LAKE BO RG NE BASIN LEVEE DISTRICT STATE O F LO UISIANA

Transcription

1 LAKE BO RG NE BASIN LEVEE DISTRICT STATE O F LO UISIANA A Ll- FU N D TYPES A N D A C C O U NT G R O U PS Balance S heet,d ecem ber31,1996 GOVERNM ENTA L FUNDS BO ND SERIES 1989 REFERENDUM DEB3- CA~~3AL GENERAL SERVICE PROJECTS FUND FUN[) FUND ASSETS AND OTHER DEBITS Assets: Cash (note 2) Receivables(note 3) Interfund receivables (note 13) tnventory Fixed assets(note 4) O therdebits: Amountavailable in debtservice funds(note 12) Am ountto be provided for~e%~rom e~'t ofgenerallong-term obligations $I,362,025 1,856,958 22,104 $436, , $1,409, TOTAL ASSETS AND OTHFR DEBITS LIA BILITIES,EQ UITY,A ND OTHER CREDITS Liabilities: Payables (note 9) Interfund payables(note 13) Deductions from ad valorem tax payable - retirem entsystem s Accrued forcompensated absences (note 7) Deferred revenue Bondspayable (note 10) TotalLiabilities Equity and O therc redits: Investm entin generalfixed assets Fund balances: Reserved (note 12) U nreserved -undesignated Total'Equity and OtherCredits TOTAL LIABILITIES,EQ UIrY AN D OTHER CRED ITS $3,241,087 $1,176,720 $1,419,338 $32,237 $20 $666, ,468 22, B35 22, ,148 3,138, ,153,719 1, , , ,538 $3,241,0'~,7 $1,'~7E,72~~ $'~,419,33~, The accom panying notes are an integralpartofthis statem ent. 4

2 Statem enta ACCO UNT G RO UPS G ENERAL G ENERA L TOTAL FIXED LONG-TERM (MEMORANDUM ASSETS OBLIGATIONS ONL~ $26, $3,207,906 2,592,005 15,130 22, $1,153,719 1, ,313,729 5,313,729 $26.727,942 $ $39,032,535 $698,567 15,130 N O NE $26.727, $62, ,000 6, NO NE 78,449 62,448 93, ,000 7,353,084 26,727,942 1,175,823 3, , $26,727,942 $6,467,448 $39,032,535

3 Statem entb LA K E B O RG N E BA SIN LEVEE DISTR ICT STATE"O F LO UISIA NA G O V ER N M ENTA L FU N DS Statem entofrevenues,expenditures, and C hanges in Fund Balances Forthe YearEnded Decem ber31,i996 BOND SERIES 1989 REFERENDUM DEBT CAPITAL. TOTAL GENERAL SERVICE PROJECTS (MEMORANDUM FUND FUND FUND ONLY) REVENUES Ad valorem taxes ~ntergovernm entalrevenue: State revenue sharing State ~rantsand contracts Use ofm oney and property: Interestearnings Royalties Otherincom e Totallevenues $1,794, ,000 86,078 79, ,920 28, ,218,750 $2,541, ,000 4,253, , EXPENDITURES Public w orks: Generaladm inistrative Em ployee related benefits Travel Professionalservices Contraclualservices M aterials and supplies Equipm entpurchases Deduct ions from ad valorem taxes forretilementsystem s Levee m aintenance Pu m pin.q stations Capitaloutlay Debtserv ice: Principa'l Interestand otherco sts Other Totalexpenditures 117, ,593 2,907 21, ,152 2, ,255 55,469 22, , , , , ,545 4,973,970 4,973, , ,593 2,907 21, ,152 2, ,255 78, , ,958 4, , , EXCESS (Deficiency)OF REVENUES OVER EXPENDITURES 713,264 77,007 (765,220) 35,051 FUND BALANCES AT BEG INNING O F YEAR INCREASE IN INVENTO RY FUND BALANCES AT END OF YEAR 1,076,712 1,414,758 4,910,602 NONE NONE $3,138,252 $1,153,719 $659,538 $4,951,509 The accom panying notes are an integralpartofthis statem ent

4 Schedule 1 LA K E BO R G N E BA SIN LEV EE D ISTR ICT STA TE O F LO U ISIA NA Schedule ofperd iem Paid Board M em bers Forth,e YearEnded Decem ber31,1996 M ichaelfrade la G eorge E.Lopez,President Ronald Neal Total NUM BER ,1 AM O UNT $ $3,000

5 LEGISLATIVE A UDITOR LA K E B O RG N E BA SIN LEV EE D ISTRICT STA TE O F LO UISIA NA AuditReport,Decem ber31,1996 O ur auditw as m ade for the purpose ofform ing an opinion on the generalpurpose financial statem ents taken as a w hole. The accom panying supplem entalinform ation schedule listed in the table ofcontents is presented forthe purpose ofaddifionalanalysis and is nota required partofthe generalpurpose financialstatem ents Df Lake Borgne Basin Levee District. Such information has been subjected to the procedures applied in the audit of the financial statem ents and,in ouropinion,is stated fairly in a lm aterialrespects in relation to the general purpose financialstatem ents taken as a w hole. JES:LW M :d~ Legislative A uditor

6 DAN IEl,C KYI,E,PtlD.,CPA,CFI LIGISI,A] IVE AuI)rlOR O FFIC E O F L EG ISLA TIV E A U D ITO R STA TE O F I.O UISIA N A BATO N RO U G E,LO U ISIAN A M arch NO RT ITIIIRD SIRIFI POST OFFICE BOX TELEPIIONF:(504) FACSIM ILE: (504) BOA RD O F LEVEE CO M M ISSIO NERS O F THE LA KE BO RG N E BASIN LEVEE D STRiCT STATI"O F LO UISIA NA Violet.Louisiana W e have audited the accom panying generalpurpose financialstatem ents ofthe Lake Borgne Basin Levee D istrict,a com ponentunitofthe State oflouisiana,as ofand forthe yearended Decem ber31,1996,as listed in the foregoing table ofcontents. These financialstatem ents are the responsibility ofm anagem entofthe Lake Borgne Basin Levee District. O urresponsibility is to express an opinion on these financialstatem ents based on ouraudit. W e cenducted our audit in accordance w ith genera ly accepted auditing standards and genera ly accepted governm ental auditing standards contained in the G overnm ent A uditing Standards,issued by the C om ptro ler G eneralofthe U nited States. Those standards require thatw e plan and perform the auditto obtain reasonable assurance aboutw hetherthe financial statem ents are free of m aterialm isstatem ent. A n audit includes exam ining,on a test basis, evidence supporting the am ounts and disclosures in the financialstatem ents. A n audit also includes assessing the accounting principles used and significant estim ates m ade by m anagem ent,as we las evaluating the overa lfinancialstatem entpresentation. W e believe thatourauditprovides a reasonable basis forouropinion. In our opinion,the generalpurpose financialstatem ents referred to above presentfairly,in a l m aterial respects, the financial position of the Lake Borgne Basin Levee District as of Decem ber31,1996,and the results ofoperations forthe yearthen ended,in conform ity w ith genera ly accepted accounting principles. As discussed in note 14,the levee district has been nam ed in tw o law suits. For one of the lawsuits,the probability ofan unfavorable outcom e cannot be reasonably determ ined by the levee district's legalcounsel. Accordingly,no provision forany liability has been m ade in the generalpurpose financialstatem ents forlosses relating to this law suit. W e have also issued separate reports dated M arch 17,1997,on internalcontrolstructure and com pliance w ith laws and regulations as required by G overnm enta uditing Standards,issued by the C om ptro lerg eneralofthe U nited States.

7 Statem entc BUDGET SERE S 1989 DEBT SERVICE FUND VARIANCE FAVO RABLE ACTUAL (UNFAVORA BLE) BUDGET BOND REFERENDUM CAPITAL PROJECTS FUND W FAVORA BLE ACTUAL (UNFAVORA BLE) $69/,477 $747,283 $ (I, $4.210,000 $4,167, , ($42,871) (2,893) , , ,270 22,981 (1,711 4,424, ,970 (549, , , , (12) 691,545 (1,723) 4,424,022 4,973,970 (549,948) , ,508) (755,220) ( ) 1,076,712 1, NO NE 1,414, NONE NONE NONE NONE NONE NONE NO NE $1,098,447 $1,153,719 $ $1, 255,250 $ ($ )

8 LA K E BO RG N E BA SIN LEV EE D ISTR ICT STATE O F LO U ISIA NA G eneralpurpose F:inancialStatem ents and IndependentA uditor's Reports As ofand forthe YearEnded Decem ber31,1996 W ith Supplem entalinform ation Schedule C O NTENTS Statem ent Page No ndependentauditor's Reporton the FinancialStatem ents 2 G eneralpurpose FinancialStatem ents Balance Sheet-A lfund Types and A ccountg roups Statem entofrevenues,expenditures and C hanges in F:und Balances Statem entofrevenues,expenditures,and Changes in Fund Balances -Budget(GAAP Basis)and Actual-GovernmentalFunds A B C Notes to the FinancialStatem ents Schedule Page N o Supplem entalinform ation Schedule -Schedule ofperd iem Paid Board M em bers 1 21 Exhibit O therreports Required by G overn m enta udith}g Standards. Report on InternalControlStructure Based Solely on an A uditofthe G eneralpurpose FinancialStatem ents Reporton Com pliance W ith Law s and Regulations A B

9 LA K E BO RG NE BA SIN LEVEE DISTRICT STA TE O F LO UISIA NA N otes to the FinancialStatem ents A s ofand forthe YearEnded Decem ber NTR O D UCTIO N The Lake Borgne Basin Levee District was created by Louisiana Revised Statute (R.S.) 38:291(G). The Lake Borgne Basin Levee Districtis comprised ofalthe territory contained within the Parish ofst.bernard. The levee districtprim arily provides flood protection forthose areas contained in the district. The levee district is responsible for 60 m iles of levees, 8 pum ping stations, and 53 m iles of drainage canals. The governing board adm inisters the operations and responsibilities of the levee district in accordance w ith the provisions of Louisiana statutes. The Board of C om m issioners of the Lake Borgne Basin Levee District consistof3 m em bers appointed by the governor. The board has 32 em ployees. SUM M A RY O F SIG NIFICA NT A CCO UNTING PO LICIES A. BA SIS O F PRESENTATIO N The accom panying financial statem ents have been prepared in accordance w ith generaly accepted accounting principles (GAAP)as applied to governmentalunits.the GovernmentalAccounting Standards Board (GASB)is the accepted standard-setting body for establishing governm ental accounting principles and financial reporting standards. B. R EPO RTIN G ENTIT Y GASB Codification Section 2100 has defined the governm entalreporting entity to be the State of Louisiana. The levee district is considered a com ponent unit ofthe State of Louisiana because the state exercises oversight responsibility in that the governor appoints the com m issioners and public service is rendered w ithin the state's boundaries. The accom panying statem ents present inform ation only as to the transactions of the Lake Borgne Basin Levee D istrict,a com ponentunitofthe State oflouisiana. A nnua ly, the State of Louisiana issues generalpurpose financialstatem ents,w hich include the activity contained in the accom panying financialstatem ents. C. FUND A C CO UNTING The levee districtuses funds and accountgroups to report on its financialposition and the results of its operations. Fund accounting is designed to dem onstrate legal com pliance and to aid financialm anagem ent by segregating transactions relating to certain governm entfunctions oractivities.

10 LA K E BO RG N E BA SIN LEV EE D ISTR ICT STA TE O F LO U ISIA NA V iolet.louisiana G eneralpurpose FinancialStatem ents and IndependentA uditor's Reports As ofand forthe YearEnded Decem ber31, 1996 W ith Supplem entalinform ation Schedule M ay 7,1997

11 LEG ISLA TIV E A U DIT A DV ISO RY C O U N C IL M "M BERS Representative Francis C.Thom pson,c hairm an SenatorR onald C.Bean,V ice C hairm an SenatorRobert J.Barham SenatorW ilson E.Fields SenatorThom as A.G reene SenatorC raig F.Rom ero Representative F.C harles M cm ains,jr Representative Edw in R.M urray Representative W arren J.Triche,Jr. Representative David Vitter DanielG.Kyle,Ph.D.,C PA,C FE PJgEC;~EQP~Q A lbertj.robinson,jr.,c PA

12 LA K I-B O R G N E BA SIN LEVEE D ISTR ICT STATE O F LO UISIA NA Note,~to the FinancialStatem ents (Continued) The annual requirem ents to am ortize the outstanding bond issues at D ecem ber 31, 1996 including interestof$2,489,684,are as fo low s: Ei.s~ a Ivg~_r G eneral Series 1989 G eneral O btigation DebtService O bligation Refunding Fund Bonds Bonds Total $306, , $361, , , , ,290 3,439, $667, , , , ,290 3,439,479 2, Tota $924,856 $7,969,828 $8, O UTSTA N DING D E'FEA SED DEBT The defeased bonds m ature February 1, 2000,to February 1,2009,in varying am ounts and w il be ca led for redem ption on February 1, 1999,at the principalam ount thereof and accrued interestto the date fixed forredem ption. 12. R ESERVED FUND BA LA NCES The reserved fund balance.s atdecem ber31, 1996,are as fo low s G eneral Fund Debt Service Fund Tota R eserved for: Inventory Debtserv ice $22,104 $22,104 $1,153, Tota $22,104 $1,153,719 $1,

13 LA KE!BO RG NE BA SIN LEVEE DISTRICT STATE O F LO UISIA NA Notes to the FinancialStatem ents (Continued) t3. INTERFUND RECEIVA BLES/PAYA BLES The interfund receivables/payables atdecem ber31,1996,are as fo low s: ece Interfund ~ayables DebtService Funds -Series 1989 G eneralf~m d $15,130 $15,130 $15,130 $15,130 The interfund receivables and payables resulted from the G eneralo bligation Bonds, Series 1989 Fund ad valorem ta~es being deposited to the G eneralfund. 14. LITIG ATIO N A ND C LA IM S The levee district is a defendantor codefendantin tw o law suits in w hich the plaintifs a lege property damage and personalinjury. One ofthese lawsuits is covered by insurance. Forthe otherlaw suit,the probability ofan unfavorable outcom e and the potentialliability to the levee districtcannotbe reasonably determ ined by the levee district's legalcounsel. 15. LEV EE D ISTR IC T TA X ES A rticle 6, Section 39 of the Louisiana C onstitution of 1974 provides that for the purpose of constructing and m aintaining levees, levee drainage, flood protection, hurricane flood prote(,tion,and a lotherpurposes incidentalthereto,the levee districtm ay levy annua ly a tax notto exceed five m ils. Ifthe levee district needs to raise additionalfunds in excess ofthe am ount co lected constitutiona ly, the taxes in excess of five m ils m ust be approved by a majority vote ofthe electors. By the specialelection held in the Parish ofst.bernard on O ctober 6, 1990,voters renew ed the specialfive-m ilad valorem tax on a l property in the parish fora period of10 years,beginning w ith the year1991 and ending w ith the year2000,to constructand m aintain necessary levees,levee drainage,flood protection,and hurricane flood protection,and a lotherpurposes incidentalthereto. By the specialelection held in the Parish of St.Bernard on July 16, 1988,the voters elected to perm itthe Lake Rorgne Basin Levee Districtto incurdebtand issue generalobligation bonds for$6,900,000 solely forthe purpose of constructing flood protection and drainage projects within the levee district. The general obligation bonds debtservice are to be financed from ad valcrem taxes. By the specialelection held in the Parish ofst.bernard on O ctober 1,1994,the voters authorized the Lake Borgne Basin Levee D istrictto levy a special10-yearthree-m ilproperty tax. The purpose ofthis threem ilproperty tax is forconstruction and m aintenance ofnecessary levees,levee drainage,flood protection,hurricane flood protection,and a lotherpurposes incidentalthereto. The fo low ing is a sum m ary ofauthorized and levied ad valorem taxes: 18

14 LA K E:B O RG N E BA SIN LEVEE D ISTR ICT STATE O F LO UISIA NA G O V ER N M ENTA L FU N D S Statem entofrevenues,i:-xpenditures,and C hanges in Fund Balances -B udget (GAAP Basis)and Actual Forthe YearEnded Decem ber31,1996 GENERAl.FUND VARIANCE FAVORA BLE BUDGET ACTUAL (UNFAVORA BLE) REVENUES Ad valorem taxes Intergovernm entalrevenue: State revenue sharing State ~lrants and contracts Use ofm oney and property -interestearnings Other Totallevenues EXPENDITURES G eneraladm inistrative Em ployee related benefits Travel Professionalservices Contractualserv ices M aterials and supplies Equipmentpurchases Deduct ions from ad valorem taxes for retirem entsystem s Levee m aintenance Pum ping stations Capitalc,utlay -public works -flood protection Debtservice: Principal Interestand othercosts Other Totalexpenditures $1,519,281 $1,794, ,000 92,270 83,749 10,602 1, , , ,000 86,078 79, , ,593 2,907 21, ,152 2, ,255 55, , ,275 1, (6,192) (3,895) (5,642) (8,856) 245 4,757 31, (7,255) (11,148) 4,794 (30,402) EXCESS (Deficiency)OF REVENUES OVER EXPENDITURES 467, , FUND BALANCES AT BEGINNING O F YEAR INCREASE IN INVENTORY FUND BALA NCES AT END O F YEAR 2,419,132 2,419,132 2,734 5,856 $2,889,695 $3,138,252 NO NE The accom panying notes are an integralpartofthis statem ent 7

15 LA KE BO RG NE BA SIN LEVEE DISTRICT STATE O F LO UISIA NA Notes to the FinancialStatements (Continued) G. INVENTO RY Inventory isvalued atcost,which approximates m arket,using the first-in,first-out(fifo) m ethod. The costofthe G eneralfund inventory is recorded as an expenditure w hen purchased ratherthan w hen consum ed. H. FIX ED A SSETS Fixed assets are recorded as expenditures atthe tim e purchased orconstructed,and the reiated assets are capitalized (reported)in the generalfixed assets accountgroup. Public dom air) or infrastructures are not capitalized. Interest costs incurred during construction a~e notcapitalized. No depreciation has been provided on generalfixed assets. A lfixed assets are valued at historical cost or estim ated historical cost if historicalcostis notavailable. Approxim ately 21 percentofthe fixed assets are valued at estim ated cost. The valuation of land, buildings, and im provem ents other than buildings acquired after 1986 is based on historical cost w here acquisition w as by purchase or construction and fair m arket value w here acquisition was by donation. Approxim ately 9 percent ofthe fixed assets are donated and are valued at their fair m arketvalue on the date ofdonation. D EFER R ED R EVEN UE These are am ounts co lected in the current accounting period for w hich asset recognition criteria have been m et,butforw hich revenue criteria have notbeen m et. J. C O M PENSATED A BSENCES Em ployees earn and accum ulate annualand sick leave atvarious rates,depending on theiryears ofservice. The am ountofannualand 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 annualleave at the em ployee's current hourly rate ofpay. Upon retirem ent,unused annualleave in excess of300 hours and unused sick leave are used to com pute retirem entbenefits. The costofleave privileges,com puted in accordance w ith G ASB Codification Section C60,is recognized as a currentyearexpenditure w hen leave is actua ly taken. The cost of leave privileges applicable to generalgovernm ent operations not requiring current resources is recorded in the generallong-term obligations accountgroup. 12

16 LEGIS LA'IIVE A UDITOR BO A RD O F LEVEE CO M M ISSIO NERS O F THE LA K E BO RG N E BA SIN LEVEE D ISTR IC T STA TE O F LO UISIA NA InternalC ontrolreport M arch 17,1997 Page 2 In our consideration ofthe internalcontrolstructure,w e noted thatthe levee district's lim ited num ber of em ployees precludes segregation of duties and other features of an adequate system of internal accounting control, although to em ploy such controls m ay not be cost beneficial,w hich w e considerto be a reportable condition understandards established by the A m erican Institute of Certified Public Accountants. Reportable conditions involve m atters com ing to our attention relating to significant deficiencies in the design or operation of the intem a!controlstructure that,in ourjudgment,cou)d adversely afectthe entity's ability to record, process, sum m arize, and report financial data consistent w ith the assertions of m anagem entin the gen~ralpurpose financialstat,~m ents. A m aterialw eakrjess is a reportable condition in w hich the design oroperation ofone orm ore ofthe specific internalcontrolstructure elem ents does not reduce to a relatively low levelthe risk thaterrors orirregularities in am ounts thatwould be m aterialin relation to the financial statem ents being audited m ay occurand notbe detected w ithin a tim ely period by em ployees in the norm alcourse ofperform ing theirassigned functions. O urconsideration ofthe internalcontrolstructure w ould notnecessarily disclose a lm atters in the internalcontrolstructure that m ight be reportable conditions and, accordingly,w ould not necessarily disclose a l reportable conditions that are also considered to be m aterial w eaknesses as defined above. How ever,we believe thatthe reportable condition described above is a m aterialw eakness. This condition w as considered in determ ining the nature,tim ing, and extentofthe procedures to be perform ed in our audit ofthe financialstatem ents ofthe Lake Borgne Basin Levee D istrictforthe yearended D ecem ber31,1996. This report is intended forthe inform ation arid use ofthe levee districtand its m anagem ent. By provisions of state law, this report is a public docum ent, and it has been distributed to appropriate public officials. spe ctful)y subm itted, JES:LW M :dl DanielG.Kyle,C PA,C FE Legislative Auditor EXH IB IT A

17 ST A T E O F L O U ISIA N A L E G ISL A T IV E A U D IT O R Lake B orgne B asin Levee D istrict State oflouisiana V iolet,louisiana M ay 7,1997 Finan cialand C om p lian ce A udit D ivision -~ D aniel G K yle,p h.d.,c PA,C FE. Legislative A uditor

18 I)ANIEL G.KYLE,PIt.I).,CPA,CFE LE61SI.ATIVE AUDITOR O FFICE O F L EG ISLA TIV E A U D IT O R STATE O F LOU ISIAN A BATON ROUGE,LOUISIAN A M arch 17, N OW II1"l'lIIRI)S 1R IIiI POST OFFICI!BOX TEI,EPIIONE:(504) (I FACSIM ILE: (504) B O A R D O F LEVEE CO M M ISSIO N ERS O F TH E LA K E BO RG NE BASIN LEVEE DISTRICI STATE O F LO UISIANA V iolet.louisiana W e have audited the generalpurpose financialstatem ents ofthe Lake Borgne Basin Levee District,a com ponentunitofthe State oflouisiana,as ofdecem ber31,1996,and forthe year then ended,and have issued ourreportthereon dated M arch 17,1997. W e conducted our audit in accordance w ith genera ly accepted auditing standards and G overnm ent A uditing Standards, issued by the C om ptro ler G eneral of the United States. Those standards require thatw e plan and perform the auditto obtain reasonable assurance aboutw hethertile financialstatem ents are free ofm aterialm isstatem ent. M anagem ent of the Lake Borgne Basin Levee District is responsible for establishing and maintaining an internalcontrolstructure.in fulfiling thisresponsibility,estimatesand judgments by m anagem ent are required to assess the expected benefits and related costs of internal controlstructure policies and procedures. The objectives ofan internalcontrolstructure are to provide m anagem entw ith reasonable,butnotabsolute,assurance thatassets are safeguarded against loss from unauthorized use or disposition, and that transactions are executed in accordance w ith m anagem ent's authorization and recorded properly to perm itthe preparation of general purpose financialstatem ents in accordance w ith genera ly accepted accounting principles. Because of inherent lim itations in any internal control structure, errors or irregularities m aynevertheless occurand notbe detected.also,projection ofany evaluation of the structure to future periods is subjectto the risk thatprocedures may become inadequate because of changes in conditions or that the efectiveness of the design and operation of policies and procedures m ay deteriorate. In planning and perform ing our audit of the financialstatem ents of the Lake Borgne Basin Levee Districtforthe yearended Decem ber 31,1996,we obtained an understanding ofthe internal control structure. W ith respect to the internal control structure, we obtained an understanding ofthe design ofrelevant policies and procedures and w hetherthey have been placed in operation,and w e assessed controlrisk to determ ine ourauditing procedures forthe purpose of expressing our opinion on the generalpurpose financialstatem ents and not to provide an opinion on the internalcontrolstructure. Accordingly,w e do not express such an opinion. EXHIBIT A

19 LA K E BO RG N E BA SIN LEV EE DISTR ICT STATE"O F LO UISIA NA Notes to the FinancialStatements(Concluded) Parishw ide taxes -constitutional Special: O ctober6,1990 July 16,1988 O ctober The fo low ing are the principaltaxpayers forthe levee district A uthorized M ilage Levied M ilage I~_x~ajLe~ Type ofbusiness 1996 Assessed Valuation Perce ntage of "iota!a ssessm ent Valuation M obilo il M urphy O il Entergy Louisiana, Incorporated Be lsouth Terecornm unications Dom ino SugarColporation Tota[M inatom e Corporation Southern NaturalG as Com pany FirstNationalBank ofcom m erce UniversalHealth Services W arren Petroleum Com pany O iland gas O iland gas Utility Utility Sugar O iland gas Utility Banking Health care O iland gas $37,722,185 17,925,899 6,151,155 5,959,213 5,779,711 3,945,912 3,858,080 2,602,817 2,392,240 2,329,482 23% 11% 4% 4% 4% 2% 2% 2% 1% 1% Total $88,666,694 54% 19

20 LA K E BO RG N E BA SIN LEV EE DISTRICT STATE!O F LO UISIA NA Notes to the FinancialStatem ents (Continued) delinquenton Decem ber31. The taxes are genera ly co lected in Decem berof the currentyearand January and February ofthe ensuing year. Interest incom e on dem and deposits and certificates ofdeposits are recorded w hen earned and the incom e is available. A lotherrevenues are recorded w hen the levee districtis entitled to the funds Expenditures Expenditures are genera ly recognized under the m odified accrual basis of accounting w hen the related fund liability is incurred,exceptfor accum ulated annual and sick leave, w hich are recognized w hen paid, and principal and intereston generallong-term debt,w hich are notrecognized untildue. E. BUDG ET PRA CTIC ES The levee districtprepares its budgetin accordance w ith R.S.38:318. The m anaging directorofthe levee districtsubm its proposed operating budgets forthe G eneralfund, DebtService Fund,and the Bond Referendum CapitalProjects Fund to the Board of Levee C om m issioners ofthe Lake Borgne Basin Levee Districtand to the generalpublic for inspection. T he budgets are prepared on the m odified accru31basis of accounting. Forthe period underaudit,the proposed budgets were advertised in the oficialjournal Septem ber29,1995,o ctober6,1995,and O ctober 13,1995. Atthe board m eeting, O ctober17,1995,the 1996 budgetw as form a ly adopted by the levee district. The levee district does not use encum brance accounting, except in the Bond Referendum CapitalProjects Fund. A lappropriationslapse atyear-end. The original budgetw as am ended once during the year. F. CA SH Cash includes petty cash,dem and deposits,and cash w ith paying agent. Understate law,the Lake Borgne Basin Levee Districtm ay depositfunds w ithin a fiscalagentbank organized underthe law s ofthe State of Louisiana,the law s of any other state in the U nion,orthe law s ofthe U nited States. Furtherm ore,the levee district m ay invest in certificates ofdepositofstate banks organized underlouisiana law and nationalbanks having theirprincipalofi ces in Louisiana. 11

21 LA K E BO RG N E BA SIN LEVEE D ISTR ICT STATE O F LO UISIA NA SU PPLEM ENTA L INFO RM ATIO N SC HEDULE A s ofand forthe YearEnded Decem ber 31,1996 PER D IEM PA Il;)B O A R D M EM B ERS The,;chedule ofperdiem paid to the board m em bers ofthe Lake Borgne Basin Levee Districtis presented in com pliance w ith House C oncurrentresolution N o.54 ofthe 1979 Session ofthe Louisiana Legislature. Perdiem paym ents are authorized by Louisiana Revised Statute 38:308 and are included in the general adm inistrative expenditures of the G eneral Fund. Board m em bers are paid $75 perm eeting forup to 36 m eetings each year.

22 LA KI"BO RG NE BA SIN LEVEE DISTRICT STA TE O F LO U ISIA NA Note,'~to the FinancialStatem ents (Continued) K. LO N G -TER M O B LIG A TIO NS Long-term obligations expected to be financed from governm entalfunds,including longterm debt and com pensated absences for accum ulated unpaid annualleave benefits, are accounted for in the general long-term obligations account group, not in the governm entalfunds. L. FUND EQ UITY -RESERVES Reserves represent those portions of fund equity not apprcpriable for expenditure or lega ly segregated fora specific future use. M. TO TA L CO LUM NS O N STATEM ENTS 2. CA SH The totalcolumns on the statements are captioned Memorandum Only (overview)to indicate that they are presented only to facilitate financial analysis. Data in these colum ns do not present financialposition or results of operations in conform ity w ith genera ly accepted accounting principles. Neither is such data com parable to a consolidation. AtDecember31,1996,the levee districthas cash (book balances)totaling $3,207,906 as fo low s: Petty cash Interest-bearing dem and deposits Dem and deposits -.payro l C ash w ith paying agent Total $3O 3,207, $3,207,906 These deposits are stated atcost,w hich approxim ates m arket. U nderstate law,these deposits (orthe resulting bank balances)m ustbe secured by federaldepositinsurance orthe pledge of securities ow ned by the fiscalagentbank. "[he m arketvalue ofthe pledged securities plus the federaldepositinsurance m ustata ltim es equalthe am ounton depositw ith the fiscalagent. These securities are held in the nam e ofthe pledging fiscalagentbank in a holding orcustodial bank thatis m utua ly acceptable to both parties. AtDecem ber31,1996,the levee districthas $3,293,776 in deposits (colected bank balance s)with fiscalagentbanks. These depositsare secured from risk by $202,387 of federal deposit insurance and $3,091,389 of pledged securitiesheld by the custodialbank in the name ofthe fiscalagentbank (GASB Category 3). 13

23 LA K E 13O RG NE BA SIN LEVEE DISTRICT STATE O F LO UISIA NA Notes to the FinancialStatem ents (Continued) Even though the pledged securities are considered unco lateralized under the provisions of G ASB Statem ent 3,R.S,39:1229 im poses a statutory requirem ent on the custodialbank to advertise and se lthe pledged securities w ithin 10 days of being notified by the levee district thatthe fiscalagenthas failed to pay deposited funds upon dem and. 3. REC EIVA BLES The fo low ing is a sum m ary ofreceivables atdecem ber31,1996 G eneral Fund Debt Service Capital Projects Fund Fund Total Ad valorem taxes State revenue sharing Louisiana Departm entof Transportation and Developm ent $1,748,2J2 $725, $9,500 $2,473, ,500 Total $1,656,968 $725,547 $9,500 $2,592,005 A ny im m aterialaccounts notco lected in the subsequentaccounting period w ilbe w ritten of to the related revenue at'count. 4. C HA NG ES IN G ENE'RA L FIXED A SSETS A sum m ary ofchan~es in generalfixed assets fo low s Balance January Balance Decem ber31 Additions Deletions 1996 Land Buildings Im provem ents otherthan buildings Equipm ent Construction in progress $462, ,152, , $102,255 $45, $4 62,688 1,130,251 18,152, ,617 6,175,897 Total $21,846,338 $4,927,304 $4 5,700 $26,727, R ETIREM ENT SYSTEM Substantia ly a lem ployees ofthe levee districtare m em bers ofthe Louisiana State Em ployees RetirementSystem (System),a cost-sharing,m ultiple-em ployer,defined benefitpension plan. The System is a statewide public employee retirementsystem (PERS)forthe benefitofstate em ployees,w hich is adm inistered and contro led by a separate board oftrustees. 14

24 LA KE BO RG NE BASIN LEVEE DISTRICT STATE O F LO UISIA NA Notesto the FinancialStatements (Continued) A lfu l-tim e levee districtem ployees are eligible to participate in the System. Benefits vestw ith 10 years ofservice. Atretirem entage,em ployees are entitled to annualbenefits equalto $300 plus 2.5 percentoftheirhighestconsecutive 36 m onths'average salary m ultiplied by theiryears ofcredited service. Vested em ployees are entitled to a retirem entbenefit,payable m onthly for life at(a)any age with 30 years ofservice,(b)age 55 with 25 years ofservice,or(c)age 60 w ith 10 years ofserv ice. In addition,vested em ployees have the option ofreduced benefits at any age w ith 20 years of service. The System also provides death and disability benefits. Benefits are established by state statute. The System issues an annualpublicly available financialreportthat includes financialstatem ents and required supplem entary inform ation for the System. That report m ay be obtained by w riting to the State Em ployees Retirem ent System,PostOfice Box 44213,Baton Rouge,Louisiana ,orby caling (504) or(800) M em bers are required by state statute to contribute 7.5 percentofgross salary,and the levee district is required to contribute atan actuaria ly determ ined rate as required by R.S. 11:102. The contribution rate for the fiscalyear ended June 30, 1997, increased to 12.4 percent,of annualcovered payro lfrom the 12 perce nt required in the fisca~year ended June 30,1996. The levee districtcontributions to the System forthe years ended Decem ber31,1996,1995, and 1994 were $107,794,$96,730,and $84,814,respectively,equalto the required contribution foreach year. 6 PO STEM PLO Y M ENT H EA LTH CA R E A ND LIFE INSU RA NC E B EN EFITS The levee district provides certain continuing health care and life insurance benefits for its retiredlem ployees. Substantia ly a lofthe levee district's em ployees becom e eligible forthese benefits ifthey reach norm alretirem entage w hile w orking forthe levee district. These benefits forretirees and sim ilarbenefits foractive em ployees are provided through the State Em ployees Group Benefits Program whose monthly premiums are paid jointly by the employee and by the levee district. The levee district recognizes the cost of providing these benefits as an expenditure w hen paid during the year. Forthe year ended Decem ber 31,1996,the costof retiree benefits forfourretirees totaled $4,203. CO M PENSATED A RSENCES AtDecem ber31,1996,em ployees ofthe levee districthave accum ulated and vested $62,448 of em ployee leave benefits, w hich w as com puted in accordance w ith GASB Codification Section C60.This amountis recorded in the generallong-term obligations accountgroup (note 10). 8. LEASE A ND RENTA L CO M M ITM ENTS The levee districtdoes nothave any operating orcapitalleases 15

25 OTHER REPO RTS REQ UIRED BY G O V ER N M ENT A U D ITIN G STA N DA R DS The ioi~owi~g pa~ s contain repogs on internalcontrolstructure and com pliance w ith taws and regulations required by G overnm enta uditing Standards,issued by the Com ptro lerg eneralof the U nited States, The reporton internalcontrolstructure is based solely on the auditofthe financialstatem ents and includes,w here appropriate,any re portable conditions and/orm aterial w eaknesses, The reporton com pliance w ith law s and regulations is,likew ise,based solely on the audit of the presenteclfinancialstatem ents and presents,w here applicable,com pliance m atters thatw ould be m aterialto the pre sented financialstatem ents,

26 DAN IEl+G KYLI,PII.D.,CPA,CFI I,EGISLA'IIVE AUI)ITOR O FFICE O F LEG ISLA TIV E A U D ITO R STA TE O F LO U ISIAN A BATON ROUGE,LOU ISIAN A M arch NO RTtt"1tIIRD $1RI!I:I PO ST OFIICE BO X "1ELEPIIONE:(504) FACSIM ILE: (504) BOA R D O F LEVEE CO M M ISSIO NERS O F THE LA KE BO RG NE BA SIN LEVEE DISTRIC1 STA TE O F LO U ISIA NA Violet.Louisiana W e have audited the generalpurpose financialstatem ents ofthe Lake F3orgne Basin Levee District,a com ponentunitofthe State oflouisiana,as ofdecem ber31,1996,and forthe year then ended,and have issued ourreportthereon dated M arch 17,1997. W e conducted our audit in accordance w ith genera ly accepted auditing standards and G overnm ent A uditing Standards, issued by the C om ptro ler G eneral of the U nited States. Those standards require thatw e plan and perform the auditto obtain reasonable assurance aboutw hetherthe fnancialstatem ents are free ofm aterialm isstatem ent. Com pliance w ith law s,regulations,contracts,and grants applicable to the Lake Borgne Basin Levee D istrict is the responsibility of the levee district's m anagem ent. A s part of obtaining reasonable assurance about w hether the financial statem ents are free of m aterial m isstatem ent,w e perform ed tests ofthe levee district's com pliance w ith certain provisions of laws,regulations,contracts,and grants. Howew.~r,the objective ofourauditofthe general purpose financialstatem ents w as not to provide an opinion on overa lcom pliance w ith such provisions. A ccordingly,w e do notexpress such an opinion. The results of our tests disclosed no instances of noncom pliance that are required to be reported therein underg overnm enta uditing Standards. This reportis intended forthe inform ation and use ofthe levee districtand its m anagem ent. By provisions of state law, this report is a public docum ent, and it has been distributed to appropriate public officials. JES :LW M :dl [LOBLD} Legislative Auditor EX HIB IT B

27 LA KE BO RG NE BA SIN LI-VEE DISTRICT STATE O F LO UISIANA Notesto the FinancialStatements(Continued) A fund is a separate accounting entity w ith a self-balancing setof accounts. O n the other hand, an account group is a financial reporting device designed to provide accountability forcertain assets and liabilities thatare notrecorded in the funds because they do notdirectly affectnetexpendable available financialresources. Funds ofthe levee districtare classified as governm entalfunds. G overnm entalfunds account for the levee district's general activities, including the co lection and disbursem entof specific or lega ly restricted m onies,the acquisition or construction of generalfixed assets,and the servicing ofgenerallong-term debt. G overnm entalfunds ofthe levee districtinclude: The G eneralfund is the generaloperating fund ofthe levee districtand accounts for a l financial resources, except those required to be accounted forin otherfunds. 2 The Series 1989 Debt Serv ice Fund accum ulates ad valorem tax revenues to finance debt serv ice paym ents of the February 1, 1989, G eneral O bligation Bond Issue and the subsequent A ugust 1, 1993, G eneralo bligation Refunding Bond Issue. 3 The Bond Referendum C apita resources received and used im provem ent of capitalfacilities funds. Projects Fund accounts for financial for the acquisition, construction, or not reported in the other governm ental BASIS O F ACCO UNTING The accounting and financialreporting treatm entapplied to a fund is determ ined by its m easurem ent focus. The governm ental funds are accounted for using a current financialresources m easurem ent focus. VVith this m easurem ent focus, only current assets and currentliabilities are genera ly included on the balance sheet. O perating statem ents of these funds present increases and decreases in net current assets. The m odified accrualbasis ofaccounting is used by the governm entalfunds. The governm ental funds use the fo low ing practices in recording revenues and expenditures: Revenues Ad vatorem taxes and the related state revenue sharing (which is based on population and homesteads in the parish)are recorded in the yearthe taxesare assessed. As provided by R.S.47:1997(b),ad valorem taxes are assessed for the calendar year, becom e due on N ovem ber 15 of each year, and becom e 10