TOWN OF CAMPTI, LOUISIANA ANNUAL FINANCIAL REPORT JUNE 30, 2006

Transcription

1 TOWN OF CAMPTI, LOUISIANA ANNUAL FINANCIAL REPORT JUNE 3, 26 Under provisions of state law, this report is a public document, A copy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish clerk of court. _ Release Date *flii

2 Financial Report June 3, 26 TABLE OF CONTENTS Required Supplementary Information Exhibit Management's Discussion and Analysis Independent Auditor's Report Basic Financial Statements Government-Wide Financial Statements Statement of Net Assets A 9 Statement of Activities B 1 Fund Financial Statements Governmental Fund Balance Sheet-Governmental Fund C 12 Reconciliation of the Governmental Fund Balance Sheet to the Statement of Net Assets D 13 Statement of Revenues, Expenditures and Changes in Fund Balance-Governmental Fund E 14 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Fund to the Statement of Activities F 15 Proprietary Fund Statement of Net Assets G 16 Statement of Revenues, Expenses and Changes in Net Assets H 17 Statement of Cash Flows I 18 Notes to Financial Statements

3 Financial Report June 3, 26 TABLE OF CONTENTS Other Required Supplementary Information Exhibit Budgetary Comparison Schedule-General Fund 34 Internal Control and Compliance Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Schedule of Prior Year Audit Findings Status of Prior Year Legislative Auditor's Report Findings Schedule of Findings and Questioned Costs Management's Response K L M N O

4 P. O. Box 216 Campti,LA MANAGEMENT'S DISCUSSION AND ANALYSIS for the Year ended June 3, 26 The Management's Discussion and Analysis is an element of the reporting model adopted by the Governmental Accounting Standards Board (GASB) in their Statement No. 34. Certain comparative information is presented to provide an overview of its operations. Financial Highlights This annual report consists of a series of financial statements. The Statement of Net Assets and the Statement of Activities provide information about the activities of the Town as a whole and present a longer-term view of the Town's finances. These statements tell how these services were financed in the short-term as well as what remains for future spending. The Town maintains two funds; one governmental fund and a proprietary fund, the water system.

5 Page 2 A summary of the basic government-wide financial statements is as follows: Summary of Statement of Net Assets ASSETS: June 26 June 25 Governmental Business-Type Governmental Business-Type Activities Activities Total Activities Activities Total Current Assets $ 118,895 Capital Assets, Net of Accumulated Depreciation Total Assets $2422 $ 72,374 $ 191,269 $ 64,495 2, $2, $ $ $ 5,385 $ 114, LIABILITIES: Accounts Payable Customer Deposits Long Term Debt $ 63, $ 57,356 31, ,797 $ 12,71 31, ,784 $ 54, $ 6,643 25, ,289 $ 115,1 25, Total Liabilities $ 81,341 $ 55,62 $ 586,961 $ 64,693 $ $ 568,577 NET ASSETS: Invested in Capital Assets, Net of Related Debt $15,238 Unrestricted (Deficit) $1,693,695 $1,798,933 $11,319 (16.449) (198) $1,764,249 $1,874,568 (17.23) (17.221) NET ASSETS $11 $U

6 Page 3 Summary of Statement of Activities REVENUES: Governmental Activities June 26 Business-Type Activities Total Governmental Activities June 25 Business-Type Activities Total Program Revenues: Taxes Licenses & Permits Intergovernmental- Beer Tax State Grant Charge for Services Interest & Miscellaneous Transfers In $142,622 79,13 1, ,269 1, $ 3, ,226 1, $142,622 79,13 1,773 3, ,495 3, $116,21 59, ,741 9,633 2, $ 92,69 2, $116,21 59, ,741 12,242 41, Total Revenues $ $239,83 $ $ $ $ EXPENSES: General Government Public Safety Operating Expense Transfers Out $144,577 4, $ 32, $144,577 4,462 32, $28,773 81, $ 214, $28,773 81,47 214, Total Expenses $ $ $ $ $ $ Change in Net Assets Governmental Activities The Town's assets exceeded its liabilities by $16,779 (net assets) for the year ending June 3, 26. This is a increase of $5,658 from prior year. Business Type Activities The Proprietary Fund, the water system, had a decrease in net assets of $9,51 for the year ending June 3, 26. This compares to a $89,224 increase for the prior year.

7 Page 4 General Fund Budgetary Highlights Actual revenues for the year were $54,666 more than budget and expenditures were $8,91 less than budget for the year. Economic Factors and Next Year's Budget The budget for 26/27 should not change significantly from the 25/26 budget. Contacting the Town This financial report is designed to provide our citizens, taxpayers, and creditors with a general overview of the Town's finances and to show the Town's accountability for the money it receives. Any questions about this report or requests for additional information may be directed to the Town at P. O. Box 216, Campti,LA

8 MaikD. Tims, CPA -A PufssimalCvwatwi Johnson, Thomas & Cunningham Certified Public Accmtsnts INDEPENDENT AUDITOR'S REPORT The Honorable Judy Daniels, Mayor and the Town Council 197 Edenborne Street Campti, Louisiana, We have audited the accompanying financial statements of the governmental activities, the business-type activities, major fund and the aggregate remaining fund information of the, as of and for the year ended June 3, 26, which collectively comprise the Town's basic financial statements as listed in the Table of Contents. These financial statements are the responsibility of the Town's management. Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, major fund and the aggregate remaining fund information of the Town of Campti as of June 3, 26, and the respective changes in financial position and cash flows, where applicable, for the year then ended in conformity with accounting principles generally accepted in the United States of America. hi accordance with Government Auditing Standards, we have also issued a report dated March 1, 27, on our consideration of the Town's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in conjunction with this report in considering the results of our audit.

9 Page 6 The Management's Discussion and Analysis and the budgetary information on pages 1 through 4 and 33 through 34, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Johnson. Thomas & Cunningham Johnson, Thomas & Cunningham, CPA's March 1,27 Natchitoches, Louisiana

10 BASIC FINANCIAL STATEMENTS

11 GOVERNMENT-WIDE FINANCIAL STATEMENTS

12 Exhibit A Page 9 Government-Wide Statement of Net Assets June 3, 26 ASSETS: Cash & Cash Equivalents Revenue Receivable Due from Other Funds Restricted Assets- Cash & Cash Equivalents Capital Assets - Net Total Assets Governmental Activities $ 9,662 12,12 16,221 Business-Type Activities $ 25,798 9,968 36, Total $ 116,46 21,98 16,221 36, $ LIABILITIES: Accounts Payable Accrued Expenses Due to General Fund Customer Deposits Accrued Interest Long-Term Debt- Current Portion Long-Term Portion Total Liabilities $ 62,328 1,26 4,619 13, , ,221 31, , $ $ 12,439 1,932 16,221 31, , ,916 $ 586,961 NET ASSETS: Invested in Capital Assets, Net of Related Debt Unrestricted (Deficit) Total Net Assets $15,238 55,541 $1,693,695 (16,449) SU $1,798, See notes to financial statements.

13 Exhibit B Page 1 Government-Wide Statement of Activities June 3, 26 Activities Expenses Program Revenues Fees, Fines and Charges Operating for Services Grants Net (Expense) Revenue and Changes in Net Assets Governmental Business-Type Activities Activities Total Governmental Activities: General Government $144,577 Public Safety ,481 $ $(138,96) (21.954) (138,96) (21.954) Total Governmental Activities $185,39 $ $ 72 $ (16.5) Business-Type Activities: Water/Sewer $32.43 $ $3.174 $ ( ) $ ( ) Total Business-Type Activities $32.43 $ $3.174 ( ) ) Total Government $55.82 ( ) ( ) General Revenues: Taxes- Ad Valorem Sales Tax Licenses & Permits Intergovernmental: Beer Tax Interest & Miscellaneous Transfers (Net) 12,248 13,374 79,13 1, ,248 13,374 79,13 1,773 3,54 Q Total General Revenues and Transfers $ $ Change in Net Assets $ (9,51) $ (57,691) Net Assets-Beginning of Year , , Net Assets-End of Year See notes to financial statements.

14 FUND FINANCIAL STATEMENTS

15 Exhibit C Page 12 Balance Sheet-Governmental Fund General Fund June 3,26 ASSETS: Cash & Cash Equivalents Revenue Receivable Due from Other Funds Total Assets $ 9,662 12, $ LIABILITIES: Accounts Payable Accrued Expenses Total Liabilities $ 62, $ FUND BALANCES: Unreserved Total Liabilities and Fund Balances See notes to financial statements.

16 Exhibit D Page 13 Reconciliation of the Governmental Fund Balance Sheet to the Statement of Net Assets June 3, 26 Total Fund Balances for the Governmental Funds $ 55,541 Amounts reported for Governmental Activities in the Statement of Net Assets are different because: Capital Assets used in Governmental Activities are not current financial resources and, therefore, are not reported in the Governmental Funds Balance Sheet- Capital Assets 229,64 Less, Accumulated Depreciation (15,839) Long-term Liabilities are not due and payable in the current period and, therefore, are not reported in the Governmental Funds Balance Sheet- Long-term Debt (17.987) Total Net Assets of Governmental Activities S See notes to financial statements.

17 Exhibit E Page 14 Statement of Revenues, Expenditures and Changes in Fund Balance- Governmental Fund General Fund Year Ended June 3, 26 REVENUES: Taxes- Ad Valorem Sales Tax Licenses & Permits Intergovernmental- Beer Tax State Grant Charges for Services- Fines Rent Interest & Miscellaneous Total Revenues EXPENDITURES: General Government Public Safety Capital Outlay Total Expenditures Excess of Revenues over Expenditures OTHER FINANCING SOURCES: Transfers In Transfers Out Proceeds of Debt Total Other Financing $ 12,248 13,374 79,13 1, ,788 6,481 1,553 $254 $143,732 4, $ $ I 9,541 (41,732) (12,34) Excess of Revenues and Other Sources over Expenditures and Other Uses Fund Balance-Beginning of Year Fund Balance-End of Year See notes to financial statements.

18 Exhibit F Page 15 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balance of the Governmental Fund to the Statement of Activities for the Year Ended June 3, 26 Net Change in Fund Balance-Governmental Fund $ 33,655 Amounts reported for Governmental Activities in the Statement of Activities are different because: Payments made on Long-term Debt are shown as expenditures in the Governmental Fund, but the payments reduce Long-term Liabilities in the Statement of Net Assets 6,46 Governmental Funds report capital outlays as expenditures while the Statement of Activities reports depreciation expense to allocate those expenditures over the life of the asset. The increase in Capital Assets ($2,157) for the year, less Depreciation Expense for the year ($7,251) 12,96 The issuance of Long-term Debt provides current financial resources in the Governmental Fund. However, in the Government-wide Financial Statements, additional debt increases the Long-term Liabilities. New debt for the year was Total Changes in Net Assets at June 3, 26 per Statement of Activities See notes to financial statements.

19 Exhibit G Page 16 Statement of Net Assets Proprietary Fund-Water & Sewer Fund Year Ended June 3, 26 ASSETS: Current Assets- Cash & Cash Equivalents Revenue Receivable Total Current Assets Restricted Assets- Cash & Cash Equivalents Total Restricted Assets Capital Assets, Net of Accumulated Depreciation Total Capital Assets Total Assets LIABILITIES: Current Liabilities- Accounts Payable Accrued Expenses Due to General Fund Total Current Liabilities Current Liabilities Payable from Restricted Assets- Customer Deposits Current Maturity of Long-Term Debt Accrued Interest Total Current Liabilities Payable from Restricted Assets Non-Current Liabilities- Long-Term Debt Total Liabilities NET ASSETS: Invested in Capital Assets, Net of Related Debt Unrestricted (Deficit) Total Net Assets $ 25,798 9,968 $ 35,766 $ $ $2, $ $ $ 4, $ $ 31,467 12, $ $ $ $1,693,695 (16.449) $1 T 677,246 See notes to financial statements.

20 Exhibit H Page 17 Statement of Revenues, Expenses and Changes in Net Assets Proprietary Fund-Water & Sewer Fund Year Ended June 3, 26 OPERATING REVENUES: Charges for Services- Water/Sewer Connection Fees Miscellaneous Total Operating Revenues OPERATING EXPENSES: Depreciation Audit/Legal Insurance Operations & Maintenance Office Supplies, Postage & Printing Retirement Salaries Taxes-Payroll Truck Maintenance & Operations Utilities & Phone Miscellaneous Total Operating Expenses Loss from Operations NON-OPERATING REVENUES (EXPENSES): Interest Income Interest Expense Total Non-operating Revenues (Expenses) Net Loss Before Contributions & Transfers TRANSFERS: Transfers In Transfers Out Total Transfers Change in Net Assets Net Assets-Beginning of Year Net Assets-End of Year $ 185,253 2, $ $ 9,233 11,76 18,59 55,164 13,62 2,52 48,46 5,865 7,321 36, $ $ (12.434) $ 1,951 (22.29) $ (2.258) $ ( ) $ 41,732 (9.541) $ $ (9,51) S1 T 677 T 247 See notes to financial statements.

21 Exhibit I Page 18 Statement of Cash Flows Proprietary Fund-Utility Fund Year Ended June 3, 26 Cash Flows from Operating Activities: Cash Received from Customers Cash Payments to Suppliers Cash Payments to Employees Net Cash Provided (Used) by Operating Activities Cash Flows from Non-Capital Financing Activities: Operating Transfers In Operating Transfers Out Grant Net Cash Provided (Used) by Non-Capital Financing Activities $ 186,677 (127,36) (48.46) S ,732 (9,541) Cash Flows from Capital Financing Activities: Principal Payments Interest Paid Net Cash (Used) by Capital Financing Activities Cash Flows from Investing Activities: Interest Received Net Cash Provided by Investing Activities Net Increase in Cash Cash-Beginning of Year Cash-End of Year Reconciliation of Operating Loss to Cash Used by Operating Activities: Operating Loss Depreciation (Increase) Decrease to Accounts Receivable Increase (Decrease) to Accounts Payable Increase (Decrease) to Accrued Liabilities Net Cash Provided (Used) by Operating Activities $(12,434) 9,233 (5,549) 23, See notes to financial statements.

22 NOTES TO FINANCIAL STATEMENTS

23 Page 2 Notes to Financial Statements June 3, 26 Introduction: The financial statements of the Town of Campti have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The financial statements of the Town of Campti, Louisiana are prepared in accordance with generally accepted accounting principles (GAAP). The Town's reporting entity applies all relevant Governmental Accounting Standards Board (GASB) pronouncements. Proprietary funds and similar component units apply Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 3, 1989, unless the pronouncements conflict with or contradict GASB pronouncements, in which case GASB prevails. The more significant of the Town's accounting policies are described below. 1. Summary of Significant Accounting Policies: A. REPORTING ENTITY- The Town is the basic level of government which has financial accountability and control over all activities related to the Town's operations and services provided. The Town is not included in any other governmental "reporting entity" as defined by GASB pronouncements, since the Town Mayor and Council members are elected by the public and have decision making authority to levy taxes, the power to designate management, the ability to significantly influence operations and primary accountability for fiscal matters, hi addition, there are no component units as defined in Governmental Accounting Standards Board Statement 14, which are included in the Town's reporting entity. The financial statements of the are prepared in accordance with generally accepted accounting principles (GAAP). The 's reporting entity applies all relevant Governmental Accounting Standards Board (GASB) pronouncements. Proprietary funds apply Financial Accounting Standards Board (FASB) pronouncements and Accounting Principles Board (APB) opinions issued on or before November 3, 1989, unless the pronouncements conflict with or contradict GASB pronouncements, in which case GASB prevails. B. BASIS OF PRESENTATION- Government-Wide Financial Statements (GWFS) The Statement of Net Assets and Statement of Activities report information about the reporting government as a whole. They include all funds of the reporting entity. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services.

24 Page 21 Notes to Financial Statements June 3, 26 The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the Town's governmental activities. Direct expenses are those that are specifically associated with a program or function. Program revenues include (a) fees and charges paid by the recipient for goods or services offered by the program, and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues. C. FUND ACCOUNTING- The accounts of the Town are organized on the basis of funds. A fund is an independent fiscal and accounting entity with a separate set of self-balancing accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds maintained is consistent with legal and managerial requirements. The Town maintains two funds. They are categorized as a governmental fund and a proprietary fund. The emphasis on fund financial statements is on major governmental and enterprise funds; each displayed in a separate column. A fund is considered major if it is the primary operating fund of the entity or meets the following criteria. a. Total assets, liabilities, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 1 percent of the corresponding total for all funds of that category or type; and b. Total assets, liabilities, revenues, or expenditures/expenses of the individual governmental or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. The major funds of the Town are described below: Governmental Fund - General Fund The General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund.

25 Page 22 Notes to Financial Statements June 3, 26 Proprietary Fund- Enterprise Fund The enterprise fund is used to account for operations (a) that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of revenues earned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes. D. MEASUREMENT FOCUS/BASIS OF ACCOUNTING- Basis of accounting refers to when revenues or expenditures/expenses are recognized in the accounts and reported in the financial statements. It relates to the timing of the measurements made regardless of the measurement focus applied. Accrual Basis - Government-Wide Financial Statements (GWFS) The Statement of Net Assets and the Statement of Activities display information about the Town as a whole. Both of these statements have been prepared using the economic measurement focus and the accrual basis of accounting. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Modified Accrual Basis - Fund Financial Statements (FFS) The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Governmental fund types use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual; i.e., when they are both measurable and available. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities of the current period. The Town considers all revenues "available" if they are collected within 6 days after year-end. Expenditures are generally recorded under the modified accrual basis of accounting when the related liability is incurred. The exceptions to this general rule are that (1) unmatured principal and interest on long-term debt, if any, are recorded when due and (2) claims and judgments and compensated absences are recorded as expenditures when paid with expendable available financial resources.

26 Page 23 Notes to Financial Statements June 3, 26 E. CASH AND INTEREST-BEARING DEPOSITS- For purposes of the Statement of Net Assets, cash and interest-bearing deposits include all demand accounts and savings accounts of the Town. F. CAPITAL ASSETS- Capital assets, which include property, plant, and equipment, are reported in the governmental activities column in the government-wide financial statements. Capital assets are capitalized at historical cost or estimated cost if historical cost is not available. Donated assets are recorded as capital assets at their estimated fair market value at the date of donation. The Town maintains a threshold level of $2,5 or more for capitalizing capital assets. The costs of normal maintenance and repairs that do not add to the value of that asset or materially extend the life of that asset are not capitalized. Depreciation of all exhaustible capital assets is recorded as an expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Assets. Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation. The range of useful lives by type of asset is as follows: Buildings and improvements Equipment and vehicles Utility system and improvements 4 years 5-1 years 4 years In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same as in the government-wide statements. G. RESTRICTED ASSETS- Restricted assets include cash, interest-bearing deposits, and investments of the proprietary fund that are legally restricted as to their use. The restricted assets are related to utility bond covenant accounts and customer deposits. H. COMPENSATED ABSENCES- There is no formal leave policy for the Town; therefore, no entry is made to record compensated absences.

27 Notes to Financial Statements June 3, 26 Page 24 I. EQUITY CLASSIFICATIONS- In the government-wide statements, equity is classified as net assets and displayed in three components: a. Invested in capital assets, net of related debt Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. b. Restricted net assets Consists of net assets with constraints placed on their use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provision or enabling legislation. c. Unrestricted net assets All other net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt". hi the fund statements, governmental fund equity is classified as fund balance. Fund balance is further classified as reserved and unreserved, with unreserved further split between designated and undesignated. J. OPERATING REVENUES AND EXPENSES- Operating revenues and expenses for proprietary funds are those that result from providing services and producing and delivering goods and/or services. It also includes all revenue and expenses not related to capital and related financing, noncapital financing, or investing activities. K. EXPENDITURES/EXPENSES- In the government-wide financial statements, expenses are classified by function for both governmental and business-type activities. hi the fund financial statements, expenditures are classified as follows: Governmental Funds - By Character Proprietary Fund - By Operating and Nonoperating In the fund financial statements, governmental funds report expenditures of financial resources. Proprietary funds report expenses relating to use of economic resources. L. BUDGET AND BUDGETARY ACCOUNTING- Prior to the beginning of each fiscal year, the Town adopts a budget for the next fiscal year. The budget is open for public inspection. All budgetary appropriations lapse at the end of the fiscal year. The budget is prepared on the modified accrual basis of accounting

28 Page 25 Notes to Financial Statements June 3, 26 M. INTERFUND TRANSACTIONS- Legally authorized transfers are treated as interfund transfers and are included in the results of operations of both governmental and proprietary funds. Operating Transfers In 26 Operating Transfers Out General Fund $ 9,541 $41,732 Utility Fund N. LONG-TERM OBLIGATIONS- In the government-wide financial statements, long-term debt is reported as liabilities in the applicable governmental activities statement of net assets. In the fund financial statements, governmental fund types recognize debt issued reported as other financing sources. Repayment of the principal and interest is shown as an expenditure. O. ESTIMATES- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statement and the reported amounts of revenue, expenditures, and expenses during the reporting period. Actual results could differ from those estimates. 2. Ad Valorem Taxes The Town levies taxes on real and business personal property located within the boundaries of the Town. Property taxes are levied by the Town on property values assessed by the Natchitoches Parish Tax Assessor and approved by the State of Louisiana Tax Commission.

29 Page 26 Notes to Financial Statements June 3, 26 The Town bills and collects property taxes. The Town recognizes property tax revenues when levied. Property Tax Calendar Assessment date January 1 Levy date August 31 Tax bills mailed October 15 Total taxes are due December 31 Penalties and interest added January 31 Lien date January 31 Tax sale May 15 For the year ended June 3, 26, taxes of 5.75 mills were levied. Total taxes collected were $12,248 for 26, and no provision for uncollectibles is made. 3. Cash and Cash Equivalents: The Town has cash, cash equivalents, and time deposits (bank balances) of $116,842. The deposits are stated at cost which approximates market. Under state law these deposits and the resulting bank balances must be secured by federal deposit insurance or the pledge of securities owned by the fiscal bank. The market value of the pledged securities plus the federal deposit insurance must at all times equal or exceed the amount on deposit with the fiscal agent. At June 3, 26, these deposits were fully insured by FDIC Insurance. 4. Restricted Assets - Proprietary Fund Type: Restricted assets of the Utility Fund were applicable to the following at June 3, 26: Bond Sinking Fund $ 1,988 Bond Contingency Account 4,434 Customer Deposits Account 28,519 Bond Reserve Account 1,667 Cash S36 T 68

30 Page 27 Notes to Financial Statements June 3, Capital Assets: Capital assets and depreciation activity for the year ended June 3, 26, are as follows: Governmental Activities Capital Assets Not Depreciated Land Construction in Progress Balance $ 43,75 14,531 Additions $ Deletions $ 14,531 Balance $ 43,75 Capital Assets Depreciated Buildings & Improvements Furniture, Fixtures & Equipment 65,528 85,98 14,531 2,157 8, Total Assets $ 28,97 $ $ $ Accumulated Depreciation: Building & Improvements Furniture, Fixtures & Equipment $ 22, $ 2, $ 24, Total Accumulated Depreciation $ $ $ Net Capital Assets $ $ $ Business-Type Activities Balance Additions Balance Deletions Capital Assets Not Depreciated Land $ 2,69 $ 2,69 Capital Assets Depreciated Buildings Water/Sewer System Machinery & Equipment 32,814 3,272, ,814 3,272,641 13,176 Total Assets $ $

31 Page 28 Notes to Financial Statements June 3, 26 Business-Type Activities Balance Additions Deletions Balance Accumulated Depreciation: Buildings Water/Sewer System Machinery & Equipment $ 28,7 1,18, $ 1,94 81,816 7,323 $ $ 29,794 1,19, Total Accumulated Depreciation $1,21,596 $ $ $ Net Capital Assets $ $ $ Depreciation expense of $7,251 was charged to the following governmental function: General Governmental Police $2,379 $4,872 Depreciation expense of $9,233 was charged o the Water/Sewer Fund. 6. Long-Term Debt: The following is a summary of long-term debt of the, for the year ended June 3, 26: Governmental Activities Sales Tax Refund Note Payable Note Payable Business-Type Activities Bond Payable Utility Fund Total Balance at June 3, 25 Debt Issued Debt Retired $4,236 4,236 $ 2, $19,934 13,436 $416, $436,476 19,679 Balance at June 3, 26 $ = $17, Governmental Activities As of June 3, 26, the governmental long-term debt of the Town consisted of the following: As of June 3, 26, the Town of Campti incurred debt of $2,157. The sales contract dated December 1, 25, reflects payments to be made monthly of $494.91, beginning January 1, 26, with an interest rate of 8.3% and secured by a Capterpillar Backhoe Loader. Balance at June 3, 26

32 Page 29 Notes to Financial Statements June 3, 26 Business-Type Activities As of June 3, 26, the long-term debt from proprietary fund resources consisted of the following: Note Pavable-$38,615 noted dated February 24, due in monthly installments of $ 1,171, interest at 4%, secured by computer equipment. $ 6,498 Revenue Bonds-$448. Water Revenue Bonds, dated September 16, 1997, due in monthly installments of $2,141, interest 4.88%, secured by revenues earned by the Town from the operation of the water system Total Long-Term Debt $416,797 Less, Current Maturities (12,249) Long-Term Debt, Net of Current Maturities $ The annual debt service requirements to maturity for all debt outstanding as of June 3, 26, is as follows: Year Ending June 3 Governmental Activities Note Payable Principle Interest Business-Type Activities Bond & Note Payable Principle Interest $ 4,619 5,17 5,45 2,91 $1, $ 13,83 6,38 6,339 6,655 7,335 42,539 54,254 69,195 88, , $ 2,64 19,659 19,358 19,42 18,362 85,948 74,232 59,291 31,486 15,931 4,149 Totals

33 Page 3 Notes to Financial Statements June 3, Pension Plan: The Town's employees became members of the Municipal Employees Retirement System of Louisiana after June 3, This system is a cost-sharing, multiple-employer defined benefit pension plan administered by a separate board of trustees. Pertinent information for the retirement systems follows: Municipal Employees Retirement System of Louisiana (Svstem)- Plan Description-The System is composed of two distinct plans, Plan A and Plan B, with separate assets and benefit provisions. All employees of the municipality are members of Plan B. All permanent employees working at least 35 hours per week who are not covered by another pension plan and are paid wholly or in part from municipal funds and all elected municipal officials meeting the requirements of the system are eligible to participate in the System. Under Plan B, employees who retire at or after age 6 with at least 1 years of creditable service or 3 years of creditable service, regardless of age, are entitled to a retirement benefit, payable monthly for life, equal to 2 percent of their final-average salary for each year of creditable service. Final-average salary is the employee's average salary over the 36 consecutive or joined months that produce the highest average. Employees who terminate with at least the amount of creditable service stated above, and do not withdraw their employee contributions, may retire at the ages specified above and receive the benefit accrued to their date of termination. The System also provides death and disability benefits. Benefits are established or amended by state statute. The System issues an annual publicly available financial report that includes financial statements and required supplementary information for the System. That report may be obtained by writing to the Municipal Employees Retirement System of Louisiana, 7937 Office Park Boulevard, Baton Rouge, Louisiana 789, or by calling (225) Funding Policv-Under Plan B, members are required by state statute to contribute 5. percent of their annual covered salary and the Town of Campti is required to contribute at an actuarially determined rate. The current rate is 9.75 percent of annual covered payroll. Contributions to the System also include one-fourth of one percent (except Orleans and East Baton Rouge Parishes) of the taxes shown to be collectible by the tax rolls of each parish. These tax dollars are divided between Plan A and Plan B based proportionately on the salaries of the active members of each plan. The contribution requirements of plan members and the Town of Campti are established and may be amended by state statute. As provided by Louisiana Revised Statute 11:13, the employer contributions are determined by actuarial valuation and are subject to change each year based on the results of the valuation for the prior fiscal year. The Town of Campti's contributions to the System under Plan B for the year ending June 3, 26 were $6,457, equal to the required contributions for the year. Contributions for the year ended June 3, 25 were $4,422, and $4,96 for 24.

34 Page 31 Notes to Financial Statements June 3, Litigation: At July 3, 26, the Town was not involved in any civil suit. 9. Flow of Funds. Restriction on Use-Water Revenue: Under the terms of the bond indenture relating to Water Bonds, all income and revenues (hereinafter referred to as revenue) of every nature, earned or derived from operations of the Water System, are pledged and dedicated to the retirement of said bonds, and are to be set aside into the following special accounts: Period (Day/Month/Year) Sinking Fund Reserve Fund Contingency Fund 9/2/97-8/2/98 $ 1,82 9/2/98-8/2/37 2, Commencing with the month following completion of and acceptance of the waterworks improvements financed with the proceeds of the Bonds, a sum of $91 must be deposited monthly into this fund. A sum of $ 18 per month must be deposited into this fund until $25, has been accumulated therein. Commencing with the month following completion of and acceptance of the waterworks improvements financed with the proceeds of the Bonds, a sum of $123 per month must be deposited into this fund. Payments continue as described above. 1. Compensation Paid to the Mayor and Council Members: Donald Davis - Mayor Otha Bernstine Cynita Nash Rose Calvet David Jackson Mary Collins Fredrick Fisher Charles Deans Oneary Bobb $2, Total

35 Page 32 Notes to Financial Statements June 3, Receivables: The following is a summary of receivables at June 3, 26: General Proprietary Class of Receivable Fund Fund Tax, Licenses and Permits- Franchise Tax Sales Tax Fines Other Receivables Total 12. Prior Period Adjustments The financial reports for the Town for the years ended June 3, 23, 24, 25, contained accountant's reports in which no opinion was expressed. The Town's financial records for those years were not sufficient to present financial statements in accordance with generally accepted accounting principals. Therefore, as of July 1, 25, the beginning of the current year, the beginning amounts for the Town's account balances contained numerous errors. Numerous adjustments were made during the current year to correct these beginning balances. The adjustments made had the effect of changing the beginning balances to the correct amounts without using "prior period adjustments" as a line item amount in the financial statements. 13. Subsequent Events: In a letter dated July 25, 26, the IRS agreed to approve the Town's request for an installment payment schedule for the back taxes owed. The first payment will be due in August 26 for $2,6 and monthly payments thereafter in the same amount until paid in full.

36 OTHER REQUIRED SUPPLEMENTARY INFORMATION

37 Exhibit J Page 34 Budgetary Comparison Schedule General Fund For the Year Ended June 3,26 REVENUES: Taxes- Ad Valorem Sales Tax Licenses & Permits Intergovernmental- Beer Tax Tobacco Tax State Grant Charges for Services- Fines Rent Interest & Miscellaneous Total Revenues Original/Final Budget $ 12,55 84,95 45,8 6, 5, 25, 4,4 12,394 $ Actual $ 12,248 13,374 79,13 1, ,788 6,481 1,553 $25.4 Variance Favorable/ (Unfavorable) $ (32) 45,424 34,23 (4,227) (5,) 72 (7,212) 2,81 (1.841) $ 54,666 EXPENDITURES: General Government Public Safety Capital Outlay Total Expenditures $139,492 43,949 29,82 $ $143,732 4,462 2,157 $ $ (4,24) 3, $ 8.91

38 INTERNAL CONTROL AND COMPLIANCE

39 Johnson, Thomas & Cunningham Certified Pttlic Accountants. Mm CPA -A PnftsmlCymtw ( ) MxkD. Thm CPA RyrM. Cmnfm, CPA - Jessica H. Bwtoy, CPA -A PnftsswalCvjmtw Fax 352 ' 4447 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Judy Daniels, Mayor and the Town Council 197 Edenborne Street Campti, Louisiana, We have audited the financial statements of the governmental activities, the business-type activities, the major fund, and the aggregate remaining fund information of the, as of and for the year ended June 3 26, which collectively comprise the 's basic financial statements and have issued our report thereon dated March 1, 27. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the Town of Campti's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion on the internal control over financial reporting. However, we noted certain matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect the Town of Campti's ability to initiate, record, process, and report financial data consistent with the assertions of management in the financial statements. Reportable conditions are described in the accompanying Schedule of Findings and Questioned Costs as items 26-1 and A material weakness is a reportable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control structure that might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditions that are also considered to be material weaknesses. However, we believe that all of the reportable conditions described above are material weaknesses.

40 Exhibit K Page 37 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town of Campti's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed one instance of noncompliance or other matters that is required to be reported under Government Auditing Standards and which is described in the accompanying Schedule of Findings and Questioned Costs as item This report is intended solely for the information and use of the Town of Campti and the Louisiana Legislative Auditor, and is not intended to be and should not be used by anyone other than these specified parties. However, under Louisiana Revised Statute 24:513, the report is distributed by the Legislative Auditor as a public document. Johnson. Thomas & Cunningham Johnson, Thomas & Cunningham, CPA's March 1,27 Natchitoches, Louisiana

41 Exhibit L Page 38 Schedule of Prior Year Findings and Questioned Costs Year Ended June 3, Late Submission of Annual Audit The Town is required by state law to have an annual audit performed and submitted to the State within six months after the end of its fiscal year. For the year ended June 3, 25, the Town's books were in such a condition that the report could not be completed within the required time-frame. Repeat finding from 23 and 24. This is a repeat finding, see finding Payroll Tax Forms & Retirement Reports not Filed Payroll tax forms and retirement reports were not prepared or filed in a timely manner. Repeat finding from 23 and 24. For the year ended June 3, 26, the Town is current on both payroll tax forms and retirement reports. This finding is cleared Water/Sewer Accounting System Inadequate The Town's accounting system is not being used properly. Management is not approving either error corrections or adjusting entries to change customer records. Individual accounts having sizable changes between months are not investigated. Daily receipts are not reconciled to data in the system. Repeat finding from 23 and 24. Finding- Status- Finding- Status- Finding- Status- Partially corrected, see finding 26-2.

42 Exhibit L Page 39 Schedule of Prior Year Findings and Questioned Costs (continued) Year Ended June 3, Minute Book not Available Louisiana Law requires that a "municipal minutes" book be maintained by the Town Clerk. For the year ended June 3, 25, this was not done. For the year ended June 3, 26, the Town had maintained a "minute book". This finding is cleared Inadequate Listing of Assets Louisiana Law requires the Town to maintain an inventory list of all capital assets owned by the Town, including land, building, and equipment. For the year ended June 3, 25, the Town did not have such a list. Repeat finding from 24. For the year ended June 3, 26, the Town has a list of capital assets owned by them. This finding is cleared Overall Internal Control Inadequate The Town does not have adequate procedures in place to ensure that (1) disbursements are properly supported by invoice, (2) employee time records are properly maintained, (3) police tickets are accounted for, (4) invoices are approved before payments are made, (5) receipts and disbursements are recorded in proper fund, and (6) personnel records are kept up to date. Repeat finding from 24. Finding- Status- Finding- Status- Finding- Status- This is a repeat finding for 26, see 26-3.

43 Exhibit L Page 4 Schedule of Prior Year Findings and Questioned Costs (continued) Year Ended June 3, Budget not Adopted for General Fund Louisiana Law requires that the Town prepare and approve a budget for the General Fund. For the year ended June 3, 25, the Town did not adopt a budget for its General Fund. Repeat finding from 24. For the year ended June 3, 26, the Town had prepared and approved a budget for the General Fund for the 25/26 year. This finding is cleared Louisiana Compliance Questionnaire not Approved The Louisiana Governmental Audit Guide requires the questionnaire to be completed and approved by the Town Council at the commencement of the audit. This finding is cleared Inadequate Records of Disbursements As stated in the audit for the year ended June 3, 24, and the Legislative Auditor's Report dated September 14, 25, there were few copies of invoices to support disbursements made during the year. Finding- Status- Finding- Status- Finding- Status- For the year ended June 3, 26, invoices were available to support disbursements for the year. This finding is cleared.

44 Exhibit L Page 41 Schedule of Prior Year Findings and Questioned Costs (continued) Year Ended June 3, Lack of Evidence Supporting Capital Assets We were unable to determine if during the year capital assets were either purchased or disposed of due to the lack of documentation to support any changes. Repeat finding from 24. For the year ended June 3, 26, the Town had documentation for the purchase of new capital assets. This finding is cleared Late Filing and Payment of Payroll Taxes All payroll operations are in need of review by Town management to include timely filing of payroll reports, on-time payment of taxes due, proper use of sign-in sheets and time cards, and maintenance of individual payroll records. See Legislative Auditor's Report dated September 14, 25. Status-For the year ended June 3, 26, payroll reports and tax payments were made on time. This finding is cleared Inconsistent Billing of Water/Sewer Charges Finding- Status- Finding- Finding- The monthly billings for Water/Sewer charges were not prepared each month, not all bills were sent to customers, and there was no follow-up in delinquent accounts. See Legislative Auditor's Report dated September 14, 25, for additional findings. Status- For the year ended June 3, 26, monthly bills are being prepared and mailed on time, late charges are being assessed and, when necessary, "cut-off* notices are being sent. This finding is cleared.