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TOWN OF FARMERVILLE FARMERVILLE. LOUISIANA
RFPORTONAUDITOF BASIC FINANCIAT STATEMENTS
YEAR ENDED niNF.m 2011 AND 2010
Underprovisionsofstafelaw this report is a public document A copy of the report has been submitted to the entity and ottier appropnate public officials The report is available for public inspection at the Baton Rouge office of the LegislativeAuditor and where appropriate, at the office of the parish clerk of court
Release Date MAR 1 8 2012 TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA ANNUAL FINANCIAL REPORT RJNE30, 2011
TABLE OF CONTENTS
PAGE REQUIRED SUPPLEMENTAL INFORMATION (PART I)
Management's Discussion and Analysis A - E
FINANCIAL SECTION
Independent Auditors' Report I - II
BASIC FINANCIAL STATEMENTS
GOVERNMENT - WIDE FINANCIAL STATEMENTS
EXHIBIT A Statements of Net Assets 1
EXHIBIT B Statements of Activities 2
FUND FINANCIAL STATEMENTS
EXHIBIT C Balance Sheets - Governmental Funds 3
EXHIBIT C - 1 Reconciliation ofthe Balance Sheets to the Statement of Net Assets - Governmental Funds 4
EXHIBIT D Statements of Revenues, Expenditures and Changes m Fund Balance - Governmental Funds 5
EXHIBIT D - I Reconciliation ofthe Statements of Revenues, Expenditures and Changes m Fund Balance of Governmental Funds to the Statements of Activities 6
PROPRIETARY FUND STATEMENTS
EXHIBIT E Statements of Fund Net Assets - Proprietary Funds 7 - 8
EXHIBIT F Statements of Revenues, Expenses and Changes in Fund
Net Assets - Proprietary Funds 9-10
EXHIBIT G Statements of Cash Flows - Proprietary Funds 11-12
NOTES TO FINANCIAL STATEMENTS 13-35
REQUIRED SUPPLEMENTAL INFORMATION (PART II)
STATEMENT A General Fund - Statements of Revenues, Expenditures and Changes in Fund Balance - Budget (GAAP) and Actual 36 TOWN OF FARMERVILLE FARMERVILLE LOUISIANA ANNUAL FINANCIAL REPORT JUNE 30, 2011
TABLE OF CONTENTS
STATEMENT B Special Revenues - Sales Tax Fund - Schedules of Revenues, Expenditures and Changes m Fund Balances - Budget (GAAP) and Actual 37 - 38
STATEMENT B-1 Special Revenues - 2002 Sales Tax Fund - Recreation Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget (GAAP) and Actual 39
STATEMENT C Enterprise Funds - Statements of Revenues, Expenses, and Changes in Retained
Earnings - Budget (GAAP) and Actual 40
STATEMENT C-l Enterprise Funds - Schedule of Detail of Expenses, Budget (GAAP) and Actual 41
OTHER SUPPLEMENTAL INFORMATION ( PART Iin
SCHEDULE A Combining Balance Sheets - Special Revenue Funds 42
SCHEDULE B Combining Statements of Revenue Expenditures and Changes in Fund Balances - Special Revenue Funds 43 SCHEDULE C Balance Sheets - Capital Projects Fund 44
SCHEDULE D Statements of Revenues, Expenditures and Changes in Fund Balances -
Capital Projects Fund 45
SCHEDULE E Combining Balance Sheets - Debt Service Funds 46
SCHEDULE F Combining Statements of Revenues, Expenditures and Changes in Fund Balance -
Debt Service Funds 47
SCHEDULE G Schedule of Insurance in Force 48
SCHEDULE H Cash Accounts and Investments 49
Report on Intemal Control over Fmancial Reportmg and on Compliance and Other Matters Based On an Audit of Financial Statements Performed in Accordance with Govemment
AudiUng Standards 50-51
PRIOR YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS 52 - 59
CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS 60 - 69 MANAGEMENT'S DISCUSSION AND ANALYSIS Town of Farmerville, Louisiana Management's Discussion and Analysis June 30, 2011
The management ofthe Town of FarmerviUe, Louisiana offers readers ofthe Town of Farmerville, Louisiana's (Town) financial statements this narrative overview an analysis ofthe financial activities ofthe Town for the fiscal year ended June 30,2011 Management discussion and analysis is designed to provide an objective analysis ofthe Town's financial activines based on currently known facts, decisions, or conditions
Overview ofthe Financial Statements
The Town's basic financial statements consist ofthe govemment-wide financial statements, fimd financial statements, and notes to the financial statements This report also contains other supplementary information, which is in addnion to the basic financiai statements
Govemment-Wide Financial Statements
The statement of net assets presents information on all ofthe Town's assets and liabilities, with the difference between the two reported as net assets The statement of acnvities shows how the government's net assets changed dunng this fiscal year All changes in net assets are reported as soon as the underlying event occurs regardless ofthe timing ofthe related cash flows
Each of these reports is broken down between governmental activiUes and busmess-type activities Governmental achvities normally are those activities that are supported by taxes, licenses, permits, finesan d intergovernmental revenues for example, the police and fire departments Business-type activities are fimctions that are intended to support their costs through charges for services or fees such as the water and sewer departments
Fund Financial Statements
The Town of FarmerviUe, Louisiana maintains four individual govemmental funds. General Govemment, Special Revenue, Debt Service, and Capital Projects Information is presented separately in the govemmental fimd balance sheet and in the govemmental fund statement of revenues, expenditures, and changes in fund balances for the general fimd which is considered to be a major fund
The Tovm adopts an annual budget for its general fund A statement of revenues, expenditures and changes in fxmd balance IS presented on Statement A which compares actual revenues and expenditures to the onginal budget and amended budget figures The original budget was adopted on June 11, 2010 and it was amended on June 11, 2011
The Town operates one proprietary fund The Town uses an enterprise fund to account for its water and sewer disposal operations This enterpnse fund reports the same functions presented as business-type activities in the govemment-wide financial statements
The notes to the financial statements have additional information presented that is essential to a full understanding ofthe data provided in the government-wide financial statements The notes are found on pages 13-35
Govemment-wide Financial Analysis
Overall, the Town's financial posinon and results of its operation improved in fiscal 2011 The largest percentage ofthe total assets (76%) is the Town's investment in net capital assets The Town has outstanding debt of S3 223 352 in 2011 and $2,980,000 00 in 2010, which was used to finance someofthe$137,742,48lin2011and$12,984,725in2010capital assets (For more detailed information on the Town's debt and capital assets, see pages 26 - 27 ) The total liabilities of $ 4,109,950 in2011 and $3,597,263 in 2010 are 23% in 2011 and 21% in 2010 of the total assets The following table reflects the condensed statement of net assets at June 30, 2011
Govemmental Business-Type Total Activities Activities Assets Current Assets $ 1,410,611 34 $ 534,050 95 $1,944,662 29 Non-current Assets 8071677 21 8155526 69 16227203 9 Total Assets $9,482,288 55 $ 8.689,577 64 $18,171,866 19
Liabihnes Current Liabilities $ 721,864 78 $ 343,767 25 $ 1,065,632 03 Non-current Liabilities 2659318 45 385000 3044318 45 Total Liabilities $ 3,381,183 23 $ 728,767 25 $4,109,950 48
Net Assets $ 6.101,105 32 $ 7,960,810 39 $14,061,915 71 Invested in Capital Assets, Net of Related Debt $ 3,460,285 20 $7,434,322 29 $10,894,607 49 Restncted 1773039 09 526677 64 2299716 73 Unrestricted 867781 03 -189 54 867591 49 Total Net Assets $6,101,105 32 $7,960,810 39 $14,061,915 71
The Town's govemmental activities increased the net assets by $293,362 The total change in business-type activiUes increased the Town's assets by $117,483 Below is a summary ofthe statement of activities
Govemmental Business-Type Activities Activities Total Revenues Program Revenues $ 638.143 12 $ 1.565.855 92 $ 2,203.999 04 I General Revenues 2788168 37 23333 39 281150176 1 Total Revenues S 3,426,31149 $ 1.589,189 31 $ 5,015,500 80 1
Expenses General and Administrative $ 686,608 64 $ 00 $ 686.608 64 1 Public Safety 1063093 41 0 1063093 41 Public Services 942290 87 0 942290 87 Culture and Recreation 292663 21 0 292663 2 J Capital Proiects 23139 89 0 23139 89 Water & Sewer 0 1471706 58 1471706 58 Interest on Lone-Term Debt 125153 35 0 125153 35 Total Expenses $ 3.132,949 37 $ 1.471,706 58 $ 4.604.655 95 1
"•" Increases (Decreases) in Net Assets S 293,362 12 $ 117,482 73 S 410.844 85 ,
NetAssets-July 1,2010 5807743 2 7843327 66 13651070 86
Net Assets-June 30, 2011 $ 6,101,105 32 $ 7,960,810 39 $ 14,061,915 71
-B- PROGRAM REVENUES
• General Government Culture and Recreation • Public Safety • Water Public Services Sewer Capital Projects
Program Revenues are Broken Down By:
General Government $ .00 Public Safety 129,004.67 Public Services 405,922.05 Culture and Recreation .00 Water 1,207,189.44 Sewer 358,666.48 Capital Projects 103,216.40 Total Program Revenues $ 2,203,999.04
-C- GENERAL REVENUES
48.79%
Property Taxes Sales Taxes Franchise Taxes Alcoholic Beverage Tax Occupational Licenses Other Licenses & Taxes Investment Earnings Mineral Lease Miscellaneous Transfers Video Bingo Sales of Assets Intergovernment Revenue
General Revenues Consist ofthe Following:
Property Taxes $ 705,949.24 Sales Taxes 1,371,698.75 Franchise Taxes 184,065.41 Alcoholic Beverage Tax 7,097.00 Occupational Licenses 175,729.86 Other Licenses & Taxes 1,541.00 Video Bingo 68,763.42 Investment Earnings 67,814.50 Intergovernment Revenue 24,837.89 Miscellaneous 60,776.84 Mineral Lease 47,901.60 Sales of Assets 1,426.25 Transfers 93,900.00 Total General Revenues $ 2,811,501.76
-D- Financial Analysis ofthe Govemment's Funds
The Town of Farmerville's govemmental hinds reported a combined ending fund balances of $2,681 324 which is an increase of $31,731 Ofthe $2,681,324, $421,779 is reserved for debt service
The Town's propnetary fund shows an negative ending unrestncted net assets of $(9,710) The net change m water assets had an increase of $117,482
General Fund Budgetary Highlights
The major differences between the onginal budget and the final budget ofthe General Fund are
1 The increase in budget revenue of $ 191,900 is due mainly to an increase $48,000 for sale of oil and mineral leases, a $50,000 transfer from our enterprise fund and an increase in property taxes of $31,000
2 Expenditures increased by $191,071 The town had not budgeted for a special election for a sales tax for police department We had an increase in vehicle repairs of $33,000 And we purchased a garbage tmck Also, increased asset purchases and grant expenses for Police Department by $17,000
The final budget and the actual results difference show a positive position The difference in budgeted revenue and actual IS within the 1% range The difference in budgeted expenditures and actual is less than 1%
Capital Asset and Debt Administration
The total investment in net capital assets as of June 30, 2011 is $13,742,480
New major capital assets purchased in fiscal 2011 are
1 The Fire Department purchased 2011 International Pumper Truck for $258,661 and did an addition to Union Village Fire Station for $54,900
2 The Sanitation Department purchased a used Garbage Truck for $32,000
3 The Recreation Department installed acoustics system for Recreation Center for $39,157 and purchased
4 The Street Department purchased two tractors with bush hog mowers and two zero tum mowers for $87,196
5 The Water Department purchased a hydraulic excavator for $158,800
At the end ofthe current fiscal year, the Town had a total outstanding bonded debt and capital leases of $3,223,352 This debt is financed through sales taxes collected
Current Financial Factors
In the first 3 months of fiscal 2011, sales tax collections are up 10 % over amounts collected in the same time last year
The budget for fiscal 2012 is $5,493,470 in gross revenue with expenses of $5,192,900 There is $100,000 budgeted to extend our water service to across Lake D'Arbonne on Hwy 33 South and $20,000 for improvements to Tovra Hall The revenues also includes a 11 % increase due to increase in production at our processing plant The budget reflects an increase for Sales Tax collections due to passing a new 1/2 cent sales tax for Police Department
The water, sewer, and sanitation revenues increased by $2,131 18 in the first five months of 2012 compared to the same time period in 2011 GARRETT & GARRETT CERTIFIED PUBLIC ACCOUNTANTS 119 PROFESSIONAL DRTVE WEST MONROE, LOUISIANA 71291
CAROLYN V GARRETT PHONE 318 322-0845 JUDY D GARRETT FAX 318 322-5577
December 5, 2011
INDEPENDENT AUDITORS' REPORT
The Honorable Stein Baughman, Mayor and Members ofthe Board of Alderman
We have audited the accompanying financiai statements ofthe govemmental activities, the business-type activities, each major fund, and the aggregate remaining fiind information ofthe Town of FarmerviUe, Louisiana, as of and for the year ended June 30, 2011 and 2010, which collectively comprise the Town's basic financiai statements as listed in the table of contents These basic financialstatement s are the responsibility ofthe Town of FarmerviUe, Louisiana's management Our responsibility is to express an opinion on these basic financial statements based on our audit
Except as discussed in the following paragraph, we conducted our audit in accordance with auditmg standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General ofthe United Slates and the Louisiana Govemmental Audit Guide 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 pnnciples used and significant estimates made by management, as well as evaluating the overall financialstatemen t presentation We believe that our audit provides a reasonable basis for our opinion generally accepted in the United States of America
The Town of FarmerviUe was required to implement, Govemmental Accounting Standard Board Statement No 45, entitled "Accounting and Financial Reporting by Employers for Post Employment Benefits other than Pensions " (GASB 45) This standard has not been implemented as of June 30, 2011 The major change under GASB 45 is to attnbute the cost of post retirement benefits to the time which the employee is working for the employer This standard does not require the funding of these benefits, but it does require recognizing the liability and expense in the financial statements See note # 22
In our opinion, except for the effects of not implementing GASB 45, the financial statements refened to above present fairly, in all material respects the respective financial position ofthe govemmental activities, the business-type activities, each major fund, and the aggregate remaining fiind information ofthe Town of FarmerviUe, Louisiana, as of June 30, 2011 and 2010, and the respective changes in financial position and cash flows, where applicable, thereof, for the year then ended in conformity with accounting pnnciples generally accepted in the United States of Amenca
In accordance with Govemment Auditing Standards, we have also issued our report dated December 5, 2011 on our consideration ofthe Town of Farmerville, Louisiana's internal control over financial reporting and 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 intemal control over financiai reporting and compliance and the results of that testing and not to provide an opinion on the intemal control over financial reporting of on compliance That report is an integral part ofan audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in considenng the results of our audit
Management's Discussion and Analysis on pages A - F and the required supplemental mformation, on pages 36-44 are not a required part ofthe basic audited financialstatements , but are supplementary information required by accountmg principles The Honorable Stem Baughman, Mayor and Members ofthe Board of Alderman December 5, 2011 Page 2 generally accepted in the United States of Amenca We have applied certam limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplemental information However, we did not audit the information and express no opinion thereon
Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise the Town of Farmerville, Louisiana's basic financial statements The combining and individual fund statements and schedules, as well as the accompanying supplemental information as listed in the Table of Contents and identified as Schedule A through Schedule H are presented for purpose of additional analysis and are not a required part of the basic financial statements The supplemental information on Schedule A through H has been subjected to the auditing procedures applied m the audit ofthe basic financial statements and, m our opinion, are fairly stated in all material respects in relation to the basic financial statements and accordingly, we express no opinion on them
GARRETT & GARRETT CERTIFIED PUBLIC ACCOUNTANTS ^Si^'fAootcPk BASIC FINANCIAL STATEMENTS TOWN OF FARMERVILLE EXHIBIT A FARMERVILLE, LOUISIANA STATEMENTS OF NET ASSETS JUNE 30. 2011 AND 2010
PRIMARY GOVERNMENT GOVERNMENTAL BUSINESS-TYPE TOTALS ACTIVITIES ACTIVITIES 2011 2010 ASSETS
Cash and Cash Equivalents $ 946,170 43 $ 343,367 69 $ 1,289,538 12 $ 1,616,906 91 Receivables Net 137,468 59 177,642 26 315,11085 313,761 58 Receivables - Others 16 34 00 16 34 33,373 80 Prepaid Expenses 69,835 00 13,041 00 82,876 00 86,385 00 Deposits - Insurance 6,119 70 00 6,119 70 00 Due from Other Funds 48,125 40 00 48,125 40 00 Due from Other Governments 202,875 88 00 202,875 88 56,099 70 Restncted Cash and Cash Equivalents 1,773,039 09 711,683 82 2,484,722 91 2,157,081 57 Capital Assets, Net 6,298,638 12 7,443,842 87 13,742,480 99 12,984,725 62 Total Assets $ 9,482,288 55 L 8,689.577 64 $ 18.171,866 19 L 17,248,334 18 LIABILITIES
Accounts Payable $ 284,950 20 $ 114,737 27 $ 399,687 47 $ 232,800 44 Accmed Liabilities 203,217 30 30,166 79 233,384 09 241,767 88 Due to Other Funds 14,158 81 33,966 59 48,125 40 00 Customer Deposits 00 148,246 60 148,246 60 142,695 00 Cunent Portion of Long-Term Obligations Revenue Bonds Payable 150,000 00 15,000 00 165,000 00 160,000 00 Capital Leases Payable 15,196 25 00 15,196 25 00 USDA Loan 13,838 22 00 13,838 22 00 Accmed Interest Payable 40,504 00 1,650 00 42,154 00 00 Long-Term Debt Revenue Bonds Payable 2,285,000 00 385,000 00 2,670,000 00 2,820,000 00 Capital Leases Payable 120,796 98 00 120,796 98 00 USDA Loan 253,52147 00 253,521 47 00 Total Liabilities ^ 3.381.183 23 $ 728.767 25 $ 4,109,950 48 $ 3,597,263 32
NET ASSETS
Invested in Capital Assets, Net of Related Debt $ 3,460,285 20 $ 7,434,322 29 $ 10,894,607 49 $ 10,404,725 62 Restncted for Debt Service 421,779 35 114,03168 535,811 03 605,61144 Fire Dept - General Fund 222,677 23 00 222,677 23 194,403 19 Fire Dept - Fire Protection Distnct 6,765 32 00 6,765 32 7,053 21 Fire Dept - Volunteer 74,124 86 00 74,124 86 58,164 32 Capital Projects 552,550 83 412,645 96 965,196 79 608,221 74 Recreation/Street Improvements 495,14! 50 00 495,141 50 481,046 65 Unrestncted (Deficit) 867,781 03 (189 54) 867,591 49 1,291,844 69 Total Net Assets i_ 6.101.105 32 $ 7,960.810 39 $ 14,061,915 71 $ 13,651,070 86
The notes are an integral part of these statements See accompanying independent auditors' report
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2011 2010 FUND BALANCES - Total Govemmental Funds $ 2,681,324 12 S 2.649.592 70
Amounts reported for Govemmental Activities in the Statement of Net Assets are different because
Capital Assets used in Govemmental Activities are not Financial Resources and therefore are not reported m the Govemmental Funds
Govemmental Capital Assets $ 9,789,326 66 $ 9,137,016 00 Less Accumulated Depreciation (3,490.688 54) (3.355.230 50) Net $ 6.298.638 12 $ 5,781.785 50
Long-term Liabilities, mcluding Bonds Payable, are not due and payable in the current period and therefore are not reported in the Govemmental Funds
Accmed Interest Payable 40,504 00 43,635 00 Bonds Payable 2,435,000 00 2,580,000 00 USDA Loan 267,359 69 00 Lease Payable 135.993 23 00 Net $ 2,878.856 92 $ 2.623.635 00
NET ASSETS OF GOVERNMENTAL ACTIVITIES fEXHIBIT A^ S 6.101.105 32 $ 5.807.743 20
The notes are an integral part of this statement See accompanying independent auditors' report
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O 0- U, c/i CO P- U W ai > Hi O U M 3 1 i u, w < a O X > Hffi Qi a o O m m o OO O VO VO o VO r~ Os OS o m rn O in m o Os o_ •^, in VO m vo' •^ CN Os' _^ oo O 'in* V\Oo ro CN 'VO* CN* CN W OO OO 6^ 6n o m ooi o o VO VO oo sOO VO O TT VO vo__ O Os VO in in —f—1' vo' 00 o •^ m 6^ 6^ r- o r- •^ >n CN o CN m Os Ov o Ol ro ro --r r- O^ O in r; oo' oo' Tj-' .—1 O 00 fS roo ro ro Tf 6e m rn m •* VO VO 00 Ov &e 6e Ol »n Ol VO in o •—1 ro o 1—1 •^ O VO •^ V^O m CN in VO 00 vo' VD C'^N^ ro Os 0ds0 O m fS CN •* ro fee o M fl Oil c § pa U •3 U C3 c ca w w^ m u U n = " -S O rS ^ ^ CO (O -K m CQ C d o Q Q H H Ps tlH TOWN OF FARMERVILLE EXHIBIT D-1 FARMERVILLE. LOUISIANA RECONCILIATION OF THE STATEMENTS OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED JUNE 30. 2011 AND 2010 2011 2010 NET CHANGE IN FUND BALANCES - Total Govemmental Funds (EXHIBIT D) $ 31,73142 $ 446,987 02 Amounts reported for govemmental activities in the statement of activities are different because Govemmental funds report capital outlays as expenditures However, m the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense Capital Outlay - Net 906,842 94 413,655 15 Depreciation Expense (368,728 33) (310,934 40) The instance of long-term debt provides current financials resources to govemmental funds, while the repayment ofthe principal of a long-term Debt consumes the current financiai resources of govemmental funds Neither transaction, however, has any effect on net assets Also, govemmental funds report the effect of issuance costs, premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the statement of activities The detail of these differences m the treatment of long-temi debt and related Items IS as follows Bancorp South - Lease Purchase (145,842 00) 00 USDA Loan (269,100 00) 00 Bonds 00 (500,000 00) Bond Payments 130,000 00 120,000 00 Bancorp South - Lease Payments 9,848 78 00 USDA Loan Payments 1,740 31 00 Some expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in govemmental funds Increase/Decrease in Accrued Expenses (3,131 00) 8,295 00 CHANGE IN NET ASSETS OF GOVERNMENTAL ACTIVTTTES (EXHIBIT B) 293.362 12 S 178.002 77 The notes are an integral part of these statements See accompanying independent auditors' report -6- TOWN OF FARMERVILLE EXHIBIT E FARMERVILLE. LOUISIANA STATEMENTS OF FUND NET ASSETS PROPRIETARY FUNDS JUNE 30, 2011 AND 2010 TOTAL ASSETS WATER SEWER 2011 2010 Curtent Assets Cash and Cash Equivalents $ 300,814 47 $ 42,553 22 $ 343,367 69 $ 199,839 48 Accounts Receivable, Net 177,642 26 00 177,642 26 166,323 90 Grant Receivable 00 00 00 32,983 91 Prepaid Insurance 8,503 00 4,538 00 13,04100 13,046 00 Total Current Assets $ 486.959 73 $ 47,091 22 $ 534.050 95 $_ 412,193 29 Non-Current Assets Restncted Assets Cash and Cash Equivalents Water Fund - Meter Deposits $ 184,956 18 $ 00 $ 184,956 18 $ 176,157 32 Depreciation and Contingency Fund 80,053 85 123,428 22 203,482 07 176,881 77 LCDBG Program 50 00 00 50 00 00 Sewer Bonds - Reserve 00 114,03168 114,03168 210,961 63 Sewer Bonds - Sinking Fund 00 00 00 10,109 67 2010 Sewer Bonds 00 209,163 89 209,163 89 393,240 00 Total Restricted Assets s_ 265,060 03 $ 446,623 79 $ 711,683 82 $ 967,350 39 Capital Assets Property, Plant, and Equipment, at Cost $ 6,068,181 49 $ 6,543,286 74 $ 12,611,468 23 $ 12,509,940 48 Construction in Progress 00 340,689 30 340,689 30 34,931 30 Less Accumulated Depreciation (2,507,175 46) (3,026,891 20) (5,534,066 66) (5,367,683 66) Land 25,752 00 00 25,752 00 25,752 00 Total Capital Assets $ 3,586,758 03 $ 3,857.084 84 $ 7.443,842 87 $ 7,202,940 12 TOTAL ASSETS $ 4.338.777 79 S 4.350.799 85 $ 8.689.577 64 $ 8.582.483 80 LIABILITIES Current Liabilities (Pavable from Current Assets) Accounts Payable 43,01170 $ 71,72557 $ 114,73727 $ 99,490 67 Accmed Liabilities 21,374 79 8,792 00 30,166 79 27,990 58 Total Current Liabilities (Payable from Curtent Assets) $ 64,386 49 $. 80,517 57 144,904 06 S 127,481 25 Current Liabilities (Payable from Restncted Assets) Customers' Deposits 148,246 60 S 00 148,246 60 142,695 00 Bonds Payable 00 15,000 00 15,000 00 15,000 00 Accmed Interest Payable 00 1,650 00 1,650 00 00 Total Current Liabilities (Payable from Restncted Assets) $ 148,246 60 16,650 00 $ 164,896 60 $ 157,695 00 -7- TOWN OF FARMERVILLE EXHIBIT E FARMERVILLE. LOUISIANA CONTINUED STATEMENTS OF FUND NET ASSETS PROPRIETARY FUNDS JUNE 30, 2011 AND 2010 TOTAL WATER SEWER 2011 2010 Long-Term Liabilities Due To/From Sewer Funds $ (172,622 47) $ 172,622 47 $ 00 00 Due To/From Other Funds 33,966 59 00 33,966 59 68,979 89 Bonds Payable 00 385,000 00 385,000 00 385,000 00 Total Long-Term Liabilities $ (138,655 88) $ 557,622 47 $ 418,966 59 $ 453,979 89 TOTAL LIABILITIES £ 73.977 21 $ 654.790 04 $ 728.767 25 $ 739.156 14 NET ASSETS Invested in Capital Assets Net of Related Debt $ 3,586,758 03 $ 3,857,084 84 7,443,842 87 7,202,940 12 Restncted for Capital Projects 80,053 85 332,592 U 412,645 96 570,121 77 Restncted for Debt Services 00 00 00 221,071 30 Unrestncted 597,988 70 (493,667 14) 104,321 56 (150,805 53) TOTAL NET ASSETS 4.264.800 58 $ 3.696.009 81 $ 7.960.810 39 S 7.843.327 66 The notes are an integral part of these statements See accompanying independent auditors' report TOWN OF FARMERVILLE EXHIBIT F FARMERVILLE, LOUISIANA STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEARS ENDED JUNE 30, 2011 AND 2010 BUSINESS - TYPE ACTIVITIES ENTERPRISE FUND TOTAL WATER SEWER 2011 2010 Operating Revenues Charges for Services $ 1,061,981 36 $ 347,922 48 $ 1,409,903 84 $ 1,275,842 56 Grants 00 10,744 00 10,744 00 32,983 91 Miscellaneous 308 08 00 308 08 1,067 96 Total Operating Revenues $ 1,062,289 44 $ 358,666 48 1,420,955 92 $ 1,309,894 43 Operating Expenses Administrative Expenses Salanes and Employee Benefits $ 327,780 49 $ 103,34111 $ 431,12160 S 421,718 64 Administrative Fee 30,000 00 00 30,000 00 30,000 00 Advertising 346 45 450 00 796 45 29125 Auditing Fees 6,000 00 1,000 00 7,000 00 7,000 00 Bank Charges 59 47 00 59 47 00 Computer Expense 14,661 83 00 14,661 83 14,874 73 Dues 62100 00 62100 470 00 IBM 4,811 08 00 4,81108 00 Insurance - Liability 14,294 75 2,265 00 16,559 75 17,792 63 Miscellaneous 6,688 28 13197 6,820 25 1,680 06 Office Supplies 5,034 69 00 5,034 69 6,687 27 Postage 14,909 96 00 14,909 96 16,238 19 Radio Repairs 1,984 70 00 1,984 70 798 42 Equipment and Tmck Expense 50,522 99 10,975 87 61,498 86 28,774 84 Telephone Expense 9,550 12 645 13 10,195 25 9,216 31 Travel and Training 2,023 12 214 69 2,237 81 2,113 22 Water Supply Initiative Program 13,146 00 00 13,146 00 4,561 23 Total Administration $ 502,434 93 $ 119,023 77 $ 621,458 70 $ 562,216 79 Matenals and Supplies Chlorine $ 39,759 79 $ 5,905 00 $ 45,664 79 $ 29,653 63 Chlonne Equipment Repair 3,923 98 00 3,923 98 2,341 20 Chemicals 00 2,224 61 2,224 61 564 29 Chemicals Test 00 7,533 00 7,533 00 10,364 00 Grant Expenses 2,100 00 00 2,100 00 00 Supphes 47,676 13 11,733 24 59,409 37 34,062 93 Sub Contract Services 00 8,650 00 8,650 00 6,775 00 Pump Repairs 00 48,957 57 48,957 57 72,928 44 Meter Replacements 10,091 74 00 10,091 74 5,436 79 Pilgrims Pride Water Well Repairs 24,868 57 00 24,868 57 25,276 05 Major Well and Tank Repairs 19,264 74 25,254 90 44,519 64 66,363 12 Treatment Plant Repairs 31,044 51 42,668 28 73,712 79 15,012 10 Safe Drinking Program 11,522 40 00 11,522 40 5,151 20 Utilities 168,469 00 49,686 37 218,155 37 198,709 87 Total Materials and Supplies $ 358,720 86 $ 202,612 97 $ 561,333 83 $ 472,638 62 Depreciation and Amortization $ 138,049 18 $ 130,569 87 $ 268,619 05 $ 258,295 87 TOWN OF FARMERVILLE EXHIBIT F FARMERVILLE, LOUISIANA CONTINUED STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEARS ENDED JUNE 30, 2011 AND 2010 ENTERPRISE FUND TOTAL WATER SEWER 2011 2010 Total Operating Expenses $ 999,204 97 $ 452,206 61 $ 1,451,41158 $ 1,293,15128 Net Operating Income (Loss) $ 63,084 47 $ (93,540 13) $ (30,455 66) $ 16,743 15 Non-Operating Revenues (Expenses) Interest Income Regular $ 9,808 59 $ 34 37 $ 9,842 96 $ 2,834 51 Sinking and Reserve Funds 00 7,600 78 7,600 78 11,758 33 Interest Expense 00 (20,295 00) (20,295 00) (6,070 00) Other Income 6,322 98 (433 33) 5,889 65 10,99199 Grant Expense - Capital Projects Funds 144,900 00 00 144,900 00 00 Transfers to/from Other Funds 00 00 00 123,000 00 Total Non-Operating Revenues (Expenses) $_ 161,03157 $ (13,093 18) $ 147,938 39 $ 142.514 83 Changes in Net Assets $ 224,116 04 $ (106,633 31) $ 117,482 73 $ 159,257 98 Net Assets - Beginning ofthe Year 4,040,684 54 3,802,643 12 7,843,327 66 7,684,069 68 Net Assets - End ofthe Year $ 4,264,800 58 $ 3,696,009 81 $ 7,960,810 39 $ 7,843,327 66 The notes are an integral part of this statement See accompanying independent auditors' report -10- TOWN OF FARMERVILLE EXHIBIT G FARMERVILLE, LOUISIANA STATEMENTS OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEARS ENDED JUNE 30, 2011 AND 2010 BUSINESS - TYPE ACTIVITIES ENTERPRISE FUND TOTAL WATER SEWER 2011 2010 Cash Flows from Operating Activities Receipts from Customers $1,050,663 00 $ 340,20191 $ 1,390,864 91 $ 1,214,500 28 Payments to Suppliers (527,991 18) (208,752 38) (736,743 56) (633,510 82) Payments to Employers and Employee Benefits (326,267 82) (102,677 57) (428,945 39) (413,174 07) Other Receipts (Payments) 308 08 1,035 13 1,343 21 43,975 90 Net Cash Provided by Operating Activities ^ 196,712 08 $ 29,807 09 l_ 226,519 17 L. 211,79129 Cash Flows from Noncapital Financmg Activities Customer Deposit $ 5,551 60 $ 00 $ 5,551 60 $ 4,935 00 Other Receipts 8,392 98 00 8,392 98 00 Due To/From Other Funds (35,013 30) 00 (35,013 30) (105,919 90) Due To/From SewerAVater Dept (7,720 57) 7,720 57 00 00 Net Cash Provided by Noncapital Financing Activities ^ (28,789 29) $_ 7,720 57 $_ (21,068 72) $_ (100,984 90) Cash Flows from Capital and Related Financing Activities Purchase of Capital Assets $ (36,264 37) $ (27,608 95) $ (63,873 32) $ (104,041 14) Constmction in Progress 00 (295,014 00) (295,014 00) (34,93130) Capital Additions Grant (144,900 00) (10,744 00) (155,644 00) 00 Payment on Long-Term Debt 00 00 00 (140,000 00) Sales of Assets 2,006 19 (933 33) 1,072 86 00 Payables - Equipment 00 52,170 80 52,170 80 00 Grants 144,900 00 00 144,900 00 00 Bonds 00 00 00 400,000 00 Transfers 00 00 00 123,000 00 Net Cash (Used) by Capital and Related Financing Activities $ (34,258 18) $ (282,129 48) $ (316,387 66) $ 244,027 56 Cash Flows from Investing Activities Interest Earned on Investments $ 9,808 59 $ 7,635 26 $ 17,443 85 $ 14,592 84 Interest Expense 00 (18,645 00) (18,645 00) (7,745 00) Net Cash Provided (Used) by Investing Activities $_ 9,808 59 l_ (11,009 74) $_ (1,201 15) l_ 6,847 84 Net Increase (Decrease) in Cash and Cash Equivalents $ 143,473 20 $ (255,61156) $ (112,138 36) $ 361,681 79 Cash and Cash Equivalents - July 1 422,401 30 — 744,788 57 1,167,189 87 — 805,508 08 Cash and Cash Equivalents - June 30 ^ 565.874 50 I_ 489.177 01 L 1055 05151 L 1.167.189 87 11- TOWN OF FARMERVILLE EXHIBIT G FARMERVILLE. LOUISIANA CONTINUED STATEMENTS OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEARS ENDED JUNE 30, 2011 AND 2010 BUSINESS - TYPE ACTIVITIES ENTERPRISE FUND TOTAL WATER SEWER 2010 — 2011 Reconciliation of Cash and Cash Equivalents to the Statement of Net Assets Cash and Cash Equivalents s 309,087 98 $ 42,553 22 $ 351,641 20 $ 199,839 48 Restncted Cash Water Fund - Meter Deposit 176,682 67 00 176,682 67 176,157 32 Depreciation and Contingency Fund 80,053 85 123,428 22 203,482 07 176,881 77 LCDBG Program 50 00 00 50 00 00 Sewer Bonds - Reserve 00 114,03168 114,031 68 210,961 63 Sewer Bonds - Sinking Fund 00 00 00 10,109 67 2010 Sewer Bonds 00 209,163 89 209,163 89 393,240 00 Total Cash and Cash Equivalents $ 565.874 50 1= 489.177 01 5= 1.055.051 51 $ 1,167.189 87 Reconciliation of Operating Income (Loss) to Net Cash Flows from Operatingi Activities Operating Income (Loss) $ 63,084 47 $ (93,540 13) $ (30,455 66) $ 16,743 15 Adjustments to Reconcile Operatmg Income to Net Cash Provided by Operating Activities Depreciation 138,049 18 130,569 87 268,619 05 258,295 87 Changes in Assets and Liabilities (Increase) Decrease in Accounts Receivable (11,318 36) 00 (11,318 36) (61,842 28) (Increase) Decrease in Receivables - Other 32,983 91 00 32,983 91 (21,991 92) (Increase) Decrease in Prepaid Insurance 3,185 00 (3,180 00) 5 00 (6,475 19) Increase (Decrease) in Accoimts Payable (30,784 79) (6,139 41) (36,924 20) 18,517 09 Increase (Decrease) in Accmed Liabilities 1,512 67 2,096 76 3,609 43 8,544 57 Net Cash Provided (Used) bv Operating Accounts I. 196.712 08 L 29.807 09 $ 226.519 17 $ 211.791 29 Schedule of Noncash, No Capital Financing, Capital and Related Financing, and Investing Activities s_ 00 s_ 00 s_ 00 $_ 00 The notes are an integral part of this statement See accompanying independent auditors' report -12- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA INDEX TO NOTES TO THE FINANCIAL STATEMENTS JUNE 30. 2011 AND 2010 Note No Descnption Page No 1 Summary of Sigmficant Accounting Policies 13-18 2 Cash and Investments 18-20 3 Receivables/Allowances for Doubtful Accounts 20- 21 4 Water and Sewer Statistics 21-22 5 Property Taxes 22 6 Long-Term Debt 22-25 7 Capital Assets 26-27 8 Interfiind Assets/Liabilities 27 9 Compensation 27-28 10 Employee Retirement 28-32 11 Related Party Transactions 32 12 Legal Compliance - Budget 32 13 Equity 32 14 Summary Disclosures of Significant Contingencies 33 15 Proprietary Fund Segment Information 33 16 Statement of Cash Flows for Propnetary Funds 33 17 Economic Dependency 33 18 Legal 34 19 Risk Management 34 20 Restncted Net Assets 34 21 Capital Projects Fund 34-35 22 Post Employment Benefits 35 TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 INTRODUCTION The Town of Farmerville, Louisiana (hereafter refened to as the Town) operates under an elected Mayor/Council form of government The Town's major operations include water and sewer, public safety, fireprotection , recreation and parks, and general administrative services The council consist of five members who are elected for a four year term See note number nine for a detail of compensation for the mayor and council The Town of Farmerville is located in Union Parish surrounded by Darbonne Lake recreation area The Town's major industry is timber and poultry, which includes a Poultry processing plant The Town's population was 2,808 m 2000 NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accounting and reporting policies ofthe Town of Farmerville, Louisiana conform to generally accepted accounting principles generally accepted in the United States of America (GAAP) as applicable to governments Such accounting and reporting procedures also conform to the requirements of Louisiana Revised Status 24 517 and to gmdes set forth in the Louisiana Municipal Audit and Accounting Guide, and to industry audit guide. Audits of State and Local Govemment Units (Revised) The following is a summary of certain significant accounting policies GASB Statement No 14 - The reporting entity, established cnteria for determining the govemmental reporting entity and component units that should be included within the reporting entity Under provisions of this statement, the municipality IS considered a pnmary govemment, since, it is a special purpose govemment that has a separately elected governing body, IS legally separate, and is fiscally independent of other state or local governments As used in GASB Statement No 14, fiscally independent means that the municipality may without the approval or consent of another govemmental entity, determme or modify its own budget, levy its own taxes or set rates or charges, and issue bonded debt The mumcipahty has oversight of other component units that are either blended into the mumcipalities basic financial statements or discretely presented in a separate column in the govemment-wide financiai statements Blended Component Units - The Town of Farmerville did not have any blended component units Discretely Presented Component Units - The Town of Farmerville did not have any Discretely Presented Component Units Government-Wide and Fund Financial Statements - In accordance with Govemment Accounting Standards Board Statement No 34, the Town has presented a Statement of Net Assets and Statement of Activities for the Town as a whole These statements include the primary govemment and its component units, if applicable, with the exception of fiduciary funds Those funds are reported separately Govemment-wide accounting is designed to provide a more comprehensive view ofthe govemment's operations and financiai position as a single economic entity Part ofthe effect of interfund activity has been removed from these statements Govemmental activities, which normally are supported by taxes and intergovemmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support Likewise, the pnmary govemment is reported separately from certain legally separate component units for which the primary govemment is financiallyaccountabl e The Statement of Activities demonstrates the degree, to which the direct expenses of a given function or segment are offset by program revenues Direct expenses are those that are clearly identifiable with a specific function or segment Program Revenues include, charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment, and grants and contributions that are restricted to meetings, the operational or capital requirements of a particular function or segment Taxes and other items not properly included among program revenues are reported instead as general revenues 13- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30. 2011 AND 2010 NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Separate financiai statements are provided for govemmental funds, propnetary funds, and fiduciary funds, even though the latter are excluded from the govemment-wide financiai statements Major individual govemmental funds and major individual enterpnse funds are reported as separate columns in the fund financiai statements Eliminating Intemal Activity - Interfund receivables and payables are eliminated in the Statements of Net Assets except for the net residual amounts due between govemmental and busmess-type activities These are presented as intemal balances The allocation of overhead expenses from one function to another or within the same function are eliminated in the Statement of Activities Allocated expenses are reported by the function to which they are allocated Application of FASB Statements and Interpretations - Reporting on governmental-type and business-type activities are based on FASB Statements and the Interpretations issued after November 30, 1989, except where they conflict or contradict GASB pronoimcements Capitalized Assets - Tangible and/or intangible assets used in operations with an initial useful life that extends beyond one year are capitalized Infrastmcture assets such as roads and bridges are also capitalized Capital assets are recorded at their histoncal cost and are depreciated using the straight-lme method of depreciation over their estimated useful lives They are reported net of accumulated depreciation on the Statement of Net Assets Depreciation of contributed assets of propnetary funds is charged against contributed capital as opposed to unrestncted net assets Under the requirements of GASB Statement No 34, the Town is considered a Phase 3 govemment as its total annual revenues are less than $10 million Such governments are not required to report major general infrastructure assets retroactively The Town has opted not to retroactively report these type of capital assets Program Revenues - The Statement of Activities presents three categories of program revenues - (1) charges for services, (2) operating grants and contributions, and (3) capital grants and contributions Charges for services are those revenues ansing from charges to customers who purchase, use or directly benefit from goods and services provided by the Town Grants and contributions, whether operating or capital m nature, are revenues arising from receipts that are restncted for specific use Indirect Expenses - Expenses are reported according to function except for those that meet the definition of special or extraordinary items Direct expenses are specifically associated with a service or program Indirect expenses include general govemment or administration that cannot be specifically traced to a service or program Govemments are not required to allocate indirect expenses to other functions, and the Town has chosen not to do so Operating Revenues - Proprietary funds separately report operatmg and non-operating revenues Revenues from transactions ofthe Town's operation of providing water and sewer services are considered operatmg revenues All other revenues, which are reported as cash flows from capital or non-capital financing and investing, are reported as non- operating revenues Restncted Net Assets - Restncted net assets are those for which a constraint has been imposed either externally or by law The Town recognizes the use of restricted resources for expenditures that comply with the specific restnctions Restncted resources are exhausted before unrestricted net assets are used Fund Accounting - The Town uses funds to report on its financiai position and the results of its operations Fund accounting is designed to demonstrate legal compliance and to aid financiai management by segregating transactions relatmg to certain govemment functions or activities A fund IS a separate entity with a self-balancing set of accounts Funds ofthe Town are classified mto two categories govemmental and propnetary Each category, in tum, is divided into separate fund types The fund classifications and a descnption of each existing fund type follow -14- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Govemmental Funds - Govemmental funds account for all or most ofthe Town's general activities, includingthe collection and disbursemenl of specific or \egally restncted momes, the acquisition or constmction of general fixed assets, and the servicing of general long-term obligations Govemmental funds include 1 General Fund - is the general operating fund of the Town and accounts for all financiai resources, except those required to be accounted for in other funds 2 Special Revenue Funds - account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes The Town had four special revenue funds as follows a The Town of Farmerville Sales Tax Department - The citizens ofthe Town of Farmerville approved a 1 % sales and use tax Proceeds ofthe tax have been pledged and dedicated to the retirement of Sales Tax Bonds dated May 1, 1985 The excess funds can be used for streets and sanitation expenditures b On October 20, 2001 an additional 1/2 of 1% sales and use tax was approved This tax was approved for constmction of a recreation center and street improvements Bonds were sold in the amount of $2,900,000 for constmction ofthe recreation center and improvements ofthe streets The street constmction was completed during 2002 The recreation center was completed at June 30, 2004 c FarmerviUe Volunteer Fire Department, Inc - The Town of Farmerville Volunteer Fire Department filed an amendment to the Articles of Incorporation on January 22, 2001 They also filed for tax exempt status from the Intemal Revenue Service They are a tax exempt organization under the code sections 509 (a) (1) and 170 (b) (A) (vi) Based on an opinion, at June 30,2002, ofthe Louisiana Legislative Auditor's office, the Volunteer Fire Department, should be included m the Town's financial statements as a Special Revenue Fund In pnor years the Volunteer Fire Department had been included in the statements as a component xmit ofthe Town of Farmerville The volunteer fire department expenditures for operating the firedepartmen t is paid by the Town of Farmerville's General Fund The transactions in the Volunteer Fire Department, Inc is for miscellaneous fund raisers and miscellaneous expense for the volunteer fireman The Town transfers the State of Louisiana 2% rebate to the volunteer fire department, and is accumulated for purchase of equipment Contnbutors to the Volunteer Fire Departments elect all the members ofthe goveming board The governing board is solely responsible for the Volunteer Fire Department Operations The accounting records are maintained by an employee ofthe Town of FarmerviUe d Farmerville Area Fire Protection Distnct of Union Parish - The Union Parish Police Jury created the Farmerville Area Fire Protection Distnct of Union Parish on November 2, 1999 The fire district was created to pass a property tax to provide fire protection for an area ofthe parish without fire protection The Union Pansh Police Jury entered into an intergovemmental agreement with the Town of Farmerville to provide fire protection for the newly created distnct The Fire Distnct will retain 5% of the advalorem taxes in their checking account All other proceeds will be transfened to the Town of Farmerville, to be used by the Town's fire department Based on an opinion ofthe Louisiana Legislative Auditor's Office, the Fire Protection Distnct should be included in the Town's financiai statement as a Special Revenue Fund e On April 30, 2011, a 1/2 of 1% sales tax was passed for the operations ofthe Farmerville Police Department A separate fund will be set up as of July 1, 2011 to account for the dedicated funds Propnetary Funds - Proprietary funds account for activities similar to those found in the private sector, where the detenmnation of net mcome is necessary or usefiil to sound financiai administration Propnetary funds differ from govemmental funds in that their focus is on income measurement, which, together with the mamtenance of equity, is an important financiai indicator Proprietary funds include 15- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED 1 Enterprise Funds - account for operations (a) where the intent ofthe goveming 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 changes, or (b) where the goveming body has decided that periodic determination of revenues earned, expenses incuned, and/or net income is appropriate for capital maintenance, public policy, management control, accountability or other purposes a The Town of Farmerville Water Department - The Town of Farmerville rates for user charges are approved by the Town Council and the legal liability for the general obligations portion ofthe water authority's debt remain with the Town of Farmerville b The Town of Farmerville Sewer Department - The sewer charges are approved by the Town Council, but are regulated by the EPA Net Assets Fund Balances - In the Statement of Net Assets, the difference between a govemment's assets and liabilities is recorded as net assets The three components on net assets is as follows Invested in Capital Assets, Net of Related Debt - This category records capital assets net of accumulated depreciation and reduced by any outstanding balances of bonds, mortgages, notes or other bortowing attnbutable to the acquisition, constmction or improvement of capital assets Restncted Net Assets - Net assets that are restricted by external sources such as banks or by law are reported separately as restricted net assets When assets are required to be retained in perpetuity, these non-expendable net assets are recorded separately from expendable net assets These are components of restncted net assets Unrestncted Net Assets - This category represents net assets not appropriable for expenditures or legally segregated for a specific future use In the Balance Sheet of govemmental funds, fund balances are segregated as follows Reserved - These resources are segregated because their use is earmarked for a specific use Unreserved - This category represents that portion of equity not appropriable for expenditures or legally segregated for a specific future use Interfund Transactions - All interfund transactions, except quasi-external transactions, are reported as operating transfers These are eliminated in the govemment-wide statements Basis of Accounting/Measurement Focus - The accounting and financiai reporting treatment applied to a fund is determined by its measurement focus All govemment funds, includmg General, Special Revenue, Debt Service, and Capital Projects Funds, are accounted for using a current financiai resources measurement focus With this measurement focus, only cunent assets and cunent liabilities generally are included on the balance sheet in the funds statements Long- term assets and long-term liabilities are included in the government-wide statements Operating statements of these funds present increases (i e , revenues and other financing sources) and decreases (i e , expenditures and other financing uses) in net current assets The government-wide statements of net assets and statements of activities, all propnetary funds, and other funds are accounted for on a flow of economic resources measurement focus With this measurement focus, all assets and all liabilities associated with the operation of these activities are either included on the balance sheet or on the statement of fiduciary net assets Proprietary fund-type operating statements present increases (e g , revenues) and decreases (e g , expenses) m net total assets 16- TOWN OF FARMERVILLE FARMERVILLE. LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30. 2011 AND 2010 NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED The fimd financiai statements ofthe General, Special Revenues, Capital Projects, Debt Service and agency funds are maintained and reported on the modified accmal basis of accounting Under this method of accounting, revenues are recognized in the period in which they become measurable and available With respect to real and personal property tax revenue and other local taxes, the term "available" is limited to collection within sixty days ofthe fiscal year-end Levies made prior to the fiscalyear-en d but which are not available are defened Interest income is recorded as eamed Federal and State reimbursement-type grants are recorded as revenue when related eligible expenditures are incurred Expenditures, other than accmed interest on long-term debt, are recorded when the fund liability is inciured The statements of net assets, statements of activities, financiai statements ofthe Propnetary Funds and Fiduciary Funds (except for agency funds) are presented on the accmal basis of accounting Under this method of accounting, revenues, are recognized when eamed and expenses are recorded when liabilities are incuned without regard to receipt or disbursement of cash Budgets and Budgetary Accounting - The Town adopts an annual budget for the General Fund and Enterprise Fund It IS prepared in accordance with the basis of accounting utilized by that fund Any revisions that alter the total expenditures must be approved by the Board of Aldermen Budgeted amounts shown are as onginally adopted or as amended by the Board Budget amendments are passed on an as-needed basis Cash and Cash Equivalents - Cash includes amounts in demand deposits, interest bearing demand deposits and certificates of deposits Cash equivalents include amounts in time deposits and those mvestments with original matunties of 90 days or less Under state law, the Town may deposit funds in demand deposits, interest-bearing demand deposits, money market accounts, or time deposits with state banks organized under Louisiana law and national banks having their pnncipal offices in Louisiana Investments - Investments are limited by Louisiana Revised Statute 33 2955 If the original matunties of investments exceed 90 days, they are classified as investments Otherwise, the mvestments are classified as cash and cash equivalents In accordance with GASB Statement No 31, investments are recorded at fair value with the corresponding increase or decrease reported in investment eamings All investments ofthe Town are certificates of deposits or saving accounts and their fair value is determined by the face value ofthe certificate Use of Estimates - The preparation of financiai statements m conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certam reported amounts and disclosures Accordingly, actual results could differ from those estimates Restncted Assets - Certain proceeds of enterprise funds are classified as restricted assets on the balance sheet because their use is limited Components of these assets are as follows These assets consist of cash restricted for the Water Meter Deposits Customers' Deposits on Meters 2011 2010 Cash $ 8,273 51 $ 5,058 68 Certificates of Deposits 176,682 67 171.098 64 Total $ 184.956 18 $ 176.157 32 The liability for customer's deposits on meters is $148,246 60 at June 30, 2011 and $142,695 00 at June 30, 2010 The Town has over ftmded the restncted assets by $36,709 58 at June 30, 2011 and $33,462 29 at June 30, 2010 Inventories - Inventories were written off due to immatenality Minimum amounts of inventory are not maintained or counted Most supplies are ordered when needed 17- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED Capital Assets - The Town's assets are recorded at historical cost The Town adopted the Louisiana Legislative Auditors Capitalization Policy Depreciation is recorded using the straight-line method over the useful lives ofthe assets as follows Equipment and Fumiture 3-10 Years Buildings 39 - 40 Years Utility Plant/Sewer Collection System 5 - 40 Years Infrastmcture 40 - 60 Years Vehicles 5 - 10 Years In June 1999, the Governmental Accounting Standards Board issued Statement No 34 which requires the inclusion of infrastmcture assets used in govemmental activities in the general purpose financiaistatement s retroactively reported back to 1982 An exception exists for local govemments with annual revenues of less than $10 million As a result of this exception, the Town has elected to not report its govemmental infrastmcture retroactively The infrastmcture currently being depreciated over a penod of 40 years is the water and sewer system that is reported in the business-type activities ofthe Town From this point forward, the Town will use the basic approach to infrastmcture reporting for its govemmental activities Compensated Absences - The Town vacation pay carry forward each year is 40 hours Sick pay is limited to 480 hours carryforward Any vacation pay of 40 hours or less is paid at the termination of employment, which sick time is not guaranteed Unpaid vacation time has been recorded as an accmed payable, while sick time has not Long-Term Obligations - In the government-wide financiai statements, debt principal payments of both govemment and business-type activities are reported as decreases in the balance ofthe liability on the Statement of Net Assets In the fund financiai statements, however, debt principal payments of governmental funds are recogmzed as expenditures when paid Cash includes amounts in demand deposits, interest-bearing demand deposits, and money market accounts Under state law, the Town may deposit funds in demand deposits, interest-bearing demand deposits, money market accounts, or time deposits with state banks organized under Louisiana law and national banks having their pnnciple offices in Louisiana Under state law, deposits, or the resulting bank balances, must be secured by federal deposit insurance or the pledge of securities owned by the bank The market value ofthe pledged secunties plus the federal deposit insurance must at all times equal the amount on deposit with the bank These secunties are held in the name ofthe pledging bank in a holding or custodial bank that is mutually acceptable to both parties The State of Louisiana banking regulations require the FDIC to insure $250,000 of checking and savings for each mumcipahty NOTE # 2 - CASH AND INVESTMENTS CASH PLEDGED BY BANKS TOTAL MARION FIRST COMMUNITY RECONCILED AMOUNT STATE NATIONAL TRUST AMOUNT PER BANKS BANK BANK BANK Total-June 30, 2011 $ 3,757,534 19 $ 3,960,832 82 $ 2,197,053 76 $ 700,44146 $ 1,063,337 60 Pledge Receipt (3,793,51127) (3.793,51127) (2,065.412 24) (750.341 03) (977.758 00) Difference $ (35,977 08) $ 167,32155 $ 131.641 52 $ (49.899 57) $ 85.579 60 FDIC Covers Savings Maximum $ (1,250,000 00) S (1.250,000 00) $ (500,000 00) $ (500,000 00) $ (250,000 00) Difference (Overfiinded) Underfunded $ (1.285,977 08) $ (1,082.678 45) $ (368,358 48) $ (549,899 57) $ (164,420 40) TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 2 - CASH AND INVESTMENTS CONTINUED TOTAL MARION FIRST COMMUNITY RECONCILED AMOUNT STATE NATIONAL TRUST AMOUNT PER BANKS BANK BANK BANK Total-June 30, 2010 $ 3,773,988 48 $ 3,784,684 01 $ 1,675,05149 $ 902,606 37 $ 1,207,026 15 Pledge Receipt (3.145,583 36) (3,145,583 36) (1.576,639 24) (527,775 92) (1.041,168 20) Difference S 628,405 12 $ 639,100 65 98,412 25 374,830 45 $ 165.857 95 FDIC Covers Savings Maximum $ 750,000 00 $ 750,000 00 l_ (250.000 00) l_ (250,000 00) S (250,000 00) Difference (Overfunded) Underfunded $_ (151.587 75) s_ 124.830 45 $ (84,142 05) The pledged deposits are stated at cost, which approximates market value Under state law, these deposits must be secured by federal deposits insurance or the pledge of secunties owned by the fiscal agent bank The market value ofthe pledged secunties plus the federal deposit insurance must at all times equal the amount of deposit within the fiscal agent These secunties are held in the name ofthe pledging fiscal agent bank in a holding or custodial bank that is mumally acceptable to both parties At June 30, 2010 the deposits are underfunded at First National Bank in the amount of $124,830 45 The underfunded of govemmental is not secured by the pledge of securities and is a violation of law The insurance coverage of public unit accounts depends upon the type of deposit and the location ofthe insured depository institution All time and savings deposits owned by a public unit and held by the same official custodian in an insured depository institution within the State in which the public unit is located are added together and insured up to $250,000 Separately, all demand deposits owned by a public unit and held by the same official custodian in an insured depository institution within the State in which the public umt is located are added together and insured up to $250,000 For the purpose of these mles, the term "savings deposits" includes NOW accounts, money market deposit accounts, but does not include interest-beanng demand deposit accounts The term "demand deposits" mean deposits payable on demand and for which the depository institution does not reserve the nght to require advance notice ofan intended withdrawal INVESTMENTS The govemment's investments are categorized as either (1) insured or registered or for which the secunties are held by the govemment or his agent in the govemment's name, (2) uninsured and unregistered for which the securities are held by the broker's or dealer's tmst department or agent in the govemment's name, or (3) uninsured and unregistered for which the securities are held by the broker or dealer, or by its tmst department or agent, but not in the govemment's name CATEGORIES CARRYING JUNE 30. 2011 AMOUNT Govemment Security Savings $ 2,949,057 33 $ 00 00 $ 2,949,057 33 Certificates of Deposit 90 Days or Less 00 00 00 00 Over 90 Days 792,506 33 00 00 792,506 33 Total Investments $ 3.741.563 66 $ 00 00 $ 3.741.563 66 19- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 2 - CASH AND INVESTMENTS CONTINUED CATEGORIES CARRYING JUNE 30, 2010 AMOUNT Govemment Security Savings S 1,230,478 11 $ 00 00 $ 1,230,478 11 Certificates of Deposit 90 Days or Less 00 00 00 00 Over 90 Days 973,426 13 00 ^ 973,426 13 Total Investments S 2.203.904 24 $ 00 00 $ 2.203.904 24 The State requires collateral pledged for deposits to be held m the govemment's name by the tmst department The tmst department reviews collateral pledged for compliance Substantially all deposits matured in June 2011, therefore, interest was not accmed on the certificates of deposits NOTE # 3 - RECEIVABLES/ALLOWANCE FOR DOUBTFUL ACCOUNTS Revenues are recognized as soon as they are both measurable and available Revenues are considered to be available when they are collectible within the cunent period or soon enough thereafter to pay liabilities ofthe cunent period For this purpose, the govemment considers revenues to be available if they are collected withm 60 days ofthe end ofthe current fiscal period Property taxes, franchise taxes, licenses, and interest associated within the current fiscal period are considered to be susceptible to accmal and so have been recognized as revenues ofthe cunent fiscal penod Only the portion of special assessments receivable due within the cunent fiscal period is considered to be susceptible to accmal as revenue of the cunent period All other revenue items are considered to be measurable and available only when cash is received by the government Receivables at June 30, 2011 and 2010 consist ofthe following CAPITAL DEBT SPECIAL REVENUE PROJECTS SERVICE TOTALS GOVERNMENTAL ACTlVrriES GENERAL SALES TAX RECREATION FUND FUNDS 2011 2010 Licenses and Taxes $ 17,122 56 $ 00 $ 00 S 00 S 00 s 17 122 56 S 19.551 54 Union Pansh Police Jury 48150 00 00 00 00 48150 616 55 Advalorem Taxes 1,610 82 00 00 00 00 I.6I0 82 8.157 83 Sales Taxes 00 78,835 82 39 417 89 00 118.253 71 119 728 31 Other Funds Water Dq)artment 21,391 59 00 00 144.900 00 13.900 00 ISO 191 59 00 Sales Tax Department 4,750 00 00 00 00 00 4.750 00 00 General Fund 00 00 8,083 81 00 00 8,083 81 00 USDA 00 00 00 9,980 00 00 9,980 00 00 CDBG Grant 00 00 00 3,122 40 00 3,122 40 00 State of Louisiana 26,720 00 00 00 18,153 48 00 44,873 48 56,096 70 Miscellaneous 16 34 00 00 00 00 16 34 389 89 NET GOVERNMENTAL ACTIVnTIES $ 72.092 81 $ 78.835 82 L= 47.501 70 $ 176.155 88 S 13,900 00 $ 388.486 21 s 204,540 82 BUSINESS TYPE ACTIVITIES Customer Receivables $ 188,768 09 s 175,536 31 Allowances for Bad Debts (11.125 83) (9.212 41) NET BUSINESS TYPE ACTIVITIES k 177,642 26 L 166 323 90 Allowances for doubtful accounts for the Propnetary Fund - Water/Sewer receivable accounts is based on the collectibility of outstanding receivables -20- TOWN OF FARMERVILLE FARMERVILLE. LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 3 - RECEIVABLES/ALLOWANCE FOR DOUBTFUL ACCOUNTS CONTINUED Aged Accounts Receivable Water Customers DAYS DAYS DAYS TOTAL CURRENT 30-60 60-90 OVER 90 June 30,2011 $ 188,768 09 $ NOTE#4- WATER AND SEWER STATISTICS The utility rates for water, sewer and garbage are as follows RESIDENTIAL COMMERCIAL WATER First 2,000 Gallons $10 00 $17 50 Over 2,000 Gallons $3 00 per 1,000 Gallons $ 3 00 per 1,000 Gallons SEWER $ 3 00 per 1,000 Gallons $ 3 00 per 1,000 Gallons Based on water usage $10 00 $25 00 GARBAGE $2 00 $2 00 RECONNECT FEE DUMPSTER 40 Cu Yd-Per Pull $150 00 8 Cu Yd - Per Container $25 00 Plus 1 X Week 50 00 Plus 2 X Week 100 00 6 Cu Yd - Per Container $20 00 Plus 1 X Week 40 00 Plus 2 X Week 80 00 4 Cu Yd - Per Container $ 15 00 Plus 1 X Week 25 00 Plus 2 X Week 50 00 COMPACTOR $150 00- 250 00 TAPPING FEE $250 00 II Any frilltim e employee, council member, firemen,an d the mayor receive a prefened rate for utilities Based on the approved rate schedule CURRENT Water $ 10 00 Sewer 3 00 Garbage 10 00 $ 23 00 -21- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 4 - WATER AND SEWER STATISTICS CONTINUED III The Town of Farmerville also has an industrial rate of $1 00 per 1,000 gallons of water used The Poultry Plant receives the industrial rate of $1 00 The Union Parish Police Jury Jail has an industrial rate of $1 00 Industrial rate customers do not receive a minimum fee charge NOTE # 5 - PROPERTY TAXES Property taxes attach as an enforceable hen on property as of January 1 Tax notices are usually mailed dunng November each year and become delinquent after December 31, of the year The delinquent taxes are sold each year, therefore, an allowance for uncollectible was not recorded For the Years Ended June 30,2011 and 2010, taxes were levied on property with assessed valuations totaling $23,291,040 for 2011 and $21,812,725 for 2010 and were dedicated as follows 2011 2010 2011 2010 General Fund 9 00 Mills 9 00 Mills $ 208,752 92 $ 208,941 22 Dedicated Fund - Fire Dept 10 46 Mills 10 46 Mills 242,439 32 242,765 65 Total Taxes Levied $ 451J 92 24 $ 451.706 87 Dedicated Funds - Area Fire Protection Distnct $ 246.514 09 $ 276.009 63 Payments in Lieu of Taxes .242 93 8,000 33 A recap ofthe largest assessment is as follows ASSESSED VALUE 2011 2010 2011 2010 Community Tmst Bank $ 1,507,860 00 $ 1,389,160 00 S 29,342 61 ;S 27,033 44 Deloutre Properties 598,530 00 609,530 00 11,228 55 11,86148 Wal-Mart 1,646,530 00 1,568,280 00 31,905 45 33,048 53 Lakeview Nursing Home 503,350 00 530,350 00 9,795 19 9,795 19 BellSouth 433,840 00 471,700 00 9,179 25 9,179 28 Marion State Bank 198,370 00 669,660 00 12,066 95 13,03158 Farmerville Motors 254,510 00 373,210 00 4,952 76 7,262 67 Claibome Electric 454,200 00 439,450 00 8,838 73 8,553 84 Daniel G Kamin Farmerville Ent 380,870 00 380,870 00 7,411 73 7,41170 First National Bank 141,910 00 324,560 00 2,680 92 6,315 94 Union Village 345,280 00 - 6,719 15 - NOTE # 6 - LONG-TERM DEBT The govemment issues general obligation bonds to provide fimds for the acquisition and constmction of major capital facilities General obligation bonds have been issued for both general govemment and propnetary activities These bonds therefore are reported in the proprietary fimds if they are expected to be repaid from proprietary revenues General obligation bonds are direct obligations and pledge the frill faith and credit ofthe govemment These bonds generally are issued as 25-year serial bonds, except for refunds m issues, with equal amount of principal maturing each year The Town did not have any general obligation bonds -22- TOWN OF FARMERVILLE FARMERVILLE. LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30. 2011 AND 2010 NOTE # 6 - LONG-TERM DEBT CONTINUED The excess funds from general obligation bonds were transfened to the general fund to be used as restncted funds The fimds not expended are shown as restricted funds in the general fund equity Revenue Bonds The govemment also issues bonds where the government pledges income to pay debt service A $ 01 sales tax is pledge to pay these revenue bonds In Febmary 2002, $2,900,000 of revenue bonds were issued for constmction of a recreation center and street improvements An additional sales tax of 1/2 of 1% sales tax was approved for payment of these bonds 2010 Revenue Bonds The Town received $500,000 of revenue bonds in June 2010 These bonds were used for the street constmction cost on Louisiana Highway 2 The project was not completed as of June 30,2011 The bonds are payable over 20 years with an interest rate of 4 95% USDA Loan The USDA loan was for purchase of equipment for the street department with the use ofthe USDA grant for the purchase of equipment for the water department The total loan was $269,100 and the grant was for $144,900 The monthly payments are $2,008 with payments starting on May 10, 2011 The interest rate is 4 13% The bonds are payable from the sales tax fund, with the water department payment ofthe excess ofthe equipment purchase over the grant of $ 13,900 Bancorpsouth - Lease Purchase The Town purchased a garbage tmck with a 3 year lease purchase agreement The monthly payment is $1,630 98 per month for 36 months with a balloon payment of $100,000 Outstanding Revenue Bonds and Lease Purchase balances at June 30, 2011 and 2010 are as follows PURPOSE INTEREST RATES 2011 2010 PROPRIETARY FUND Revenue Bonds 4 95% i_ 400,000 00 $_ 400,000 00 GOVERNMENTAL FUNDS Bancorpsouth - Lease Purchase 3 39% 135,993 23 00 USDA 4 13% 267,359 69 00 Revenue Bonds-2010 4 95% $ 500,000 00 $ 500,000 00 Recreation Center & Street Improvements 4 35%-7 00% 1,950,000 00 2,080,000 00 Total Govemmental Funds s_ 2,853,352 92 L 2.580.000 00 TOTALS L 3,253.352 92 L 2.980.000 00 -23- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 6 - LONG-TERM DEBT CONTINUED PROPRIETARY FUND PRINCIPAL AMOUNTS UTILITIES INTEREST REVENUE YEAR RATE BONDS 2012 4 95% $ 15,000 00 2013 4 95% 15,000 00 2014 4 95% 15,000 00 2015 4 95% 15,000 00 2016 4 95% 15,000 00 2017-2021 4 95% 100,000 00 2022 - 2026 4 95% 120,000 00 2027 - 2030 4 95% 105,000 00 Totals $ 400.000 00 BOND PRINCIPAL AND INTEREST UTILITIES INTEREST REVENUE YEAR RATE BONDS 2012 4 95% $ 34,057 50 2013 4 95% 33,315 00 2014 4 95% 32,572 50 2015 4 95% 31,830 00 2016 4 95% 31,087 50 2017-2021 4 95% 166,825 00 2022 - 2026 4 95% 160,590 00 2027 - 2030 4 95% 113,910 00 Totals $ 604,187 50 Changes in Long-Term Liabilities During the year ended June 30, 2011. The following changes occuned in liabilities reported in the general long-term debt account group Revenue Bonds Debt Service requirements and Lease Purchase requirements are listed below JULY I, 2010 ADDITIONS REDUCTIONS JUNE 30 2011 Proprietary Fund Revenue Bonds $_ 400,000 00 $ 00 l_ 00 $ 400,000 00 Govemmental Funds Sales Tax Debt - Sewer Bonds $ 00 $ 00 $ 00 $ 00 Sales Tax Debt - Streets and Recreation Center 2,080,000 00 00 (130,000 00) 1,950,000 00 Revenue Bonds-2010 500,000 00 00 00 500,000 00 Bancorpsouth - Lease Purchase 00 145,842 00 (9,848 78) 135,993 22 USDA 00 269,100 00 (1,740 31) 267,359 69 L 2.580.000 00 L 414.942 00 1= (141.589 09^ 12.853.352 91 •24- fS ON _^ r- _ o ON o o o O O oo o oo •^ tN &^ S? ^ ^ ^ S? s? S? 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J o < NOTE # 7 - CAPITAL ASSETS Capital Asset activity for the year ended June 30, 2011 is as follows BEGINNING ENDING GOVERNMENTAL ACTIVITIES BALANCE ADDITIONS RETIREMENTS BALANCE Land $ 221,468 51 $ 00 $ 00 $ 221,468 51 Buildings 2,198,857 03 66,241 65 (402 21) 2,264,696 47 Improvements Other Than Buildings 1,054,902 68 00 00 1,054,902 68 Machinery and Equipment 3,968,734 95 856,359 50 (269,888 28) 4,555,206 17 Infrastmcture 1,693,052 83 00 00 1,693,052 83 Constmction in Progress 00 00 00 00 Totals at Histoncal Cost $ 9,137,016 00 $ 922,601 15 $ (270,290 49) $ 9,789,326 66 Less Accumulated Depreciation Buildings $ 314,859 47 $ 46,676 36 $ (402 21) $ 361,133 62 Improvements 275,002 21 31,188 75 00 306,190 96 Machinery and Equipment 2,376,91150 255,906 93 (262,279 53) 2,370,538 90 Infrastmcture 388,457 32 64,367 74 00 452,825 06 Total Accumulated Depreciation $_ 3,355,230 50 $ 398,139 78 $_ (262,681 74) I. 3,490,688 54 GOVERNMENTAL ACTIVITIES CAPITAL ASSETS NET $ 5.781.785 50 $ 524.461 37 $ (7.608 751 $ 6.298.638 12 BEGINNING ENDING BALANCE ADDITIONS RETIREMENTS BALANCE BUSINESS-TYPE ACTIVITIES Land $ 25,752 00 $ 00 $ 00 $ 25,752 00 Constmction in Progress 34,93130 305,758 00 00 340,689 30 Water System 4,954,852 67 00 00 4,954,852 67 Sewer System 6,339,267 40 00 00 6,339,267 40 Water and Sewer - Union Village 484,742 50 00 00 484,742 50 Machinery and Equipment 731,077 91 206,703 32 (105,175 57) 832,605 66 Totals at Historical Cost $ 12,570,623 78 S 512,46132 $ (105,175 57) $ 12,977,909 53 Less Accumulated Depreciation Water System $ 2,041,802 81 s 114,608 23 S 00 $ 2,156,41104 Sewer System 2,782,41106 119,152 59 00 2,901,563 65 Machinery and Equipment 543,469 79 34,858 23 (102,236 05-) 476,091 97 Total Accumulated Depreciation $ 5,367,683 66 s 268,619 05 $_ (102,236 05) $ 5,534,066 66 BUSINESS-TYPE ACTIVITIES CAPITAL ASSETS NET $ 7.202.940 12 243.842 27 % (2.939 52-^ % 7.443.842 87 In propnetary funds, the following estimated useful lives are used to compute depreciation Investments 25 - 60 Years Equipment 10-20 Years Vehicles 4 - 5 Years -26- TOWN OF FARMERVILLE FARMERVILLE. LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30. 2011 AND 2010 NOTE # 7 - CAPITAL ASSETS CONTINUED FASB-34 (Capitalization of Interest Costs) requires that interest expenditures incuned dunng constmction of assets be capitalized FASB-62 (Capitalization of Interest Cost in Situations Involving Certain Tax-Exempt Bonowings and Certain Gifts and Grants) concludes that constmcted assets financed with the proceeds of tax-exempt debt (if those funds are extemally restricted to finance the acquisition ofthe asset or used to service the related debt) should include capitalized interest only to the extent that interest cost exceeds interest eamed ofthe tax-exempt bonowmg No interest costs were capitalized NOTE # 8 - INTERFUND ASSETS/LIABILITIES Due From/To Other Funds AMOUNT RECEIVABLE FUND PAYABLE FUND 2011 2010 Capital Projects Fund Sewer Department $ 13,900 00 $ 00 General Fund - Garbage Water - Garbage Fees 21,39159 68,979 89 General Fund Recreation Sales Tax 8,083 81 8,083 81 General Fund Sales Tax 4,750 00 00 Water Department Sewer Department - Loan 172,622 47 164,901 90 Totals l_ 220.747 87 $ 241.965 60 TRANSFERRED FROM TRANSFERRED TO PURPOSE 2011 2010 Fire Distnct General Fund Property Taxes m Excess of Required Deposit $ 246,514 09 S 276,009 63 General Fund Volunteer Fire Department 2% Insurance Monies 16,666 15 00 Sales Tax General Fund Administrative Fee 30,000 00 30,000 00 Water Department General Fund AdministraUve Fee 30,000 00 30,000 00 Fire Department General Fund AdministraUve Fee 5,000 00 5,000 00 Recreanon Center General Fund AdministraUve Fee 10,000 00 10,000 00 Sales Tax Glory Road Constmction 00 8,000 00 Sales Tax General Fund Garbage Expenses 50,000 00 46,000 00 Sales Tax Debt Service Fund Debt Service 39,750 00 108,000 00 Sales Tax Sewer Sewer Debt Service 34,800 00 15,000 00 Recreation Sales Tax Debt Service Fund Debt Service 236,125 44 216,450 00 General Fund Debt Service Fund Lease Payments 13,047 83 00 Totals $ 711.903 51 ? 744,459 63 NOTE # 9 - COMPENSATION The amount paid the mayor and council during the audit year is as follows Mayor 2011 2010 Salary and Expenses Mayor Stem Baughman $ 29,453 74 $ 29,749 98 Travel Expendimres 7,776 68 6,304 91 Tolal 1= 37.230 42 $ 36.054 89 Police Chief (a) Bim Culbertson $ 2.400 00 1= 2,400 00 -27- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE30, 2011 AND 2010 NOTE # 9 - COMPENSATION CONTINUED 2011 2010 Alderman Jerry Taylor $ 10,854 20 $ 8,406 20 Lavelle Maine 9,198 20 6,767 20 Joseph G Jones 8,754 20 6,506 20 Wayne Jones 8,754 20 6,506 20 Gerome Nation 10,554 20 8,977 55 Total 1= 48.115 00 L= 37,163 35 (a) The Police Chief is also the elected Marshall In that capacity he receives $200 a month He also receives a salary for his position as chief of police NOTE #10 - EMPLOYEE RETIREMENT Substantially all employees of the Town of Farmerville are members of the following statewide retirement systems Municipal Employees Retirement System of Louisiana, Municipal Police Employees Retirement System of Louisiana, or Firefighters Retirement System of Louisiana and Social Security These systems are multiple-employer public employee retirement systems(PERS), controlled and administered by separate boards of tmstees Pertinent information relative to each plan as follows A Municipal Employees Retirement System of Louisiana (System) - The System is composed of two distinct plans. Plan A and Plan B, with separate assets and benefit provisions All employees ofthe municipality were members of Plan B In July 2002, the Town elected Plan A Normal Retirement eligibility and benefit computation A member of Plan A is eligible to retire and receive normal retirement benefits if 1 He has credit for at least twenty-five years of Plan A service, regardless of his age, or, 2 He has credit for at least ten years of Plan A service and is at least the age of sixty years The monthly Maximum Plan A normal retirement benefit is an amount equal to three percent ofthe member's final compensation multiplied by his years of credited service (three percent multiplied by each year of credited service multiplied by final compensation), provided that 1 A member who held an elective office in a participating mumcipahty is paid an additional monthly benefit equal to one-half of one percent ofthe member's final compensation multiplied by each year of such elective service (one-half of one percent multiplied by each year of such elective service multiplied by final compensation), and 2 For an employee who was a member only of the supplemental plan pnor to the revision date, the monthly benefit eamed for service credited prior to the revision date will be determined on the basis of one percent of final compensation plus two dollars per month for each year of service credited pnor to the revision date, and three percent of final compensation for each year of service credited after the revision date For example, the monthly retirement benefit of a member who has credit for twenty-seven years of service with a final compensation (see definition) of $1,500 would be computed as follows 3% x 27 x $1,500 = $1,215 If this member had credit for thirty years of service his benefit would be $1,350 (3% x 30 x $1,500 = $1,350) -28- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30. 2011 AND 2010 NOTE # 10 - EMPLOYEE RETIREMENT CONTINUED The monthly benefit, as it may be increased by cost-of-living adjustments, is paid for the life ofthe retiree and, if an optional mode of benefit payments is selected (see Mode of payment options), a monthly benefit, payable upon the death ofthe retiree, will be paid to the option beneficiary for the life ofthe beneficiary Applications for normal retirement should be submitted to the system at least six weeks prior to the planned retirement date A copy ofthe member's birth certificate and, if an optional mode of benefit payments is selected (see Mode of payment options), a copy ofthe option beneficiary's birth certificate must be attached to the application of retirement If a retired member dies without having received in retirement benefits an amount equal to his accumulated employee contributions and if he is survived by no person eligible for any other benefits, the difference between the amount of his accumulated employee contributions and the amount he received in retirement benefits will, upon application, therefore, be paid to his designated beneficiary or, if none, his estate Early Retirement eligibility and benefit computation A member of Plan A who has credit for twenty years of Plan A service, exclusive of military service, may retire at any age However, the benefits paid to such a member must be actuarially reduced from the earliest age that he would otherwise have become eligible for a normal retirement if he had continued in service to that age and such a member may not participate in the Defened Retirement Option Plan Disability retirement eligibility and benefit computation A member of Plan A is eligible to retire and receive disability retirement benefits if he has credit for at least five years of service, is not eligible for normal retirement benefits, and suffers disability The monthly Maximum Plan A disability retirement benefit is the lesser of (1) an amount equal to three percent ofthe member's final compensation multiplied by his years of service (three percent multiplied by each year of credited service multiplied by final compensation), but not less than forty-five percent ofthe member's final compensation, or, (2) an amount equal to what the member's normal retirement benefit would be based on his current final compensation, but assuming he remained in continuous service until his earliest normal retirement age and usmg the retirement benefit computation factors which would be applicable to his normal retirement An applicant for disability retirement may select an optional mode of benefit payments (see Mode of payment options) Survivor benefit eligibility and computation Upon the death of a member of Plan A who has credit for five or more years of service and who is not eligible for normal retirement benefits, the following survivor benefits, upon application therefore, are payable 1 A surviving spouse with minor children will be paid a monthly benefit equal to sixty percent ofthe member's final compensation, such benefit to continue as long as the spouse lives or until no child in his care satisfies the definition of minor child A surviving spouse is deemed to have minor children for as long as at least one minor child IS legally under his care The surviving spouse must have been mamed to the deceased member for al least twelve months preceding the member's death to be eligible for survivor benefits •29- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 10 - EMPLOYEE RETIREMENT CONTINUED 2 A surviving spouse with no minor children will be paid either (a) a monthly benefit equal to forty percent of the member's final compensation, payable when the surviving spouse attains the age of sixty years or becomes disabled and payable for as long as the surviving spouse lives, or (b) a monthly benefit equal to the actuanal equivalent of (a), but not less that twenty percent ofthe member's final compensation, payable upon the death ofthe member and payable for as long as the surviving spouse lives To select (b), a surviving spouse must notify the system of such selection within ninety days ofthe death ofthe member and such selection is final and inevocable and is in lieu of eligibility for (a) (the forty percent benefit payable when the surviving spouse attains the age of sixty years) The surviving spouse must have been mamed to the deceased member for at least twelve months preceding the member's death to be eligible for survivor benefits 3 A surviving minor child with no surviving spouse will be paid a monthly benefit equal to thirty percent ofthe member's final compensation, however, total payments may not exceed sixty percent ofthe member's final compensation If more than two minor children survive the member, the benefit payable at any time to each child is an amount determined by dividing the total amount payable (sixty percent ofthe member's final compensation) by the number of children the eligible for a benefit Minor child survivor benefits may only be applied for and paid to the person who has legal care, custody, and control of minor child A member who is eligible for normal retirement at the time of his death and who leaves a surviving spouse will be deemed to have retired and selected the Option No 2 mode of benefit payments on the date of his death, such benefits, upon application therefore, are paid in lieu of any other survivor benefits Upon the death of any member who is eligible for normal retirement at the time of his death and who leaves surviving minor children but no surviving spouse, an amount equal to thirty percent ofthe member's final compensation shall be paid to each minor child each month, not to exceed an aggregate of sixty percent If more than two minor children survive such a member, the benefit payable at any time to each child is an amount determined by dividing the total amount payable (sixty percent of the member's final compensation) by the number of children then eligible for a benefit Minor child survivor benefits may only be applied for and paid to the person who has legal care, custody, and control of minor child A copy ofthe member's and survivor's maniage license must be attached to the application for survivor benefit's if the applicant is a surviving spouse of a member A copy ofthe minor child's birth certificate and applicable custodyjudgment must be attached to the application for survivor benefits if the application is filed on behalf of a surviving minor child of a member If only one person is eligible for survivor benefits that person may apply for and be paid a refund ofthe deceased member's accumulated employee contributions m heu of payment of survivor benefits If two or more persons are eligible for survivor benefits and they all agree to do so, they may apply for and be paid a refund of the deceased member's accumulated employee contnbutions in lieu of payment of survivor benefits The survivor(s) must notify the board in writing ofthe decision to request a refund in lieu ofthe survivor benefits Such refund payments are subject to the same provisions as are other refund payments Employee contributions Each member of Plan A shall contnbute 9 25% of his eamings from each and every payment of eamings Each participating employer of Plan A shall contribute an amount equal to a percentage of each employee's eamings as determined each year by the Public Retirement Systems' Actuanal Committee However, subject to certam restrictions, the board of tmstees may maintain the employer contribution rate for the next fiscal year at the same rate as the cunent year if the rate determined by the Public Retirement Systems' Actuarial Committee for the next fiscal year is less that the rate for the current year •30- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 10 - EMPLOYEE RETIREMENT CONTINUED Contributions to the System mclude one-fourth of one per cent ofthe taxes shown to be collectible by the tax rolls of each municipality State statue requires covered employees to contnbute a percentage of their salaries to the System As provided by Louisiana revised Statute 11 103, the employer contributions are determined by actuarial valuation and are subject to change each year based on the results ofthe valuation for the prior fiscal year B Municipal Police Employees Retirement System of Louisiana (System)"All full-time police department employees engaged in law enforcement are required to participate in the System Employees who retire at or after age 50 with at least 20 years of creditable service or at or after age 55 with at least 12 years of creditable service are entitled to a retirement benefit, payable monthly for life, equal to 3 1/3 per cent 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 previously and receive the benefit accmed to their date of termination The System also provides death and disability benefits Benefits are established by state statute State statue requires covered employees to contribute a percentage of their salaries to the system As provided by Louisiana Revised Statute 11 103, the employer contributions are determmed by actuarial valuation and are subject to change each year based on the results ofthe valuation for the prior year C Firefighters Retirement System of Louisiana-Membership in the Louisiana Firefighters Retirement System is mandatory for all fiill-time firefighters employed by a municipality, parish, or fire protection district that did not enact an ordinance before January 1, 1990, exempting itself fi-omparticipatio n in the System Employees are eligible to retire at or after age 55 with at least 12 years of creditable service or at or after age 50 with at least 20 years of creditable service Upon retirement, members are entitled to a retirement benefit, payable monthly for life, equal to 3 1/3 per cent of their final-average salary for each year of creditable service, not to exceed 100 per cent of their final-average salary Final- average salary is the employee's average salary over the 39 consecutive or joined months that produce the highest average Employees who terminate with at least 12 years of service and do not withdraw their employee contnbutions may retire at or after age 55 (or at or after age 50 with at least 20 years of creditable service at termination) and receive the benefit accmed to their date of termination The System also provides death and disability benefits Benefits are established by state statute State statue requires covered employees to contnbute a percentage of their salaries to the System Employer contributions are determined annually based on results ofthe valuation ofthe prior fiscal year with adjustments for any dedicated tax monies or appropriated funds The following provides certain disclosures for the municipality and the retirement systems that are required by GASB Codification Section P20-129 YEAR ENDED JUNE 30, 2011 % ]3MPL0YEE S % POLICE % FIR EFIGHTERS Total Current Year Payroll L 1.054.634 21 i_ 513.87151 $ 46.032 46 Total Current Year Covered Payroll 891.909 57 1= 42.045 28 $ 46.032 46 ContnbuUons Required by statute Employees 9 25% $ 82,501 63 7 50% $ 3,099 34 10 00% S 4,396 30 Employer 14 25% 209,528 63 25 00% 11,006 52 20 00% 9.383 67 Total 292.030 26 E 14.105 86 s_ 13,779 97 -31 TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 10 - EMPLOYEE RETIREMENT CONTINUED YEAR ENDED JUNE 30, 2010 % IEMPLOYEE S % POLICE % FIR EFIGHTERS Total Current Year Payroll $ 971.194 35 $ 479.376 58 37.854 60 Total Current Year Covered Payroll L 794.047 27 39.337 00 37.854 60 Contnbutions Required by statute Employees 9 25% $ 73,294 07 7 50% $ 2,950 28 8 00% 3,028 33 Employer 13 50% 106,970 17 11 00% 4,327 12 14 00% 5,334 72 Total 180.264 24 7.277 40 8.363.05 NOTE #11- RELATED P ARTYTR.^ ^s.\CTION S The Town of FarmerviUe did not have any related party transactions dunng the fiscal year ended June 30, 2011 NOTE # 12 - LEGAL COMPLIANCE - BUDGET The budget for the year ended June 30,2011 was adopted in June 2010 and revised June 2011 The budgets were prepared based on generally accepted accounting principles (GAAP), except depreciation is not budgeted Budgets were not prepared for the Volunteer Fire Department or the Farmerville Fire Distnct funds The majority ofthe Fire Distnct Funds are included with the Fire Department budgets Budgets are adopted as totals rather than line items INCOME EQUITY EXPENSE TOTAL General Budget - Budget S 2,028,485 00 $ 5,600 00 $ (2,034,085 00) $ 00 -Actual 1,962,288 49 68,61191 (2,030,900 40) 00 Special Revenue Sales Tax - Budget 959,300 00 00 (923,035 00) 36,265 00 - Actual 954,224 71 00 (888,946 93) 65,277 78 special Revenue Recreation - Budget 493,700 00 12,110 00 (505,810 00) 00 - Actual 485,547 47 43,760 34 (529,307 81) 00 Water Department - Budget 1,109,700 00 00 (957,420 00) 152,280 00 - Actual 1,223,32101 00 (861,155 79) 362,165 22 Sewer Department - Budget 433,500 00 62,730 00 (496,230 00) 00 - Actual 366,301 63 106,633 31 (472,934 94) 00 TOTAL - Budget $ 5,024,685 00 $ 80,440 00 $ (4,916,580 00) $ 188,545 00 - Actual 4,991.683 31 219,005 56 (4,783,245 87) 427,443 00 - Difference $ (33.00169) $ 138.565 56 S 133.334 13 $ 238.898 00 The water and sewer department budget did not include the expenses for depreciation These amounts were reduced from the actual per the financial statements The capital projects funds for sewer were accounted for in the capital project fimd and then the assets are transfened to the sewer department These transactions was not accounted for m the sewer budget, therefore, they are deleted from the amounts above NOTE#13-EQUITY Reservations of fund balances of govemmental funds are created to either (1) satisfy legal covenants that require that a portion ofthe fund balance be segregated or (2) identify the portion ofthe fund balance that is not appropriable for future expenditures -32- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FE^JANCIAL STATEMENTS JUNE 30, 2011 AND 2010 NOTE # 14 - SUMMARY DISCLOSURES OF SIGNIFICANT CONTINGENCIES At June 30, 2011 the Town of Farmerville did not have a significant contingency NOTE # 15 - PROPRIETARY FUND SEGMENT INFORMATION The Town maintains one Enterprise Fund which provides water and sewer services Segment information for the years ended June 30, 2011 and 2010 is as follows 2011 2010 Cunent Assets 534,050 95 412,193 29 Non-Cunent Assets 711,683 82 967,350 39 Capital Assets, Net 7^43,842 87 7,202,940 12 Total Assets 8,689,577 64 8,582,483 80 Cunent Liabilities (309,800 66) (285,176 25) Long-Term Liabilities (418,966 59) (453,979 89) Total Net Assets 7,960.810 39 S 7.843.327 66 2011 2010 Invested in Capital Assets, Net 7,443,842 87 7,202,940 12 Unrestncted 412,645 96 791,193 07 Restncted 104,321 56 (150,805 53) 7.960.810 39 $ 7.843.327 66 Operating Revenues Water Sales and Service 1,061,981 36 936,096 98 Sewer Sales and Service 347,922 48 339,745 58 Grants/Miscellaneous 308 08 1,067 96 Grant 10,744 00 32,983 91 Total Operating Revenues 1,420,955 92 1,309,894 43 Operating Expenses (1,182,792 53) (1,034,855 41) Depreciation (268,619 05) (258,295 87) Operating (Losses) (30,455 66) 16,743 15 Non-Operating Revenue/Expense 147,938 39 142,514 83 Change in Net Assets 117.482 73 S 159.257 98 NOTE # 16 - STATEMENT OF CASH FLOWS FOR PROPRIETARY FUNDS2 For purposes of this Statement of Cash Flows, for proprietary fund types, all highly liquid investments, including restncted assets, with a matunty of three months or less when purchased are considered to be cash equivalents The cash and cash equivalents as stated on the Statement of Cash Flows is as follows WATER AND SEWER 2011 2010 Unrestncted 343,367 69 199,839 48 Restncted 711,683 82 967,350 39 Total $ 1.055.051 51 S 1.167.189 87 NOTE # 17 - ECONOMIC DEPENDENCY A large portion ofthe water and garbage revenues are due to the agreement with the Poultry Processing Plant •33- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE30, 2011 AND 2010 NOTE # 18 - SUMMARY DISCLOSURES OF SIGNIFICANT CONTINGENCIES Risk Management handles all defense for the Town The Tovm's attorney advises us that the Town has five lawsuits which are bemg handled by Risk Management No estimate of damages has been determined NOTE # 19 - RISK MANAGEMENT The Town is exposed to nsks of loss in the areas of health care, general and auto liability, property hazards and workers' compensation All of these risks are handled by purchasing commercial insurance coverage There have been no significant reductions in the insiu'ance coverage during the year NOTE # 20 - RESTRICTED NET ASSETS The components of restncted net assets are as follows GOVERNMENTAL FUNDS NON- EXPENDABLE EXPENDABLE 2011 2010 Debt Service $ 00 $ 421,779 35 $ 421,779 35 $ 384,540 14 Fire Department 222,677 23 00 222,677 23 194,403 19 Fire Department - Volunteer 74,124 86 00 74,124 86 58,164 32 Fire Department - Fire Distnct 6,765 32 00 6,765 32 7,053 21 Recreation/Street Improvements 495,141 50 00 495,141 50 538,901 84 Capital Projects Fund 506,960 68 00 506,960 68 481,046 65 Capital Projects - Sales Tax Fund 45,590 15 00 45,590 15 38,099 97 Totals $ I.35I.259 74 1= 421.77935 $ 1.773.039 09 $ 1.702.209 32 NOTE # 21 - CAPITAL PROJECTS FUND See Schedule C and D for details ofthe Capital Projects Fund The Town is in the process of building a new street off Louisiana 2 The project is funded by a bond issue for $500,000 The Town received a USDA loan for Street Department equipment The USDA grant was used for water department equipment An addition to the Unionville Fire Station was financedb y the State of Louisiana Facility Planning & Control The State of Louisiana Miscellaneous State Aid Fund provided a $40,000 grant for improvements to LA 2 intersection ASSETS 2011 2010 Cash in Banks 489,290 54 481,046 65 Receivables 176.155 88 00 TOTAL ASSETS $ 665.446 42 $ 481.046 65 LIABILITIES AND FUND EQUITY LIABILITIES Payables $ 158.485 74 $_ 00 EQUITY AND OTHER CREDITS Reserve for Capital Improvements 506.960 68 $ 481,046 65 TOTAL LIABILITIES AND FUND EQUITY 665.446 42 $ 481.046 65 -34- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA NOTES TO FINANCIAL STATEMENTS JUNE 30. 2011 AND 2010 NOTE # 21 - CAPITAL PROJECTS FUND CONTINUED RECEIPTS 2011 2010 Bonds $ 00 S 500,000 00 USDA Loan 269,100 00 00 State of Louisiana 100,094 00 00 CDBG/LCDBG Funds 3,122 40 00 Interest Income 292 30 00 Total Receipts $_ 372,608 70 l_ 500,000 00 EXPENDITURES Sewer Improvements $ 10,744 00 $ 67 50 Glory Road Constmction 41,912 00 27,022 05 Equipment Purchases 224,871 18 00 Building 55,768 02 00 Administrative Costs 20,017 49 00 Total Expenditures $_ 353,312 69 $_ 27,089 55 OPERATING FINANCING SOURCES (USES) Operating Transfer In Town of Farmerville 6,618 02 S 00 Sales Tax Fund 00 8,000 00 Totals 6,618 02 8,000 00 EXCESS OF RECEIPTS AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER (USES) $ 25,914 03 $ 480,910 45 FUND BALANCE - JULY 1 481,046 65 136 20 FUND BALANCE - JUNE 30 $ 506.960 68 $ 481.046 65 NOTE # 22 - POST EMPLOYMENT BENEFITS The Town of Farmerville provides continuing employee benefits for its employees who retired with the State Municipal Retirement System, the Police Retirement System and the Fire Retirement System The Town of Farmerville provides health insurance through the Louisiana Municipal Risk Management Agency, II for each employee Family coverage is available, but not paid by the Town The Town is also providing life insurance and dental insurance for retirees The Town records the cost of these benefits as expenditures on a monthly basis For the year ended June 30, 2011, the total cost ofthe benefit to employees is $232,706 69 and $219,675 21 for 2010 Of this amount $13,897 08 for 2011 and $13,897 08 for 2010 was for retirees benefits As of June 30 another employee retired making the monthly benefit $1,158 09 These premiums are financed on a "pay-as-you-go" basis The Town also provides employees, councilmen. Mayor and volunteer firemen minimum water bills This benefit is also provided after retirement This benefit is financed on a "pay-as-you-go" basis The Town was required to implement Govemmental Accounting Standards Board Statement No 45 entitled "Accounting and Financial Reporting by Employers for Post Employment Benefits other than Pensions" (GASB 45) The major change under GASB 45 is to attnbute the cost of post retirement benefits to the time which the employee is working for the employer This standard does not require the fundmg of these benefits, but it does require recognizing the liability and expense in the financiai statements The Town is in the process of determimng the cost of these benefits •35- REQUIRED SUPPLEMENTAL INFORMATION (PART II) TOWN OF FARMERVILLE STATEMENT A FARMERVILLE. LOUISL'^A GENERAL FUND STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET (GAAP) AND ACTUAL FOR THE FISCAL YEARS ENDED JUNE 30, 2011 AND 2010 % CHANGE % CHANGE LAST PROJECTED ADOPTED ACTUAL BUDGET VS RESULT ACTUAL PROJECTED PROJECTED AT YEAR LAST YEAR ESTIMATED ACTUAL ACTUAL ENDVS ORIGINAL ADOPTED TO DATE REMAINING RESULT RESULT AT PROPOSED PROPOSED BUDGET BUDGET JUNE 30, 2011 FOR YEAR YEAR END YEAR END BUDGET BUDGET REVENUES TAXES Advalorem - General $ 200,000 00 $ 215,000 00 $ 208,752 90 208,752 90 $ 210,000 00 Advalorem - Fire Department 230,000 00 250,000 00 242,439 32 242,439 32 230,000 00 Franchise 190.000 00 187,000 00 184,065 41 184,065 41 190,000 00 Housmg Authority in Lieu of Taxes 00 16,000 00 8,242 93 8,242 93 8,000 00 Sales Taxes 00 00 00 00 475,000 00 Total Taxes l_ 620,000 00 $_ 668.000 00 $_ 643,500 56 643,500 56 3 00% $ 1,113,000 00 73 00% LICENSES AND TAXES Alcoholic Beverages $ 7,000 00 $ 7,000 00 $ 7,097 00 7,097 00 $ 7,000 00 Occupational 100,000 00 99,000 00 96,499 53 96,499 53 95,000 00 Occupational Insurance 75.000 00 90,000 00 79,230 33 79,230 33 90,000 00 Other 00 00 00 00 4,000 00 Video Bingo 70,000 00 70,000 00 68,763 42 68.763 42 70,000 00 Total Licenses and Taxes l_ 252,000 00 s_ 266,000 00 l_ 251,590 28 251,590 28 5 00% $ 266,000 00 6 00% CHARGES FOR SERVICES Juvenile Court $ 4,000 00 $ 3,000 00 $ 2,250 92 2,250 92 $ 2 000 00 Municipal Court Cost 25,000 00 25,000 00 23,235 00 23,235 00 25,000 00 Accident Report 1,200 00 1,200 00 1,11950 1,119 50 1,200 00 Drug Task Force 6,500 00 6,000 00 6,056 00 6,056 00 6,500 00 Garbage Fees 400,000 00 405,000 00 405,922 05 405,922 05 400,000 00 Zoning Charges 500 00 300 00 200 00 200 00 500 00 Total Charges for Services $_ 437,200 00 $_ 440.500 00 $_ 438,783 47 438,783 47 $ 435,200 00 1 00% FINES AND FORFEITS DWI Fines $ 2,000 00 $ 1,000 00 $ 700 00 700 00 1,000 00 Municipal Court Fines 75,000 00 65,000 00 65,299 50 65,299 50 75.000 00 Bench Warrants 00 3,000 00 2,910 00 2,910 00 2,600 00 Others 00 00 00 go 100 00 Total Fines and Forfeits 1_ 77,000 00 l_ 69,000 00 L_ 68.909 50 68.909 50 78,700 00 14 00% MISCELLANEOUS Miscellaneous l.OOO 00 $ 2,500 00 $ 1,084 25 $ 1,084 25 1,000 00 Farmerville City Park 100 00 100 00 00 00 00 Oil & Mineral Lease 00 48,000 00 47,901 60 47,901 60 00 Sale of Assets General Fund 00 00 100 00 100 00 00 Police Department 00 00 685 00 685 00 00 Garbage Department 00 4,285 00 8,250 00 8,250 00 00 Fees - Farmer's Market 3,000 00 1.600 00 1,541 00 - 1,541 00 2,000 00 Administrative Fees and Mechanic 75,000 00 75,000 00 75,000 00 - 75,000 00 75,000 00 Interest Income 4.000 00 10,000 00 10,194 65 _ 10,194 65 1,000 00 Total Miscellaneous $_ 83,100 00 $_ 141,485 00 $_ 144,756 50 $ $ 144.756 50 2 00% $_ 79.000 00 -45 00% STATE SOURCES Grants Fire Department $ 00 $ 5,000 00 $ 4,980 00 $ $ 4,980 00 $ 00 Police Grants 00 00 18,985 00 - 18.985 00 35,000 00 Public Safety Grants 00 00 3,268 75 - 3,268 75 00 Supplemental Pay State of Louisiana Fire Department 6,000 00 6,000 00 6,000 00 - 6.000 00 6,000 00 Police 60.000 00 60,000 00 60,000 00 - 60,000 00 60,000 00 State Revenue Sharing 1,000 00 500 00 380 00 - 380 00 500 00 Beer Tax 4,000 00 6,000 00 5,854 86 - 5,854 86 4.500 00 State 2% Insurance Fund 18,000 00 18,000 00 18,603 03 - 18.603 03 18,000 00 Total State Sources F 89,000 00 1. 95,500 00 L 118,07164 $ $ 118,07164 24 00% H 124,000 00 5 00% TOTAL REVENUE $_1,558,30 0 00 $_ 1.680,485 00 s_ 1.665,61195 $ $ 1,665,611 95 -1 00% $ 2.095,900 00 26 00% EXPENDITURES SUMMARY OF EXPENDITURES - BY DEPARTMENT General Govemment Administrative $ 360,970 00 399,510 00 393,199 30 $ $ 393.199 30 - 98% 436,751 59 11 00% SUMMARY OF EXPENDITURES - BY FlJNCTIO N Pubhc Safety Police $ 686.624 00 $ 762,275 00 $ 776,535 57 $ $ 776,535 57 1 01% $ 853.800 00 10 00% Fire 221,360 00 206,785 00 186,360 75 186,360 75 90% 240,706 00 29 00% Sanitation 304,635 00 353,515 00 353,546 31 353,546 35 1 00% 348,900 00 -1 00% Total Other Financing By Function $ 1,212,61900 E 1,322,575 00 T 1.316,442 63 $ $ 1.316,442 63 1 00% E 1,443,406 00 10 00% SUMMARY OF OTHER EXPENDfrURES Capital Outlay $ 255,00 00 $ 276,000 00 % 291,544 48 $ $ 291,544 48 6 00% $ 240.000 00 -18 00% Debt Service Lease Purchase 00 13,000 00 13,047 84 13.047 84 13.000 00 Total Summary of Other Expenditures $ 255.000 00 $_ 289,000 00 304.592 32 S $ 304.592 32 5 00% $_ 253,000 00 SUMMARY OF OTHER FINANCING RECEIPTS (USES) Transfers In $ 310,000 00 $ 348.000 00 $ 296,514 09 $ $ 296,514 09 15 00% $ 260,000 00 -12 00% Transfers Out (28,000 00) (23,000 00) (16,666 15) (16,666 15) 27 00% ( 6.333 85) 8 00% Others 00 00 162 45 162 45 00 Total Summary of Other Financmg Receipts (Uses) $ 282,000 00 $_ 325,000 00 280.010 39 $ $ 280,010 39 14 00% 253.666 15 -14 00% NET CHANGES IN FUND BALANCE $ 11,71100 $ (5,600 00) $ (68,61191) $ $ (68,611 91) $ 216,408 56 FUND BALANCES - JULY 1 402,436 06 402,436 06 402,436 06 402,436 06 333.824 15 FUND BALANCES - JUNE 30 $ 4I4.M7 06 396.836 06 L 333.824 15 1= 333.824 15 L 550.232 71 The notes are an integral part of these statements See accompanying notes and auditors' report -36- TOWN OF FARMERVILLE STATEMENT B FARMERVILLE, LOUISIANA SPECIAL REVENUES - SALES TAX FUND SCHEDULES OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET (GAAP) AND ACTUAL FOR THE FISCAL YEARS ENDED JUNE 30, 2011 AND 2010 2011 ORIGINAL AMENDED (BUDGET) 2010 REVENUE BUDGET BUDGET ACTUAL VARIANCE ACTUAL Taxes Sales Tax $ 930,000 00 $ 915,000 00 :$ 914,602 12 $ (397 88) $ 921,716 66 Interest Eamed 15,000 00 20,000 00 21,752 65 1,752 65 20,692 40 State Mowing Contract 12,500 00 12,500 00 12,570 00 70 00 6,285 00 Reimbursements 500 00 500 00 149 94 (350 06) 00 Sale of Assets 00 11,000 00 5,150 00 (5,850 00) 00 Street Cuttmg Fees 300 00 300 00 00 (300 00) 00 TOTAL REVENUES 958,300 00 $ 959,300 00 954,224 71 $ (5.075 29) $ 948,694 06 EXPENDITURES GENERAL GOVERNMENT Salanes 84,500 00 $ 98,500 00 $ 101,332 76 $ (2,832 76) $ 88,725 35 Employee Benefits Expenditures Medicare Tax 1,250 00 1,450 00 1,425 64 24 36 1,277 00 Municipal Retirement 12,360 00 13.860 00 13,776 88 83 12 11,775 66 PICA 5,200 00 6,200 00 6,023 49 176 51 5,505 81 Unemployment 210 00 210 00 196 75 13 25 177 88 Hospital Insurance 21,000 00 22,000 00 21,937 50 62 50 21,269 50 Dental 1,400 00 1,500 00 1,53180 (31 80) 1,531 80 Workers Compensation Insurance 3,300 00 4,500 00 4,942 00 (442 00) 3,390 83 Employee Drug Test 200 00 200 00 55 00 145 00 120 00 Uniforms 1,500 00 1,500 00 1,025 71 474 29 1,231 68 Administrative Fees 30,000 00 30,000 00 30,000 00 00 30,000 00 Advertising and Filing 400 00 600 00 576 00 24 00 364 50 Asset Purchase 00 42,000 00 50,278 12 (8,278 12) 6,383 50 Auditing 4,000 00 6,000 00 6,000 00 00 4,000 00 Building Maintenance 5,000 00 25,000 00 20,718 80 4,281 20 19,210 69 Computer 6,000 00 2,000 00 1,821 76 178 24 4,730 00 IBM Lease Purchase 4,000 00 4,000 00 3,958 44 41 56 3,958 44 Insurance - Liabihty 15,000 00 5,000 00 8,617 88 (3,617 88) 6,862 06 Grant Expense 00 00 00 00 2,500 00 Capital Improvements - TIF 00 00 00 00 5,000 00 Miscellaneous 5,000 00 1,000 00 00 1,000 00 58 00 Office Expenditures 3,000 00 2,000 00 1,377 03 622 97 2,543 32 Sales Tax Collection Cost 9,300 00 11,300 00 11,889 64 (589 64) 9,434 02 Telephone 1,500 00 2,000 00 2,293 19 (293 19) 2,156 04 Travel 00 00 138 42 (138 42) 00 Total General Govemment $ 214,120 00 $ 280,820 00 $ 289,916 81 $ (9,096 81) L.232,20 6 08 PRISON LABOR AND EXPENDITURES Labor and Expenditures $ 18,000 00 $ 2,000 00 $ 1,934 70 $ 65 30 $ 1,880 77 Tolal Pnson Labor and Expenditures $ 18,000 00 $ 2.000 00 $ 1,934 70 $ 65 30 ^ 1,880 77 STREET REPAIRS Salaries $ 170,000 00 $ 185,000 00 $ 187,241 53 $ (2,241 53) $ 170,820 97 Employee Benefit Expenditures Medicare Taxes 2,500 00 2,600 00 2,629 88 (29 88) 2,141 20 Municipal Retirement 20,500 00 23,000 00 22,790 93 209 07 20,567 56 PICA Taxes 10,500 00 11,200 00 11,23141 (3141) 10,349 23 Unemployment Taxes 415 00 415 00 373 21 41 79 336 25 Hospital Insurance 22,000 00 25,000 00 25,956 00 (956 00) 23,432 50 Dental 2,000 00 2,000 00 1,816 58 183 42 1,721 11 Workers Compensation Insurance 20,000 00 19,000 00 20,787 98 (1,787 98) 18,403 13 Employee Drug Testing 300 00 1,800 00 1,764 80 35 20 187 00 Uniforms 2,500 00 3,500 00 3,285 20 214 80 2,541 81 Clean City Expense 18,000 00 20,000 00 19,752 48 247 52 18,473 61 Insurance 10,000 00 10,000 00 8,590 63 1,409 37 13,040 31 Street Asset Purchase 00 15,000 00 14,812 50 187 50 00 Street Improvement 50,000 00 5,000 00 00 5,000 00 85,969 89 Street Maintenance 40,000 00 30,000 00 26,922 17 3,077 83 27,149 57 Tmck Equipment - Oil and Gas 15,000 00 28,000 00 32,153 42 (4,153 42) 22,209 26 Tmck Equipment Repairs 20,000 00 22,000 00 25,112 62 (3,112 62) 35,650 02 Utilities 62,000 00 64,000 00 64,060 18 (60 18) 63,223 50 Miscellaneous 6.000 00 14,000 00 16,266 35 (2,266 35) 14,635 89 Total Street Repair $ 471,715 00 $ 481,515 00 $ 485,547 87 $ (4,032 87) S_ 530,852 81 MAINTENANCE DEPARTMENT Tmck Expenditures $ 2,000 00 $ 2,500 00 S 2,569 41 $ (69 41) $ 1,759 88 Shop Supplies 8,000 00 10,000 00 11,975 89 (1,975 89) 12,327 06 Total Maintenance Department $ 10,000 00 $ 12,500 00 $ 14.545 30 $ (2,045 30) $~ 14,086 94 TOTAL EXPENDITURES $ 713,835 00 $ 776,835 00 $ 791,944 68 5_ (15,109 68) $ 779,026 60 EXCESS OF REVENUE OVER (UNDER) EXPENDITURES $ 244.465 00 $ 182,465 00 $ 162,280 03 s_ (20,184 97) ^ 169,667 46 -37- TOWN OF FARMERVILLE STATEMENT B FARMERVILLE, LOUISIANA CONTINUED SPECIAL REVENUES - SALES TAX FUND SCHEDULES OF REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET (GAAP) AND ACTUAL FOR THE FISCAL YEARS ENDED JUNE 30. 2011 AND 2010 2011 ORIGINAL AMENDED (BUDGET) 2010 BUDGET BUDGET ACTUAL VARIANCE ACTUAL OTHER FINANCING SOURCES (USES) Operating Transfers In (Out) Debt Service Fund - Sewer $ (100,000 00) $ (50,000 00) $ 00 $ 50,000 00 $ (108,000 00) Transfer to LCDBG Capital Projects 00 00 (200 00) (200 00) 00 Transfer to Glory Road Constmction (3,000 00) (1,000 00) (3,280 00) (2,280 00) 00 Transfer to Other Funds - Garbage (50,000 00) (50,000 00) (50,000 00) 00 00 Transfer Debt Service - TIF Bonds (5,000 00) (40,000 00) (38,306 25) 1,693 75 00 Transfer Debt Service - USDA Loan 00 (5,200 00) (5,216 00) (16 00) 00 Transfer to Garbage - Asset Purchase 00 00 00 00 (46,000 00) Transfer to Sewer (25,000 00) 00 00 00 (15,000 00) Total Other Financing Sources (Uses) $ (183,000 00) $ (146,200 00) $ (97,002 25) S 49,197 75 $ (169,000 00) EXCESS OF REVENUE AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER (USES) BEFORE EXTRAORDINARY ITEM 61,465 00 $ 36,265 00 65,277 78 $ 29,012 78 $ 667 46 FUND BALANCES - JULY 1 777,450 48 777,450 48 777,450 48 776,783 02 FUND BALANCES - JUNE 30 838,915 48 $ 813.715 48 $ 842.728 26 $ 777.450 48 The notes are an integral part of these statements See accompanymg notes and auditors' report -38- TOWN OF FARMERVILLE STATEMENT B-1 FARMERVILLE, LOUISIANA SPECIAL REVENUES - 2002 SALES TAX FUND - RECREATION SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET (GAAP) AND ACTUAL FOR THE FISCAL YEARS ENDED JUNE 30, 2011 AND 2010 2011 ORIGINAL AMENDED (BUDGET) 2010 BUDGET BUDGET ACTUAL VARIANCE ACTUAL REVENUE Sales Taxes $ 465,000 00 $ 457,000 00 :S 457,096 63 $ 96 63 $ 459,984 29 Concession Sales 1,000 00 500 00 379 59 (120 41) 947 97 Membership Dues 7,500 00 7,200 00 6,985 00 (215 00) 7,646 00 Building Rental 10,000 00 7,000 00 6,540 00 (460 00) 8,700 00 Interest 20,000 00 12,000 00 3,658 43 (8,341 57) 11,21875 Miscellaneous Income 00 00 1,188 82 1,188 82 1,403 75 Special Programs 4,000 00 10,000 00 9,699 00 (301 00) 5,174 00 Total Revenues $ 507,500 00 $ 493,700 00 :S 485,547 47 $ (8.152 53) $ 495,074 76 EXPENDITURES Salanes $ 93,000 00 $ 93,000 00 :S 95,962 25 $ (2,962 25) $ 78,420 32 Employee Benefits Expenditures Medicare Tax 1,350 00 1,350 00 1,35106 (106) 1,084 61 Municipal Retirement 12,500 00 12,500 00 12,846 05 (346 05) 7,781 97 PICA 5,700 00 5,700 00 5,777 41 (77 41) 4,637 51 Unemployment 210 00 210 00 188 79 21 21 149 87 Hospital Insurance 17,000 00 17,300 00 17,304 00 (4 00) 11,896 50 Dental 1,200 00 1,200 00 1,225 44 (25 44) 1,06142 Workers Compensation Insurance 4,200 00 5,200 00 5,659 00 (459 00) 4,053 05 Employee Drug Test 500 00 500 00 11175 388 25 00 Uniforms 1,200 00 1,200 00 2,632 61 (1,432 61) 1,488 67 Asset Purchases 20,000 00 50,000 00 50,614 69 (614 69) 50,944 63 Activity Expense 10,000 00 16,000 00 15,08165 918 35 3,652 57 Administrative 10,000 00 10,000 00 10,000 00 00 10,000 00 Advertising and Filing 1,000 00 2,000 00 1,945 00 55 00 2,109 82 Auditing 1,500 00 3,000 00 3,000 00 00 1,500 00 Ball Park Expense 00 2,000 00 923 62 1,076 38 340 89 Computer Expense 2,000 00 2,500 00 2,521 15 (21 15) 3,849 90 Liability Insurance 20,000 00 8,000 00 8,792 26 (792 26) 17,040 52 Miscellaneous 1,000 00 3,000 00 4,348 02 (1,348 02) 5,501 33 Office Supplies 1,000 00 2,000 00 1.763 27 236 73 543 50 Repairs and Maintenance 10,000 00 15,000 00 16,363 78 (1,363 78) 75,990 56 Sales Tax Collection Fee 4,650 00 5,650 00 5,796 62 (146 62) 4,626 96 Supphes 3,000 00 1,000 00 1,107 95 (107 95) 3,157 64 Telephone 5,000 00 5,000 00 4,592 58 407 42 4,529 84 Utilities 20,000 00 20,000 00 20,746 64 (746 64) 21,525 71 Vehicle Expense 2,000 00 2,000 00 2,257 26 (257 26) 2,925 12 Total Expenditures $ 248,010 00 $ 285,310 00 $ 292.912 85 $ (7,602 85) $ 318,81291 CONCESSION EXPENDITURES $ 500 00 $ 500 00 $ 269 52 $ 230 48 $_ 677 65 TOTAL EXPENDITURES $ 248,510 00 $ 285,810 00 $ 293,182 37 $ (7,372 37) $_ 319,490 56 EXCESS OF REVENUE OVER (UNDER) EXPENDITURES $ 258.990 00 $ 207,890 00 $ 192,365 10 $ (15,524 90) s_ 175,584 20 OTHER FINANCING SOURCES (USES) Operatmg Transfer In (Out) Debt Service Fund (220,000 00) $ (220,000 00) $ (236,125 44) $ (16,125 44) $ (216,450 00) Total Other Financing Sources (Uses) (220.000 00) $ (220,000 00) $ (236,125 44) $ (16,125 44) $ (216,450 00) EXCESS OF REVENUE AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER (USES) BEFORE EXTRAORDINARY ITEM 38,990 00 $ (12,110 00) $ (43,760 34) $ (31.650 34) $ (40,865 80) FUND BALANCES - JULY I 538,901 84 538,901 84 538,901 84 579,767 64 FUND BALANCES - JUNE 30 577.891 84 $ 526.791 84 $ 495,141 50 $ 538.901 84 The notes are an integral part of these statements See accompanying notes and auditors' report -39- TOWN OF FARMERVILLE STATEMENT C FARMERVILLE. LOUISIANA ENTERPRISE FUND STATEMENTS OF REVENUES. EXPENSES. AND CHANGES IN RETAINED EARNINGS - BUDGET (GAAP) AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2011 WATER SEWER ORIGINAL AMENDED ORIGINAL AMENDED OPERATING REVENUES BUDGET BUDGET ACTUAL VARIANCE BUDGET BUDGET ACTUAL VARIANCE Charges for Service Water Sales $ 850,000 00 $ 1,015,000 00 $ 1,022,150 53 $ 7,150 53 $ 00 $ 00 $ 00 $ 00 Less Bad Debts 00 00 (11,125 83) (11,125 83) 00 00 00 00 Penalties 45,000 00 45,000 00 47,016 45 2,016 45 00 00 00 00 Sewer Sales 00 00 00 00 340,000 00 355,000 00 347,422 48 (7,577 52) Tapping Fees 5,000 00 4,000 00 3,940 21 (59 79) 1,500 00 1,500 00 500 00 (1,000 00) Miscellaneous 00 1 000 00 308 08 (691 92) 00 00 00 00 Total Operating Revenues 900,000 00 $ 1,065,000 00 $ 1,062.289 44 (2,710 56) $ 341,500 00 $ 356.500 00 $ 347.922 48 $_ (8.577 52) OPERATING EXPENSES Cost of Sales and Service 437,000 00 s 382,000 00 $ 358,720 86 $ 23.279 14 $ 235,200 00 $ 376,000 00 $ 202,612 97 $ 173,387 03 Administration 450,970 00 500,420 00 502,434 93 (2,014 93) 106,490 00 120,230 00 119,023 77 1,206 23 Depreciation 00 25,000 00 138.049 !8 (113.049 18) 00 00 130.569 87 (130,569 87) Total Operatmg Expenses 887,970 00 907,420 00 999.204 97 (91 784 97) $ 341,690 00 $ 496,230 00 $ 452,206 61 $ 44,023 39 OPERATING INCOME (LOSS) 12,030 00 157,580 00 63,084 47 (94.495 53) $_ (190 00) $ (139,730 00) $ (104,284 13) $ 35,445 87 NONOPERATING REVENUE (EXPENSES) Interest Income Regular 2,000 00 $ 4,000 00 $ 9,808 59 $ 5,808 59 $ 12,000 00 $ 4,500 00 S 7,635 15 $ 3,135 15 Grant Income - Capital Projects Funds 00 35,000 00 144,900 00 109,900 00 00 10,000 00 10,744 00 744 00 Other Income 00 5,700 00 6.322 98 622 98 00 500 00 (433 33) (933 33) Interest Expense 00 00 00 00 00 00 (20,295 00) (20,295 00) Total Nonoperating Revenue (Expenses) 2,000 00 44,700 00 161,031 57 116,331 57 12,000 00 15,000 00 (2,349 18) $ (17.349 18) NET INCOME (LOSS) BEFORE OPERATING TRANSFERS 14.030 00 $ 202.280 00 $ 224.116 04 $ 21.836 04 $ 11.810 00 $ (124,730 00) $ (106.633 31) $_ 18.096 69 (TRANSFER TO)/FROM OTHER FUNDS General Fund/Sewer (50,000 00) (50,000 00) 25,000 00 00 00 $ 00 Hwy 33 South Sewer Grant 00 00 00 62,000 00 00 (62,000 00) Transfer from Sales Tax/Debt Service 00 00 (25,000 00) 00 00 00 Total (Transfer To)/From Other Funds 00 (50,000 00) $_ 00 (50,000 00) $_ 00 62.000 00 00 $ (62.000 00) NET INCOME (LOSS) 14,030 00 $ 152,280 00 $ 224,116 04 71,836 04 $ 11,81000 (62,730 00) $ (106.633 31) $ (43.903 31) RETAINED EARNINGS - Begmmng of Year 4,040.684 54 4,040,684 54 4,040,684 54 3,802,643 12 3,802.643 12 3,802,643 12 RETAINED EARNINGS - End of Year $ 4.054.714 54 $ 4.192.964 54 $ 4.264.800 58 $ 3.814.453 12 $ 3,739,913 12 $ 3.696.009 81 The notes are an integral part of these statements See accompanying notes and auditors' report -40- TOWN OF FARMERVILLE STATEMENT C-i FARMERVILLE, LOUISIANA ENTERPRISE FUND SCHEDULE OF DETAIL OF EXPENSES, BUDGET (GAAP) AND ACTUAL FOR THE FISCAL YEAR ENDED JUNE 30, 2011 WATER SEWER ORIGINAL AMENDED ORIGINAL AMENDED COST OF SALES AND SERVICES BUDGET BUDGET ACTUAL VAJUANCE BUDGET BUDGET ACTUAL VARLWCE WATER AND SEWER SUPPLIES AND MATERIALS Chemicals $ 00 % 00 $ 00 $ 00 $ 2,000 00 $ 2,000 00 $ 2,224 61 $ (224 61) Chemical Test 00 00 00 00 1,200 00 7,000 00 7,533 00 (533 00) Chlonne 20,000 00 40,000 00 39,759 79 240 21 7,000 00 6,000 00 5,905 00 95 00 Chlonne Equipment Repair 4,000 00 4,000 00 3,923 98 76 02 00 00 00 00 Grant Expenses 00 00 2,100 00 (2,100 00) 5.000 00 65,000 00 00 65,000 00 Asset Purchases 00 00 00 00 00 35,000 00 00 35.000 00 Hwy 33 South Sewer 00 00 00 00 00 20,000 00 00 20,000 00 Sub Contractor Services 00 00 00 00 6,000 00 8,000 00 8,650 00 (650 00) Poultry Plant Water Well Repairs 50,000 00 25,000 00 24,868 57 13143 00 00 00 00 Major Repairs and Additions 100,000 00 40,000 00 31.044 51 8,955 49 100,000 00 80,000 00 25,254 90 54.745 10 Major Wei! and Tank Repairs 50,000 00 20,000 00 19,264 74 735 26 00 00 00 00 Meter Replacement 5,000 00 15,000 00 10,091 74 4,908 26 00 00 00 00 Pump Repair 00 00 00 00 30.000 00 50,000 00 48,957 57 1,042 43 Safe Drmkmg Program 5,000 00 5,000 00 11,522 40 (6,522 40) 00 00 00 00 Supplies 40,000 00 55,000 00 47,676 13 7,323 87 6,000 00 11,000 00 11,733 24 (733 24) Treatment Plant Repairs 00 00 00 00 30,000 00 42,000 00 42,668 28 (668 28) Reserved Account 18,000 00 18,000 00 00 18,000 00 00 00 00 00 Utilities 145,000 00 160,000 00 168,469 00 (8.469 00) 48,000 00 50,000 00 49,686 37 313 63 Totals $ 437,000 00 $ 382,000 00 F 358,720 86 $ 23,279 14 $ 235,200 00 $ 376,000 00 $ 202,612 97 $ 173.387 03 ADMINISTRATIVE Advertising and Filing $ 00 $ 500 00 $ 346 45 $ 153 55 $ 00 $ 00 $ 00 $ 00 Administrative Fee 30,000 00 30,000 00 30,000 00 00 00 00 450 00 (450 00) Auditing 5,500 00 6,000 00 6,000 00 00 1,500 00 1,000 00 1,000 00 00 IBM 4,500 00 4,500 00 4,811 08 (311 08) 00 00 00 00 Bank Charges 00 00 59 47 (59 47) 00 00 00 00 Computer Expense 15,000 00 15,000 00 14,661 83 338 17 00 00 00 00 Dues 500 00 500 00 62100 (121 00) 00 00 00 00 Insurance - Liability 20,000 00 15,000 00 14,294 75 705 25 00 5,500 00 2,265 00 3,235 00 Miscellaneous 500 00 6,500 00 6,688 28 (188 28) 300 00 300 00 13197 168 03 Office Supplies 5,000 00 5,000 00 5,034 69 (34 69) 00 00 00 00 Postage 15,000 00 15,000 00 14,909 96 90 04 00 00 00 00 Radio Repairs 00 1,500 00 1,984 70 (484 70) 00 00 00 00 Telephone 8,000 00 10,000 00 9,550 12 449 88 500 00 500 00 645 13 (145 13) Travel and Training 1,500 00 2,000 00 2,023 12 (23 12) 250 00 00 214 69 (214 69) Water Supply Initiative Program 6,000 00 13,500 00 13.146 00 354 00 00 250 00 00 250 00 Subtotal $ 111,500 00 $ 125,000 00 s_ 124,13145 $ 868 55 $ 2.550 00 $ 7,550 00 $ 4,706 79 $ 2,843 21 Truck & Equipment Expense Equipment - Gas and Oil $ 1,000 00 $ 1,000 00 $ 344 29 % 655 71 $ 00 $ 00 $ 00 $ 00 Equipment Repairs 3,000 00 17,000 00 16,394 45 605 55 00 3,500 00 3,593 02 (93 02) Truck - Gas and Oil 12,000 00 17,000 00 18,326 96 (1,326 96) 5,200 00 5,500 00 6,041 38 (541 38) Truck Repairs 5,000 00 12.000 00 15.457 29 (3,457 29) 2.000 00 1,500 00 1,34147 158 53 Total Truck & Equipment Expenses l_ 21,000 00 s_ 47,000 00 l_ 50.522 99 $ (3,522 99) $ 7.200 00 $ 10.500 00 s_ 10.975 87 $ (475 87) Cost of Labor Salanes $ 226,500 00 S 232,000 00 $ 232.653 41 $ (653 4!) $ 70,000 00 $ 74,000 00 $ 74,807 59 $ (807 59) Employee Benefit Expense Retirement Expense 28.850 00 30,000 00 30,117 24 (117 24) 8.250 00 8,750 00 8,800 22 (50 22) Medicare Tax 3,300 00 3,300 00 3,302 42 (2 45) 1,030 00 1.070 00 1,067 62 2 38 FlC A CoatnbuUon 14,000 QQ 14,000 00 14,ni U {\1\ U) 4,200 00 4,600 00 4,56S 21 VKll Unemployment Tax 520 00 520 00 462 51 57 49 160 00 160 00 148 34 11 66 Hospital Insurance 30,000 00 30,000 00 28,529 42 1,470 58 8,600 00 8,600 00 8,652 00 (52 00) Dental 2,500 00 2,500 00 2.093 34 406 66 600 00 600 00 612 72 (12 72) Worker's Compensation Insurance 10,000 00 10,800 00 11,91800 (1,11800) 3,500 00 3.500 00 3,81100 (311 00) Employee Drug Testing 300 00 300 00 165 00 135 00 100 00 100 00 55 00 45 00 Uniforms 2,500 00 5,000 00 4.368 04 63196 500 00 800 00 82139 (21 39) Total Cost Labor iZ 318,470 00 H 328.420 00 il 327,780 49 $ 639 48 EI 96,940 00 EI 102,180 00 EI 103,341 11 $ (1.161 11) otal Administrative $_ 450.970 00 l_ 500.420 00 1_ 502,434 93 $ (2.014 96) i_ 106.690 00 i_ 120.230 00 i_ 119.023 77 L= 1,206 23 The notes are an integral part of these statements See accompanying notes and auditors' report -41- OTHER SUPPLEMENTAL INFORMATION( PART III) SPECIAL REVENUE FUNDS Special revenue funds are used to account for special revenues that are legally restricted lo expenditures for particular purposes SALES TAX FUND Proceeds ofthe 1 % sales tax are to be used for costs incurred in operating a Sanitary Landfill Site for Garbage and Waste Disposal, for Street Repair and Maintenance, and for Sewer Repair and Maintenance FARMERVILLE VOLUNTEER FIRE DEPARTMENT. INC The volunteer fire department receives funds from fund raisers, drink sales and from the State of Louisiana 2% rebate funds Their expenses are purchases of drinks, miscellaneous equipment, fund raiser and volunteer firemen benefits Most funds are accumulated to be used for purchase of fire department equipment FARMERVILLE AREA FIRE PROTECTION DISTRICT OF UNION PARISH The Fire District receives proceeds of advalorem taxes from the Sheriffs Department Five percent of collections are retained by the fire distnct The remaining funds are transferred to the Town of Farmerville for use in operating expenses, capital improvements and equipment purchases 2002 SALES TAX FUND On October 20, 2001 an additional V^ of 1% sales and use tax was approved This tax was approved for construction of a recreation center and street improvements Bonds were sold in the amount of $2,900,000 for construction of the recreation center and improvements ofthe streets These projects were started June 30, 2002, and not completed until after June 30, 2003 2011 1/2 SALES TAX FOR POLICE On April 30,2011 a 1/2 of 1% sales tax was passed for the operations ofthe Farmerville Police Department A separate fund will account for the dedicated fiinds CAPITAL PROJECTS FUND Capital projects funds should be established when capital acquisition or construction is financed, in whole or in part, through bonds, intergovemmental revenues, majorprivate donations or special assessments In addition, capital projects funds can be useful when capital acquisition or construction is financed by several funds or over several accounting periods The capital projects fund is for the construction of streets and sewer TOWN OF FARMERVILLE SCHEDULE A FARMERVILLE, LOUISIANA SPECIAL REVENUE FUNDS COMBINING BALANCE SHEETS JUNE 30, 2011 AND 2010 FARMERVILLE FARMERVILLE VOLUNTEER AREA FIRE RECREATION FIRE PROTECTION TOTALS ASSETS SALES TAX 1SALE S TAX DEPARTMENT 1:)ISTRIC T 2011 2010 Cash $ 220,018 21 $ 150,918 25 $ 28,525 82 $ 6,765 32 $ 406,227 60 $ 284,403 48 Cash - Certificate of Deposits 552,163 04 329,185 77 45,599 04 00 926,947 85 1,001,394 37 Receivables Sales Taxes 78,835 82 39,417 89 00 00 118,253 71 119,111 76 Other Funds 00 8,083 81 00 00 8,083 81 8,083 81 Other 00 00 00 00 00 389 89 Deposit - Workers Compensation 6,119 70 00 00 00 6,119 70 6,119 70 Prepaid Insurance 12,317 00 5,016 00 00 00 17,333 00 21,31800 Restncted Assets Certificate of Deposits 45,590 15 00 00 00 45,590 15 38,099 97 TOTAL ASSETS 1= 915.043 92 1= 532,621 72 i= 74,124 86 $ 6.765 32 L 1.528.555 82 $ 1,478,920 98 LIABILITIES AND EQUITY LIABILITIES Vouchers Payables $ 40,652 65 $ 29,172 36 $ 00 $ 00 s 69,825 01 $ 70,819 13 Accrued Liabilities 25,588 01 8,307 86 00 00 33,895 87 26,532 00 Due to Other Funds 6,075 00 00 00 00 6,075 00 00 TOTAL LIABILITIES 1_ 72,315 66 $_ 37,480 22 i_ 00 s_ 00 L 109,795 88 i. 97,351 13 EQUITY Fund Balance Reserved for Capital Projects $ 45,590 15 $ 00 $ 00 $ 00 $ 45,590 15 $ 38,099 97 Unreserved 797,138 11 495.141 50 74,124 86 6,765 32 1,373,169 79 1,343,469 88 TOTAL EQUITY 1_ 842,728 26 495,141 50 $ 74,124 86 6,765 32 1,418,759 94 1,381,569 85 TOTAL LIABILITIES AND EOUITY 1_ 915.043 92 532,621 72 1^ 74.124 86 6.765 32 1.528.555 82 1,478,920 98 See auditors' report -42- TOWN OF FARMERVILLE SCHEDULE B FARMERVILLE, LOUISIANA SPECIAL REVENUE FUNDS COMBINING STATEMENTS OF REVENUE EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEARS ENDED JUNE 30, 2011 AND 2010 FARMERVILLE FARMERVILLE VOLUNTEER AREA FIRE RECREATION FIRE PROTECTION TOTALS SALES TAX SALES TAX DEPARTMENT DISTRICT 2011 2010 REVENUES Taxes Sales Taxes $ 914,602 12 $ 457,096 63 $ 00 $ 00 $ 1,371,698 75 S 1,381,700 95 Advalorem Taxes 00 00 00 246,514 09 246,514 09 276,009 63 Miscellaneous Memberships 00 6,985 00 00 00 6,985 00 7,646 00 Youth Programs 00 9,699 00 00 00 9,699 00 5,174 00 Buildmg Rental & Fees 00 6,540 00 00 00 6,540 00 8,700 00 Concessions 00 379 59 2,762 96 00 3,142 55 2,079 37 Interest Eamed 21,752 65 3,658 43 367 74 3162 25,810 44 31,958 03 Claibome Electric 00 00 1,206 89 00 1,206 89 1,479 25 Others 149 94 1,188 82 7,170 74 00 8,509 50 10,281 80 Street Cuttmg Fees 12,570 00 00 00 00 12,570 00 6,285 00 Sales of Assets 5,150 00 00 00 00 5,150 00 00 TOTAL REVENUES 954,224 71 $ 485,547 47 $ 11,508 33 $ 246.545 71 $ 1.697,826 22 $ 1,731,314 03 EXPENDITURES General Govemment 289,916 81 $ 292,912 85 $ 10,484 04 51 3: 593,633 21 $ 586,113 01 Pnson Labor and Expenditures 1,934 70 00 00 00 1,934 70 1,880 77 Street Repair 485,547 87 00 00 00 485,547 87 530,852 81 Maintenance Department 14,545 30 00 00 00 14,545 30 14,932 98 Concession Expense 00 269 52 1,729 90 00 1,999 42 677 65 TOTAL EXPENDITURES 791,944 68 293,182 37 $_ 12,213 94 $ 31951 $ 1.097,660 50 $ 1,134,457 22 EXCESS OF REVENUE OVER (UNDER) EXPENDITURES $ 162,280 03 192,365 10 $_ (705 6 n $_ 246,226 20 S. 600,165 72 $ 596,856 81 OTHER FINANCING SOURCES (USES) Operatmg Transfers In (Out) Bond Fund Transfer 00 (236,125 44) 00 $ 00 (236,125 44) (324,450 00) Transfer to Debt Service (43,522 25) 00 00 00 (43,522 25) 00 Transfer of Grant To General Fund 00 00 16,666 15 (246,514 09) (229,847 94) (276,009 63) Transfer To/From Other Funds 00 00 00 00 00 (15,000 00) Transfer To Capital Projects Funds (3,480 00) 00 00 00 (3,480 00) 00 Transfer To Other Funds - Garbage (50,000 00) 00 00 00 (50,000 00) (46,000 00) Total Other Financmg Sources (Uses) $ (97,002 25) $ (236,125 44) $_ 16,666 15 (246.514 09) $ (562,975 63) $ (661.459 63) EXCESS (DEFICIENCY) OF REVENUES AND OTHER USES SOURCES OVER (UNDER) EXPENDITURES AND OTHER (USES) $ 65,277 78 $ (43,760 34) $ 15,960 54 (287 89) $ 37,190 09 $ (64,602 82) FUND BALANCES - JULY 1 777,450 48 538,901 84 58,164 32 7,053 21 1,381,569 85 1.446,172 67 FUND BALANCES - JUNE 30 842.728 26 $ 495,141 50 74,124 86 6.765 32 $ 1.418.759 94 $ 1.381.569 85 See auditor's report -43- TOWN OF FARMERVILLE SCHEDULE C FARMERVILLE. LOUISIANA CAPITAL PROJECTS FUND BALANCE SHEETS JUNE 30. 2011 AND 2010 HIGHWAY INFRASTRUCTURE UNIONVILLE USDA IMPROVEMENTS LCDBG GRANT FIRE STATION EQUIPMENT GLORY ROAD DOZIER CREEK 2011 2010 ASSETS Cash in Banks $ 40 029 92 $ 00 $ 00 $ 7,212 38 $ 441985 53 $ 62 71 i 489 290 54 $ 481 046 65 Receivable - State of Louisiana 00 00 18,153 00 00 00 18 153 48 00 Receivable - CDBG Grant 00 3 122 40 00 00 00 3 122 40 00 Receivable - USDA 00 00 154,880 00 00 00 154,880 00 00 TOTAL ASSETS $ 40.029 92 S 3,122 40 S 18,153 48 S 162.092 38 S 441.985 53 S 62 71 S 665.446 42 $ 481.046 65 LIABILITIES AND FUND EQUITY LIABILITIES Accounts Estimate and Retainage Payable $ _00 $ 3,122 40 $ 18.153 48 $ 134,552 66 S 2,657 20 $_ 00 $ 158,485 74 S EQUITY AND OTHER CREDITS Reserve for Capital Improvements $ 40,029 92 S_ 00 S 00 S 27,539 72 S 439,328 33 S 62 71 S 506,960 68 $ 481.046 65 TOTAL LIABILITIES AND FUND EQUITY $ 40.029 92 S 3.122 40 S 18.153 48 S 162.092 38 S 441.985 53 S_ 62 71 S 665 446 42 S 481.046 65 Sec auditor s report TOWN OF FARMERVILLE SCHEDULE D FARMERVILLE^ LOUISIANA CAPfTAL PROJECTS FUND - NON-MAJOR GOVERNMENTAL FUNDS STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE FISCAL YEARS ENDED JUNE 30, 2011 AND 2010 HIGHWAY INFRASTRUCTURE UNIONVILLE USDA IMPROVEMENTS LCDBG GRANT FIRE STATION EQUIPMENT GLORY ROAD DOZIER CREEK 2011 2010 REVENUES - State of Louisiana Facility Planning & Control $ 00 S 00 s 49,350 00 s 00 S 00 S 10,744 00 $ 60,094 00 $ 00 Miscellaneous State Aid 40 000 00 00 00 00 00 00 40 000 00 00 CDBG/LCDBG Funds 00 3,122 40 00 00 00 00 3,122 40 00 Interest Income 29 92 00 00 00 262 38 00 292 30 00 USDA Loan 00 00 00 269.100 00 00 00 269 100 00 00 Bonds 00 00 00 00 00 00 00 500,000 00 Total Revenues s_ 40,029 92 L 3,122 40 L 49,350 00 L 269.100 00 S 262 38 l_ 10,744 00 S 372,608 70 $ 500,000 00 EXPENDITURES Sewer Improvements s 00 $ 00 $ 00 $ 00 $ 00 $ 10,744 00 $ 10,744 00 $ 67 50 Glory Road Construction 00 00 00 00 41,912 00 00 41,912 00 27 022 05 Cost of Equipment 00 3,122 40 00 221,748 78 00 00 224,871 18 00 Building 00 00 55,768 02 00 00 00 55,768 02 00 Legal Fees/Other 00 00 00 20,011 50 00 5 99 20 017 49 00 Total Expenditures 5_ 00 5_ 3 122 40 L 55,768 02 L 241,760 28 $ 41 91200 L_ 10 749 99 $ 353 312 69 S 27,089 55 OTHER FINANCING SOURCES (USES) Operating Transfer In Town of Farmerville s 00 S 00 s 6418 02 s 200 00 $ 00 $ 00 $ 6 618 02 S 00 Sales Tax Fund 00 00 00 00 00 00 00 8,000 00 Total Other Financmg Sources (Uses) $_ 00 L 00 L 6.418 02 s_ 200 00 s 00 s_ 00 s 6.618 02 s 8 000 00 EXCESS OF REVENUES AND OTHER SOURCES OVER (UNDER) EXPENDITURES AND OTHER (USES) s 40,029 92 s 00 s 00 s 27,539 72 $ (41.649 62) s (5 99) $ 25 914 03 $ 480 910 45 FUND BALANCE - JULY 1 _ 00 _ 00 _ 00 00 480,977 95 _ 68 70 _ 481 046 65 136 20 FUND BALANCE - JUNE 30 1_ 40,029 92 l_ h 00 L 27.539 72 s 439,328 33 s_ 62 71 ^ 506.960 68 $ 481.046 65 See auditor s report -45- TOWN OF FARMERVILLE SCHEDULE E FARMERVILLE, LOUISIANA DEBT SERVICE FUNDS c:OMBININ G BALANCE SHEETS JUNE30. 2011 AND 2010 2002 $500,000 LEASE TOTALS SALES TAX USDA BONDS BONDS PURCHASE 2011 2010 ASSETS Investments, at cost of Amortized Cost $ 404,667 18 $ 3,212 17 $ 00 $ 00 $ 407,879 35 $ 384,540 14 Receivable - Water Department 00 13,900 00 00 00 13,900 00 00 TOTAL ASSETS $ 404.667 18 S 17,112 17 $ 00 L 00 421.779 35 $ 384.540 14 LIABILITIES AND EQUITY LIABILITIES 00 $ 00 $ 00 00 $ 00 00 EOUITY Reserved Designated for Debt Service 404,667 18 17,112 17 $ 00 $ 00 $ 421,779 35 $ 384.540 14 Total Equity 404,667 18 17.112 17 $ 00 $ 00 421,779 35 $ 384,540 14 TOTAL LIABILITIES AND EQUITY 404.667 18 i 17.112 17 $ 00 1— 00 $ 421.779 35 $ 384.540 14 See auditor's report -46- TOWN OF FARMERVILLE SCHEDULE F FARMERVILLE. LOUISIANA DEBT SERVICE FUNDS COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE FISCAL YEARS ENDED JUNE 30, 2011 AND 2010 2002 $500,000 LEASE TOTALS SALES TAX _USD A BONDS BONDS PURCHASE 2011 2010 REVENUES Interest Eamed $ 14,069 20 $_ 4 17 $ 00 14,073 37 13,358 04 TOTAL REVENUES $ 14.069 20 $_ 4 17$ 00 $ 00 $ 14,073 37 $ 13,358 04 EXPENDITURES Debt Service Principal Retirement $ 130,000 00 $ 1,740 31 $ 15,000 00 $ 9,848 77 $ 156,589 08 $ 120,000 00 Interest and Fiscal Charges 100.067 60 267 69 24.750 00 3,199 06 128.284 35 105,131 30 TOTAL EXPENDITURES $ 230,067 60 $ 2.008 00 $ 39.750 00 $ 13,047 83 $ 284.873 43 $ 225,13130 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES $ (215,998 40) $ (2,003 83) $ (39,750 00) $ (13,047 83) $ (270,800 06) $ (211,773 26) OTHER FINANCING SOURCES (USES) Operating Transfer In/Out Water Department $ 00 $ 13,900 00 $ 00 $ 00 $ 13,900 00 $ 00 2002 Sales Tax 236,125 44 _ 5,216 00 39,750 00 13,047 83 294.139 27 216,000 00 Total Other Financing Sources(Uses) $ 236,125 44 $ 19.116 00 $ 39,750 00 $ 13.047 83 $ 308,039 27 $ 216,000 00 EXCESS (DEFICIENCY) OF REVENUE AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES AND OTHER FINANCING SOURCES (USES) $ 20,127 04 $ 17,112 17 $ 00 $ 00 $ 37,239 21 $ 4,226 74 FUND BALANCES - UNRESERVED - JULYl 384,540 14 00 00 _00 384.540 14 380,313 40 FUND BALANCES - UNRESERVED JUNE 30 $ 404.667 18 $ 17.112 17 £ 00 i 00 $ 421.779 35 $ 384.540 14 See auditor's report •47- TOWN OF FARMERVILLE SCHEDULE G FARMERVILLE. LOUISIANA SCHEDULE OF INSURANCE IN FORCE JUNE 30, 2011 AND 2010 POLICY COST PREPAID INSURANCE COMPANY NUMBER DATES TYPE COVERAGE 2011 2010 2011 2010 Western Secunty 0601-13355742 08/22/10 - 08/22/11 Mike Allen $ 25,000 00 $ 100 00 $ 100 00 LA Supervisor of Public Service Public Employee Bond 0601-68716392 04/09/11 - 04/09/12 Collection Clerk 10,000 00 100 00 100 00 0601-18306710 09/01/10 -09/01/1! Lillie Gunlcr 10,000 00 100 00 100 00 0601-18295297 07/03/11 -07/03/12 Theon Butler 10,000 00 100 00 100 00 0601-18297290 07/03/11 -07/03/12 Employee Blanket Bond 10,000 00 161 00 161 00 0601-18295749 07/18/11 -07/18/12 City Clerk & Tax Collector - Gay Nell Mcintosh 300,000 00 1.750 00 I 750 00 0601-15243804 01/01/11 -01/01/12 Mayor Stein Baughman 100,000 00 350 00 350 00 0601-14552375N 01/01/11. -01/01/12 Council - Jerry Taylor 00 892 50 100 00 060I-I4552362N 01/01/11 .-01/01/1 2 00 00 100 00 Charter Oak Fire Ins Co GP09316086 05/01/11 •-05/01/1 2 Comprehensive General Liability General Aggregate Limit $ 2,000,000 00 $ 56 070 00 $ 46,489 30 Products - Completed Operations 2.000,000 00 Personal & Advertising Injury Limit 1,000,000 00 Each Occurrence Limit 1,000,000 00 Damages to Premises Rented 100,000 00 Employee Benefits Liability Aggregate Limit 3,000,000 00 Each Employee Limit 1,000,000 00 Law Enforcement Liability Aggregate Limit 2,000,000 00 Each Wrongful Act Limit 1,000,000 00 Public Entity Management Limit Aggregate Limit 2,000,000 00 Each Wrongful Act Limit 1,000,000 00 Public Entity Employment Related Aggregate Limit 1.000,000 00 Each Wrongful Employment Practice 1,000,000 00 Travelers BA 1A10262I2 05/01/11 .-05/01/1 2 Business Auto 11 PUB Liability $ 1,000,000 00 $ 39,555 00 $ 47,229 00 National Fire Insurance MNP 271360566 01/01/11 -•01/01/12 Business Pro Policy Commercial Property - Buildmg $ 3,960,000 00 $ 4,567 00 $ 00 Fire & Police Station 600,000 00 Shop/Storage 20,000 00 Water Wells (5) 125,000 00 Elevated Tank 300,000 00 Sewer Treatment Plant 45,000 00 Fire Station # 2 200,000 00 Fire Station # 3 100,000 00 Fire Station # 4 100,000 00 Metal Building- 305 S Washington 10,000 00 Main Office - 407 South Main 500,000 00 Recreation Center 1,275,000 00 Water Treatment Plan 585,000 00 $ 3,860,000 00 Commercial Cnme 50,000 00 98 00 99 00 Inland Marine 2,500 00 552 00 556 00 Terrorism Coverage 00 47 00 46 00 00 00 701 00 Equipment Breakdown 25,000 00 1,142 00 00 Arthur J Gallagher Risk 132293-b 01/01/12-01/01/12 Workers Compensation 00 89,514 00 68,550 00 Management Bodily Injury By Accident 1,000,000 00 Bodily Injury By Disease 1,000.000 00 TOTALS $ 195.098 50 $ 166.531 30 $ 52.503 00 $ 52,021 00 See auditor's report -48- TOWN OF FARMERVILLE SCHEDULE H FARMERVILLE, LOUISIANA CASH ACCOUNTS AND INVESTMENTS JUNE 30, 2011 AND 2010 INTEREST GOVERNMENTAL BUSINESS-TYPE TOTAL FUNDS RATES ACTIVITIES ACTIVITIES 2011 2010 GENERAL FUND Checking General Fund 25% $ 63,95121 $ 00 $ 63,95121 $ 102,746 33 Property Tax Account - 12,682 41 00 12,682 41 26,875 44 Payroll Account - 1,973 63 00 1,973 63 (748 29) Accounts Payable - 1,251 78 00 1,251 78 1,027 61 Fire Department 25% 37,728 91 00 37,728 91 75,953 87 Police Department 1 25% 5,000 14 00 5,000 14 00 Savings Fire Department 1 25% 319,885 95 00 319,885 95 210,090 55 Petty Cash . 800 00 00 800 00 800 00 DEBT SERVICE FUNDS Savmgs/Certificate of Deposit Sales Tax Bond Sinking Fund - 2002 25% 100,977 34 00 100,977 34 91,636 27 Sales Tax Bond Reserve - 2002 25% 303,689 84 00 303,689 84 292,903 87 USDA Smking Fund 25% 3,012 17 00 3,012 17 00 USDA Reserve Fund 25% 200 00 00 200 00 00 UTILITY FUND Water Department Checking Water 25% 00 249,654 66 249,654 66 180,515 48 Water Meter 50% 00 8,273 51 8,273 51 5,058 68 LCDBG Program 1 25% 00 50 00 50 00 50 00 Petty Cash 00 200 00 200 00 200 00 Certificates of Deposits Water Meter Account 75% 00 176,682 67 176,682 67 171,098 64 Water 1 25% 00 50,959 81 50,959 81 00 Water Department Reserve 1 25% 00 80,053 85 80.053 85 65.468 49 Sewer Department Checking Sewer 10% 00 42,553 22 42,553 22 19,063 99 Sewer Revenue Bond Account 25% 00 209,163 89 209,163 89 393,240 00 Certificate of Deposits Sewer Bond Reserve 75% 00 114,031 68 114,031 68 210,971 64 Sewer Depreciation and Contmgency 25% 00 123,428 22 123,428 22 111,41328 Sewer Bond Sinking Fund 00 00 00 10,109 67 VOLUNTEER FIRE DEPARTMENT Checking 10% 26,31127 00 26.311 27 13,650 71 Savings 25% 2,214 55 00 2,214 55 00 Certificate of Deposit 65% 45,599 04 00 45,599 04 45,23130 FARMERVILLE AREA FIRE PROTECTION Checking 56% 6,765 32 00 6,765 32 7,053 21 CAPITAL PROJECTS FUND Dozier Creek Checking - 62 71 00 62 71 68 70 TIF Funds - $500,000 Bonds Revenue Bonds 25% 441.985 53 00 441,985 53 480,777 95 USDA Checking 1 25% 7,212 38 00 7.212 38 00 Capital Outlay Checking 35% 40,029 92 00 40,029 92 00 SALES TAX FUNDS Check mg Regular 1 25% 220,018 21 00 220,018 21 169,796 85 Savmgs Street Sales Tax Fund 1 25% 552,163 04 00 552,163 04 532,561 24 Street Reserve Fund 1 25% 45,590 15 00 45,590 15 38,099 97 2002 SALES TAXES - RECREATION Checking 1 25% 150,918 25 00 150,918 25 93,953 71 Certificate of Deposit 85% 329,185 77 00 329,185 77 424.319 32 GRAND TOTALS S 2.719.209 52 3; 1.055,05151 $ 3.774.261 03 $ 3.773.988 48 See auditor's report -49- COMMENTS ON COMPLIANCE AND INTERNAL CONTROL GARRETT & GARJIETT CERTIFIED PUBLIC ACCOUNTANTS 119 PROFESSIONAL DRIVE WEST MONROE, LOUISIANA 71291 CAROLYN V GARRETT PHONE 318 322-0845 JUDY D GARRETT FAX 318 322-5577 December 5, 2011 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 Stem Baughman, Mayor and Members ofthe Board of Aldermen Town of Farmerville, Louisiana We have audited the financiaistatement s ofthe govemmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of Town of Farmerville, Louisiana, as of and for the years ended June 30, 2011 and 2010, which collectively comprise the Town of Farmerville, Louisiana basic financiaistatement s and have issued our report thereon dated December 5.2011 We conducted our audit in accordance with auditing standards generally accepted in the United States of Amenca and the standards applicable to financiai audits contained in Govemment Auditing Standards, issued by the Comptroller General ofthe United States Intemal Control Over Financial Reporting In planning and performing our audit, we considered Town of Farmerville, Louisiana's internal control over financiai reporting as a basis for designing our auditmg procedures for the purpose of expressing our opinions on the financiai statements, but not for the purpose of expressing an opinion on the effectiveness ofthe Town of Farmerville, Louisiana's intemal control over financiai reporting Accordingly, we do not express an opinion on the effectiveness ofthe Town of Farmerville, Louisiana's intemal control over financiai reporting A deficiency in mtemal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis A material weakness is a deficiency, or combination of deficiencies, in mtemal control such that there is a reasonable possibility that a material misstatement ofthe entity's financiai statements will not be prevented, or detected and corrected on a timely basis Our consideration of mtemal control over financiai reporting was for the limited purpose descnbed in the first paragraph of this section and was not designed to identify all deficiencies in intemal control over financiai reporting that might be deficiencies, significant deficiencies, or material weaknesses We did not identify any deficiencies in intemal control over financial reporting that we consider to be material weaknesses, as defined above However, we identified certain deficiencies in intemal control over financial reporting, descnbed in the accompanymg schedule of findingsan d questioned costs that were consider to be significant deficiencies in internal control over financiai reporting ( See pages 60 - 63) A significant deficiency is a deficiency, or a combination of deficiencies, in intemal control that is less severe than a matenal weakness, yet important enough to merit attention by those charged with governance -50- To the Honorable Stem Baughman, Mayor and Members ofthe Board of Aldermen Town of FarmerviUe, Louisiana Page 2 Compliance and Other Matters As part of obtaining reasonable assurance about whether Town of Farmerville, Louisiana's financiai statements are free of matenal misstatement, we performed test 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 financialstatemen t 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 instances of noncompliance or other matters that are required to be reported under Govemment Auditing Standards and which are descnbed in the accompanying schedule of findings and questioned costs as items listed on pages 52 - 68 The Town of Farmerville, Louisiana's response lo the findings identified in our audit is described in the accompanying schedule of findings and questioned costs We did not audit Town of Farmerville, Louisiana's response and, accordingly, we express no opimon on it This report is intended solely for the information and use of management. Town's Board of Aldermen, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties GARRETT & GARRETT CERTIFIED PUBLIC ACCOUNTANTS ^Mdlc\AotXttPk -51- PRIOR YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS TOWN OF FARMERVILLE FARMERVILLE. LOUISIANA PRIOR YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Internal Control 07-04 - Fixed Assets Description of Findings. The Town has not maintamed the list of Fixed Assets, except for the vehicles and heavy equipment The major items are mcluded on the depreciation schedule Recommendation. The Town's accounting department should update the Fixed Assets list on a quarterly basis Also, the list of assets should include the location ofthe assets Management's Corrective Action Plan: The Town is to review procedures on a monthly basis to address the fixed assets problem Name of Contact Person: Gay Nell Pepper, Town Clerk Action Taken in 2010 The Town agreed to provide each department supervisor a copy ofthe depreciation schedule The supervisor will inventory all assets and provide the Town with a list of assets, which the Town has and the items on the depreciation schedule which has been junked The supervisors has not provided the information at June 30, 2011 Actions Taken in 2011 The Town inventoned their equipment, but the assets has not been reconciled to the depreciation schedule 08-01 - Vehicle Fuel Description of Findings The Town does not monitor their gasoline usage Each vehicle has a umque credit card in which a log is supposed to be mamtained listing the date, meter reading, the gallons purchased, and the dollar amount of fuel purchased This information is logged in when fuel is purchased Most vehicles had these logs however, some departments did not list their meter readings, while others did not tum in their fuel purchase tickets The business office personnel does not use these logs to compare to the fuel bills Recommendation. The Town should assign an employee to be responsible for reconciling the log, purchases and mileage usage on a monthly basis and report to management Management's Corrective Action Plan: The Town will compare the logs against the fuel bills The department head will be given completed logs back to explain any discrepancies Each vehicle log will be completed on a monthly basis •52- TOWN OF FARMERVILLE FARMERVILLE. LOUISIANA PRIOR YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Name of Contact Person: Gay Nell Pepper, Town Clerk Action Taken in 2010. The Town has started a vehicle log on a monthly basis They are still working on a computer program to match the log with the fuel bills At June 30, 2011, the Town is still working on comparing this mformation Actions Taken in 2011. The Town now monitors their vehicle and fuel use 08-03 - Utility Services. Description of Findings The Town needs to review their procedures on utility services to customers that receive services other than water In our test ofthe utility billing, some people receive sewer and garbage services from the Town while water services are received from another water system Some of these customers are receiving free services due to noncommum cation between the water service distnct and the Town There are no v^Titten contracts between the service distnct and the Town Problems occur when a customer moves and a new customer moves mto the service address and the problem with collecting the fees from the people that do not receive water services There is no incentive to pay the fees with the Town's cunent collection policy Recommendation The Town needs to address the problem and try to negotiate an agreement with the Water Services Distnct relating to collection of sewer and garbage fees The Town could charge the Water Services Distnct and let them collect the fees on their water bills The street is in the Town and their option is to void the agreement with the Water District and start providing water to that street Management's Corrective Action Plan. The Town will develop procedures to prevent this problem in the future Name of Contact Person: Mike Allen, Water Supervisor Action Taken in 2010 At June 30, 2011 the Town has not completely solved the problem Action Taken in 2011: The Town now reads the meters ofthe water district and bills sewer charges based on these readings -53- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA PRIOR YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS 08-04 - Fixed Asset, Debt Service Fund, Capital Projects Fund; Farmerville Area Fire District Description of Findings. The Town does not maintain a general ledger for these funds The information is assembled from different sources to add to the financiai statements at year end Recommendations* The Town needs to set up a general ledger for these funds Management's Corrective Action Plan The Town will set up these funds Name of Contact Person Gay Nell Pepper, Town Clerk Action Taken in 2010. The Town had not set up these funds at June 30, 2011 Actions Taken in 2011. The Town set up these accounts in fiscal 2012 and plans to maintain these ledgers Name of Contact Person: Gay Nell Pepper, Town Clerk Date to be Completed. December 31. 2011 10-02 - Utility Deposit System and Customer Refunds Description of Findings. Transactions to the Town's Utility Deposit System have to be manually entered, except, for deposits that are applied to water bills which are done automatically when the account is cut off The Town has an employee checking the transactions to this system for errors, however, no one is correcting the enors The Town refunds back to the customer, the difference in their final utility bill and their deposit on file with the Town The refund checks have to be manually posted to the utility bills to clear out the credit balances Because ofthe timing problems in posting the checks to the bills, a general ledger account is set up to keep up with the refund checks that have not been posted to the bills The Town does not monitor this account Recommendation: The Town needs to conect errors in the utility deposit system and monitor the refund account -54- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA PRIOR YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Action Taken in 2010 The Town has appointed someone to monitor the refund transactions Actions Taken in 2011 The person the Town appomted to monitor the refund transactions was not trained to complete this procedure Management's Corrective Action Plan The Town will make an effort to train this person in fiscal 2012 Name of Contact Person: Gay Nell Pepper, Town Clerk Date to be Completed: June 30,2012 10-03 - Police Tickets Description of Findings: There are no wntten procedures for maintaining, issuing and accountmg for traffic tickets An accounting for the numerical sequence ofthe traffic tickets/citations is not kept Recommendation. The Town needs to have written procedures for the processing ofthe police tickets to have a clear understanding of what should be done, how, who and when it should be done, and that the procedures followed meet management's expectations The Town should maintain a log of all ticket numbers to ensure that all tickets are accounted for and processed Since the Town has a computenzed ticket system, one copy ofthe tickets should be filed numencally The Town should appoint someone to review and maintain the police ticket log and report to management any missing ticket numbers Management's Corrective Action Plan: The Town's business office and the police department will work together to develop procedures lo maintain the numeric list of police tickets as well as wntten police ticket procedures Actions Taken in 2011 The business office wrote up their procedures for police tickets but did not write up procedures for the police department Management's Corrective Action Plan. The Town will complete the written policy and procedures for the tickets for all departments ofthe Town Name of Contact Person Gay Nell Pepper, Town Clerk •55- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA PRIOR YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Date to be completed: June 30, 2012 10-04 - Recreation Department Receipts Description of Findings The recreation department collects membership fees, building rentals and concession fees These collections are taken to the business office each business morning The recreation department has a billing system that mcludes a cash receipts system This system is not integrated with the Town's main accounting system Most ofthe collections in this department are for $2 daily member fees Individual receipts are not written for each of these fees, however a manual sign in sheet is maintamed with fees listed by member's name For monthly fees, building rentals and the concession fees, individual receipts are written In our review of their cash collections, we were not given sufficient documentation to verify the cash collections accuracy From the mformation we were given, the department could not be mamtainmg their computenzed billing system The Town's business office does not deposit the recreation money daily Some ofthe deposits are for small amounts of cash The Town's other collections are deposited each aftemoon Recommendation The Town's recreation department needs to reconcile their cash collections to the receipts written on that day and the $2 sign in sheets The recreation department needs to maintain their membership computer program If the program does not meet their needs, the employees need to maintain manual membership files The Town needs lo deposit all collections daily Management's Corrective Action Plan: The accounting person will look into the problem with the receipts and either retrain the recreation personnel on the billing system or set up new procedures for their personnel lo follow The Town's employees will start depositing all cash on a daily basis Action Taken in 2011 The Town's business office deposits all collections received from the recreation department daily There are problem with the accounting for cash collections (See Finding 11-3) Management's Corrective Action Plan: See Finding 11-03 Name of Contact Person. M Stein Baughman, Mayor Date to be Completed. June 30, 2012 -56- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA PRIOR YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Compliance. 08-02 - Personal Use of Vehicles Description of Findings: Some ofthe Town's employees use the Town's vehicles to commute to work from their home In general, employees using employer vehicles are subject to tax on the value ofthe personal use If the business use of these vehicles is substantiated, It is excludable as a working condition fnnge benefit under IRC 132(f) For these vehicles, any amount not substantiated as business use must be included in wages Substantiation generally requires keeping daily records of vehicle use These substantiation requirements do not apply to a "qualified nonpersonal use vehicle " A qualified nonpersonal use vehicle is one that, by design, is not likely to be used more than minimally for personal purposes This includes vehicles such as constmction or farm vehicles, school buses, specially modified pickup trucks, etc (For a complete list, see Publication 15- B) Use of these vehicles is considered a working condition fnnge benefit and does not require substantiation for use to be excluded from the wages ofthe employee Passenger automobiles are generally not classified as qualified non personal use vehicles because by nature they are more likely to be used for personal use, they are considered "listed property" under IRC 280 F (d) (4) Clearly marked police or fire officer vehicles are also treated as qualified nonpersonal use vehicles, if the following conditions apply The employee must always be on call The employee must be required to use the vehicle for commuting The employer must prohibit personal use (other than commuting) for travel outside of the officer's or firefighter's junsdiclion A police or fire vehicle is clearly marked if it has insignia or words which make it clear that it is a police or fire vehicle A marking on a license plate is not a clear marking for this purpose According to the regulations, the exclusion for a clearly marked police or fire vehicle applies only to a vehicle that is required to be used for commuting by a police officer or fire fighter who, when not on a regular shift, is on call at all times Other than commuting, personal use of the vehicle, outside the limit of the police officer's anest powers or the fire fighter's obligation to respond to an emergency, must be prohibited by the govemmental unit Recommendation The Town needs to review all vehicles and set up policies which comply with the IRS regulations Management's Corrective Action Plan: The Town will document the reasons for the commuting use of these vehicles For any personal use other than commuting, the cost which will be added to the employees taxable income subject to all employer taxes and benefits Name of Contact Person: Gay Nell Pepper, Town Clerk Action Taken in 2010: The Town has not completed the personal use information at June 30, 2011 Action Taken in 2011: The Town documented the reason for first responders (firemen and police officers) to use their vehicles for commuting The Town has not included the personal use of vehicles of non-first responders on their W-2s which is a violation of IRS regulations •57- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA PRIOR YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Management's Corrective Action Plan The Town will include the personal use of vehicles on each employee's W-2 based on the prevailing IRS mileage rate Name of Contact Person: Gay Nell Pepper, Town Clerk Date to be Completed: December 31,2011 09-01 - Pledged Securities Description of Findings: The Town pledged secunties were insufficient to cover the amoimt of deposits in excess ofthe federal deposit insurance coverage It was discovered that the FDIC insurance would not cover checking accounts which pay interest on checking They are considered savings accounts Since most ofthe Town's checking accounts are receiving interest, the Town is limited to one $250,000 FDIC insurance coverage One bank did not have sufficient pledged secunties as of June 30,2010 and 2009 The Town's bank deposits were unsecured in the amouni of $124,830 45 at June 30,2010 and $170,618 83 at June 30, 2009 This is a violation of state law Recommendation: We recommend that the accounting department prepare a worksheet as a part ofthe bank reconciliation procedures The bank balances per the reconciled balance and the bank statement amount should be listed by banks and make sure that the FDIC coverage and pledged receipts are sufficient to cover the balances per bank The Town should require the bank send the pledged secunties detail on a monthly basis If the banks do not comply with the monthly reconciliation or does not provide sufficient secunties, we recommend that the accounts be closed and move lo another bank Management's Corrective Action Plan: The banks will be notified ofthe problem and will be conecled Name of Contact Person: Gay Nell Pepper, Town Clerk Action Taken in 2010: The 2009 amount was corrected in 2009 The 2010 amount will be corrected Actions Taken in 2011: This problem was corrected in 2011 -58- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA PRIOR YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS 10-01-Payroll Description of Findings- There were several enors in the calculation of FICA and Medicare on employees that contnbuted to the cafeteria plan and received supplemental pay These errors were not matenal in total amount or at each employee level We set up the amount due to the Town by the IRS for the miscalculations for this fiscal year, however, the problems with the cafeteria plan extends to prior years The Town maintains a separate checking account for payroll transactions The Town reimburses this account for each departments' transaction for each payroll period However, the Town assumes that the payroll tax drafts will equal the reimbursements, therefore the drafts are not recorded Recommendation: The Town's management should review on a periodic basis the payroll transactions for accuracy, especially when calculations are changed The Town needs to conect the errors in the FICA and Medicare calculations and lake appropriate actions in that regard The Town also needs to change their transactions in regards to posting checks and drafts to the payroll cash account Actions Taken in 2011: The Town corrected the problems with the FICA and Medicare withholdings, however the withholdings for the cafetena plan does not match the cafeteria withholdings We did not find any changes to the way the Town records transactions to the payroll checking account Management's Corrective Action Plan The Town has conected the problems with the cafetena plan deductions The Town will record the drafts to the general ledger Name of Contact Person: Gay Nell Pepper, Town Clerk Date to be Completed. June 30, 2012 -59- CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Fmdings related to the Financial Statements that are required to be reported under Govemment Auditing Standards Internal Control 11-01 - Rotation of Days off for Office Staff The office staff of the Town work on a ten hour four day work week For mtemal control purposes, individual days off should be rotated on a periodic basis at least once a year The payroll clerk should not be allowed to rotate a day off on the two days that she processes payroll The individual employees would not be allowed to swap days with another employee on other than a temporary basis Actions Taken None Actions Planned The Town plans to rotate the days off on the first full week of January each year Person Responsible: Gay Nell Pepper, Town Clerk Date Completed. June 30, 2012 11-02-PoliceTickets In our review ofthe police tickets we found that several tickets were either dismissed by someone other than the magistrate, were not signed by the magistrate, and were not entered into the ticket system We recommend that all tickets are processed through the ticket system and that only the magistrate can dismiss tickets in open court Tickets that are dismissed have to be signed by the magistrate and include the appropriate documentation Tickets that are voided should also be processed through the ticket system so there will be an accounting ofthe numbers Also, the Town's written policy needs to be updated to reflect the procedures the Town is now using and to mclude a policy on insuring that all ticket number are included Action Taken The clerk will not process dismiss tickets unless the tickets includes the proper documentation Actions Planned: The clerk plans to make sure all tickets are accounted for in the ticket system Person Responsible. M Stein Baughman, Mayor -60- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Date Completed June 30, 2012 11-03 - Recreation Center In our review ofthe cash collections and bookkeeping procedures ofthe recreation center, we found that the Center is not making daily deposits of monies received as required by the Town's procedures The recreation center has receipts which are difficult to trace to deposits and deposits without receipts Based on interviews with the Center's employees, differences could not be adequately explained The Center sponsors activities in which it charges fees to participate such as basketball and soccer leagues In our review ofthe receipts for the soccer league, we found receipts written over a couple of months in which monies were not deposited to the bank The employees said that the missing cash was reimbursed back to the individuals because the soccer league was cancelled In other situations, the Center deposited monies in the bank which had no receipts The bank deposits with the missing receipts and the soccer league payments were not in the same time frame and therefore could not be offset There are also activities that the recreation center did not charge the approved fees, nor did they receive approval ofthe change in fees We did not find evidence that the employees are keeping adequate records ofthe members' billing system We recommend that all payments for services, recreation activities, membership dues, rental and any other activity be paid directly to the main business office's cash receipts system The person paying for the activity will have a Town of Farmerville receipt which can be shown to the recreation center for proof of payment The daily fees of $2 00 per day should be discontinued and the only fee would be the monthly fee of $5 00 The billing for the monthly fee of $5 00 can be added to the utilities billing system and would be paid when the person pay their utilities bill The person in charge ofthe utilities billing informed us that the addition ofthe $5 00 charge could be added without any problem with the system Any person who does not receive a utilities bill could be added lo the system and the only charge would be the recreation center monthly fee The rental ofthe building should have a form completed for rental The Town cannot reserve the building until the rental is paid The Town should maintain a calendar of events After the building rental is paid, the booking would then be added to the calendar of events The Mayor and a member ofthe council should approve all future activities planned at the recreation center The weekly management meeting with the Mayor can be used for approval of future activities Action Planned The Mayor will discuss the recommendations with the council Person Responsible M Stein Baughman, Mayor Date to be Completed: June 30, 2012 11-04-Receipts We recommend that all payments to the Town be paid directly to the Town of Farmerville's business office cashiers At present some ofthe payments are received by employees other than the cashiers, which bypasses the Town's collection -61- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS procedures To improve intemal control, the receipts collections should be centralized to individuals that were hired to collect money The Town would have to add additional revenue codes to the cash receipts system, which based on our discussion with management, should not present a problem Action Planned: The Mayor will discuss the recommendation with the council Person Responsible M Stem Baughman. Mayor Date to be Completed: December 31, 2011 11-05 - Purchase Orders: The Town of Farmerville needs to review the approval of purchases by supervisors At present the limit is $500 For better intemal control, we suggest that the limit be reduced to $300 which has to include a purchase order signed by the supervisor Any amount greater than $300 would have to have a purchase order signed by the Mayor If the Mayor is unavailable, the purchase order has to be approved by a member ofthe Town's audit committee or water superintendent Purchases of $25 or less from council approved vendors located in the Town of Farmerville would not have to have approval or a purchase order, but a purchase order is suggested If no purchase order is used the invoice should be given to the accounts payables clerk with information mcluding the department, general ledger account number and be signed by the employee that either received the supplies or ordered the supplies The Town has a weekly supervisor meeting with the Mayor on Monday The supervisor should bring any purchase order to the Monday meeting This will create planning by each ofthe supervisor's The purchase orders should include a description of what is being purchase, estimate cost, the department, type ofthe expense and general ledger number A copy ofthe signed purchase order should be given to the accounting payable clerk and a copy is to be retained by the Mayor The purchase order forms will need to have enough multiple copies to accommodate all individuals that require a copy including the mayor and accounts payable clerk All invoice's address should be the Town's Post Office Box The Town should send all current vendor's a change of address A council approved vendor's list should be provided to all supervisor's Any vendor not on the list, must have council approval before any purchases are made from a new vendor Action Planned* The Mayor will discuss the recommendations with the council Person Responsible. M Stem Baughman, Mayor Date to be Completed December 31, 2011 -62- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS PRIOR YEAR FINDINGS 11-06 - Fixed Asset, Debt Service Fund, Capital Projects Fund; Farmerville Area Fire District Description of Fmdings: The Town does not mamtain a general ledger for these fiinds The information is assembled from different sources to add to the financial statements at year end Recommendation s: The Town needs to set up a general ledger for these funds Management's Corrective Action Plan The Town will set up these funds Name of Contact Person: Gay Nell Pepper, Town Clerk Action Taken in 2010. The Town had not set up these funds at June 30, 2011 Actions Taken in 2011 The Town set up these accounts in fiscal 2012 and plans to maintain these ledgers Name of Contact Person- Gay Nell Pepper, Town Clerk Date to be Completed June 30, 2012 11-07 - Utibty Deposit System and Customer Refunds Description of Findings. Transactions to the Town's Utility Deposit System have to be manually entered, except, for deposits that are applied to water bills which are done automatically when the account is cut off The Town has an employee checking the transactions to this system for errors, however, no one is conecting the errors The Town refunds back to the customer, the difference m their finalutilit y bill and their deposit on file with the Town The refund checks have to be manually posted to the utility bills to clear out the credit balances Because ofthe timing problems in posting the checks to the bills, a general ledger account is set up to keep up with the refund checks that have not been posted to the bills The Town does not monitor this account -63- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Recommendation. The Town needs to correct enors in the utility deposit system and monitor the refund account Action Taken in 2010: The Town has appointed someone to monitor the refund transactions Actions Taken in 2011. The person the Town appointed to monitor the refund transactions was not trained to complete this procedure Management's Corrective Action Plan The Town will make an effort to train this person in fiscal 2012 Name of Contact Person: Gay Nell Pepper, Town Clerk Date to be Completed June 30,2012 11-08-Police Tickets Description of Findings- There are no written procedures for maintaining, issuing and accounting for traffic tickets An accounting for the numerical sequence ofthe traffic tickets/citations is not kept Recommendation: The Town needs to have written procedures for the processing ofthe police tickets to have a clear understanding of what should be done, how, who and when it should be done, and that the procedures followed meet management's expectations The Town should maintain a log of all ticket numbers to ensure that all tickets are accounted for and processed Since the Town has a computerized ticket system, one copy ofthe tickets should be filed numencally The Town should appoint someone to review and maintain the police ticket log and report to management any missing ticket numbers Management's Corrective Action Plan The Town's business office and the police department will work together to develop procedures to maintain the numenc list of police tickets as well as wntten police ticket procedures Actions Taken in 2011 The business office wrote up their procedures for police tickets but did not write up procedures for the police department Management's Corrective Action Plan. The Town will complete the written policy and procedures for the tickets for all departments ofthe Town -64- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Name of Contact Person: Gay Nell Pepper, Town Clerk Date to be completed: June 30, 2012 11-09 - Recreation Department Receipts Description of Findings: The recreation department collects membership fees, building rentals and concession fees These collections are taken to the business office each business morning The recreation department has a billing system that includes a cash receipts system This system is not integrated with the Town's main accounting system Most ofthe collections in this department are for $2 daily member fees Individual receipts are not written for each of these fees, however a manual sign in sheet is maintained with fees listed by member's name For monthly fees, building rentals and the concession fees, individual receipts are written In our review of their cash collections, we were not given sufficient documentation to verify the cash collections accuracy From the information we were given, the department could not be maintaining their computerized billing system The Town's business office does not deposit the recreation money daily Some ofthe deposits are for small amounts of cash The Town's other collections are deposited each aftemoon Recommendation: The Town's recreation department needs to reconcile their cash collections to the receipts written on that day and the $2 sign in sheets The recreation department needs to maintain their membership computer program If the program does not meet their needs, the employees need to maintain manual membership files The Town needs to deposit all collections daily Management's Corrective Action Plan: The accountmg person will look into the problem with the receipts and either retrain the recreation personnel on the billing system or set up new procedures for their personnel to follow The Town's employees will start depositing all cash on a daily basis Action Taken in 2011 The Town's business office deposits all collections received from the recreation department daily There are problem with the accounting for cash collections (See Finding 11-3) Management's Corrective Action Plan: See Finding 11-03 Name of Contact Person: M Stein Baughman, Mayor -65- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Date to be Completed- June 30, 2012 11-10 - Fixed Assets Description of Findings: The Town has not maintained the list of Fixed Assets, except for the vehicles and heavy equipment The major items are included on the depreciation schedule Recommendation: The Town's accounting department should update the Fixed Assets list on a quarterly basis Also, the list of assets should include the location ofthe assets Management's Corrective Action Plan: The Town is to review procedures on a monthly basis to address the fixed assets problem Name of Contact Person: Gay Nell Pepper, Tovra Clerk Action Taken in 2010 The Town agreed to provide each department supervisor a copy ofthe depreciation schedule The supervisor will inventory all assets and provide the Town with a list of assets, which the Town has and the items on the depreciation schedule which has been junked The supervisors has not provided the information at June 30, 2011 Actions Taken in 2011: The Town inventoried their equipment, but the assets has not been reconciled to the depreciation schedule Date to be Completed: June 30, 2012 11-11-Utility Services- Description of Findings: The Town needs to review their procedures on utility services to customers that receive services other than water In oiu" test ofthe utility billing, some people receive sewer and garbage services from the Town while water services are received from another water system Some of these customers are receiving free services due to noncommunication between the water service district and the Town There are no written contracts between the service distnct and the Town Problems occur when a customer moves and a new customer moves mto the service address and the problem with collecting the fees from the people that do not receive water services There is no incentive to pay the fees with the Town's cunent collection policy •66- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Recommendation: The Town needs to address the problem and try to negotiate an agreement with the Water Services Distnct relating to collection of sewer and garbage fees The Town could charge the Water Services Distnct and let them collect the fees on their water bills The street is in the Town and their option is to void the agreement with the Water Distnct and start providing water to that street Management's Corrective Action Plan The Town will develop procedures to prevent this problem in the future Name of Contact Person: Mike Allen, Water Supervisor Action Taken in 2010: At June 30, 2011 the Town has not completely solved the problem Action Taken in 2011: The Town now reads the meters ofthe water district and bills sewer charges based on these readings Date to be Completed: June 30, 2012 Compliance: 11-12 - Personal Use of Vehicles Description of Findings: Some ofthe Town's employees use the Town's vehicles to commute to work from their home In general, employees usmg employer vehicles are subject to tax on the value ofthe personal use If the business use of these vehicles is substantiated. It is excludable as a working condition fnnge benefit under IRC 132(f) For these vehicles, any amount not substantiated as business use must be included in wages Substantiation generally requires keeping daily records of vehicle use These substantiation requirements do not apply to a "qualified nonpersonal use vehicle " A qualified nonpersonal use vehicle is one that, by design, is not likely to be used more than minimally for personal purposes This includes vehicles such as construction or farm vehicles, school buses, specially modified pickup tmcks, etc (For a complete list, see Publication 15- B) Use of these vehicles is considered a working condition fnnge benefit and does not require substantiation for use to be excluded fromth e wages ofthe employee Passenger automobiles are generally not classified as qualified non personal use vehicles because by nature they are more likely to be used for personal use, they are considered "listed property" under IRC 280 F (d) (4) Clearly marked police or fire officer vehicles are also treated as qualified nonpersonal use vehicles, if the following conditions apply The employee must always be on call The employee must be required to use the vehicle for commuting The employer must prohibit personal use (other than commuting) for travel outside of the officer's or firefighter's junsdiction A police or fire vehicle is clearly marked if it has insignia or words which make it clear that it is a police or fire vehicle A marking on a license plate is not a clear marking for this purpose According to the regulations, the exclusion for a clearly marked police or fire vehicle applies only to a vehicle that is required to be used for commuting by -67- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS a police officer or fire fighter who, when not on a regular shift, is on call at al! times Other than commuting, personal use of the vehicle, outside the limit of the police officer's anest powers or the fire fighter's obligation to respond to an emergency, must be prohibited by the govemmental unit Reco mme n datio n: The Town needs to review all vehicles and set up policies which comply with the IRS regulations Management's Corrective Action Plan. The Town will document the reasons for the commuting use of these vehicles For any personal use other than commuting, the cost which will be added to the employees taxable income subject to all employer taxes and benefits Name of Contact Person: Gay Nell Pepper, Tovra Clerk Action Taken in 2010: The Town has not completed the personal use information at June 30, 2011 Action Taken in 2011: The Town documented the reason for first responders (firemen and police officers) to use their vehicles for commuting The Town has not included the personal use of vehicles of non-first responders on their W-2s which is a violation of IRS regulations Management's Corrective Action Plan The Town will include the personal use of vehicles on each employee's W-2 based on the prevailing IRS mileage rate Name of Contact Person- Gay Nell Pepper, Town Clerk Date to be Completed: December 31,2011 11-13-Payroll Description of Findings There were several enors in the calculation of FICA and Medicare on employees that contributed to the cafeteria plan and received supplemental pay These enors were not matenal in total amount or at each employee level We set up the amount due to the Town by the IRS for the miscalculations for this fiscal year, however, the problems with the cafeteria plan extends to pnor years The Town maintains a separate checking account for payroll transactions The Town reimburses this account for each departments' transaction for each payroll penod However, the Town assumes that the payroll tax drafts will equal the reimbursements, therefore the drafts are not recorded •68- TOWN OF FARMERVILLE FARMERVILLE, LOUISIANA CURRENT YEAR RECOMMENDATIONS AND STATUS OF RECOMMENDATIONS Recommendation The Town's management should review on a periodic basts the payroll transactions for accuracy, especially when calculations are changed The Town needs to conect the enors in the FICA and Medicare calculations and take appropriate actions in that regard The Town also needs to change their transactions in regards to posting checks and drafts to the payroll cash account Actions Taken in 2011 The Town conected the problems with the FICA and Medicare withholdings, however the withholdings for the cafeteria plan does not match the cafeteria withholdings We did not find any changes to the way the Town records transactions to the payroll checking account Management's Corrective Action Plan. The Town has conected the problems with the cafeteria plan deductions The Town will record the drafts to general ledger Name of Contact Person: Gay Nell Pepper, Town Clerk Date fo be Completed; June 30, 2012 -69-n so