CAPITAL AREA GROUND WATER CONSERVATION DISTRICT. FINANCIAL STATEMENTS June 30, 2009

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1 20MOtC 28 ^H«--^ CAPITAL AREA GROUND WATER CONSERVATION DISTRICT FINANCIAL STATEMENTS June 30, 2009 Under provisions of state taw, 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, v^here appropriate, at the office of the parish clerk of court. Release Date.4/2Ji^ WILLIAM P. GAINES, JR., CPA A Professional Corporation

2 TABLE OF CONTENTS INDEPENDENT ACCOUNTANT'S REVIEW REPORT 1 MANAGEMENT'S DISCUSSION AND ANALYSIS 3 FINANCIAL STATEMENTS Statement of Net Assets 5 Statement of Revenues, Expenses and Changes in Fund Net Assets 6 Statement of Cash Flows 7 Statement of Changes in Assets and Liabilities - Agency Fund 8 Notes to Financial Statements 9 INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES 18 Page

3 WILLLAM P. GAINES, JR., CPA A PROFESSIONAL CORPORATION 4257 Church Street, Suite 105 Zachary, LA Independent Accountant's Review Report Capital Area Ground Water Conservation District 3535 South Sherwood Forest Boulevard, Suite 129 Baton Rouge, LA I have reviewed the accompanying financial statements of the business-type activities of Capital Area Ground Water Conservation District (the District), as of and for the year ended June 30, 2009, which comprises the District's basic financial statements as hsted in the table of contents. These financial statements are the responsibility of the District's management. My review was conducted in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants and applicable standards of Government Auditing Standards issued by the Comptroller General of the United States of America. A review consists principally of inquu-ies of District personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the fmancial statements taken as a whole. Accordingly, I do not express such an opinion. Based on my review, I am not aware of any material modifications that should be made to the accompanying fmancial statements in order for them to be in conformity with generally accepted accounting principles. In accordance with the Louisiana Governmental Audit Guide and the provisions of state law, I have issued a report, dated November 20, 2009^ on the results of my agreed-upon procedures.

4 Independent Accountant's Review Report Page 2 The management's discussion and analysis on pages 3 through 4 are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. Such information has not been subjected to the inquiry and analytical procedures applied in the review of the basic financial statements, but was compiled fi^om information that is the representation of management, without audit or review. Accordingly, I do not express an opinion or any other form of assurance on the supplementary information. C?VA William P. Gaines, Jr., CPA A Professional Corporation November 20, 2009

5 MANAGEMENT'S DISCUSSION AND ANALYSIS The Management's Discussion and Analysis of Capital Area Ground Water Conservation District (the District) presents a narrative overview and analysis of the District's financial activities for the year ended June 30, This document focuses on the current year's activities, resulting changes and currently known facts in comparison with the prior year's information. We encourage readers to consider the information presented in conjunction with the District's fmancial statements, which follow this section. Fmancial Highlights 1. Beginmng with the fiscal year ending June 30, 2005, the District changed the fmancial reports from governmental funds to an enterprise fund. This was done to meet the reqmrements of Governmental Accounting Standards Board (GASB) Statement No The revenue for FYE June 30, 2009 was $256,420, an increase of $47,128 over FYE June 30, 2008 of $209, The revenues of the FYE June 30, 2009 exceeded the expenses by $56, Starting with FYE June 30, 2005, the District depreciated the fixed assets. Management believed that the fiimiture and fixtures would not be reduced in value below current recorded amoimts and decided that furniture and fixtures would not be depreciated. Management believes that the water well will last for 50 years and have no salvage value and the depreciation should be on the straight-line method. This created depreciation in the FYE June 30, 2009 of $ 7, The District's investments in certificates of deposit decreased this fiscal year by $18, The District's total assets at FYE June 30, 2009 were $720,968 as compared to $650,656 at FYE June 30, 2008, an increase of $70,312. Overview of the Hnancial statements The preparation of these financial statements requires the utilization of significant estimates. many of which will not be known for many years.

6 Management's Discussion and Analysis Page 2 Condensed statement fund net assets June 30, 2009 Total assets $ Total liabilities $ Total net assets $

7 CAPITAL AREA GROUND WATER CONSERVATION DISTRICT STATEMENT OF NET ASSETS ENTERPRISE FUND and AGENCY FUND JUNE 30, 2009 ASSETS Current assets: Cash and cash equivalents Investments Accounts receivable net Total current assets Noncurrent assets: Capital assets: Land Furniture Water well Less accumulated depreciation Total noncurrent assets Total assets L -C L Proprietary Activity Enterprise Fund 136, ,255 6L ,823 15, ,025 77,18n 319, Governmental Activity Agency Fund $ 4,030 $ 4,030 $ LL^BILrriES Current liabilities: Accrued expenses Compensated absences DuetoUSGS Total current liabilities $ 3,994 15, NET ASSETS Invested in capital assets, net of debt Unrestricted Total net assets 319, $ See Accountant's Review Report

8 CAPITAL AREA GROUND WATER CONSERVATION DISTRICT STATEMENT OF REVENUES, EXPENSES and CHANGES IN FUND NET ASSETS ENTERPRISE FUND For die Year Ended June 30, 2009 Enterprise Fund Operating revenues Pumpage fees $ Total operating revenues Operating expenses Salaries 101,048 Other employee expenses 23,115 Compensated absences 10,647 Depreciation 7,659 Information technology 1,936 USGS - Real time network 5,250 USGS - Saltwater project 17,200 USGS - Subsidence wells 5,550 Office supplies 1,460 Rent 14,484 Travel 1,339 Postage 372 Telephone 1,589 Insurance 3,897 Dues and subscriptions 779 Printing 1,151 Miscellaneous 620 Accounting fees Total operating expenses Operating income (loss) 56,324 Nonoperating revenue Interest income Change in net assets 63,818 Total net assets - beginning Total net assets - ending $ See Accountant's Review Report

9 CAPITAL ARE GROUND WATER CONSERVATION DISTRICT STATEMENT OF CASH FLOWS ENTERPRISE FUND For the Year Ended June 30, 2009 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers $ 255,559 Payments to suppliers ( 57,627) Payments to employees ( 108,648) Payment for employee benefits ( ) NET CASH (USED) BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES iqi CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of capital assets ( 600) NET CASH (USED) BY CAPITAL AND RELATED FINANCIAL ACTIVITIES ( 600) CASH FLOWS FROM INVESTING ACTRTTIES Interest income 7,494 Redemption of certificates of deposit NET CASH (USED) BY INVESTING ACTIVITIES NET INCREASE IN CASH AND CASH EQUIVALENTS 94,950 BALANCE - BEGINNING OF YEAR BALANCE - END OF YEAR $ RECONCILLVTION OF OPERATING INCOME TO NET CASH (USED) BY OPERATING ACTIVITIES Operating income 56,324 Adjustments to reconcile operating income to net cash proceeds (used) by operating activities Depreciation expense 7,659 Change in assets and liabilities Increase in receivables ( 861) Increase in payables 3,447 Increase in accruals 3^047 NET CASH (USED) BY OPERATING ACTIVITIES $ See Accountant's Review Report

10 CAPITAL AREA GROUND WATER CONSERVATION DISTRICT. STATEMENT OF CHANGES IN ASSETS AND LIABILITIES - AGENCY FUND For the Fiscal Year Ended June 30, 2009 USGS PARISH COST SHARING Balance July 1,2008 Addition Balance Deduction June 30, 2009 ASSETS Cash $ $ $ $ LIABILITIES Due to USGS $ $ $ $ See Accountant's Review Report

11 CAPITAL AREA GROUND WATER CONSERVATION DISTRICT NOTES TO FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2009 INTRODUCTION The Capital Area Ground Water Conservation District was created under the provisions of Louisiana Revised Statutes 38: to provide for the effective administration, conservation, orderly development, and supplementation of groundwater resources within the conservation district, composed of the parishes of East Baton Rouge, East Feliciana, Pointe Coupee, West Baton Rouge, and West Feliciana. The District monitors the usage of groundwater within the District and provides assistance through the United States Geological Survey for the development of new sources of groundwater. The District is governed by a board of commissioners consisting of 15 members appointed by the governor. 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. BASIS OF PRESENTATION The accompanying general purpose financial statements of the Capital Area Groxmd Water Conservation District have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and fmancial reporting principles. B. REPORTING ENTITY The Capital Area Ground Water Conservation District is a political subdivision of the State of Louisiana and as such is the fmancial reporting entity. The financial reporting entity consists of only the Capital Area Groimd Water Conservation District and no other organizations. GASB Statement No. 14 established criteria for determining which component units should be considered part of the Capital Area Groimd Water Conservation District for financial reporting purposes. Capital Area Ground Water Conservation District has no component units. C. FUND ACCOUNTING For the periods beginning after June 15, 2003, the District was required to comply with Governmental Accounting Standards Board (GASB) Statement Number 34. GASB 34, paragraph 15 states... Business type activities are fmanced in whole or in part by fees

12 CAPITAL AREA GROUND WATER CONSERVATION DISTRICT NOTES TO FINANCIAL STATEMENTS (CONTINHJED) For die Fiscal Year Ended June 30, 2009 charged to external parties for goods or services. These activities usually report in Enterprise Funds. Paragraph 67 reads: Enterprise funds may be used to report any activity for which a fee is charged to extemal users for goods and services. Activities are required to be reported as enterprise funds if any one of the following criteria is met. Governments should apply each of these criteria in the context of the activity's/7r//?czpa/ revenue sources, a. The activity is financed by debt that is secured solely by a pledge of the net revenues &om fees. b. Laws or regulations require that the activity's costs to provide services, including capital costs (such as depreciation or debt service) be recovered with fees and charges, rather than with taxes or smiilar revenue. c. The pricing policies of the activity establish fees and charges designed to recover its costs, including capital costs (such as depreciation or debt service). Because of these requirements, beginning with the July, 2004 period, the District has converted from a governmental fund and account groups to an enterprise fund. Agency Funds should be used to report resources held by the reporting government in a purely custodial capacity. Agency Funds typically involve only the receipt, temporary investments, and remittance of fiduciary resources to individuals, private organizations or other governments. D. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING Enterprise fimd statements of net assets and revenues, expenses, and changes in fund net assets should be presented using the economic resources measurement focus and the accrual basis of accounting. Revenues Pumpage fees are recorded in the year earned, even though the payment may be received in the following year. Interest earned is recorded when paid. Grants are recorded when the reimbursable expenditures are made. Other revenue is recognized when it becomes measurable and available. 10

13 CAPITAL AREA GROUND WATER CONSERVATION DISTRICT NOTES TO FINANCIAL STATEMENTS (CONTINUED) For the Fiscal Year Ended June 30,2009 Expenses Expenses are reported in the period in which incurred, not in the period in which paid. Other Financing Sources (Uses) Transfers between funds which are not expected to be repaid (and any other financing sources) are accounted for as other financing sources (uses). These other financing sources (uses) are usually recorded only at the end of the fiscal year. E. BUDGETS The District uses the following budget practices: 1. Budgets are prepared and adopted by the District annually. The budgetary calendar for the fiscal year begins July 1 and ends Jime 30 of the following year. The budget for the fiscal year ending June 30, 2009, and prior years, never exceeded $ 250,000, so the District did not have to advertise for a public hearing on the budget. The original budget was adopted on Jime 17, The District's operations are financed with self-generated revenues and any excess of revenues over expenses at the end of the fiscal year is retained for use in subsequent years. 3. The District does not use encumbrance accounting. 4. The budget is prepared on an accrual basis. 5. The budget was amended one time in the FYE June 30, Because only governmental funds are required to have a comparison of actual to budget, no comparison is presented. F. ENCUMBRANCES The District does not use encumbrance accounting, nor is the budget formally integrated into the accounting records. 11

14 CAPITAL AREA GROUND WATER CONSERVATION DISTRICT NOTES TO FINANCIAL STATEMENTS (CONTINUED) For the Fiscal Year Ended June 30, 2009 G. CASH AND CASH EQUIVALENTS Cash includes amoimts in demand deposits, interest-bearing demand deposits, and time deposits. Cash equivalents include amounts in time deposits, and those investments with original maturities of 90 days or less. Under state law, the District may deposit funds in demand deposits, interest-bearing demand deposits, or time deposits with state banks organized under Louisiana law or any other state of the United States, or xmder the laws of the United States. H. INVESTMENTS Investments are limited by Louisiana Revised Statutes (RS) 33:2955 and the District's investment policy. If the original maturities of investments exceed 90 days, they are classified as investments; however, if the original maturities are 90 days or less, they are classified as cash equivalents. I. INVENTORIES The District has no inventories. J. PREPAID ITEMS The District does not have any prepaid items. K. FIXED ASSETS GASB Statement No. 34 changed the requirements for depreciation. Fixed assets are now recorded at the time of purchase or construction in the fixed asset account. Depreciation has now been provided on fixed assets. All fixed assets are recorded at historical cost. GASB Statement No. 34 provides that past depreciation that should have been taken will not be shown on the statement of revenues, expenses and changes in fund net assets, but will be an adjustment to prior fund net assets. L. COMPENSATED ABSENCES The District has the following policy relating to vacation and sick leave: The earning of vacation and sick leave is based on the equivalent of full time state service. It is credited at 12

15 CAPITAL AREA GROUND WATER CONSERVATION DISTRJCT NOTES TO FINANCIAL STATEMENTS (CONTINUED) For the Fiscal Year Ended June 30, 2009 the end of each regular pay period of 80 hours of regular duty. Each full time employee earned hours of vacation and hours of sick leave for every 80 hour pay period. The District has adopted a vacation policy that provides that annual vacation in excess of 20 days must be taken m the calendar year in which it is earned. Annual leave must be applied for by the employee and may be used only when approved by the District. Upon retirement or resignation, annual unused leave up to 300 hours is paid to employees at the employee's cunent rate of pay. The employee is not paid for any unused sick leave. The District's recognition and measurement criteria for compensated absences follows: GASB Statement No. 16 provides that vacation and other compensated absences with similar characteristics should be accrued as a liability as the benefits are earned if both of the following condhions are met. a. The employee's rights to receive compensation are attributable to services already rendered. b. It is probable that the employer will compensate the employee for the benefits through paid time off or some other means, such as cash payments at termination or retirement. The District's policy on sick leave does not qualify sick leave as compensated absences. Only the current portion of the liability for compensated absences is reported in the statement of net assets. The current portion is the amount left unpaid at the end of the reporting period that normally would be liquidated with expendable available financial resources. M. LONG - TERM OBLIGATIONS The District has no long-term obligations. N. USE OF ESTIMATES The preparation of fmancial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from these estimates. 13

16 CAPITAL AREA GROUND WATER CONSERVATION DISTRICT NOTES TO FINANCIAL STATEMENTS (CONTINUED) For the Fiscal Year Ended June 30, 2009 O. FUND NET ASSETS Reserves Reserves represent those portions of fund net assets not appropriable for expenses or legally segregated for a specific future use. Designated Net Assets Designated fund net asset balances represent tentative plans for future use of financial resources. 2. CASH AND CASH EQUIVALENTS At June 30, 2009, the District had cash and cash equivalents totaling $140,624 as follows: General Fund Agency Fund Total ^ Demand deposits $ 85,600 $ 4,030 $ 89,630 Interest bearing demand deposits 50, ,948 Cash on hand Total $ 136,594 $ 4,030 $140,624 These deposits are stated at cost, which approximates market. Under state law, these deposits must be secured by federal deposit insurance or the pledge of securities owned by the fiscal agent bank. The market value of the pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent. At June 30, 2009 and during the year, all cash and cash equivalents were fully covered by FDIC insurance, or pledged securities by the fiscal agent bank. 14

17 CAPITAL AREA GROUND WATER CONSERVATION DISTRICT NOTES TO FINANCIAL STATEMENTS (CONTINUED) For die Fiscal Year Ended June 30, LEVIED PUMPAGE FEES The authorized and levied pumpage fees are $3.50 per million gallons pumped. Effective April 1, 2008 that rate was increased to $4.00 per million gallons pumped. The following are the principal fee payers for the District: Georgia - Pacific Baton Rouge Water Co. Exxon USA Exxon Chemical Entergy Parish Water Co. 4. INVESTMENTS The District's investments consist solely of a certificate of deposit with a maturity of 180 days and carried at cost. The certificate of deposit was fully covered by FDIC insurance during the year and at year end. The investment consists of: 5. RECEF^^ABLES Certificate of Deposit $ 203,255 The following is a summary of receivables at June 30, 2009: 6. CHANGES IN FIXED ASSETS Pumpage Fees $ 61,256 A summary of changes in fixed assets follows: Balance 6/30/08 Additions Deductions Balance 6/30/09 Land Monitoring Wells Furniture Totals $ 11, , $ $ $ 0 $ $ $ 11, , $

18 CAPITAL AREA GROUND WATER CONSERVATION DISTRICT NOTES TO FINANCL\L STATEMENTS (CONTINUED) For the Fiscal Year Ended June 30, PENSION PLAN The District does not have a pension plan. However, the executive director and the administrative assistant are members of the Louisiana State Employees Retirement System (LASERS). The employees contribute 7.5% of gross salary and the District contributes 15.8% of the employee's gross salary to LASERS. Contributions to LASERS for the fiscal year ended June 30, 2009 were $8,118 by the employees and $18,485 by the District, which were the required contributions. 8. OTHER POSTEMPLOYMENT BENEFITS The District does not offer any postemployment benefits. 9. COMPENSATED ABSENCES 10. LEASES At June 30, 2009, employees of the District have accumulated and vested $15,691 of employee leave benefits, which was computed in accordance with GASB Codification Section C60. Of this amount, $15,691 is recorded as current accrued payable in the statement of fimd net assets. The District has no capital leases. The District has operating leases of the following nature: The District leases office space in Baton Rouge. The minimum annual commitments under noncancelable operating leases are as follows: Fiscal year ending 06/30/10 06/30/11 06/30/12 06/30/13 Total Amount 14,484 14,484 14, $

19 CAPITAL AREA GROUND WATER CONSERVATION DISTRICT NOTES TO FINANCIAL STATEMENTS (CONTINUED) For the Fiscal Year Ended June 30, RELATED PARTY TRANSACTIONS The District had no related party transactions. 12. LITIGATION AND CLAIMS The District was involved in no litigation during or at the end of the fiscal year ended June 30, ON-BEHALF PAYMENTS FOR FRINGE BENEFITS AND SALARIES The District made no on-behalf payments. 14. COMPENSATION PAID BOARD MEMBERS Board members of the District are not compensated. 17

20 WILLIAM P. GAINES, JR., CPA A PROFESSIONAL CORPORATION 4257 Church Street, Suite 105 Zachary, LA Independent Accoimtant's Report on applying Agreed-Upon Procedures To the Management of Capital Area Ground Water Conservation District I have performed the procedures included in the Louisiana Governmental Audit Guide and enumerated below, which were agreed to by the management of Capital Area Ground Water Conservation District and the Legislative Auditor, State of Louisiana, solely to assist the users in evaluating management's assertions about Capital Area Ground Water Conservation District's compliance with certain laws and regulations during the year ended Jime 30, 2009 included in the accompanying Louisiana Attestation Questionnaire. This agreed-upon procedures engagement was performed in accordance v^th standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of the specified users of the report. Consequently, I make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. Public Bid Law 1. Select all expenditures made during the year for material and supplies exceeding $20,000, or public works exceeding $100,000, and determine whether such purchases were made m accordance with LSA-RS 38: (the public bid law). No expenditures were made during the year for materials and supplies exceeding $20,000 or for public works exceeding $100,

21 Independent Accountant's Report on applying Agreed-Upon Procedures Page 2 Code of Ethics for Public Officials and Public Employees 2. Obtain from management a list of the immediate family members of each board member as defined by LSA-RS 42: (the code of ethics), and a Hst of outside business interests of all board members and employees, as well as their immediate families. Management provided me with the required list including the noted information. 3. Obtain from management a listing of all employees paid during the period under examination. Management provided me v^th the required list. 4. Determine whether any of those employees included in the listing obtained from management in agreed-upon procedure (3) were also included on the listing obtained from management in agreed-upon procedure (2) as immediate family members. Budgeting None of the employees included on the list of employees provided by management [agreed-upon procedure (3)] appeared on the list provided by management in agreedupon procedure (2). 5. Obtained a copy of the legally adopted budget and all amendments. Management provided me with a copy of the original budget. The budget was amended on June 16, 2009 to increase the USGS modeling budget by $25, Trace the budget adoption and amendments to the minute book. I traced the adoption of the original budget to the minutes of the meeting held on June 17, Compare the revenues and expenditures of the final budget to actual revenues and expenditures to determine if actual revenues or expenditures exceed budgeted amounts by more than 5%. I compared the revenues and expenditures of the final budget to the actual revenues and expenditures. Actual revenues and expenditures did not exceed budgeted revenues and expenditures by more than 5%. 19

22 Independent Accountant's Report on applying Agreed-Upon Procedures Page 3 Accounting and Reporting 8. Randomly select 6 disbursements made during the period under examination and: Meetings (a) trace payments to supporting documentation as to proper amount and payee: I examined supporting documentation for each of the six selected disbursements and found that payment was for the proper amount and made to the correct payee. (b) determine if payments were properly coded to the correct fund and genered ledger account; All of the payments were properly coded to the correct fund and general ledger account. (c) determine whether payments received approval from proper authorities. Inspection of documentation supporting each of the six selected disbursements indicated approval from two of the commissioners authorized to approve disbursements. All of the disbursements were for items approved in the budget. 9. Examine evidence indicating that agendas for meetings recorded in the minute book were posted or advertised as required by LSA-RS 42:1 through 42:12 (the open meetings law). Debt All meetings were properly posted. 10. Examine bank deposits for the period under examination and determine whether any such deposits appear to be proceeds of bank loans, bonds, or like indebtedness. I inspected copies of all bank deposit slips for the period under examination and noted no deposits which appear to be proceeds of bank loans, bonds, or like indebtedness. Advances and Bonuses 11. Examine payroll records and minutes for the year to determine whether any payments have been made to employees which may constitute bonuses, advances, or gifts. 20

23 Independent Auditor's Report on Applying Agreed-Upon Procedures Page 4 A readhig of the minutes of the district for the year indicated no approval for any payments that may constitute bonuses, advances, or gifts. I also inspected payroll records for the year and noted no instances which would indicate payments to employees which would constitute bonuses, advances, or gifts. Prior Comment and Recommendations There were no prior comments or recommendations. I was not engaged to, and did not, perform an examination, the objective of which would be the expression of an opinion on management's assertions. Accordingly, I do not express such an opinion. Had I performed additional procedures, other matters might have come to my attention that would have been reported to you. This report is intended solely for the use of management of Capital Area Groimd Water Conservation District and the Legislative Auditor, State of Louisiana, and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their purposes. By provisions of state law, this report is a public document, and it has been distributed to appropriate public officials. d^'f^^ ^-yc^i- a^i^ William P. Gaines, Jr., CPA A Professional Corporation November 20,