LO U ISIA N A STATE B O A RD O F N U R SIN G D EPA R TM EN T H EALTH A N D H O SPITA LS STATE O F LO U ISIAN A

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1 LO U ISIA N A STATE B O A RD O F N U R SIN G D EPA R TM EN T H EALTH A N D H O SPITA LS STATE O F LO U ISIAN A Basic Financial Statem ents and Independent Auditors'Reports As of and for the Two Years Ended June 30,2002 W ith Supplem entalinform ation

2 LO U ISIA N A STA TE B O A R D O F N U R SIN G 3510 N.CA U SEXVAY BLVD.,SU ITE 501 M ETA IRIE,LO U ISIA N A (50~) N ursing Educators Patsy Bourgc;ois,M SN,CN S,RN N ora Steel,D N S,POX/,C Karen M oody,ph.d, RN C N ursinu Adm inistrators D eborah Ford,M SN,RN,CNA Frankie Rosenthal,M SN,RN,CNA,CN S O ther Areas of N ursine Kathleen Cooper,M N,CN S,RN O sw ald Ferry,EdD,CRNA Tom m ie Jean Ashby,RN,BSN Elsie Crapanzano,M SN,RN Advanced Practice N ursin~ Patsy M cclanahan,m SN,RD M S,RN CN P N on-voting M edicạ1d octors EliSorkow,M.D. Barbara M oreant,executive D irector

3 TABLE O F CO N TENTS IndependentAuditors'Reporton the l~inaneialstatem ents M anagem ent's D iscussion and Analysis Basic FinancialStatem ents: G overnm ent-w ide FinancialStatem ents - Statem entof N etassets Statem entof Activities Fund FinancialStatem ents -G overnm entalfund Balance Sheet Statem entof Revenues,Expenditures and Changes in Fund Balance N otes to the FinancialStatem ents Page R equired Supplem entary Inform ation: Budgetary Com parison Schedules-G eneralfund O ther ReportRequired by G overnm ent Auditing Standards: IndependentAuditors'Reporton Com pliance and on InternalControlO ver Financial Reporting Based on an Auditof the Basic FinancialStatem ents Perform ed in Accordance w ith Governm enta uditing Standards Schedule of Findings Resolution of Prior Year Findings Supplem ental Inform ation Requir ed by D ivision of Adm inistration: Independent Auditors'Reporton AnnualFinancialReportto the Louisiana D ivision of Adm inistration 37 Atm ualfinancialreport 38

4 P.O.Box 158 D enham Springs,LA 7072% / Fax:225/ PresidentD r. B aton R ouge,la / Fax :225/ IN D EPEN D ENT AU D ITO R S'REPO RT O N TH E FINAN CIAL STATEM ENTS B oard M em bers of Louisiana State B oard of N ursing D epar tm ent H ealth and H ospitals State of Louisiana M etairie,louisiana W e have audited the accom panying basic financialstatem ents of the Louisiana State Board of Nursing,a com ponentunitof the State of Louisiana,asof and for the two yearsended June 30, 2002, as listed in the Table of Contents. These basic financial statem ents are the responsibility of Louisiana State Board of Nursing's m anagem ent. O ur responsibility is to expt'ess an opinion on these basic financialstatem ents based on ouraudit. W e conducted our audit in accordance w ith auditing standards generally accepted in the United States of Am erica and the standards applicable to financial audits contained in Govet~zm entauditing Standards,issued by the Com ptroller Generalof the United States,and the Louisiana Governm ental A udit G uide. Those standards and the guide require thatw e plan and perform the auditto obtain reasonable assurance aboutw hether the basic financial statem ents ate free of m aterialm isstatem ent. An audit includes exam ining,on a testbasis, evidence supporting the am ounts and disclosures in the basic financialstatem ents. An audit also includes assessing the accounting pritlciples used and significant estim ates m ade by m anagem ent, as w ell as evaluating the overall basic financial statem ent presentation. W e believe thatourauditprovides a reasonable basis for our opinion. In our opinion,the basic financialstatem ents referred to above presentfairly,in allm aterial respects,the financialposition of the Louisiana State Board of Nursing,asof June 30,2002, and the results of its operations for the tw o years then ended,in conform ity w ith accounting principles generally accepted in the U nited States of Am erica. As described in N ote 1 to the basic financialstatem ents,the Louisiana State Board of Nursing adopted the provisions of G overnm entalaccounting Standards Board Statem entno.34,basic FinancialStatem ents - and M anagem ent's D iscussion and Ana lysis - For State and l~ cal G overnm ents;statem entn o.37,basic FinancialStatem ents - and M ana gem ent's D iscussion and Analysis -for State and LocalGovernments: Omnibus;and Interpretation No.6, Recognition and M easurem entof Certain Liabilities and Expenditures in Governm entalfund FinancialStatem ents,asof July 1,2000.This resultsin a change in the form atand contentof the basic financialstatem ents. The accom panying M anagem ent's D iscussion and Analysis,as listed in the Table of Contents, is required supplem entary inform ation and therefore, is not a required part of the basic

5 financial statem ents but is supplem entary inform ation required by the Governm ent Accounting Standards Board. W e did noc audit and do not express an opinion on such inform ation. H ow ever,w e have applied certain lim ited procedures prescribed by professional standards w hich resulted in the discovery of m aterialerrors in the financialstatem ents and thatraised doubts thatw e w ere unable to resolve regarding w hether m aterialm odifications should be m ade to the inform ation for it to conform w ith guidelines established by the G overnm entalaccounting Standards Board. The accom panying Budgetary Com parison Schedule,as listed in the Table of Contents,is required supplem entary inform ation and therefore,is nota required partof the basic financial statem ents but is supplem entary inform ation required by the G overnm ent Accounting StandardsBoard.Such inform ation hasbeen subjected to the auditing proceduresapplied in the auditof the basic financialstatem ents and,in our opinion,is fairly stated in allm aterial respects in relation to the basic financialstatem ents taken as a w hole. W e have also issued ourreportdated July 25,2002 on ourconsideration ofthe LouisianaState Board ofn ursing's annualfinancialreport to the Louisiana D ivision of Adm inistration as of and for the year ended June 30,2002,w hich is listed in the Table of contents as Other Supplem entary Inform ation. In accordance w ith G overnm entauditing Standards,w e have also issued our reportdated July 25,2002,on our consideration of the Louisiana State Board of Nursing'sinternalcontrol over financial reporting and our tests of its com pliance w ith certain provisions of law s, regulations,and contracts. Thatreportisan integralpartof an auditperform ed in accordance w ith Governm entauditing Standardsand should be read in conjunction w ith thisreportin considering the results of our audit. Certified Public Accountant,APAC Certifi ed Public Accountan t July 25,2002

6 LO UISIA NA STATE BOA RD O F NURSING M ANAG EM ENT'S DISCUSSIO N A ND A NA LY(;IS AS O F JUNE 30,2002 The M anagem ent's Discussion and Analysis of the Louisiana State Board of Nursing~ financial perform ance presents a narrative overview and analysis ofthe Louisiana State Board ofnursing's financialactivities forthe yearended June 30,2002. This docum entfocuses on the cu~entyear's activities,resulting changes,and currently known facts in com parison with the prioryear's Morm ation. Please read this documentin conjunction with the additionalinformation contained in the transmittal letterpresented and the Louisiana State Board ofnursing's financialstatem ents,which begin on page 7. FIN AN C IA L H IG H LIG HTS The Louisiana State Board ofnursing's assets exce eded its liabilities atthe close offiscalyear 2002 by $2,600,821,which represents a 6.84% increase from lastfiscalyear.the netassets increased by $179,432 (or6.86% ).. k The Louisiana State Board ofnursing's revenue decreased $36,396 (or1.37%)and the net results from activities decreased by $625,773 (or71.3% ), ~k, k ~r O V ERV IEW O F THE FINA NCIA L STATEM ENTS The fo lowing graphic ilustrates the m inim um require m ents for Special Purpose Govern m ents Engaged in Business-Type Activities established by G overn mentalaccounting Standards Board Statem ent34,basic FinancialStatem ents--and M anaqem ent's Discussion and A nalysis- for State and LocalG overnm ents These financfalsta(ements consistofthree secfions -Management's Discussion and Analysis(this section),the basic financialstatements (including the notes to the financialstatements),and required supplem entary inform ation. U N A U D ITE D 3

7 ~,1A Ii" U I" LU U I~ IA N A LO UISIA NA STATE BOARD O F NURSING M AN AG EM ENT'S DISCUSSIO N A ND A NALYSIS AS O F JUNE 30,2002 Basic FinancialStatem ents The StatementofRevenues,Expenses,and Changes in Fund NetAssets (pages 8-9)presents inform ation show ing how the Louisiana State Board ofnursing's assets changed as a resultofcurrent yearoperations. Regardless ofw hen cash is afected,a lchanges in netassets are reported when the underlying transactions occur. As a result,there are transactions included thatw ilnotaffectcash untilfuture fiscalperiods. The Cash Flow Statement(pages 10-11)presents information showing how the Louisiana State Board ofnursing's (BTA)cash changed as a resultofcurrentyearoperations. The ca sh flow statementis prepared using the directm ethod and includes the reconciliation ofoperating inco me to netca sh provided (used)by operating activities (indirectmethod)asrequired by GASB 34. FINA N C IA L A NA LYSIS O F TH E ENTITY U N A U D ITE D 4

8 8 1A II:.O F L(.,)U I~IA NA LO UISIA NA STATE BOA RD O F NURSING M ANAG EM ENT'S DISCUSSIO N AND ANALYSIS AS O F JU NE 30,2002 Restricted net assets represent those assets that are not available for spending as a re sult of legislative re quirem ents,donoragreem ents,grantre quirem ents. Conversely,unre stricted netassets are those thatdo nothave any lim itations on w hatthese am ounts m ay be used for. Netassets ofthe Board increased by $251,850 or9.97%,from June 30,2001to June 30,2002. The Louisiana State Board ofnursing's (BTA)totalrevenuesdecreased by $36,396 or(1.37%).the totalcostofalprograms and servicesincre ased by $589,377 ormore than 32.98%. CA PITA L A SSET AND DEBT A DM INISTRATIO N CapitalAssets Atthe end of2002,the Louisiana State Board ofnursing had $23,267 invested in a broad range of capitalassets,including furniture,fixtures and equipment.(see Table below). This amountre presents a netdecrease (including additions and deductions)of$72,419,or75.68%, overlastyear. U N A U D ITED 5

9 ~ IA II=U ~ I-U U [~SIA NA LO UISIA NA STATE BOA RD O F NURSING M ANAG EM ENT'S DISCUSSIO N AND A NALYSIS AS O F JUNE 30,2002 (NetofDepreciation,in thousands) Land Buildings and im provem ents Equipm ent Infrastructure 23, ,686 Totals $ 23,267 $ 95,686 Thisyear's majoradditionsincluded (in thousands) ~ Computers $11,373 t Debt NIA The Louisiana State Board ofnursing had $ thousand in bonds and notes outstanding atyearend,com pared to $ thousand lastyear,an increase of._ % as show n in the table below. O utstanding DebtatYear-end (in thousands) G eneralo bligation Bonds Revenue Bonds and Notes Totals $ 0 0 $ 0 0 O 0 The Louisiana State Board ofnursing has claims and judgmentsof$. outstanding atyear-end co mpared with $ _ lastyear.otherobligations include accrued vacation pay and sick leave. VA R IATIO NS BETW EEN O RIG INA L A ND FINA L BUDG ETS U N A U D ITE D 6

10 ~,IA i: (,il"lu U I~IA N A LO UISIA NA STATE BOA RD O F NURSING DISCUSSIO N AND ANALYSIS A S O F JUNE 30,2002 Revenues were approxim ately $41thousand overbudgetand expenditures were less than budgetdue in partto budgeted positions notfi led forthe entire fiscalyear. ECO NO M IC FA CTO RS A N D NEXT YEA R 'S BUDG ETS A ND RATES The Louisiana State Board ofnursing's elected and appointed ofi cials considered the folov~ing factors and indicators w hen setting nextyear's budget,rates,and fees. These factors and indica tors include: ~ Dem and forregistered Nurs es in Louisiana ~ Increased stafand related benefits ~ Decrease interestrates on deposits The Louisiana State Board ofnursing expects thatnextyear's results wilim prove based onthe fo low ing : ~ Increase in dem and forregistered Nurs e,;in Louisiana CONTACTING THE LOUISIANA STATE BOARD OF NURSING'S (BTA)MANAGEMENT This financialreportis designed to provide ourcitizens,taxpayers,custom ers,and investors and creditors w ith a generaloverview ofthe Louisiana State Board ofnursing's finances and to show the Louisiana State Board ofnursing's accountability forthe m oney itrece ives. Ifyou have questions aboutthis report orneed additionalfinancialinfom m fion,contactm s.barbara L.M orvantm N,RN, Executive Directorat U N A U D IT ED 7

11 BA SIC FINAN CIA L STATEM ENTS The basic financialstatem ents include integrated sets of financialstatem ents as required by the G ASB. The sets ofstatem ents include: G overnm ent;w ide financialstatem e.nts Fund financialstatem ents - G overnm entalfu nds in addition,the notes to the financialstatem ents are included to provide inform ation thatis essentialto a user's understanding of the basic financialstatem ents.

12 LO U ISIANA STATE BO ARD O F N UR SIN G D EPARTM ENT O!~H EALTH AN D H O SPITALS STATEM ENT O F N ET A SSETS JUNE 30,2002 A SSETS C u rren t A ssets Cash and cash equivalents C ertificates of D eposit Receivables TotalCurrent Assets N oncurre~t A ssets Equipm ent Accum ulated depreciation Totalnoncurrentassets 495, ,500, , ,014, , (318,550.~0) 23~ TO TAL A S SETS LIA B ILITIES AN D N ET A SSETS Cur entlia bilities Accounts payable Payrolldeductions and accruals Rentpayable TotalCurrentLiabilities N oncur ent Lia bilities Com pensated absences TotalN oncurrentliabilities TO TAL LIA BILITIES N et Assets Investm entin capitalassets Unrestricted 46, , , , ~ , , ,777, TO TAL LIABILITIES AN D NE T ASSETS The accom panying notes are an integralpartof this statem ent. 9

13 LO U ISIANA STATE BO ARD O F N U RSIN G D EPAR TM EN T O F H EALTH AN D H O SPITALS STATEM EN T O F ACTIVITIES JUNE 30,2002 ~ EN SE S: Licensing Program Personalservices- Com m issionersper diem Salaries Em ployee benefits Travel O perating services Supplies Professionalserv ices D epreciation expense TotalProgram exp enses P rogram R evenues,. Licenses,perm its,and fees- Licenses Enforcem entactions TotalProgram Revenues N etprogram Revenue G eneral R evenues: Interestearnings Copies,labels,and lists TotalG eneralrevenues $ 12, ,254, , , , , , , ,447, ,486, , ,555, , , , , NetAssets atjune 30,2001 2,620, NetAssets atjune 30,2002 The accom panying notes are an integralpartofthis statem ent 10

14 LO U ISIANA STATE BO AR D O F N UR SING D EPAR TM EN T O F H EALTIt AN D H O SPITALS STATEM ENT O F ACTIVITIES JUNE 30,2001 EX PEN SE S: Licensing Program Personalservices - Com m issioners per diem Salaries Em ployee benefits Travel O perating services Supplies Professionalservices Sm allasset purchases D epreciation expense Total Program expenses P rog ra m R evenues: Licenses,perm its,and fees- Licen ses Enforcem entactions Total Program Revenues N etprogram Revenue G eneralr evenues: Interestearnings" Copies,labels,and lists TolalG eneralrevenues Increa se tn n et assets NetAssets atjune 30, , , , , , , , , ,857, ,475, , ,543, , , , , ,814, NetAssets atjune 30,2001 The accom panying notes are an integralpartof thisstatem ent 11

15 LO U ISIANA STATE BO ARD O F N U RSIN G D EPARTM ENT O F H EALTH AN D H O SPITAL S BALAN CE SH EET -G O VERNM ENTAL FUND JUNE 30,2002 A SSETS Cash and cash equivalents Certificates of D eposit Receivables TO TAL A SSETS $ 495, ,500, ~ $ 3,014, LIABILITIES AND FUND EQ UITY Liabilities: Accounts payable Payrolldeductions and accruals Rentpayable TotalLiabilities Fund Equtfy: Fund balance - U nreserved -undesignated TotalFund Equity 46, , ~905~ ~905, TOTAL LIABILITIES AND FUND EQUITY Reconciliation of totalgovernm entfund Balance to Net Assets of Governm entactivities: TotalG overnm entfund Equity Am ounts Reported for Governm entactivitiesin the Statem entof NetAssets are D iferentbecause: CapitalAs setsuse.m in Govern m entalactivities~.re not FinancialResourcesand there fore are notre ported in the Funds(NetofAccumulated Depre ciation of$318,550.40) $ 2,905, , Long-Term Liabilities,including Com pensated Absences,are not D ue and Payable in the CurrentPeriod and therefore notre ported in tilefunds (128,371.51) NetAssets of Governm entalactivities The accom panying notes are an integralpartof this statem ent "12

16 LO U ISIAN A STATE BO AR D O F N UR SIN G D EPARTM EN T O F H EALTH AN D H O SPITALS STA TEM EN T O F REVEN UES,EKPEN D ITURE S,AN D CH AN G ES IN FUND BALAN CE - G O VE RN M EN TAL FU N D YEAR ENDED JUNE 30,2002 R even u es: U se of m oney and property - Interest earnings Licenses,perm its,and fees- Licenses Enforcem entactions M iscellaneous- Copies,labels,and lists TotalRevenues, Ex# endttures: Current- Personalservices - Com m issioners per diem Salaries Em ployee benefits Travel O perating services Supplies Professionalservices Capitaloutlays TotalExpenditures Excess, of Revenues (Expenditures) FUND BALANCE -JUNE 30,2001 $ 68, ,486, , , ,628, ,675,00 1,254, , , , , , , ,350, ~ ,628, FUND BALANCE -JUNE 30,2002 The accom panying notes are an integralpartof this statem ent. 15

17 LO U ISIAN A STATE BO ARD O F N U RSIN G D EPARTM EN T O F H EALTH AN D H O SPITALS STAT EM EN T O F IEEVEN U ES,E KPEN D ITU RES,AN D C IIAN G ES IN FION D BALAN CE - G O VERN M EN TAL FU N D -C O N TIN U ED YEAR ENDED JUN E 30,2002 lieconctliation of the change in Fund Equity - G overnm ental Fund to the change in N et Assets of Govem~m entalactivities: NetChange in Fund Equity Governm entalfund $ 277, Am ounts Reported for G overnm entalactivities in the Statem entof Activities are diferent because: G overnm entalfunds reportcapitaloutlays as expenditures w hile G overnm entalactivities reportdepreciation expense to a locate those expendituresover the life of the assets: Capitalassetpurchases capitalized D epreciation expense 11, (83,791.40) Som e expensesreported in the Statem entof Activities,such as com pensated absences,do notrequire use of currentfinancialresources and therefore are notreported as expendituresin governmentalfunds (24~764.00) Change tn NetAssets of Governm entalacttvtties $ 180, The accom panying notes are an integralpartof this statem ent 14

18 LO U ISIAN A STATE B O ARD O F N U R SIN G D EPARTM F,N T O F H EALTH AN D H O SPITALS STATEM EN T O F REVEN U ES,EX PEN D ITU RES,AN D CH AN G ES IN FUND BALAN CE - G O VE RN M ENTAL FU N D YEAR ENDED JUNE 30,2001 R even ues: Use of m oney and properly - Intcrestearnings Licenses,perm its,and fees - Licenses Enforcem entactions M iscellaneous - Copies,labels,and lists TotalRevenues FAcpendt/ures: Current- Personalservices - Com m issioners per diem Salaries Em ployee benefits Travel O perating services Supplies Professionalservices C apitaloutlays TotalExpenditures Excess of Revenues (Expenditures) FUND BALAN CE -JUNE 30,2000 FUND BALANCE -JUNE 30,2001 $ 109, ,475, , $ 2,664, , , , , , , ,285,31 19, ,785, $ 878, $ 1,749,794,77 $ 2,628, The accom panying notes are an integralpartof this statem ent. 15

19 LO UISIA NA STATE BO ARD O F N URSIN G D EPAR TM ENT O F H EALTH AN D H O SPITALS STA TEM ENT O F REVEN UES,EXPEN D ITU RES,AN D CHA N G ES IN FUND BALAN CE - G O VE RN M EN TAL FUN D -CO N TIN UED YEAllENDED JUNE 30,2001 Reconciliation of the change in Fund Equity - Governm entalfund to the change in N etassets of Goverm nentalactivities: NetChange in Fund Equity Governm entalfund $ 878, Am ounts Reported for G overnm entalactivities in the Statem entof Activities are diferent because: G overn m entalfunds reportcapitaloutlays as expenditures w hile G overnm entalactivities reportdepreciation expense to allocate those expendituresover the life of the assets: Capitalassetpurchases capitalized D epred ation expense 13, (84,~16.40) Som e expenses reported in the Statem ent of Activities,such as com pensated absences,do notrequire use of currentfinancialresources and therefore are notreported as expenditu resin governm entalfu nds. (1~693.72) Change in NetAssets of GovernmentalActivities The accom panying notesare an integralpartof this statem ent 16

20 LO U ISIAN A STATE BO ARD O F N URSIN G D EPA RTM EN T O F H EALTH AN D H O SPITA LS STATE O F LO U ISIA N A N O TES TO TH E FINAN C IAL STATEM ENTS JUNE 30,2001 AND 2002 N O TE 1 -SU M M ARY O F SIG N IFICAN T ACCO U N TIN G PO LIC IES 1.A. IN TR O D U CTIO N N O TE 1 -IN TRO D U CTIO N The Louisiana State Board ofnursing (the Board)was created by the LouisianaState Legislature underthe provisionsoflouisiana Revised Statute 37:911. The Board isunder the contro lofthe D cpatlmentofliealth and H ospitalsand a com ponentunitofthe State oflouisiana and isan integralpartof such re porting entity. The Board,which iscomposed ofeleven (11)m embers appointed by the GovernorofLouisianafora term of fouryears. The Board consistsof nine re gistere d nursesselected from a listsubm itted by the Louisiana State Nurs esassociation and two pbysiciansfrom a listsubm itted by the Lo uisiana State M edicalsociety,who serve asex officio m em bersof the Board asadvisors and have no voting privileges. The nine nursesare com posed of the follow ing: Tw o nurs ing service adm inistrators Thre e nurs ing educators Thre e engaged in other are as of nurs e practice O ne advanced pra ctice re gistered nurse The Board electsfro m itsm em bersa pre sident,vice president,and such otherofficers asitconsidersnecessary to carlt outthe dutiesand functionsof the board. The Board ischarged w ith the responsibility oflicensing and regulating registere d nurses in the State oflo uisiana. Act633 ofthe 1995 Legislative Session am ended the Nurse Practice Actto require liceosure ofadvanced Practice Registered Nurses (APRNs). AtJune 30,2002 appro ximately 42,500 registered nursesand 2,300 APRNswere licensed. The Board 's ofi ce islocated in N ew O rleans,louisiana,and em ploys31 adm inistra tive personnel, The Board's operationsare funded entire ly through annualself.genera ted revenues. 1.B. FIN AN CIA L REPO RTIN G EN TITY GASE Statem entno.14,"the FinancialReporting Entity,"hasdefined the governm entalre porting entity to be the State of Lo uisiana, The Lo uisiana State Board ofnurs ing isconsidere d a com ponentunitofthe State of Louisiana be cause the state exercises oversight re sponsibility in that the governor appoints the board m em bers,and public service is rendere d w ithin the state's boundaries. The accom panying basic financial statem ents pre sent inform ation only as to the tra nsactions of the Lo uisiana State Board of Nurs ing, a com ponentunitof the State of Louisiana. Annually tbe State of Lo uisiana issuesa bas ic financialstatem entw hich includesthe activity cotttained in the accom panying financial statem ent. The basic financial statem ent is issued by the Louisiana D ivision of Adn~dnistration-O fi ce ofstatew tde Reporting and Accounting Policy and audited by the Lo uisiana Le gislative Auditor. 17

21 LO U ISIANA STA.TE BO AR D O F N UR SIN G D EPA RTM EN T O F H EALTH AN D H O SPITALS STATE O F LO U ISIAN A N O TES TO TH E FINAN CIAL STATEM EN TS JUNE 30,2001 AN D C. BA SIS O F PRESEN TATIO N "/'he Statem entof NetAssetsand Statem entof Activltiesdisplay inform ation aboutthe reporting govern m ent as a whole. They include allfunds ofthe Louisiana State Board ofnursing. The sta tem ents distinguish between governm entaland business-type activities. Governm entalactivities generally are financed through taxes,intergovernm entalrevenues,and other ra )nexchange re venues. Business-type activitiesare financed in w hole orin partby feescharg ed to externalpartiesfor goodsor services. Fund financialstatem ents of the Louisiana State Board ofnurs ing are organized into funds,each of w hich is considered to be separa te accounting entities. Each fund isaccounted forby providing a separate setofselfbalancing accounts that constitute its assets,liabilities,fund equity,re venues and expenditures/expenses. Fundsare organized into thre e m ajorcategories: govern m ental,proprietary,and fiduciary. An em phasisis placed on m ajorfundswithin the governmentaland pro prietary categories.a fund isconsidered m ajorifitis the prim ary ope rating fund of the Lo uisiana State Board of Nursing or m eets the follow ing criteria: Total assets, liabilities, re venues, or expenditures/expenses of that individual governm ental or enterprise fund are atleast10 percentof the corresponding totalfor alfundsof thatcategory ortype; and b. Totalassets,liabilities,re venues,orexpenditure s/expenses of the individualgovernm entalfund or enterprise fund are atleast5 percentofthe corre sponding totalfor allgovernm entaland enterprise funds com bined. The fund ofthe Lo uisiana State Board ofnursing is described below : Governm entalfund G eneralfund The GeneralFund isthe prim ary operating fund ofthe Board and isclassified asa majorfund.h isused to accountfor allactivi tiesexceptthose legaly or adm inistra tively re quired to be accounted for in oth er funds. 1.D. M EASU RE M ENT FO CU S AN D BASIS O F ACCO U NTING M easure m entfocus is a term used to describe "w hich" transactions are re cord ed w ithin the various financial sta tem ents. Basis of accounting re fers to "w hen" transactions are re corded regardless of the m easure m ent focusapplied. O n the govern m ent-w ide Statem entofnetas sets and the Statem entofactivities,both governm entaland business-like activitiesare pre sented using the econom ic re sourcesm easure m entfocus. In the fund financialstatem ents,the "current fitlaneial resources" m easure m ent focus or the "econom ic re sources"m easurem entfocusisused as appropriate: 18

22 LO U ISIAN A STATE BO AR D O F N UR SIN G D EPA RTM EN T O F IIEALTH AN D H O SPITALS STATE O F LO U ISIAN A N O TES TO TH E FINAN CIAL STATEM EN TS JUNE 50,2001 AND 2002 Allgovernm entalfundsutilize a "currentfinancialresources"m easure m entfocus. O nly curre ntfinancial assetsand liabilitiesare generally included on theirbalance sheets. Theiroperating statejnentspre sent sourcesand usesofavailable spendable financialresourcesduring a given period.these f0ndsuse fund balance as their m easure of available spendable financialresourc es atthe end of the period. In the governm ent-w ide Statem entofnetassets and Statem entofactivities,both governm entaland businesslike activities are pre sented using the accrualbasis ofaccounting, Underthe accrualbasis ofaccounting, re venuesare re cognized w hen earn ed and expensesare re corded w hen the liability isincurred oreconom ic assetused. Revenues,expenses,gains,losses,assets,and liabilities re sulting from exchange and exchangelike transactionsarc re cognized w hen the exchange takes place. In the fund financial statem ents, govern m ental funds are presented on the m odified accrual basis of accounting. Underthism odified accrualbasisof accounting,re venuesarc re cognized w hen "m easura ble and available." M easura ble m eans know ing or being able to re asonably estim ate the am ount. Available m eans collectible within the currentperiod orwithin sixty days afteryearend. Expenditures (including capital outlay)are record ed when the re lated fund liability isincurred,exceptforgenera lobligation bond principal and intere stw hich are re ported w hen due. 1.E, ASSETS,LIABILITIES,NET ASSETS AN D FUND EQ UITY For the purpose of the Statem entof NetAssets,cash,including tim e deposits includes aldem and,savings accounts,and certificatesof deposits of the Board w ith an originalm aturity of 90 daysor less. Investm ents are carried at fair value. Fair value is based on quoted m arket price. Additionalcash and investm entdisclosure sarc pre sented in Notes2.C.and 3,A. In the governm ent-w ide statem ents, re ceivables consist of al revenues earned at year-end and not yet received. In the fund financialstatem ents,m aterialreceivablesin governm entalfundsinclude re venue accrualssuch as licenses,perm its and exam ination feessince they are usually both m easurable and available. Nonexchange transactionscollectible butnotavailable are defened in the fund financialstatem entsin accordance w ith file m odified accrual,but not deferre d in the governm ent-w ide financial statem ents in accord ance widl file accrualbasis. Intere stand investm entearnings ate re cord ed w hen earn ed only ifpaid w ithin 60 dayssince they would be considere d both m easura ble and avzilable, Prepaids re flect paym ents to vendors that benefit future re porting periods and are also re ported on the consum ption basis.pre paidsare sim ilarly re ported in governm ent-w ide and fund financialstaterjlents, 19

23 LO U ISIAN A STATE B O ARD O F N UR SIN G D EPAR TM EN T O F H EALTH A N D H O SPITA LS STATE O F LO UISIANA N O TES TO TH E FINAN CIAL STATEM ENTS JUNE 30,2001 AND 2002 The accounting treatm entoverproperty,plant,and equipm ent(fixed assets)dependson whetherthe assets are used in governm entalfund operations and w hether they are reported in the governm ent.wide or fund financialstatem ents. G overnm ent-w ide Statem ents In the governm ent-w ide financialstatem ents,fixed assets are accounted for as capitalassets. Capital assets purchased oracquire d w ith an originalcostordonated value of$%000 orm ore are recorded at historicalcost,or estim ated historicalcost.donated f'med assets are re corded attheirestim ated fairvalue atthe date ofdonation, Estim ated historicalcostwasused to value the m ajority ofthe assetsacquired priorto July 1,2000. D epre ciation of all exhaustible fixed assets is re cord ed as an alocated expense in tile Statem ent of Activities, w ith accum ulated depre ciation re flected in the Statem ent of Net Assets. Depre ciation is pro vided over the assetsestim ated usefulfivesusing the stra ight-line m ethod of depre ciation. The range ofestim ated usefullivesby type of assetisasfolow s: Buildings Im pro vem ents Equipm ent years years 3-20 years Fund FinancialStatem ents In the fund financialstatem ents,fixed assets used in govern m entalfund opera tionsare accounted foras capitaloutlay expendituresof the governm entalfund upon acquisition. Em ployeesof the Board earn and accum ulate vacation and sick leave atvarying ra tes,depending upon their years of service. The am ountofvacation and sick leave thatm ay be accum ulated by each em ployee is unlim ited. Upon term ination,em ployees or their heirs are com pensated for up to 300 hours of unused vacation leave at the em ployee's hourly ra te of pay atthe tim e of term ination. Upon retirem ent,unused vacation leave in excessof300 hours plusunused sick leave are used to com pute retire m entbenefits. The liability for these com pe nsated absences is re cord ed as long-term debt in the govern m ent-w ide statenaem s. The curre nt portion ofthis debt can notbe estim ated and accordingly,it is reported as a noneurre m liability. In the fund financialstatem ents,the entity reports only the currentportion ofthe com pensated absences liability. G overnm ent-w ide Statem ents Equity isclassified as netassetsand displayed in three com ponents a. Investm ent in Capital As set - Consists of capita l assets included re stricted capital assets net of accum ulated depreciation and re duced by the outstanding balancesofany bonds,m or*.gages,notes, or other borrow ings thatare attributa ble to the acquisition,construction,or im provem entof those assets. 20

24 LO U ISIA NA STATE BO ARD O F N UR SIN G D EPARTM ENT O F H EALTH AN D H O SPITALS STATE O F LO U ISIANA N O TES TO TIlE FINAN CIA L STATEM EN TS JUNE 30,2001 AN D 2002 b. Restricted NetAssets- Consistsof netassetswith constraintsplaced on the use eitherby (1)external groupssuch ascreditors,gra ntors,contributors,orlawsor regulationsofothergovernments;or(2) law through constitutionalprovisionsor enabling legislation. c. Unrestricted Net As sets - Allother net assets that do not m eet the definition of "restricted" or "investm entin capitalassets. Fund Statem ents Governm entalfund equity isclassified asfund balance. Fund balance isfurtherclassified asreserved and unre served,w ith unre serv ed furthersplitbetween designated and undesignated. 1.F. REVE N U ES,EXPEN D ITU RE S,AND EXP EN SES Revenues In the governm ent-w ide financialstatem ents,re venuesare classified aseitherpro gram orgenera lre venues. Pro gram re venues consistprim arily of licensing fees and enforcem entaction fees. G enera lre venues consist prim arily of interest,m iscelaneous and non-pro gram re lated revenues. In the fund financialsta tem ents, revenuesare classified by source offunding. Expenditures~Expenses In the governm ent-w ide financialstatem ents,expenses are classified by function for both governm entaland business.type activities. In the fund financialstatem ents,expenditure sare classified asfollow s Governm entalfunds- By Character: Current(furtherclassified by function) DebtService CapitalO utlay In the fund financialstatem ents,governm entalfundsreport expenditure sof financialre sources. N O TE 2.-STEW ARD SH IP,CO M PLIAN CE,AN D ACCO U NTABILITY By its nature asa state agency,the Board issubjectto variousstate lawsand regulations. An analysisoftile Board 's com pliance w ith significant laws and re gulations and dem onstration of its steward ship over Board re sources follow s. 2.A. FUND ACCOUNTING REQUIREM ENTS The Board com pliesw ith allstate law sand re gulationsrequiring the use of separa te funds.the Board hasno legally re quired funds. 2.B. RE STATEM ENTS The Board im plem ented new re porting m odelstandard sin fiscalyear2002.asa re sult,beginniog balancesof fund equity has been restated and converted to net assets as re ported in the governm ent-w ide financial statem ents. The detailsofthatrestatem entfollow : 21

25 LO U ISIAN A STATE BO ARD O F N URSIN G D EPARTM ENT O F H EALTH AN D H O SPITALS STATE O F LO U ISIAN A N O TES TO TH E FINAN CIAL STATEM EN TS JUNE 30,2001 AND 2002 Fund Balance asofjune 30,2000 Fixed Assets(net)June 30,2000 Com pensated AbsencesJune 30,2000 Fund Balance restated asnetassetsjune 30,2000 1,749,794,77 166, (101,914.09) 2.C. D EPO SITS AN D IN VESTM EN TS LAW S AN D REG U LATIO N S In accordance w ith state law,alluninsure d deposits ofthe Board in financialinstitutionsm ustbe secure d w ith acceptable collateralvalued atthe low erofm arketor par. Acceptable collateralincludes certain U.S. G overu m ent or G overnm ent Agency securities, certain State of Louisiana or political subdivision debt obligations,or surety bonds. As re quired by 12 U.S,C.A.,Section 1823(e),alfinancialinstitutionspledging collateralto the Board m usthave a w ritten collateralagreem entapproved by the board of dire ctorsor loan com m ittee.as re flected in Note 3.A.,aldepositsw ere fu ly insure d or collatefalized. Investm entsare lim ited by R.S.33:2955 and the Board's investm entpolicy N O TE 3.-D ETAIL N O TES O N TRAN SACTIO N CLA SSES/ACCO U N TS The following notespre sentdetailinform ation to supportthe am ountsre ported in the basic financialstatem ents foritsvat'iousassets,liabilities,equity,re venues,and expenditure s/expenses. 3.A. CASH AN D INVESTM ENTS The Board 's policies regard ing deposits ofcash are discussed in Note 1.E. The table presented below is designed to disclose the levelofcustody creditrisk assum ed by the Board based upon how itsdepositsw ere insured or secure d w ith collatera latjune 30,2002.The categoriesofcre ditrisk are defined asfollows: Category 1 - Insure d by FDIC or collateralized w ith securitiesheld by the Board or by itsagentin itsnam e Category 2 - D ninsure d butcollateralized w ith securities held by the pledging l~nancialinstitution's trust departm entor agentin the Board's nam e Category 3 - Uninsured and unco lateralized;or collateralized with securities held by the pledging financialinstitution,or by its trustdepartm entor agentbutnotin the Board's nam e;or co Ilatcralized w ith no w ritten or approved collatera lagreem ent of D eposits D em and deposits Certificates of D eposit TotalDeposits TotalBank Balance $ 526,527 $ 2,500,000 $ 3,026,527 ody CreditRisk Category $ 110,933 $ 0 $ 110,933 $ $ $ Tolai Carrying Value $ 415,594 $ 495,200 $ 2,500,000 $ 2,500,000 s 2;,~5,594 ~ 2995,2oo_ 22

26 LO U ISIAN A STATE BO ARD O F N UR SIN G D EPARTM EN T O F H EALTH AN D H O SPITALS STATE O F LO U IS/A NA N O TES TO TH E FINAN CIAL STATEM ENTS JUNE 30,2001 AN D 2002 Reconciliation to G ovetalm ent-w idc Statem entof N etassets Petty casll Unrestricted cash Cerlificatesof D eposit TotalCash and Certificates $ ,100 2,500,000 $ 2,995,200 Even though the pledged securities are considere d unco lateralized (Category 3) under the provisions of GASB Statem entno.3,r.s.39:1229 im posesa statutory requirem enton the custodialbank to advertise and sellthe pledged securities within 10 daysofbeing notified by the Board thatthe fiscalagenthasfailed to pay deposited fundsupon dem and. 3.B. ACCO U NTS RECEIVABLE Receivablesdeta ilatjune 30,2002,isasfo lows Accrued interest Payrolltax overpaym ent O ther re ceivable Totalreceivable G overnm ental Activities $ 10,480 8, $ 19,384 3.C. CAPITAL A SSETS Capitalassetsactivity forthe tw o yearsended June 30,2002,w asasfo lows Balance at June 30, 2000 Additions G overnm entactivities: Equipm ent $ 316,802 $ 13,643 Lessaccumulated depreciation (150,642) (84,117) Governmentalactivitiescapitalassets,net $ 166,160 $ _.._ (70,474..~) Balance at June 30, 2001 $ 330, ,759 $ 95,686 * D epre ciation expense w ascharged to governm entalactivitiesasfolows D epre ciation expense $ 84,117 r G overn m entactivities: Equipm ent Le ssaccum ulated depreciation Balance at Juale 30, 2001 Additions 330,445 $ 11,373 (234,759) (83,791) 23 Balance at June 30, ,818 (318,550)

27 LO U ISIAN A STATE BO ARD O F N URSIN G D EPAR TM EN T O F IIF.AJLTH AN D H O SPITALS STATE O F LO U ISIANA N O TES TO TH E FINAN CIA L STATEM EN TS JUNE 30,2001 AND 2002 Governmentalactivitiescapitalassets,net $ 95,686 $ (72,418) * D epreciation expense w ascharged to governm entalactivitiesasfollow s D epreciation expense 3.D. ACCO U NTS PAYABLE Payables in the generalfund iscom posed ofpayables to vendors (51%) and accrued salariesand benefits 09%). 3.E. LO N G -TERM D EBT AsofJune 30,2002,the governm ental long-term debtof the Board consistsof the follow ing: Accrued Com pensated Absences Curre ntportion N oncurre ntportion TotalG overnm entalactivity debt ,372 The folow ing isa sum m ary of changesin long-term debtfor the yearended June 30,2002 Tsrpe of D ebt Governm entalactivities: Accrued Com pensated Balance July 1, 2000 Additions Deductions Ab sences $ 101,914 $ 9,353 $ (7,659) Balance June 30, 2001 $ 103,608 TotalG enera llong- Term Debt $101,914 fi $ = == 9353 $ (7,659) $ 103,608 Type of D ebt G overnm entalactivities: Accrued Com pensated Ab sences Balance July 1, 2001 Balance June 30, Additions D eductions $. (11,771) $ 128,372 TotalG enerallon~ Term Debt $ 103,608 L 36,535 $ (11~771) $ 128,

28 LO U ISIA NA STATE BO ARD O F N UR SIN G D EPARTM EN T O F H EALTH AN D H O SPITALS STATE O F LO U ISIANA N O TES TO TH E FINAN C IAL STATEM EN TS JUNE 30,2001 AN D 2002 N O TE 4.-O TH ER N O TES 4.A. EM PLO YEE PEN SIO N AN D O TIIER BEN EFIT PLAN S Substantially allofthe em ployees ofthe Board are m em bers of the Louisiana State Em ployees Retirem ent System ("System "),a costsharing,m ultiple-entployer,defined benefitpublic employee re tirementsystem (PEAS)contro led and adm inistere d by a separate board oftrustees. Allfu l tim e em ployees are eligible to participate in the System. Benefits vestw ith ten years of service. At retirementage,em ployeesare entitled to annualbenefitsequalto $300 plus2.5% of theirhighestconsecutive 36 m onth average salary m ultiplied by theiryearsof cre dited service. Vested em ployeesare entitled to a retire m entbenefit,payable m onthly forlife at (a)any age with thirty years ofservice,(19) age 55 with twenty-five years ofservice,and (c)atage sixty with ten years ofservice. In addition,vested em ployeeshave the option of re duced benefitsatany age w ith tw enty years ofserv ice. The System also pro videsdeath and disability benefit.,;. Benefitsare established by state statute. The system issues an am m alpublicly available financialre portthatincludes financialstatem ents and re quire d supplem entary inform ation for the System. That reporl m ay be obtained by w riting to the Louisiana State Em ployees' Retirem entsystem ;P.O.Box 44213;Baton Rouge,LA orby caling (800) M em bers are required by state statute to contribute at 7.5% of gross salary.the Board is required to contribute atan actuarially determ ined rate as re quired by R,S.11:102. The contribution rate for fiscalyear ended June 30,2002 re m ained at13.0% ofannualcovere d payrollfrom the 13% and 12.3% re quire d in fiscal years ended June 30,2001and 2000 re spectively. The board contributionsto the System forthe yearending June 30,2002,2001 and 2000 are $157,137,$ 105,000,and $94,151 respectively,equalto the re quired contributions for that),ear. Substantially allboard em ployeesbecom e eligible for post em ploym enthealth care,dental,and life insurance benefits ifthey reach norm alre tire m entage w hile w orking for the Board. These benefits for retire es and sim ilarbenefits for active em ployeesare provided thro ugh the insurance com pany w hose pre m ium sare paid jointly by the em ployee and the Board. The Board re cognizesthe costofpro viding these benefitsasan expenditure when paid during the year. Forthe yearsended June 30,2001and 2002,the costofpro viding those benefits forfive re tirees totaled $17,329 and $11,965,respectively. Certain em ployees of the Board participate in the Louisiana Deferred Com pensation Plan adopted underthe pro visions oflm errtalrevenue Code Section 457. Co m plete disclosures re lating to thisstatew ide plan are available in the financialstatem ents ofthe State oflouisiana. 4.B. ESTIM ATES The prepara tion offinancialstatem entsin conform ity w ith generally accepted accounting principles requires the Board 's m anagem ent to m ake estim ates and assum ptions that effect certain re ported am ounts and disclosure s.accord ingly,actualre sultsm ay diferfro m those estim ates. 25

29 LO U ISIAN A STATE BO A RD O F N U RSIN G D EPARTM EN T O 13IIEALTH AN D H O SPITA LS STATE O F LO UISIANA N O TE S TO TH E FINAN CIAL STATEM EN TS JUNE 30,2001 AN D C. RISK M ANAG EM ENT The Board isexposed to various risks oflossrelated to torts;theftof,dam age to,and destruction ofassets; errors and om issions,injuries to em ployees;em ployee health and life;and naturaldisasters. The Board m anagesthese variousrisks of lossasfollow s: Type of Loss Torts,errors and om issions Injuriesto em ployees (Workers'com pensation) Physicalproperty loss and naturaldisasters ltealth and life M ethod M anagcd Purchased insllrance w ith Louisiana O ffice of Risk M anagem entf,ublc entity risk pool Participatesin Louisiana O ffice ofrisk M anagem ent public entity risk pool Purchased insura nce w ith Lo uisiana Office ofrisk M anagem entpublic entity risk pool Participates in Louisiana O fice of G roup Benefits Plan Risk Retained None None None None M anagem entbelieves such covera ge is sufi cientto preclude any significant uninsured losses to the Board. Settled claim shave notexceeded thisinsura nce covera ge in any of the pastthree fiscalyears. The Board participatesin the LouisianaState Olfice ofrisk M anagement(publicentity risk pool),which is re sponsible fornegotiating,com pro m ising and settling alclaim sincluding al tortclaim sagainstthe Board. 4.D. CO M M ITM EN TS AN D CO NTING ENCIES Contingencies Litigation The State of Lo uisiana,d ivision of Adm inistration,o ffice of Risk M anagem ent has notreported any cases pending. 4.E. C O M PEN SA TIO N PA ID TO BO A RD M EM BER S 26

30 LO U ISIA N A STATE BO A R D O F N UR SIN G D EPA RTM EN T O F IIEALTH A N D H O SPITA LS STATE O F LO U ISIANA N O TES TO TH E FINAN CIA L STATEM ENTS JUNE 30,2001 AND 2002 Com m issioner Patsy Bourgeois Kathleen Cooper O sw ald Ferry D eborah Ford M argalx~tgriener Elise Crapanzano Gra ce M onk Karen M oody Enrica Singleton EliSorkow Patsh M c Clanahan Total M eetings une 30,2002 Am ount $ 1, ,650 $ 1,800 1,500 1,800 1, M eetings June 30,2001 Am ount 1, ,500 1, , , ,325 27

31 REQ UIRED SUPPLEM ENTARY INFO RM ATIO N Required supplem entary inform ation includes financialinform ation and disclosures that are required by the GASB but are not considered a partof the basic financialstatem ents. Such inform ation includes: ~ Budgetary Com parison Schedules - G eneralfund

32 29

33

34 O TH ER REPO RTS RE Q UIRE D BY G O VERN M EN T A UD ITIN G STAND ARD S The follow ing pages contain a reporton com pliance w ith law s and regulationsand on internal controlover financialreporting as required by Governm ent A uditing Standards, issued by the Com ptroller G eneral of the U nited States, This report is based solely on the audit of the financial statem ents and includes, w here appropriate, any reportable conditions and/or m aterialm isstatem ents in internalcontroloj:com pliance m attersthatw ould be m aterialto the presented financialstatem ents. 31

35 P.O.Box 158 D enham Springs,LA / Fax:225/ PresidentD r. Baton Rouge,LA / Fax:225/ IN D EPEN D EN T A U D ITO R 'S R EPO RT O N C O M PLIA N C E A N D O N IN TERN A L C O N TRO l,o VE R FIN AN C IAL RE PO RTIN G BA SED O N AN A U D IT O F TH E BA SIC FINAN C IA L STATEM ENTS PERFO RM ED IN A C C O RD AN CE W ITH G O VER N M EN T A UD ITIN G STAN D AR D S Board M em bers of Louisiana State B oard of N ursing D epartm enth ealth an d H ospitals Slate of Louisiana M etairie,louisiana W e have audited the basic financialstatem ents of the Louisiana State Board of Nursing,a com ponentunitofthe State of Louisiana,asofand for the tw o yearsended June 30,2002, and have issued our report thereon dated July 25, W e conducted our audit in accordance w ith auditing standards generally accepted in the United Statesof Am erica and the standards applicable to financialaudits contained in Governm enta uditing Standards,issued by the Com ptroller G eneral of the U nited States, and the Louisiana G overnm entala udit G uide. Contldtance As part of obtaining reasonable assurance about w hether the Louisiana State Board of N ursing's basic financialstatem ents are free of m aterialm isstatem ent,w e perform ed tests of its com pliance w ith certain provisions of law s,regulations,and contracts,noncom pliance w ith w hich could have a direct and m aterial efect on the determ ination of financial statem ent am ounts. H ow ever,providing an opinion on com pliance w ith those provisions w as not an objective of our auditand,accordingly,we do notexpresssuch an opinion.the resultsof our tests disclosed no instances of noncom pliance that is required to be reported under G overnm enta uditing Standards and the Louisiana G overn m ental A udttg uide. Internal ControlOver FinancialReporting In planning and perform ing our audit,w e considered the lxm isiana State Board of Nursing's internalcontrolover financialreporting to determ ine our auditing procedures for the purpose of expressing our opinion on the basic financialstatem ents and notto provide assurance on the internalcontrolover financialreporting. O ur consideration of the internalcontrolover financial reporting w ould not necessarily disclose all m atters in the internal control over financialreporting thatm ightbe m aterialw eaknesses. A m aterialw eakness isa condition in w hich the design or operation of one or m ore of the internalcontrolcom ponents does not 32

36 reduce to a relatively low levelthe risk thatm isstatem ents in am ounts thatw ould be m aterial in relation to the basic financial stat em ents being audited m ay occur and not be detected w ithin a tim ely period by em ployees in the norm al course of perform ing their assigned fu nctions. W e noted no m atters involving die internalcontrolover financialreporting and its operation thatw e consider to be m aterialw eaknesses. This reportis intended for the inform ation and use of the Louisiana State Board of N ursing and its m anagem ent, the Lo uisiana Legislative Auditor, tile State of Louisiana and is not intended to be,and should notbe used by anyone other than these specified parties. Certified Public Accountant,APAC Ce rtified Public Accountant July 25,

37 LO U ISIA N A STATE BO ARD O F N U R SIN G SC H ED U LE O F FIN D IN G S TW O YEARS END ED JUNE 30,2002 A. SU M M ARY O F A U D IT RESU LT S Tile auditors' report expresses an unqualified opinion on the basic financial statem ents of Louisiana State Board of N ursing. N o reportable conditions w ere disclosed during the audit of the basic financial statem en ts. N o instances of noncom pliance w ere disclosed during the audit of tile basic financialstatem ents. 4. There w ere no federalaw ards received by Louisiana State Board of N ursing B. FIN D IN G S--FINA N CIA L STATEM ENT S A U D IT N one

38 LO U ISIAN A STATE BO ARD O F N U RSIN G R E SO LU T IO N PR IO R Y E AR FIN D IN G S TW O YEAR';END ED JUNE 30,2002 There w ere no prior year findings 35

39 SUPPLEM ENTAL INFORM ATION REQUIRED BY STATE O F LO U ISIAN A D M SIO N O F AD M IN ISTR ATIO N O FFIC E O F STATEW ID E REPO RTIN G AN D A CCO U N TIN G PO LICY The follow ing pages contain a reporton the Board's AnnualFinancialReportprepared in accordance w ith the requirem ents of the Louisiana D ivision of Adm inistration,o ffice of Statew ide Reporting and Accounting Policy.

40 P.O.Box 158 D enham Springs,LA / Fax:225/ PresidentDr. B aton R ouge,la / Fax:225/ Board M em bersof Louisiana State Board of N ursing D epartm ent H ealth and H ospitals State of Louisiana M etairie,louisiana O ur reporton the auditof the basic financialstatem ents of the Louisiana State Board of Nursing asof and forthe tw o years ended June 30,2002,appearson Page 1. That auditw as m ade for the purpose of form ing an opinion on the basic financialstatem ents taken as a w hole. The AnnualFinancialReportas of and for the year ended June 30, 2002,is presented for purposes of additionalanalysis and is nota required partof the basic financialstatem ents. W e did not audit and do notexpress an opinion on such inform ation. H ow ever, w e have applied certain lim ited procedures prescribed by professionalstandards w hich resulted in the discovery of m aterialerrors in the financial statem ents and that raised doubts that w e w ere unable to resolve regarding w hether m aterial m odifications should be m ade to the inform ation for it to conform w ith guidelines established by the G overnm entalaccounting Standards Board. Certified Public Accountant,APAC Certified Public Accountant July 25,

41 STATE O F LO UISIANA AnnualFinancialStatem ents FiscalYearEnding June 30,2002 Schedule N umber LO UISIANA STATE BO ARD O F NURSING Division ofadm inistration O fice ofstatew ide Reporting and Accounting Policy P.O.Box Baton Rouge,Louisiana Legislative A uditor P.O.Box Baton Rouge,Louisiana Persona ly cam e and appeared before the undersigned authority, Barbara L. M orvant, M N, RN Executive Directorofthe Louisiana State Board ofnursing w ho duly sworn,deposes and says,that the financial statem ents herewith given present fairly the financial position of the Louisiana State Board ofnursing atjune 30,2002 and the results ofoperations forthe yearthen ended in accordance with policies and practices established by the Division ofadm inistration orin accordance w ith G enera ly Accepted Accounting Principles as prescribed by the G overnm ental Accounting Standards Board.Sworn and subscribed before m e,this 25th day ofjuly,2002. Sigrl~ture ofagency O f]-cial" ~IOTAR~PUBLIO Prepared by Title G eorae E.Florane III.M BA.C PA.C IA.C FE A ccountan Telephone No. Date July UNAI~)ITED

42 STATE O F LO UISIA NA LO UISIA NA STATE BOA RD O F NURSING M A NAG EM ENT'S DISCUSSIO N A ND A NALYSIS AS O F JUNE 30,2002 The M anagem ent's Discussion and Analysis of the Louisiana State Board of Nursing's financial perform ance presents a narrative overview and analysis ofthe Louisiana State Board ofnursing's financialactivities forthe yearended June 30,2002. This docum entfocuses on the cunentyear's activities,resulting changes,and currently know n facts in com parison w ith the prioryear's inform ation. Please read this documentin conjunction with the additionalinformation co ntained in the transmittal letterpresented and the Louisiana State Board ofnursing's financialstatem ents,w hich begin on page 7. FINA NC IA L H IG H LIG H TS The Louisiana State Board ofnursing's assets exceeded its liabilities atthe close offiscalyear 2002 by $2,800,821,which represents a 6.84% increase from lastfiscalyear.the netassets increased by $179,432 (or6.86% ). The Louisiana State Board ofnursing's revenue decreased $36,396 (or1.37%)and the net results from activities decreased by $625,773 (or71.3% ). O VERVIEW O F THE FINA NCIA L STA TEM ENTS The fo lowing graphic ilustrates the m inim um requirem ents for Special Purpose G overnm ents Engaged in Business-Type Activities established by Governm entalaccounting Standards Board Statem ent34,basic FinancialStatem ents--and M anaqem ent's Discussion and Analysis- forstate and LocalG overnm ents These financialstatements co nsistofthree sections -Management's Discussion and Analysis (this section),the basic financialstatements (including the notes to the financialstatements),and required supplem entary inform ation. U N A U D IT ED 2

43 STATE O F LO UISIA NA LO UISIANA STATE BO A RD O F NURSING MANAGEM ENT'S DISCUSSION AND ANALYSIS A S O F JUN E 30,2002 Basic FinancialStatem ents The basic financialstatem ents presentinform ation forthe Louisiana State Board ofnursing as a w hole,in a form at designed to m ake the statem ents easier for the reader to understand. The statem ents in this section include the Statem entofnetassets;the Statem entofrevenues,expenses, and C hanges in Fund NetAssets;and the Statem entofcash Flows. The StatementofNetAssets (page 7)presents the currentand long term portions ofassets and liabilities separately. The difference betw een totalassets and totalliabilities is netassets and m ay provide a usefulindicatorofw hetherthe financialposition ofthe Louisiana State Board ofnursing (BTA)is improving ordeteriorating. The Statem ent _ofrevenues,expenses and Changes in Fund NetAssets (pages 8-9)presents inform ation showing how the Louisiana State Board ofn ursing's assets changed as a resultofcurrent yearoperations. Regardless ofwhen cash is afected,allchanges in netassets are reported when the underlying transactions occur. As a result,there are tra nsactions included thatwilnotaffectcash untilfuture fiscalperiods. The Cash Flow Statement(pages 10-11)presents information showing how the Louisiana State Board ofnursing's (BTA)cash changed as a resultofcurrentyearoperations. The cash flow statem entis prepared using the directm ethod and includes the reconciliation ofoperating incom e to netcash provided (used)by operating activities(indirectmethod)asrequired by GASB 34. FINA N C IA L A NA LY SIS O F TH E ENTITY U N A I_ID ITE D 3

44 STATE O F LO UISIA NA LO UISIANA STATE BO ARD O F NURSING M ANAG EM ENT'S DISCUSSIO N A ND ANALYSIS A S O F JUNE 30,2002 Restricted net assets represent those assets that are not available for spending as a result of legislative requirem ents,donoragre em ents,grantre quirem ents. Conversely,unrestricted netassets are those thatdo nothave any lim itations on w hatthese am ounts m ay be used for. Netassets ofthe Board increased by $251,850 or9.97%,from June 30,2001to June 30,2002. The Louisiana State Board ofnursing's (BTA)totalre venues decreased by $36,396 or(1.37% ).The totalcostofalprograms and services increased by $589,377 ormore than 32.98%. CA PITA L A SSET A ND D EBT A D M INISTRATIO N CapitalA ssets Atthe end of2002,the Louisiana State Board ofnursing had $23,267 invested in a broad range of capitalassets,including furniture,fixtures and equipment.(see Table below). This amountrepresents a netdecrease (including additions and deductions)of$72,419,or75.68% overlastyear. U N A U D ITED 4