2DO3JUN30 P~'I2:04 ANN UAL FINANC IAL REPO RT TO W N O F FO RDO C HE,LO U ISIA NA FO R THE YEA R EN D ED D EC EM BER 31,2002

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1 LE~!S RL~ I~r _ D L7T~v~_,,~.~ nit0o,. 2DO3JUN30 P~'I2:04 TO W N O F FO RDO C HE,LO U ISIA NA ANN UAL FINANC IAL REPO RT FO R THE YEA R EN D ED D EC EM BER 31,2002

2 TO W N O F FO RD O C H E PO INTE C O U PEE PA RISH,LO U ISIA NA P.O.BO X 10 FO RD O C H E,LA (225) M AYO R Justin K.C ox C O U NC IL (as atdecem ber31,2002) M ichelm eche Irm a Sm ith PatSm ith D on Sonnier Stan Thibodeaux LEGA L C O U N SEL Stephen H.M arionneaux TO W N C LERK Leslie Thibodeaux C HIEF O F PO LIC E Fred G ueho 2nd Tuesday ofevery M onth 6:30 pm -Tow n Hall

3 TO W N O F FO RDO CHE,LO UISIA NA A N N UA L FINA NC IA L REPO RT FO R THE YEAR EN DED DEC EM BER 31,2002 TA BLE O F C O NTENTS Note Page ndependenta uditor's Report 1 G eneralpurpose FinancialStatem ents - C om bined Balance Sheet-AllFund Types and Account G roups Statem entofrevenues,expenditures,and C hanges in Fund Balance - Budgetand Actual(GAAP Basis)-GeneralFund Statem entofrevenues,expenses,and C hanges in Retained Earnings -Budget and Actual(GAA P Basis)-Proprietary Fund Type (Enterprise Fund) Statem entofc ash Flow s -Proprietary Fund Type (Enterprise Fund) Notes to the FinancialStatem ents - Introduction 1 Sum m ary ofsignificantaccounting Policies -. 2 Reporting Entity O thero rganizations Fund Accounting Basis ofa ccounting Budgets Encum brances Cash and C ash Equivalents Accounts Receivable and Bad Debts Short-Term Interfund Receivables/Payables Inventories G eneralfixed Assets Property,Plantand Equipm ent-proprietary Fund Com pensated Absences Fund Equity Interfund Transactions U se ofestim ates Risk M anagem ent C om parative Data TotalC olum ns on C om bined Statem ents C ash Deposits w ith FinancialInstitutions 3 C hanges in Fixed Assets 4 Ad Valorem Taxes 5 Sales Tax and C entralized C ollection Agency Agreem ent 6 Franchise Agreem ents 7 Pension Plan and Retirem entc om m itm ents 8 C ontingentliabilities 9

4 TOW N O F FO RDO C HE,LO UISIA NA A N N UA L FINA NC IA L REPO RT FO R THE YEA R EN DED D EC EM BER 31,2002 TA BLE O F C O N TENTS Com pensation Paid to Board M em bers FederalFinancialAssistance Supplem entalinform ation Schedule ofrevenues -Budgetand Actual(GAA P Basis)-GeneralFund Schedule ofexpenditures -Budgetand Actual(GAA P Basis)-G eneralfund (GA A P Basis)-Propriety Fund Type - S chedule ofexpenses -B udgetand A ctual Enterprise Fund O therreports Required by G overnm enta uditing Standards: ndependenta uditor's Reporton C om pliance and on InternalC ontrolo ver Reporting Based on an A uditoffinancialstatem ents Perform ed in A ccordance Schedule offindings N ote :

5 Phone OFIqCE (225) FAX (225)63a-3669 E-m~ CEI(VtelED PUBLIC ACCO UNTANT (A ProfessionalCorpomtlon) Practice 12m ited to Governm entalaccounting,auditing mad FinancialReporting O m ce ANCHOR DRIVE "~m~nulss,la M em ber AMERICAN IN fititrfe Ol~CPAs LOUISIANA SOCIETY OF CI'A~ GOVERNMENT FINANCE OFFICERS ASSOCIATION IND EPEN D ENT AU D ITO RIS REPO RT O N TH E FINAN CIAL STATEM EN TS To the M ayor and Board of Alderm en Tow n of Fordoche,Louisian a Ihave audited the accom panying generalpurpose financialstatem entsof the TO W N O F FO RD O CHE,LO UISIANA, as ofand for the year ended Decem ber 31,2002,as listed in the Table ofcontents. These generalpurpose financialstatem ents are the responsibility ofthe Town offordoche,louisiana'sm anagem ent. M y responsibility is to express an opinion on these genera lpurposes financialstatem ents based on m y audit. Iconducted m y auditin accordance w ith auditing standards genera lly accepted in the United States of Am erica; the standar ds applicable to financialaudits contained in Governm entauditing Standards,issued by the Com p- troller Generalof the United States;and with provisionsof Louisiana Revised Statute 24:513 and the provisionsof the Louisiana Governm entalauditguide~published jointly by the Society oflouisiana Certified Public Accountantsand the Louisiana Legislative Auditor. Those standardsrequire thatiplan and perform the auditto obtain reasonable assura nce aboutw hether the financialstatem entsar e free of m aterialm isstatem ent. An auditincludes exam ining,on a testbas is,evidence supporting the am ounts and disclosuresin the financial statem ents. An audit also includesas sessing the accounting principles used and significantestim ates m ade by m anagem ent,asw ellas evaluating the overallgeneral purpose financial sta tem ent presentation. I believe that m y audit provides a reasonable bas is for m y opinion. In m y opinion,the generalpurpose financialstatem ents referred to above presentfairly,in allm aterialrespects, th e financialposition of the Tow n offordoche,lo uisiana,asof Decem ber 31,2002,and the resultsof itsopera - tions and the cash flows of its proprietary fund type for the year then ended in conform ity with accounting principles generally accepted in the United States of Am erica. In accordance wi th Govern m entauditing Standards,Ihave also issued my reportdated June 17,2003,on my considera tion of the Tow n of Fordoche,Louisiana's internal controlover financial reporting and m y tests ofits com pliance wi th certain provisionsoflaws,re gulations,contra cts an d grants. Thatreport isan integralpartof an auditperform ed in accordan ce wi th Governm entauditing Standards an d should be read in conjunction wi th this report in considering the results of m y audit. M y auditw as perform ed for the purp ose of form ing an opinion on the genera lpurpose financialstatem ents taken as a w hole. The accom panying financialinform ation listed assupplem ental Inform ation in the table of contentsis presented for purp oses of additional analysis and is nota required partof the generalpurpose financialstatem ents ofth e Town offordoche,louisian a. Such inform ation has been subjected to the auditing procedure s applied in the auditof the generalpurp ose financialstatem ents and,in m y opinion,isfairly stated,in allm aterial respects,in re lation to th e genera lpurpose financialstatem entstaken asa w hole. June 17,2003

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9 TOW N O F FO RDOCHE,LOUISIANA STATEM ENT O F REVENUES,EXPENDITURES,AND C HANG ES IN FUND BALANCES - BUDGET AND ACTUAL (GAAP BASIS)-GENERAL FUND FOR THE YEAR ENDED DECEM BER 31,2002 (W ith Com parative Totals foryearended Decem ber31,2001) Revenues: Taxes Licenses and perm its Intergovernm entalrevenue Fines and forfeitures M iscellaneous revenues 78,600 12, ,300 S Actual 84,224 12,841 87,544 12,138 26,688 Variance Favorable (Unfavorable) $ 5, ,544 3,838 $ Actual 91,018 10,746 4,308 12,397 61,851 TotalRevenues ,320 Expenditures: Current- G eneralgovernm ent Public safety Streets and drainage Com m unity center Capitaloutlays - Generalgovernment Public safety Com m unity center 70,570 22,620 20,100 6,500 1,000 2, ,920 66, ,003 7,542 3,761 3, ,393 4,529 3,433 2,097 1,042) (2,761) (925) (14,473) 46,496 26, ,011 64,405 TotalExpenditures 269,210 Excess Revenues (Expenditures) (103,960) (54,917) 49,043 17,859 Other Financing Sources (Uses): Proceeds from capitallease financing Paym ents on capitallease financing (6,016) Exce ss Revenues and Other Sources (Ex penditures and Other Uses) (111,260) (60,933) 50,327 Fund Balance -January , ,861 FUND BALANCE -DECEM BER 31 $ 54,444 $ 104,771 $ 50,327 $ 165,704 The accom panying notes are an integralpartofthis statem ent

10 TOW N O F FO RDOCHE,LO UISIANA STATEM ENT O F REVENUES,EXPENSES,AND CHAN GES IN RETAINED EARNINGS BUDG ET AND ACTUAL (GAAP BASIS)-PRO PRIETARY FUND TYPE FO R THE YEA R ENDED DECEM BER 31,2002 (W ith Comparative Totals foryearended December31,2001) Enterprise Operating Revenues: Charges forservices - W atersales M isce laneous revenues $ 47,500 3,100 Actua 49, Variance Favorable (Unfavorable) 1, Actua $ 47,740 5,275 TotalO perating Revenues 50,600 56,333 5,733 53,015 Operating Expe nses: W aterexpenses Generaland adm inistrative 65,960 18,800 60, ,299 (378) 58,975 16,575 TotalO perating Expenses 84,760 79,839 4,921 75,550 Ope rating Loss (34,160) (23,506) 10,654 (22,535) Non-operating Revenues (Expenses): Interestearned Interestexpense 2,600 (3,169) 1,087 (3,169) (1,513) 2,400 (3,274) TotalNon-operating Revenues (Expense (569) (2,082) (1,513) (874) N et Loss (34,729) (25,588) 9,141 (23,409) Add depreciation on fixed assets acquired by grants forcapitalacquisitions and construction thatreduces contributed capita 43,750 (34,729) (7,672) ,341 Retained Earnings -January 1 69, ,742 RETAI NED EARNINGS -DECEM BER 31 $ 34,354 $ 61,411 $ 9,141 $ 69,083 The accom panying notes are an integralpartofthis statem ent. 6

11 TOW N O F FO RDOCHE,LO UISIANA STATEM ENT O F CASH FLOW S -PROPRIETARY FUND TYPE FO R THE YEA R ENDED DECEM BER 31,2002 (W ith Com parative Totals foryearended Decem ber ) Enterprise Cash Flows from Operating Activities: Operating loss Adjustments to reconcile operating income to netcash provided by operating activities - Depreciation Changes in assets and liabilities - Decrease (increase)in receivables Increase (decrease)in accounts payable Increase (decrease)in due to GeneralFund Increase (decrease)in deferred revenues $ (23,506) $ (22,535} 28,545 28,702,041,240,208,090) 840 (2,045) 906 (1,722) NetCash Provided by (Used for)o perating Activities Cash Flows from Capita/and Related Financing Activities: Proceeds from LC DBG grant Acquisition offixed assets Paym ents on capitallease financing and interest 7,438 (1,200) (13,866) ,359 (40,359) (9,g88) NetCash (Used for)capitaland Related Financing Activities (15,066) (9,988) Cash Flows from Investing Activities: Intereston investm ents NetCash Provided by Investing Activities Cash and Cash Equivalents atjanuary (6,541) (3,44O) 60,572 CASH AND CASH EQUIVALENTS AT DECEMBER 31 $ 50,591 $ 57,132 The accom panying notes are an integralpartofthis statem ent.

12 TOW N O F FO RDO CHE,LO UISIA NA NOTES TO THE FINANCIAL STATEM ENTS D EC EM BER 31,2002 NO TE 1 -INTRO D UCTIO N The Town offordoche,louisiana (the "Town")was incorporated M ay 10,1961,underthe provisions oftitle 33,Chapter2,Part 1,ofthe Louisiana Revised Statutes (Law rason Act-ActNo.36 of 1898). The Tow n operates under a M ayor-board of A lderm en Councilform of governm ent and provides the follow ing services-public safety (police),streets,public im provem ents,and generaladm inistrative services. In addition, the Tow n ow ns and operates a w aterenterprise activity. NO TE 2 -SU M M A RY O F SIG N IFICA NT AC CO U NTIN G PO LIC IES As the m unicipalgoverning authority,forreporting purposes,the Tow n offordoche is considered a separate financialreporting entity. The financialreporting entity consists of[a]the prim ary governm ent(m unicipality),[b]organizations forwhich the prim ary governmentis financia ly accountable,and [c]otherorganizations for w hich nature and significance of their relationship w ith the prim ary governm ent are such that exclusion w ould cause the reporting entity's financialstatem ents to be m isleading orincom plete. Governm entalaccounting Standards Board (GASB)Statement No.14 established criteria fordeterm ining w hich com ponentunits should be considered partofthe Tow n offordoche forfinancialreporting purposes. The basic criterion for including a potentiajcom ponentunitw ithin the reporting entity is financialaccount~ ability. The GASB has set forth criteria to be considered in determ ining financialaccountability. This criteria include: Appointing a voting majority ofan organization's governing body,and a. The ability ofthe m unicipality to im pose its w ilon thatorganization and/or b. The potentialforthe organization to provide specific financialbenefits to orim pose specific financialburdens on the m unicipality. O rganizations forwhich the municipality does notappointa voting majority butare fiscaly dependenton the m unicipality. O rganizations forw hich the reporting entity financialstatem ents w ould be m isleading ifdata ofthe organization is notincluded because ofthe nature orsignificance ofthe relationship. As required by genera ly accepted accounting principles,these financialstatem ents present the Tow n of Fordoche (the primary government).there are no componentunits thatare required to be included with the reporting entity. The m unicipality m ay appointsom e,orall,governing board m em bers oforganizations thatare notincluded as com ponentunits in the primary governm ent's reporting entity. These organizations are classified as [a] related organizations,[b]jointventures and jointly governed organizations,and [c]componentunits of anothergovernmentwith characteristics ofa jointventure orjointly governed organization. Considered in the determ ination ofcom ponentunits ofthe reporting entity w ere the Pointe C oupee Parish Police Jury,Sheriff,C lerk ofc ourt,assessor,and SchoolBoard and the D istrictattorney and Judges for the 18th JudicialDistrict, Itw as determ ined thatthese governm entalentities are not com ponent units of

13 TOW N O F FO RDO C HE,LO UISIANA NOTES TO THE FINANCIA L STATEM ENTS (CO NTIN UED) D EC EM BER 31,2002 the Tow n of Fordoche reporting entity because they have separately elected governing bodies, are legally separate,and are fisca ly independentofthe Tow n offordoche. A lso,excluded from the reporting entity: Fire Protection D istrict N o.4 of the Parish of Pointe C nunp_~_.lnui.~i~n~ This potentialcomponent unit has a separate board appointed jointly by the area governments' governing bodies. Itprovides services to residents,w ithin the geographic boundaries ofthe governmentand otherareas adjacentto it. This unitis excluded from the reporting entity because the governm ent does not have the ability to exercise influence or controlover its daily operations, approve budgets orprovide funding. Fund A ccountinq The m unicipality uses funds and account groups to report on its financialposition and the results of its operations. Fund accounting is designed to dem onstrate legalcom pliance and to aid financialm anagem ent by segregating transactions relating to certain governm entfunctions oractivities. A fund is a separate accounting entity w ith a self-balancing setofaccounts, O n the otherhand,an account group is a financialreporting device designed to provide accountability forcertain assets and liabilities that are not recorded in the funds because they do not directly affect net expendable available financialre. so urces. Funds ofthe m unicipality are classified into tw o categories: governm entaland proprietary, In turn,each category is divided into separate fund types. The fund classifications and a description ofeach existing fund type follow : Governm entalfunds are used to accountfora lorm ostofthe m unicipality's generalactivities,including the collection and disbursem entofspecific orlegally restricted m onies,the acquisition orconstruction ofgeneral fixed assets,and the servicing ofgenerallong-term debt. G overnm entalfunds include: GeneralFund--the generaloperating fund ofthe m unicipality and accounts forallfinancialresources exceptthose required to be accounted forin otherfunds. Proprietary Fund Type Proprietary funds are used to accountforactivities sim ilarto those found in the private sector,w here the determ ination ofnetincom e is necessary orusefulto sound financialadm inistration. Proprietary funds differ from governm entalfunds in that their focus is on incom e m easurem ent,w hich,togetherw ith the m aintenance ofequity,is an im portantfinancialindicator. Proprietary funds include: Enterprise funds--accountforoperations (a)where the intentofthe governing body is thatthe costs (expenses,including depreciation)ofproviding goods orservices to the generalpublic on a continuing basis be financed orrecovered primarily through usercharges;or(b)w here the governing body has decided thatperiodic determ ination ofrevenues earned,expenses incurred,and/ornetincome is appropriate for capital m aintenance, public policy, m anagem ent control, accountability,or other purposes.

14 TO W N O F FO RDO C HE,LO U ISIA NA NOTES TO THE FINANC IAL STATEM ENTS (CO NTIN UED) D EC EM BER 31,2002 The accounting and financialreporting treatm entapplied to a fund is determ ined by its m easurem entfocus. A lgovernm entalfunds are accounted forusing a currentfinancialresources m easurem entfocus. W ith this m easurem entfocus,only currentassets and currentliabilities generally are included on the balance sheet. O perating statem ents forthese funds presentincreases and decreases in netcurrentassets. The m odified accrualbasis of accounting is used by a lgovernm entalfunds. The governm entalfunds use the fo low ing practices in recording revenues and expenditures: Ad valorem taxes and related state revenue sharing are recorded in the yearthe taxes are due and payable. Ad valorem taxes are assessed on a calendar yearbasis and attach as an enforceable lien and becom e due and payable on the date the tax ro ls are filed w ith the recorder of m ortgages. Louisiana Revised Statute 47:1993 requires that the tax rollbe filed on or before N ovem ber 15 of each year. Ad valorem taxes becom e delinquentifnotpaid by Decem ber31. The taxes are norm a ly collected in Decem berofthe currentyearand January and February ofthe ensuing year. Sales and use tax revenues are recorded in the m onth they are received by the parish tax co lector Federaland state grants and reim bursem ents are recorded w hen the Tow n is entitled to the funds. Fines,forfeitures,and courtcosts are recorded in the year they are received by the Tow n orparish tax collector. Fees,charges and com m issions are recognized as revenue in the m onth in w hich they are earned and billed. Substantia ly a lotherrevenues are recorded w hen received by the Tow n Expenditures Expenditures are recognized under the m odified accrualbasis ofaccounting w hen the related fund liability is incurred. OtherFinancing Sources (Uses) Transfers betw een funds that are not expected to be repaid are accounted for as other financing sources (uses)and are recorded w hen the actual transfers occurs A lproprietary funds are accounted foron a flow ofeconom ic resources m easurem entfocus and a determ i- nation of net incom e and capitalm aintenance. W ith this m easurem ent focus,allassets and allliabilities associated w ith the operation ofthese funds are included on the balance sheet. The proprietary funds use the accrualbasis ofaccounting. Revenues are recognized w hen earned,and expenses are recognized atthe tim e liabilities are incurred. 10

15 TO W N O F FO RDO C HE,LO U ISIANA NOTES TO THE FINANCIAL STATEM ENTS (CO NTINUED) D EC EM BER 31,2002 A proposed operating budget for the fiscalyear,prepared on GAAP Basis,is approved by the Board of Alderm en and adopted in accordance w ith the Local G overnm ent Budget Law. The operating budget includes proposed expenditures and the m eans offinancing them. D uring the year, m onthly budgetary com parison statem ents are used as m anagem ent tools to control operations. W hen necessary the Board adopts budgetam endm ents w hich are included in m inutes published in the officialjournal. The Board exercises budgetary controlatthe line item level. U nexpended appropriations lapse at the year end and m ustbe reappropriated in the nextyear's budgetto be expended. The Tow n does notfo low the encum brance m ethod ofaccounting Cash and cash equivalents includes am ounts in dem and deposits,interest-bearing dem and deposits,and pooled cash in the Louisiana AssetM anagem entpool,inc.. U nderstate law,the m unicipality m ay deposit funds in dem and deposits,interest-bearing dem and deposits,m oney m arketaccounts,ortim e deposits w ith state banks organized under Louisiana law and nationalbanks having their principaloffices in Louisiana. State statutes also authorizes localgovernm ents in Louisiana to investin the Louisiana Asset M anagem ent PoolInc.(LAM P),a non-profit corporation formed by an initiative of the State Treasurer and organized underthe law s ofthe State oflouisiana,w hich operates a localgovernm entinvestm entpool. Investm ents are stated atcost. The Tow n uses the directcharge-offm ethod w hereby unco lectible am ounts due from ad valorem taxes are recognized as bad debts atthe tim e inform ation becom es available w hich w ould indicate the unco lectibility of the particular receivable. The direct charge-of m ethod is used because it does not cause a m aterial departure from GAA P and itapproxim ates the valuation m ethod. During the course ofoperations,num erous transactions occur betw een individualfunds forgoods provided orservices rendered. These receivables and payables are classified as due from otherfunds ordue to other funds on the balance sheet, Short-term interfund loans are classified as interfund receivables/payables. nventories forsupplies are im m aterialand are recorded as expenditures w hen purchased Fixed assets ofgovernm entalfunds are recorded as expenditures atthe tim e purchased orconstructed,and the related assets are reported in the generalfixed assets accountgroup. Public domain ("infrastructure") 11

16 TO W N O F FO RDO CHE,LO UISIANA NO TES TO THE FINA NC IAL STATEM ENTS (CO NTINU ED) D EC EM BER 31,2002 generalfixed assets consisting ofcertain im provem ents other than buildings,including roads,streets,and drainage system s,are notcapitalized w ith otherfixed assets. Interestcostincurred during construction are capitalized. No depreciation has been provided on generalfixed assets. A lfixed assets are valued at historicalcostorestim ated costifhistoricalcostis notavailable. Repairs and m aintenance are recorded as expenditures;renew als and betterm ents are capitalized, Prooertv.Plantand Eouiom ent-proorietarv Fund Fixed assets used in the proprietary fund operations are included on the balance sheet of the funds netof accum ulated depreciation. Additions to the utility plant in service are recorded at cost or,if contributed property,at their estim ated fair value at tim e of contribution. Repairs and m aintenance are recorded as expenses;renew als and betterm ents are capitalized. The sale or disposalof fixed assets is recorded by removing costand accum ulated depreciation from the accounts and charging the resulting gain orloss to incom e. Depreciation is charged as an expense againstoperations. Depreciation is com puted using the straight-line m ethod w ith estim ated usefullives as follow s: W atersystem Equipm ent V ehicles O ffice Equipm ent 35 Years 10 Yea rs 5 Years 5 Years The Tow n has notestablished any vacation orsick leave policies Fund Equity C ontributed Capital Contributed capital is recorded in proprietary funds that have received capital grants or contributions from developers,custom ers,orotherfunds w hen such resources are restricted forthe acquisition or construction of capital assets. Contributed capital is am ortized based on the depreciation recognized on that portion ofthe assets acquired orconstructed from such resources. This depreciation is closed to the contributed capitalaccountand is reflected as a adjustmentto net incom e. U nreserved Retained Earnings Unreserv ed retained earnings for proprietary funds represent the net assets available for future operations ordistribution. Unreserv ed-u ndesignated Fund Balances The unreserved-undesignated fund balances forgovernm entalfunds represent the am ountavailable forbudgeting future operations. 12

17 TO W N O F FO RDO C HE,LO U ISIA NA NOTES TO THE FINANC IAL STATEM ENTS (C O NTIN UED) D EC EM BER 31,2002 Allinterfund transfers are reported as operating transfers. The preparation offinancialstatem ents in conform ity w ith genera ly accepted accounting principles requires m anagem ent to m ake estim ates and assum ptions that affect certain reported am ounts and disclosures. A ccordingly,actualresults could differfrom those estim ates. The Tow n is exposed to various risks ofloss relating to torts;theftof,dam age to,and destruction ofassets; errors and omissions;injuries to employees;and naturaldisasters.the Town attempts to minimize risk from significantlosses through the purchase ofcom m ercialinsurance. Com parative totaldata forthe prioryearhave been presented in the accom panying financialstatem ents in order to provide an understanding of changes in the Tow n's financialposition and operations. How ever, com plete com parative data (i.e.,presentation of prioryear totals by fund type in each of the statem ents) have not been presented since their inclusion would m ake the statem ents unduly com plex and difficult to read. Totalcolum ns on the Com bined Statem ents are captioned "M em orandum O nly" to indicate that they are presented only to facilitate financialanalysis. Data in these colum ns do not present financialposition or results of operations,in conform ity w ith genera ly accepted accounting principles. Neither is such data com parable to a consolidation. Interfund elim inations have notbeen m ade in the aggregation ofthis data. N O TE 3 -CASH D EPO SITS W ITH FINA NC IA L INSTITUTIO NS AtDecem ber31,2002,the status ofdeposited funds and collateralized balances are as fo low s: Balance perbank statem ents Secured by FederalDepositinsurance Secured by Pledge ofsecurities 27,142 27,142 O Unsecured and U nco lateralized These deposits are stated at cost,w hich approxim ates m arket. Understate law,these deposits m ust be secured by federaldepositinsurance orthe pledge ofsecurities ow ned by the fiscalagentbank. Cash also includes $88,901 in the Louisiana Asset M anagement PoolInc.(LAM P),a localgovernment investmentpool(see Summary ofsignificantaccounting Policies). In accordance with GASB Codification Section 150,165,the cash in LA M P at Decem ber31,2002,is notcategorized in the three risk categories provided by GASB Codification Section because the investm entis in the pooloffunds and therefore 13

18 TO W N O F FO RDO C HE,LO UISIA NA NOTES TO THE FINANCIAL STATEM ENTS (CO NTINUED) D EC EM BER 31,2002 notevidenced by securities thatexistin physicalorbook entry form. LAM P is adm inistered by LA M P,Inc.,a non-profitcorporation organized underthe law s ofthe State oflouisiana,w hich w as form ed by an initiative ofthe State Treasurer in The corporation is governed by a board ofdirectors com prising the State Treasurer,representative from various organizations oflocalgovernm ent,the G overnm entfinance O fficers Association oflouisiana,and the Society oflouisiana C PA's. O nly localgovernm ents having contracted to participate in LAM P is to provide a safe environm entforthe placem entofpublic funds in short-term,highquality investm ents. The LA M P portfolio includes only securities and other obligations in w hich local governm ents in Louisiana are authorized to invest. Accordingly, LAM P investm ents are restricted to securities issued,guaranteed,orbacked by the U.S.Treasury,the U.S.governm entorone ofits agencies, enterprises,or instrum entalities,as w ellas repurchase agreem ents collateralized by those securities. The dollar w eighted average portfolio m aturity of LA M P assets is restricted to not m ore than 90 days,and consists ofno securities w ith a m aturity in excess of397 days. LA M P is designed to be highly liquid to give its participants im m ediate access to theiraccountbalances. NO TE 4 -C HA NG ES IN FIXED ASSETS A sum m ary ofchanges in generalfixed assets foljows: Beginning Balance Additions Deletions Ending Balance Land Buildings and im provem ents Tractorand equipm ent Equipm ent O ffice equipm ent Vehicles 51,500 63,416 39,271 19,026 6,275 28,062 $ 159,392 3,862 4,325 $ 51, ,808 39,271 22,888 10,600 28,062 Totals $ 207,550 $167,5789 $ 375,129 A sum m ary ofchanges in proprietary fund type property,plantand equipm entfollow s: W ater system Equipm ent O ffice equipm ent Vehicles Accum ulated depreciation Beginning Balance Additions Deletions 737,178 33,574 1,378 23,844 $ 1, ,974 $ 1,200 (306,625) $ 489,349 $ (28,545) Ending Balance 737,178 34,774 1,378 23, ,174 (335,171) S 462,003 From 1987 through 2000 the Tow n received federal and state capital grant funds for the purpose of expanding and enhancing the existing watersystem. Grantfunds received and expended on these projects amounted to $627,071,which were capitalized. These capitalgrants and capitalcontributions are reported underfund equity and are am ortized overthe estim ated usefullife ofthe im provem ents. Forthe yearended December31,2002,$17,916 was amortized and adjusted againstthe increase in retained earnings. 14

19 TO W N O F FO RDO C HE,LO U ISIA NA NOTES TO THE FINANCIAL STATEM ENTS (CO NTINUED) D EC EM BER 31,2002 NOTE 5 -A D VALO REM TAXES Alltaxable property located within the State oflouisiana is subjectby law to taxation on the basis ofits assessed valuation. The assessed value is determ ined by the Parish Assessor,except for public utility property w hich is assessed by the Louisiana Tax Com m ission. The 1974 Louisiana Constitution provided that,beginning in 1976,a lland and residentialproperty w ere to be assessed at 10% of fair m arket value;agricultural,horticultural,m arsh lands,tim ber lands and certain historic buildings are to be assessed at10% of"use"value;and allotherproperty is to be assessed at 15% of fairmarketvalue. Fairmarketvalues are determ ined by the elected assessorofthe parish and are subject to review and finalcertification by the Louisiana Tax Com m ission. The Assessoris required to reappraise a l property every fouryears. The Sheriff of Pointe Coupee Parish,as provided by State Law, is the official tax co lector of general property taxes levied by the Tow n. Alltaxes are due by Decem ber 31 of the year and are delinquent on January 1 ofthe nextyear,w hich is also the lien date. State law requires the Sheriff to collect property taxes in the calendar year in w hich the assessm ent is m ade. Ifthe 1991 taxes are notpaid by the due date ofdecem ber31st,the taxes bearinterestat1.25% per m onth untilthe taxes are paid. Afternotice is given to the delinquenttaxpayers,the Sheriffis required by the Constitution ofthe State oflouisiana to se lthe leastquantity ofproperty necessary to settle the taxes and interestow ed. Property taxes are recognized as revenue in the year for w hich they are levied and becom e due. The majority of the year's taxes are co lected from Novem berto February by the Sheriff. Any amounts not co lected atdecem ber31stare show n as accounts receivable. The fo low ing is a sum m ary ofthe tax assessm entro ls since 1990: Year M ills Levied Assessed Value Hom estead Exem ption Tax to be Paid by O w ner Tax to be Paid by State Tota Tax $ ,119,932 1,159,133 1,230,330 1,256,344 1,296,809 1,335,392 1,497,390 1,525,691 1,573,420 1,711,392 1,885,429 2,022,382 2,100,805 $ 8, , , , , , , , , , , , , ,309,81 8, , , , , , , , , , , ,

20 A non-exclusive cable television franchise was granted to Spilw ay Cablevision,Inc.on Novem ber 14,1995 for a period of 15 years. The annual franchise fee for this franchise sha l be 3% of the annualgross subscriberrevenues. O n January 15, 1998,the Tow n renew ed a telephone franchise w ith StarTelephone Com pany,inc.for a period oftw enty-five years ending Decem ber31,2022. The annualfranchise fee forthis franchise is 2% of the C om pany's gross receipts. O n February 10,1994,the Town granted a franchise to Pointe Coupee Electric M em bership Corporation (a non-profitcorporation)to supply electric energy to the Tow n and the inhabitants thereoffora period of20 years. In consideration, the Town shal receive a fee equaling $.0025 per kilowatt-hour for each kilow att-hoursold w ithin the corporate lim its ofthe Tow n. In addition,the Tow n is provided streetlighting in the corporate lim its ofthe Tow n existing on the date ofthe franchise at no charge. A ny additionalstreet lighting needed afterthe franchise date w ilbe furnished underthe applicable rate. NO TE 8 -PEN SIO N PLAN A N D RETIREM ENT C O M M ITM ENTS A ltow n em ployees belong to the SocialSecurity System NOTE 9 -C O NTING ENT LIABILITIES There is one pending litigation againstthe Tow n and according to counselis in the discovery phase 16

21 TO W N O F FO RD O C HE,LO U ISIA NA NOTES TO THE FINANCIAL STATEM ENTS (CO NTIN UED) D EC EM BER 31,2002 N O TE 10 -C O M PENSATIO N PA ID TO BO A RD M EM BERS In com pliance w ith House Concurrent Resolution No.54 ofthe 1979 Session of the Louisiana Legislature com pensation paid to the outgoing m ayorand board m em bers is as fo low s: Justin K.C ox,m ayor M ichelm eche Irm a Sm ith PatSm ith Don Sonnier Stan Thibodeaux $ 2, $ 5,400 N O TE 11 -FED ERA L FINA N C IA L A SSISTA N C E The Tow n received no federalfunding forthe fiscalyearended Decem ber31,

22 THIS PAG E INTENTIO NALLY LEFT BLAN K 18

23 S U PPLEM EN TA L IN FO RM A TIO N 19

24 THIS PAG E INTENTIO NALLY LEFT BLAN K

25 SCHEDULE 1 TOW N O F FORDOCHE0LO UISIANA GENERAL FUND SCHEDULE O F REVENUES -BUDGET AND ACTUAL (GAAP BASIS) FO R THE YEAR ENDED DECEM BER 31,2002 (W ith Com parative Totals foryearended Decem ber31,2001) Taxes: Generalproperty Sales Electric franchise Cable "IV franchise Telephone franchise 25,000 35,000 14,500 2,600 Actual 23,547 39,586 15,842 3, Variance Favorable (Unfavorable) $ (1,453) 4,586 1,342 1,156 $ Actual 24,817 47,302 14,664 2, TotalTaxes 78,600 $ 84,224 $ 5,624 $ 91,018 Licenses and Perm its: O ccupationallicenses Liquorand beerperm its Building perm its 11, , $ (225) 75 10, TotalLicensesand Permits $ 12,025 $ 12,841 $ 816 $ 10,746 Intergovernm enta/revenues: G rant-la RuralDevelopm ent La -V ideo poker La -Beertaxes La -Departm entofjustice La -Law Enforcem ent 50,000 1, ,500 70,000 13,614 1,359 1, ,000 12, ,600 (1,529) 1, TotalIntergovernmentalRevenues $ 54,000 $ 87,544 $ 33,544 $ 4,308 Fines and Forfeitures: Traffic fines $ 8,300 $ 12,138 $ 3,838 $ 12,397 M iscellaneous Revenues: Interestearned G rass cutting contracts Comm unity Centerlease Fairand festival Donation ofland Contribution from Fire DistrictNo.4 Other 4,200 3,500 3,600 1,480 $ (2,720) $ ,840 (1,760) 16,265 16,265 5, ,000 25,000 1,025 3,603 2,576 3,218 TotalM isce[laneous Revenues $ 12,325 $ 26,688 $ 14,363 $ 61,851 21

26 SCHEDULE 2 TOW N OF FO RDOCHE,LO UISIANA SCHEDULE OF EXPENDITURES -BUDG ET AND ACTUAL (GAAP BASIS) GENERAL FUND FO R THE YEAR ENDED DECEM BER 31,2002 0Nith Com parative Totals foryearended Decem ber31,2001) Genera/Governm ent: M ayor's perdiem Councilm em bers perdiem Salary -clerk Benefits Attorney fee Assessorfee Auditfee Accounting services C onventions,conferences,sem inars Election expense Utilities Insurance Telephone Publishing and recording Tourism and prom otion Beautification program M aintenance ofbuilding M aintenance ofoffice equipm ent O ffice expense and postage Health and welfare M isce laneous expenses 2,400 3,0OO 9, , , ,200 1,900 3,570 7,700 3,500 2,700 8,500 4,300 3,400 1,900 2,000 2OO Actual 2,400 3,000 9,985 1,487 2, ,100 1,627 3,046 2,058 2,094 5,503 4,665 2,308 8,135 4,214 1,831 1,384 1,650 6O0 5,671 Variance Favorable (Unfavorable) (885) 2, (33) 100 (827) 154 (158) 1,476 2,197 (1,165) , (400) (2,171) Actual 2,400 2,950 7,723 1,949 3, , ,9OO 2,175 4,475 3,593 2, ,279 1,060 2, TotalGeneralGovernment S 70,570 S 66,041 $ 4,529 $ 46,496 Public Safety -Police: Salary -chiefofpolice Salary -police officers Benefits Uniform s and allowances Insurance Telephone and paging system Dues and subscriptions Ticketfees M aintenance ofvehicles Police supplies M aintenance ofradios M isce laneous expenses 9, ,100 2, , , , ,642 1, ,086 (1,006) (165) O (21) ,600 4, ,332 2, , TotalPublic Safety-Police $ 22,620 $ 19,187 $ 3,433 $ 26,

27 Streets and Drainage: Salaries Benefits Uniform s and linen service Insurance C ontractlabor M aintenance m aterials Streetsigns and speed bum ps M aintenance ofvehicles M aintenance ofequipm ent Sm a ltools and supplies Chem icals -weed control M isce laneous expenses Budget 11, , , ,500 1, Actual 10, , Variance Favorable (Unfavorable) 15 Actual 10, , , TotalStreets and Drainage $ 20,100 $ 18,003 $ == ~== 2,097 $ 21,049 Com m unity CenteR. Insurance Electricity Supplies M aintenance Janitorial $ 1,269 $ (269) ,584 (384) 1,460 1,648 (248) , TotalCom munity Center CapitalOutlays: G eneralgovernm ent Public safety -police Com m unity center 1,000 2,500 $ $ 3,761 3,425 $ (2,761) -925 $ 4, ,393 (14,473) 64,405 TotalCapitalO utlays $ 149,420 $ 167,579 $ (18,159) $ 68,416 23

28 SC HEDULE 3 TOW N OF FORDOCHE,LO UISIANA SCHEDULE O F EXPENSES -BUDGET AND ACTUAL (GAAP BASIS) PRO PRIETARY FUND TYPE -ENTERPRISE FUND FOR THE YEAR ENDED DECEM BER (W ith Com parative Totals foryearended Decem ber31,2001) Actual Variance Favorable (Unfavorab e~ Actual Operating Expenses: W aterexpenses - Salary -superintendent Salary -maintenance Benefits professionalfees Currentused in pumping M aintenance ofvehicles M aintenance oftrencher M aintenance ofpum ping equipm ent M aintenance oftines M aintenance ofchlorinator Chlorine Supplies and sma ltools M aintenance ofvehicles Depreciation 13,800 2,850 3, , ,000 3,000 5O O0 1,050 29,000 14,154 1,114 2,193 4,922 1, ,746 2, ,545 (354) 1,736 1, (60) O (39) 455 2,557 8, ,857 5, , O TotalW aterexpenses G eneraland Adm inistrative - Satary -clerk Benefits Auditfees Accounting services Insurance Dues and subscriptions M aintenance ofcom puter Office supplies Bils and postage M isce laneous Depreciation $ 9,700 1,100 1, , ,1O ,677 1,689 1,100 3, S (589) 8OO (1,246) (54) , , TotalGeneraland Administrative $ 18,800 24

29 OTHER REPORTS REO UIRED BY G O VERN M EN T A UD ITIN G S TA N DA RD S The follow ing pages contain a report on com pliance w ith law s and regulations and on internalcontrolover financialreporting as required by G overnm ent A uditing S tandards, issued by the C om ptro lerg eneralofthe U nited States. This reportis based solely on the audit of the financialstatem ents and includes,w here appropriate,any reportable conditions and/ormaterialm isstatem ents in internalcontrolorcom pliance m atters thatw ould be m aterialto the presented financialstatem ents.

30 CEP,TtVlED PUBLIC ACCOUNTANT (A ProfessionalCorporation) Practice Lim ited to Governm entalaccounting,auditing and FinancialReporting Phone OFFIC~ (22~) F.~x (22S)63s-3669 Ofice 7(,63 ANCHOa DRIW V~X'aXK~.LA 707S Member AMERICAN INSTI TUTE OF CP~ LOIJISLKNIA SO~-.LI~I~ OF CpAs GOVERNMENT FINANCE OFFICERS ASSOCIATION IND EPEN D EN T AUD ITO R'S REPO RT O N CO M PLIAN CE AN D O N INTERNAL CO N TRO L O VER FINAN CIAL RE PO RTIN G BASED O N AN AUD IT O F FINAN CIAL STATEM ENT S PERFO RM ED IN ACC O RDAN To the M ayor and Board of Alderm en Tow n of Fordoche,Louisiana CE W ITH G O VERNM EN T A UD ITIN G STAND ARD S Ihave audited the generalpurpose financialstatem entsofthe TOW N OF FORDOCHE,LOUISIANA (the "Town"), as ofand for the year ended Decem ber 31,2002,and have issued m y reportthereon dated June 17,2003. I conducted m y auditin accordance w ith auditing standards generally accepted in the United States of Am erica and the standards applicable to financialaudits contained in Governm entauditing Standards,issued by the Com p- troller Generalofthe United States. As partof obtaining reasonable assurance aboutw hethertown of Fordoche,Louisiana's genera lpurpose financial statem ents are free of m aterialm isstatem ent,iperform ed tests ofits com pliance w ith certain provisions oflaw s, regulations,contra cts and gra nts, noncom pliance w ith w hich could have a direct and m aterial efect on the determ ination of finan cial statem ent am ounts. How ever, providing an opinion on com pliance wi th those provisionswasnotan objective ofmy auditand,accordingly,ido notexpre sssuch an opinion.the resultsofmy tests disclosed no instances of noncom pliance that are required to be reported under Governm en tauditing Standards. In planning and perform ing m y audit,iconsidered Tow n offordoche,louisiana's internalcontrolover financial reporting in order to determ ine m y auditing proceduresfor the purpose of expre ssing m y opinion on the genera l purpose financialstatem entsand notto provide as sura nce on the internalcontrolover financialreporting. M y considera tion of the internalcontrolover financialreporting w ould not necessarily disclose allm atters in the intern alcontrolover financial reporting thatm ightbe m aterialw eaknesses. A m aterialweaknessis a condition in w hich the design oropera tion ofone or m ore of the internalcontrolcom ponentsdoesnotreduce to a relatively low level the risk that m isstatem ents in am ounts th at would be m aterial in re lation to the genera l purpose financial statem ents being audited m ay occur and notbe detected w ithin a tim ely period by em ployees in the norm alcourse of perform ing their assigned functions. I noted no m atters involving the internalcontrolover financialre porting and itsopera tionsthaticonsider to be m aterialw eakn esses. Thisreport isintended for the inform ation of m anagem entand the Legislative Auditor for the State oflouisiana H ow ever,thisreport isa m atter of public re cord and itsdistribution isnotlim ited. June 17,2003

31 TOW N O F FO RDO C HE,LO UISIANA SC HED U LE O F FIN D ING S Y EA R EN D ED D EC EM BER 31,2002 A. S U M M A RY O F A U D IT RESU LTS 1. The auditor's reportexpresses an unqualified opinion on the generalpurpose financialstatem ents oftow n offordoche,louisiana. 2. No reportable conditions w ere disclosed during the audit of the genera purpose financialstatem ents. 3 N o com pliance violations w ere disclosed during the audit of the genera purpose financialstatem ents. 4. The Tow n of Fordoche,Louisiana received no federalfunds during the year B. FIN D ING S - FINA N C IA L STATEM ENTS A U DIT N one