^/f/ CITY OF NEW ORLEANS. LOUISIANA BASIC FINANCIAL STATEMENTS DECEMBER 3L 2012 (WITH INDEPENDENT AUDITORS^ REPORT THEREON) Under provisions of state law. this report is a public document Acopy of the report has been submitted to the entity and other appropriate public officials The report is available for public inspection at the Baton Rouge office of the LegislativeAuditor and, where appropnate, at the office of the parish clerk of court. Release Date AUG 0 7 2013 Postlethwaite & Netterville A Prot«u)onal Accx)URting Corporation \v,vA pncpa.com CITY OF NEW ORLEANS> LOUISIANA Basic Financial Statements December 31,2012 (With Independent Auditors* Report Thereon^ CITY OF NEW ORLEANS, LOUISIANA Table of Contents Page Independent Auditors' Report 1 Management's Discussion and Analysis 4 Basic Financial Statements: Statement of Net Position 16 Statement of Activities 17 Balance Sheet - Govemmental Funds 18 Reconciliation of Balance Sheet - Govemmental Funds to the Statement of Net Position 19 Statement ofRevenues, Expenditures, and Changes in Fund Balances - Govemmental Funds 20 Reconciliation ofthe Statement ofRevenues, Expenditures, and Changes in Fund Balances of Govemmental Funds to the Statement of Activities 21 Statement of Fiduciaiy Net Position 22 Statement of Changes in Fiduciary Net Position 23 Component Units - Combining Statement of Net Position 24 Component Units - Combining Statement of Activities 26 Notes to Basic Financial Statements 27 Required Supplementary Information Notes to Required Supplementary Information 76 Schedule ofRevenues, Expendinires» and Changes in Fund Balance - Budget (Non-GAAP Budgetary Basis) and Actual - General Fund 77 Budget to GAAP Reconciliation 78 Schedules of Funding Progress 79 KiSiAi Postlethwaite ^JSKM & Netterville •^iaciot«d CHicei n Pri'dxtC tnt cl ^ Un tKJ !r>--j«> wv>v/,pncf>o.corn Independent Auditors* Report The Honorable Mayor and Members Cit>- Council ofthe City of New Orleans, Louisiana: Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund infonnation of the Citv' of New Orleans, Louisiana (the Cit>') as of and forthe year ended December 31, 2012, and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents. Management's ResponsibiUtyfor the Financial Statements Management is lesponsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of intemal control relevant to the preparation and fsir presentation of financial statements that are free from material misstatement, whether due to fi^ud or error. Auditors* Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of Ae New Orleans Tourism Marketing Corporation, the Orleans Parish Communication District, the Audubon Commission, the French Market Corporation, the Upper Pontalba Building Restoration Corporation, the Piazza d'halia Development Corporation, the Canal Street Development Corporation, the Orleans Parish Hospital Service District A, and the Dovoitown Development District, which represent 9% and 19Vo respectively, of the assets and revenues of the aggregate discretely presented component units; the Firefighters' Pension and Relief Fund ofthe City of New Orleans (old and new systems), the Police Pension Fund of the City of New Orleans, and the Employees' Retirement System ofthe City of New Orleans, which represent 86% ofthe assets and 63% ofthe additions and revenues ofthe aggregate remaining fund infomiation; and the Board of Liquidation, City Debt, which is a major fund and 17% and 8% of assets and revenues ofthe govenmiental activities, respectively. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for the New Orleans Tourism Marketing Corporation, the Orleans Parish Comratmication District, the Audubon Commission, the French Marfcet Corporation, the Upper Pontalba Building Restoration Coqwration, the Piazza D'ltalia Development Corporation, the Canal Street Development Corporation, the Orleans Parish Ho^ital Service District A, the Downtown Development District, the Firefighters' Pension and Relief Fund of the City of New Orleans (old and new systems), the Police Pension Fund of the City of New Orleans, the Employees' Retirement System ofthe City of New Orleans, and the Board of Liquidation, City Debt, is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. 1 30th F 00' - Energy Centre • 1100 Poydras Street • New Orleans. LA /Oi 63-3000 • Td: 504.55a'^*0'/8 One Gallcria Blvd.. Suite 2100 • Mctairic, L^. 70001 • Tel; 504.837,5990 * Fa-x 504.834.3ev9 Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financiaJ statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment ofthe risks of material misstatement ofthe financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers intemal control relevant to the entit>''s preparation and fair presentation ofthe financial statements in order to design audit procedures that are appropriate in the circumstances, but not forthe purpose of expressing an opinion on the effectiveness ofthe entit>''s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accountmg estimates made by management, as well as evaluating the overall financial statement presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the reports of other auditors, the financial statements refen^ to above present &irly, in all material respects, the respective financial position of the govemmental acti\aties, the aggregate discretely presented component units, each major fimd, and the aggregate remaining fund information of the City as of December 31,2012, and the respccdve changes in financial position for the year then ended in conformit>' with accounting principles generally accepted in the United States of America. Reqmred Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, budgetary comparison information, and the schedules of fiindmg progress on pages 4 through 15 and 76 through 80 be presented to supplement the basic financial statements. Such information, although not a part of the basic fmancial statements, is required by the Govemmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical comext We and other auditors have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the infonnation and comparing the information for consistency with management's responses to our inquiries, the basic fmancial statements, and other knowledge we obtained during our audit ofthe basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us vrith sufficient evidence to express an opmion or provide any assurance. P&N Other Reporting Required by Government Auditing Standards In accordance with Govemment Auditing Standards^ we have also issued our report dated June 27, 2013. on our consideration of the City's internal control over fmancial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of intemal control over fmancial reporting and compliance and the results of that testing, and not to provide an opinion on intemal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Govemment Auditing Standards in considering the City's intemal control over financial reporting and compliance. New Orleans, Louisiana June 27,2013 P&N MANAGEMENT'S DISCUSSION AND ANALYSIS CITY OF NEW ORLEANS Management's Discussion and Analysis December 31,2012 Management's Discussion and Analysis The follov^ng Management's Discussion and Analysis (MD&A) ofthe City of New Orleans, Louisiana's (the City), financial performance provides an overview ofthe City's financial activities