in A ccordance w ith Governm enta uditine Standards O fficersand Trustees Louisiana M unicipala dvisory and TechnicalServices Bureau Corporation W e have audited the financial statem ents of Louisiana M unicipal Advisory an d Techn ical Services Bureau Corporation as of and for the year ended D ecem ber 3 I,2003,an d have issued our reportther eon dated M ay 6, W e conducted our auditin accordance w ith auditing standardsgener ally accepted in the United States of Am erica and the stan dardsapplicable to the finan cialauditscontained in GovernmentAuditing Standards,issued by th e Com ptroller G eneralof the U nited States. Com pliance A s part of obtaining reasonable assur an ce about whether the Corp oration's financial statem ents are free of material m isstatem ent,we perform ed tests of its complian ce with certain provisions of laws,regulations, contracts and gran ts,noncom plian ce with which could have a directand ma terialeffecton the determ ination of financialstatem entam ounts. H ow ever,providing an opin ion on com plian ce w ith those provisions w as notan objective of ourauditand,accordingly,we do notexpresssuch an opinion.the resultsof ourtestsdisclosed no instances of noncom pliance thatare required to be reported un der Governm enta uditing Standards. InternalControlOver Finan cialreoortine In plannin g an d performing our audit,w e considered the Corp oration'sinternalcontrolover financialreporting in order to determ ine our auditing procedur es for th e purpose of expressing our opinion on th e fm ancialsta tem ents and notto provide assur an ce on the internalcontrolover financialrep orting. O ur consideration of th e intern al controlover finan cialrep orting w ould notnecessarily disclose allm aters in the internalcontrolover finan cial rep orting th atm ightbe m aterialw eaknesses.a m aterialweakness isa condition in which th e design or operation

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