Town of Blacksburg, Virginia Comprehensive
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TOWN OF BLACKSBURG, VIRGINIA COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED June 30, 2012 DEPARTMENT OF FINANCIAL SERVICES TOWN OF BLACKSBURG, VIRGINIA TABLE OF CONTENTS INTRODUCTORY SECTION Page Letter of Transmittal.......................................................................................................................................... i Certificate of Achievement for Excellence in Financial Reporting............................................................... vi Directory of Principal Officials...................................................................................................................... vii Organizational Chart ..................................................................................................................................... viii FINANCIAL SECTION Independent Auditor’s Report....................................................................................................................... 1-2 Management’s Discussion and Analysis ....................................................................................................3-11 Basic Financial Statements Government-wide Financial Statements Exhibit 1 Statement of Net Assets...................................................................................................... 13 Exhibit 2 Statement of Activities........................................................................................................ 14 Fund Financial Statements Exhibit 3 Balance Sheet – Governmental Funds................................................................................ 15 Exhibit 4 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds ........................................................................... 16 Exhibit 5 Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual – General Fund (Non-GAAP Budgetary Basis).............................. 17 Exhibit 6 Statement of Net Assets – Proprietary Funds..................................................................... 18 Exhibit 7 Statement of Revenues, Expenses, and Changes in Fund Net Assets – Proprietary Funds....................................................................................... 19 Exhibit 8 Statement of Cash Flows – Proprietary Funds..............................................................20-21 Exhibit 9 Statement of Fiduciary Assets and Liabilities – Agency Funds........................................ 22 Notes to Financial Statements ...............................................................................................................23-51 Required Supplementary Information Exhibit 10 Analysis of Funding Progress for Defined Benefit Pension Plan...................................... 53 Exhibit 11 Schedule of Funding Progress for Other Post Employment Benefits ............................... 54 Other Supplementary Information Combining Statements Exhibit A-1 Combining Balance Sheet – Non-Major Governmental Funds.................................... 57 Exhibit A-2 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance – Non-Major Governmental Funds .............................................. 58 Exhibit B-1 Combining Statement of Fiduciary Assets and Liabilities ........................................... 60 Exhibit B-2 Combining Statement of Changes in Fiduciary Assets and Liabilities ........................ 61 TOWN OF BLACKSBURG, VIRGINIA TABLE OF CONTENTS Other Supplementary Information (Continued) Supporting Schedules Schedule 1 Schedule of Expenditures of Federal Awards..................................................................63-64 Schedule 2 Computation of Legal Debt Margin...................................................................................... 65 STATISTICAL SECTION Table 1 Net Assets by Component ......................................................................................................... 67 Table 2 Changes in Net Assets by Component .................................................................................68-69 Table 3 Fund Balances – Governmental Funds ..................................................................................... 70 Table 4 Changes in Fund Balances – Governmental Funds .................................................................. 71 Table 5 Assessed Value and Actual Value of Taxable Property ........................................................... 72 Table 6 Principal Property Tax Payers................................................................................................... 73 Table 7 Property Tax Levies and Collections ........................................................................................ 74 Table 8 Water and Sewer Revenues by Component.............................................................................. 75 Table 9 Water and Sewer Rates.............................................................................................................. 76 Table 10 Principal Water and Sewer Customers...................................................................................... 77 Table 11 Legal Debt Margin Information ................................................................................................ 78 Table 12 Ratios of Outstanding Debt by Type......................................................................................... 79 Table 13 Pledged Revenue Coverage....................................................................................................... 80 Table 14 Demographic and Economic Statistics...................................................................................... 81 Table 15 Principal Employers................................................................................................................... 82 Table 16 Full-Time Equivalent Town Government Employees by Function/Program.......................... 83 Table 17 Operating Indicators by Function/Program............................................................................... 84 Table 18 Capital Asset and Infrastructure Statistics by Function/Program............................................. 85 Table 19 Continuing Bond Disclosures...............................................................................................86-91 COMPLIANCE SECTION 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........................................................................................................93-94 Independent Auditor’s Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133.........................................................................................95-96 Summary of Compliance Matters.................................................................................................................. 97 Schedule of Findings and Questioned Costs ............................................................................................98-99 INTRODUCTORY SECTION November 28, 2012 The Honorable Mayor, Members of Town Council and the Citizens of the Town of Blacksburg, Virginia: Section 15.1-167 of the Code of Virginia, requires an annual independent audit and report of financial activity of the Town presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accounts. Pursuant to that requirement, we hereby issue the Comprehensive Annual Financial Report (CAFR) of the Town of Blacksburg, Virginia for the fiscal year ended June 30, 2012. This report consists of management’s representations concerning the finances of the Town of Blacksburg. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the Town of Blacksburg has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the Town of Blacksburg’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the Town of Blacksburg’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects. The Town of Blacksburg’s financial statements have been audited by the independent certified public accounting firm of Brown, Edwards & Company, L.L.P.. The goal of the independent audit was to provide reasonable assurance that the financial statements of the Town of Blacksburg for the fiscal year ended June 30, 2012, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial