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G<; u'.
CITY OF KAPLAN, LOUISIANA
Financial Report
Year Ended June 30, 2005
Under provisions of state law, this report is a publicdocument. A copy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.
Release Date 11 -2 3.
TABLE OF CONTENTS
Page
Independent Auditors' Report 1-2
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS (GWFS)Statement of net assets 5Statement of activities 6
FUND FINANCIAL STATEMENTS (FFS)Balance sheet - governmental funds 9Reconciliation of the governmental funds balance sheet
to the statement of net assets 10Statement of revenues, expenditures, and changes in fund balances-
governmental funds 11Reconciliation of the statement of revenues, expenditures, and
changes in fund balances of governmental funds to the statement of activities 12Comparative statement of net assets - proprietary funds 13Comparative statement of revenues, expenses, and changes in fund net
assets - proprietary funds 14Comparative statement of cash flows - proprietary funds 15-16
Notes to basic financial statements 17-43
REQUIRED SUPPLEMENTARY INFORMATIONBudgetary comparison schedules:
General Fund 45Sales Tax Fund 46
OTHER SUPPLEMENTARY INFORMATION
OTHER FINANCIAL INFORMATIONMajor Governmental Funds -
General Fund - budgetary comparison schedule - revenues 49General Fund - budgetary comparison schedule- expenditures 50-52Capital Projects Fund - bugetary comparison schedule 53
(continued)
TABLE OF CONTENTS (continued)
Page
Nonmajor Governmental Funds -Combining balance sheet 55Combining statement of revenues, expenditures, and changes in fund balances 56
Nonmajor special revenue funds -Parish Fire Protection Fund -
Schedule of revenues, expenditures, and changes in fund balance - budget(GAAP basis) and actual 58
Police Special Fund -Schedule of revenues, expenditures, and changes in fund balance - budget(GAAP basis) and actual 59
Nonmajor debt service funds -Combining schedule of revenues, expenditures and changes in fund balances 61
Schedule of number of utility customers (unaudited) 62Schedule of insurance in force (unaudited) 63Comparative departmental analysis of revenues and expenses - utility fund 64-65
COMPLIANCE, INTERNAL CONTROL AND OTHER GRANT INFORMATIONReport on Internal Control over Financial Reporting
and on Compliance and Other Matters Based onan Audit of Financial Statements Performed inAccordance with Government Auditing Standards 67-68
Report on Compliance with Requirements Applicableto Each Major Progam and Internal Control overCompliance Required by OMB Circular A-133 69-70
Schedule of Expenditures of Federal Awards 71
Notes to Schedule of Expenditures of Federal Awards 72
Schedule of Findings and Questioned Costs 73-74
Summary schedule of current and prior year audit findingsand corrective action plan 75
KOLDER, CHAMPAGNE, SLAVEN & COMPANY, LLCCERTIFIED PUBLIC ACCOUNTANTS
C. Burton KoWer. CPA'Russell F. Champagne, CPA* D — -j . nccVictorR. Slaven, CPA- r.U. OOX TUOO
Conrad 0. Chapman CPA- Abbeville, LA 70511 WEBSITE:
£' MfcTim. ^ , f-cn. WWW KCSRCPAS.COMGerald A. Trnbodeaux. Jr., CPA'
Phone (337) 893-7944Robert S. Carter. CPA Fax (337) 893-7946 MEMBER OF:
Allen J LaBry. CPA AMERICAN INSTITUTE OF
AOeoer CPA ' CERTIFIED PUBLIC ACCOUNTANTS
Penny Angelle Scruggins. CPA SOQETY OF LOUlslANft
Christine LCoUS1n. CPA CERTIFIED PUBLIC ACCOUNTANTSMary T. Thibodeaux. CPA
L INDEPENDENT AUDITORS' REPORTCheryl L. Sartey. CPA. CVAMandy 8. Self, CPA
• A P'OfBssenaJ Accounling Corporalkxi
The Honorable Levi Schexnider, Mayor,and Members of the City CouncilCity of Kaplan, Louisiana
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Kaplan,Louisiana, as of and for the year ended June 30, 2005, which collectively comprise the City's basic financialstatements as listed in the table of contents. These financial statements are the responsibility of the City'smanagement. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government Auditing Standards.issued by the Comptroller General of the United States. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the basic financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the basic financial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, therespective financial position of the governmental activities, the business-type activities, each major fund, andthe aggregate remaining fund information of the City of Kaplan, Louisiana, as of June 30, 2005, and therespective changes in financial position and cash flows, where applicable, thereof for the year then ended inconformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report dated August 30,2005, on our consideration of the City of Kaplan, Louisiana's internal control over financial reporting and onour tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is anintegral part of an audit performed in accordance with Government Auditing Standards and should be read inconjunction with this report in considering the results of our audit.
The required supplementary information on pages 45 and 46 is not a required part of the basicfinancial statements but are supplementary information required by Governmental Accounting StandardsBoard. We have applied certain limited procedures, which consisted principally of inquiries of managementregarding the methods of measurement and presentation of the required supplementary information.However, we did not audit the information and express no opinion on it.
I S3 South Beadle Road H3 East Biidise Street 113 Ea« WwUJil 1134 David Drive. Suitt (OS 4G&W. Cotton Street 332 W.Sklh Avenue 200 South Mun StreetLa&yellc.LA 70508 Breaux Bridge. LA 70517 Mirkwille, LA 71351 Morgan Cily. LA 70380 VilLe Plalte. LA 70586 Oberiin. LA 70655 Abbeville, LA 70510Phone (337) 232-4141 Phone (337) 332-4020 Phnne<318) 253-9252 Phone (985) 384-2020 Phone (337) 363-2792 Phone (337) 639-4737 Phone(>37) 813-7944Fax (337) 232-8660 Fax (337) 332-2867 Fax (318) 253-8681 Fax (985) 384-3020 Fax (337) 363-3049 Fax (337) 639-4568 Fax (337) 893-7946
The City of Kaplan has not presented management's discussion and analysis that the GovernmentalAccounting Standards Board has determined is necessary to supplement, although not required to be part of,the basic financial statements.
Our audit was conducted for the purpose of forming opinions on the financial statements thatcollectively comprise the City of Kaplan's basic financial statements. The supplementary information onpages 49 through 70 is presented for purposes of additional analysis and is not a required part of the basicfinancial statements. The accompanying schedule of expenditures of federal awards (page 71) is presentedfor purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133,Audits of States. Local Governments, and Non-profit Organizations, and is not a required part of the financialstatements of the City of Kaplan. Such information, except for that portion marked "unaudited" on which weexpress no opinion, has been subjected to the auditing procedures applied in the audit of the basic financialstatements and, in our opinion, is fairly stated in all material respects in relation to the basic financialstatements taken as a whole.
The financial information for the preceding year, which is included for comparative purposes, wastaken from the financial report for that year in which we expressed an unqualified opinion on the basicfinancial statements of the City of Kaplan, Louisiana.
Kolder, Champagne, Slaven & Company, LLCCertified Public Accountants
Abbeville, LouisianaAugust 30, 2005
CITY OF KAPLAN, LOUISIANA
Statement of Net AssetsJune 30, 2005
ASSETSCurrent assets:
Cash and interest-bearing depositsReceivables, net
Due from other governmental units
Total current assets
Noncurrent assets:Restricted assets:
Cash and interest-bearing deposits
Capital assets, net
Total noncurrent assets
Total assets
LIABILITIESCurrent liabilities:
Accounts and other payablesCompensated absences payableInternal balancesDeferred revenueNotes payableAccrued interest
Short term debt payable
Total current liabilities
Noncurrent liabilities:Compensated absences payableCustomer deposits payableLong term debt payable
Deferred revenue
Total noncurrent liabilities
Total liabilities
NET ASSETSInvested in capital assets, net of related debtRestricted for debt service
Unrestricted
Total net assets
GovernmentalActivities
$ 699,92414,56693,807
808,297
4,990,540
4,990,540
5,798,837
111,21122,018
(287,728)
29,000
(125,499)
9,229
338,000
347,229
221,730
4,623,54030,813
922,754
$5,577,107
Business-TypeActivities
$ 66,4541,149,489
542,616
1,758,559
538,63513,268,710
13,807,345
15,565,904
930,29040,264
287,7284,074
18,908203,000
1,484,264
253,8663,701,700
3,955,566
5,439,830
9,567,01062,861
496,203
$10,126,074
Total
$ 766,3781,164,055
636,423
2,566,856
538,63518,259,250
18,797,885
21,364,741
1,041,50162,282
4,074
18,908232,000
1,358,765
9,229253,866
4,039,700
4,302,795
5,661,560
14,190,55093,674
1,418,957
$15,703,181
The accompanying notes are an integral part of the basic financial statements.
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FUND DESCRIPTIONS
General Fund
The General Fund is used to account for resources traditionally associated with governments which are notrequired to be accounted for in another fund.
Special Revenue Fund
Special revenue funds are used to account for specific revenues that are legally restricted to expenditures forparticular purposes.
Sales Tax FundTo account for the receipts and use of proceeds of the City's one percent sales and use tax. These taxes arededicated for the following purposes: (1) Constructing, acquiring, extending, and/or improving publicparks and recreational facilities, drainage facilities, streets and street lighting facilities, sewers and seweragedisposal works, waterworks, natural gas facilities, electrical distribution facilities, public buildings(including a jail and/or fire department stations and equipment) and purchasing and acquiring equipment andfurnishings for the aforesaid public works, buildings, improvements and facilities, title to whichimprovements shall be in the public and (2) Paying principal and interest on any bonded or fundedindebtedness of said City or for any one or more of said purposes, and such tax to be subject to funding intobonds by said City in the manner authorized by Sub Part D, Part I, Chapter 6, Title 33 of the LouisianaRevised Statutes of 1950.
Capital Projects Fund
To account for financial resources to be used for the acquisition or construction of major facitilities.
2003 Louisiana Community Development Block Grant (LCDBG) FundTo account for the collection and disbursements of federal funds used for the constuction of new sewersystem for the City of Kaplan.
Enterprise Fund
To account for operations (a) that are financed and operated in a manner similar to private businessenterprises - where the intent of the governing body is that the costs (expenses, including depreciation) ofproviding goods or services to the general public on a continuing basis be financed or recovered primarilythrough user charges; or (b) where the governing body has decided that periodic determination of revenuesearned, expenses incurred, and/or net income is appropriated for capital maintenance, public policy,
Utility Fund -To account for the provision of electric, gas, water and sewer services to residents of the City. All activitiesnecessary to provide such services are accounted for in this fund, including, but not limited to,administration, operations, maintenance, financing and related debt service, and billing and collection.
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CITY OF KAPLAN, LOUISIANA
Reconciliation of the Governmental Funds Balance Sheetto the Statement of Net Assets
June 30, 2005
Total fund balances for governmental funds at June 30, 2005 $ 925,669
Total net assets reported for governmental activities in the statement of netassets is different because:
Capital assets used in governmental activities are not financial resourcesand, therefore, are not reported in the funds. Those assets consist of:
Land $ 114,547Building, net of $423,620 accumulated depreciation 614,216Infrastructure, net of $5,136,075 accumulated depreciation 3,682,488Equipment, net of $705,227 accumulated depreciation 579,289 4,990,540
Elimination of interfund assets and liabilitiesDue from other funds 217,524Due to other funds (217.524)
Long-term liabilities at June 30, 2005:Bonds payable (367,000)Compensated absences payable (9,229) (376,229)
Net assets of the Group Insurance Self- Insurance Internal Service Fund 37,127
Total net assets of governmental activities at June 30, 2005 $ 5.577,107
The accompanying notes are an integral part of the basic financial statements.
10
CITY OF KAPLAN, LOUISIANA
Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds
For the Year Ended June 30, 2005With Comparative Totals for the Year Ended June 30, 2004
Revenues:TaxesLicenses and permitsIntergovernmentalFines and forfeitsInterest incomeMiscellaneous
Total revenues
Expenditures:Current -
General governmentPublic safety:
PoliceFire
Streets, bridges, and drainageCulture and recreation
Capital outlayDebt service -
Principal retirementInterest and fiscal charges
Total expenditures
Excess (deficiency) of revenuesover expenditures
Other financing sources (uses):Proceeds of refunding debtPayment of refunding debtTransfers inTransfers out
Total other financing sources (uses)
Net changes in fund balances
Fund balances, beginning
Fund balances, ending
General
$ 62,778192,052
16,62420.575
-102,210
394.239
559,696
681,888197,166437,071
19,53053,217
.-
1,948,568
(1,554,329)
-1,838,401(250,246)
1,588,155
33,826
(214.524)
$ (180,698)
Sales 2003Tax LCDBG
$ 489,471 $-
1,000,000-
2,294-
491,765 1,000,000
202,184
.---
64,479
--
266,663
225,102 1,000,000
--
(257,659) (1,000,000)(257,659) (1,000,000)
(32,557)
994,626
J 962,069 $
OtherGovernmental
Funds
$-
178,850-
2,830-
181,680
10,36640,272
--
19,761
208,00037,435
315,834
(134,154)
367,000(367,000)
--.
(134,154)
278,452
5 144,298
Totals(Memorandum Only)
2005
$ 552,249192,052
1,195,47420,575
5,124102,210
2,067,684
761,880
692,254237,438437,071
19,530137,457
208,00037,435
2,531,065
(463,381)
367,000(367,000)
1,838,401(1,507,905)
330,496
(132.885)
1,058,554
$ 925,669
2004
$ 546,774190,984201,472
29,4793,235
88,711
1,060,655
810,786
749,726234,023473,74539,983
139,188
35,00034,970
2,517,421
(1,456,766)
-1,662,867(445,837)
1,217,030
(239,736)
1,298,290
$ 1,058,554
The accompanying notes are an integral part of the basic financial statements.
11
CITY OF KAPLAN, LOUISIANA
Reconciliation of the Statement of Revenues, Expenditures, andChanges in Fund Balances of Governmental Funds
to the Statement of ActivitiesFor the Year Ended June 30, 2005
Total net changes in fund balances at June 30, 2005 perStatement of Revenues, Expenditures and Changes in Fund Balances $(132,885)
The change in net assets reported for governmental activities in thestatement of activities is different because:
Governmental funds report capital outlays as expenditures. However,in the statement of activities, the cost of those assets is allocated overtheir estimated useful lives and reported as depreciation expense.
Capital outlay which is considered expenditures on Statementof Revenues, Expenditures and Changes in Fund Balances $ 137,457
Depreciation expense for the year ended June 30, 2005 (125,406) 12,051
Governmental funds report bonded debt repayments as expenditures.However, this expenditure does not appear in the statement of activitiessince the payment is applied against the bond payable balance on thestatement of net assets 208,000
Add: Net income on the Group Insurance Self- Insurance Internal Service Fund 45,045
Add: Reduction of compensated absences used over compensated absences earned 7,560
Loss on disposal of capital assets (2,168)
Difference between interest on long-term debt on modified accrual basis
versus interest on long-term debt on accrual basis 13,009
Total changes in net assets at June 30, 2005 per Statement of Activities S 150,612
The accompanying notes are an integral part of the basic financial statements.
12
CITY OF KAPLAN, LOUISIANA
Proprietary FundsComparative Statement of Net Assets
June 30, 2005 and 2004
ASSETSCurrent assets:
CashReceivables:
Accounts, net of allowance for uncollectible of5326,414 for 2005 and $342,052 for 2004
Unbilled utility receivablesGrant receivableAccrued interest receivableOther
Total current assetsNoncurrent assets:
Restricted assets -Interest-bearing deposits
Capital assets, net of accumulated depreciation
Total noncurrent assets
Total assets
LIABILITIESCurrent liabilities:
Accounts payableContract payableRetainage payableRetirement payableCompensated absences payableClaims payableDue to other fundsDeferred revenuePayable from restricted assets -
Notes payableRevenue bonds, net of deferred amount on refundingAccrued interest payable
Total current liabilities
Noncurrent liabilities:Customers' deposits payableRevenue bonds, net of deferred amount on refundingDeferred revenue
Total noncurrent liabilities
Total liabilities
NET ASSETSInvested in capital assets, net of related debtRestricted for debt serviceUnrestricted
Total net assets
Business-type Activities -Enterprise Fund
Governmental ActivitiesInternal Service Fund
2005 2004 2005 2004
665,581482,653542,616
1,255
1,758,559
538,63513,268.710
13,807,345
15,565,904
387,674376,869165,747
40,264
287,7284,074
203,00018,908
1,484,264
9,567,01062,861
496,203
66,454 $ 102,904 $101,320 $ 40,629
549,558425,933
822
1,079,217
615,2749,863,123
10,478,397
11,557,614
713,820
9,30321,563
301,6498,148
563,462746,944
15,998
2,380,887
253,866 238,1613,701,700 568,600
- 4,074
3,955,566 810.835
5,439,830 3,191,722
8,345,232
20,660
9,039
110,359
70,988
111,617
110,359 111,617
73,232 57,586
73,232 57,586
73,232
37,127
57,586
54,031
$10,126,074 $8,365,892 $ 37,127 $ 54,031
The accompanying notes are an integral part of the basic financial statements.
13
CITY OF KAPLAN, LOUISIANA
Proprietary FundsComparative Statement of Revenues, Expenses, and Changes in Fund Net Assets
Years Ended June 30, 2005 and 2004
Business-type Activities-Enterprise Fund
Governmental ActivitiesInternal Service Fund
Operating revenues:Charges for services
Operating expenses:Electricity department expensesGas department expensesWater department expensesSewerage department expensesDepreciation expenseSelf insurance expenses
Total operating expenses
Operating income
Nonoperating revenues (expenses):Interest incomeFranchise feeInterest expenseAmortization of bond issuance costsLoss on sale of assets
Total nonoperating revenues (expenses)
Income before contributions and transfers
Capital contributions
Transfers in (out):Transfers inTransfers out
Total transfers in (out)
Change in net assets
Net assets, beginning
Prior period adjustment
Net assets, ending
2005
$ 6,415,340
3,168,114820,857291,402203,748383,568
4,867,689
1,547,651
9,33217,547(81,368)(1,100)
(55,589)
1,492,062
2004
$6,025,154
2,877,374703,781290,179227,012384,638
4,482,984
1,542,170
10,21117,663
(106,814)(8,631)(12,777)
(100,348)
1,441,822
2005 2004
$435,076 $589,554
390,198 449,692
390,198 449,692
44,878 139,862
167 1,007
167 1,007
45,045 140,869
598,616
1,327,458(1,657,954)
(330,496)
1,760,182
8,365,892
$10,126,074
253,314(1,470,344)
(1,217,030)
224,792
8,141,100
$ 8,365,892
-
.
45,045 140,869
54,031 (86,838)
(61,949)
$ 37,127 $ 54,031
The accompanying notes are an integral part of the basic financial statements.
14
CITY OF KAPLAN, LOUISIANA
Comparative Statement of Cash FiowsProprietary Funds
For the Years Ended June 30, 2005 and 2004
Cash flows from operating activities:Receipts from customersPayments to suppliersPayments to employees
Net cash provided by operating activities
Cash flows from noncapital financing activities:Franchise feesCash received from other fundsCash paid to other fundsMeter deposits, net of refundsTransfers from other fundsTransfers to other funds
Net cash used by noncapital financing activities
Cash flows from capital and related financing activities:Capital contributionProceeds from short term financingProceeds from bond refundingPrincipal paid on bonds and notesInterest and fiscal charges paid on bonds
Acquisition of capital assets
Net cash used by capital and related financing activities
Cash flows from investing activities:Interest on investments
Net cash provided by investing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period
Business-Type Activities -Enterprise Fund
2005
1,976,196
17,547
(13,921)15,705
1,327,458(1,657,954)
(311,165)
56,000
2,578,000(552,306)
(79,558)(3.789.155)
(1,787,019)
8,899
8,899
(113,089)
718,178
2004
$6,242,597 $6,228,071(3,777,218) (3,701,767)
(489,183) (447,332)
2,078,972
17,637170
(340,669)6,518
253,314(1.470.344)
(1,533,374)
563,462
(722,000)(86,403)
(611.433)
(856,374)
14,249
14,249
(296,527)
1,014,705
Governmental Activities -Internal Service Fund2005
60,525
166
166
60,691
40,629
2004
435,076 $ 623,660(374,551) (584,038)
39,622
1,007
1,007
40,629
$ 605,089 S 718,178 S 101.320 S 40.629
(continued)
15
CITY OF KAPLAN, LOUISIANA
Comparative Statement of Cash FlowsProprietary Funds (continued)
For the Years Ended June 30, 2005 and 2004
Reconciliation of operating income to net cash providedby operating activities:
Operating incomeAdjustments to reconcile operating income to net cash
provided by operating activities:DepreciationLoss on sale of assetsChanges in current assets and liabilities:
(Increase) decrease in accounts receivable, net(Increase) decrease in unbilled utility receivablesDecrease in stop loss receivableDecrease in accounts payableIncrease in contracts payableIncrease in retainage payable(Decrease) increase in retirement payableDecrease in cash overdraftIncrease (decrease) in claims in processDecrease in deferred revenuesIncrease in compensated absences payable
Net cash provided by operating activities
Business-Type Activities -Enterprise Fund
Governmental Activities -internal Service Fund
2005
383,568
(116,023)(56,720)
(326,146)376,869165,747
(9,303)
(8,148)18,701
2004 2005
384,63812,777
177,79325,125
(65,319)
9,303
(8,148)633
2004
$1,547,651 $1,542,170 $ 44,878 $139,862
34,106
(40,527)15,647 (93,819)
$ 1,976,196 $2,078,972 $ 60,525 $ 39,622
Reconciliation of cash and cash equivalents per statementof cash flows to the balance sheet:
Cash and cash equivalents, beginning of period -Cash - unrestrictedInterest-bearing deposits - restricted
Total cash and cash equivalents
Cash and cash equivalents, end of period -Cash - unrestrictedInterest-bearing deposits - restricted
Total cash and cash equivalents
Net (decrease) increase
$ 102,904 $ 28,268 $ 40,629 $615,274 986,437 -
718,178
$ 66,454538,635605,089
1,014,705
$ 102,904615,274718,178
40,629
101,320
$ 101,320 $ 40,629
40,629
S (113,089) $ (296,527) $ 60,691 $ 40,629
The accompanying notes are an integral part of the basic financial statements.
16
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements
(1) Summary of Significant Accounting Policies
The accompanying financial statements of the City of Kaplan (the City) have been preparedin conformity with generally accepted accounting principles (GAAP) as applied to governmentalunits. GAAP includes all relevant Governmental Accounting Standards Board (GASB)pronouncements. In the government-wide financial statements and the fund financial statements forthe proprietary funds, Financial Accounting Standards Board (FASB) pronouncements andAccounting Principles Board (APB) opinions on or before November 30, 1989, have been appliedunless those pronouncements conflict with or contradict GASB pronouncements, in which case,GASB prevails. The accounting and reporting framework and the more significant accountingpolicies are discussed in subsequent subsections of this note.
A. Financial Reporting Entity
The City of Kaplan was incorporated in 1902 under the provisions of theLawrason Act. The City operates under a Mayor-City Council form of governmentand provides the following services as authorized by its charter: public safety, police,fire, civil defense, highways and streets, sanitation, culture - recreation, publicimprovements, planning and zoning, and general administrative services.
A financial reporting entity consists of (1) the primary government, (2)organizations for which the primary government is financially accountable, and (3)other organizations for which the primary government is not accountable, but forwhich the nature and significance of their relationship with the primary governmentare such that exclusion would cause the reporting entity's financial statements to bemisleading or incomplete. GASB Statement No. 14, The Financial Reporting Entity.establishes criteria for determining which entities should be considered a componentunit and, as such, part of the reporting entity for financial reporting purposes. Thebasic criteria are as follows:
1. A potential component unit must have separate corporate powers that distinguishit as being legally separate from the primary government. These include theright to incur its own debt, levy its own taxes and charges, expropriate propertyin its own name, sue and be sued in its own name without recourse to a State orlocal government, and the right to buy, sell, lease, and mortgage property in itsown name.
2. The primary government must be financially accountable for a potentialcomponent unit. Financial accountability may exist as a result of the primarygovernment appointing a voting majority of the potential component unit'sgoverning body; their ability to impose their will on the potential component unitby significantly influencing the programs, projects, activities, or level of servicesperformed or provided by the potential component unit; or the existence of afinancial benefit or burden. In addition, financial accountability may also exist asa result of a potential component unit being fiscally dependent on the primarygovernment.
17
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
In some instances, the potential component unit should be included in the reportingentity (even when the criteria in No. 2 above are met), if exclusion would render thereporting entity's financial statements incomplete or misleading.
Based on the foregoing criteria, the following governmental organizations are notconsidered part of the City and are thus excluded from the accompanying financialstatements for the reasons noted:
The Kaplan Housing Authority was chartered by the City, and its Board ofDirectors was appointed by the Mayor and City Council. However, the City'soversight responsibilities in the management of operations and financialaccountability are remote.
The City of Kaplan has no authority over nor is it involved with the recordkeeping of the Kaplan Volunteer Fire Department.
The Kaplan City Court is operated under the directorship of the Kaplan CityJudge who is an elected public official. Revenues are derived from court costsand appropriations from the City's General Fund. However, the City cannotsignificantly influence operations nor does it have responsibility for fiscalmanagement.
B. Basis of Presentation
Government-Wide Financial Statements (GWFS)
The statement of net assets and statement of activities displays informationabout the City of Kaplan, the reporting government, as a whole. They include allfunds of the reporting entity. The statements distinguish between governmental andbusiness-type activities. Governmental activities generally are financed throughtaxes, intergovernmental revenues, and other nonexchange revenues. Business-typeactivities are financed in whole or in part by fees charged to external parties forgoods or services. The City's internal service fund is a governmental activity.Internal service fund activity is eliminated to avoid "doubling up" revenues andexpenses.
The statement of activities presents a comparison between direct expensesand program revenues for the business-type activities of the City and for eachfunction of the City's governmental activities. Direct expenses are those that arespecifically associated with a program or function and therefore, are clearlyidentifiable to a particular function. Program revenues include (a) fees, fines, andcharges paid by the recipients of goods or services offered by the programs, and (b)grants and contributions that are restricted to meeting the operational or capitalrequirements of a particular program. Revenues that are not classified as programrevenues, including all taxes, are presented as general revenues.
18
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Fund Financial Statements
The accounts of the City are organized and operated on the basis of funds. Afund is an independent fiscal and accounting entity with a separate set of self-balancing accounts. Fund accounting segregates funds according to their intendedpurpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds ismaintained consistent with legal and managerial requirements. Fund financialstatements report detailed information about the City.
The various funds of the City are classified into two categories:governmental and proprietary. The emphasis on fund financial statements is onmajor governmental and enterprise funds, each displayed in a separate column. Afund is considered major if it is the primary operating fund of the City or meets thefollowing criteria:
a. Total assets, liabilities, revenues or expenditures/expenses of thatindividual governmental or enterprise fund are at least 10 percentof the corresponding total for all funds of that category or type;and
b. Total assets, liabilities, revenues, or expenditures/expenses of theindividual governmental or enterprise fund are at least 5 percentof the corresponding total of all governmental and enterprisefunds combined.
The major funds of the City are described below:
Governmental Funds -
General Fund
The General fund is the general operating fund of the City. It is used toaccount for all financial resources except those required to be accounted for inanother fund. All general tax revenues and other receipts that are not allocated bylaw or contractual agreement to some other fund are accounted for in this fund.General operating expenditures and the capital improvement costs that are not paidthrough other funds are paid from the general fund.
Special Revenue Fund -
Sales Tax Fund
The Sales Tax Fund is used to account for the proceeds of a one percent salesand use tax that is legally restricted to expenditures for a specific purpose.
19
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Capital Projects Fund -
The Capital Projects Fund is used to account for financial resources to beused for the construction of the new sewer plant.
Proprietary Funds -
The City reports the following major enterprise fund:
Utility Fund
The Utility fund is used to account for operations (a) that are financed andoperated in a manner similar to private business enterprises - where the intent of thegoverning body is that the costs (expenses, including depreciation) of providinggoods or services to the general public on a continuing basis be financed or recoveredprimarily through user charges; or (b) where the governing body has decided thatperiodic determination of revenues earned, expenses incurred, and/or net income isappropriate for capital maintenance, public policy, management control,accountability, or other purposes. The City applies all applicable FASBpronouncements issued after November 30, 1989 in accounting and reporting for itsenterprise fund.
Other Fund Types -
The City also reports the following fund types:
Internal Service Funds
Internal service funds are used to account for the financing of goods orservices provided by one department or agency to other departments or agencies ofthe governmental unit, or to other governmental units, on a cost-reimbursement basis.The City's internal service fund is the Self Insurance Fund. This proprietary fund isreported with governmental activities in the government-wide statements.
C. Measurement Focus/Basis of Accounting
Measurement focus is a term used to describe "which" transactions arerecorded within the various financial statements. Basis of accounting refers to"when" transactions are recorded regardless of the measurement focus applied.
Measurement Focus
On the government-wide statement of net assets and the statement ofactivities, both governmental and business-type activities are presented using theeconomic resources measurement focus as defined in item b. below.
tn the fund financial statements, the "current financial resources"measurement focus or the "economic resources" measurement focus is used asappropriate:
20
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
a. All governmental funds utilize a "current financial resources"measurement focus. Only current financial assets and liabilities aregenerally included on their balance sheets. Their operating statementspresent sources and uses of available spendable financial resourcesduring a given period. These funds use fund balance as their measureof available spendable financial resources at the end of the period.
b. The proprietary fund utilizes an "economic resources" measurementfocus. The accounting objectives of this measurement focus are thedetermination of operating income, changes in net assets (or costrecovery), financial position, and cash flows. All assets and liabilities(whether current or noncurrent) associated with their activities arereported. Proprietary fund equity is classified as net assets.
Basis of Accounting
In the government-wide statement of net assets and statement of activities,both governmental and business-type activities are presented using the accrual basisof accounting. Under the accrual basis of accounting, revenues are recognized whenearned and expenses are recorded when the liability is incurred or economic assetused. Revenues, expenses, gains, losses, assets, and liabilities resulting fromexchange and exchange-like transactions are recognized when the exchange takesplace.
Governmental fund financial statements are reported using the currentfinancial resources measurement focus and the modified accrual basis of accounting.Revenues are recognized as soon as they are both measurable and available.Revenues are considered to be available when they are collectible within the currentperiod or soon enough thereafter to pay liabilities of the current period. For thispurpose, the government considers revenues to be available if they are collectedwithin 60 days of the end of the current fiscal period. Expenditures (including capitaloutlay) generally are recorded when a liability is incurred, as under accrualaccounting. However, debt service expenditures are recorded only when payment isdue.
The proprietary fund utilizes the accrual basis of accounting. Under theaccrual basis of accounting, revenues are recognized when earned and expenses arerecorded when the liability is incurred or economic asset is used.
Program revenues
Program revenues included in the statement of activities are derived directlyfrom the program itself or from parties outside the City's taxpayers or citizenry, as awhole; program revenues reduce the cost of the function to be financed from theCity's general revenues.
21
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Allocation of indirect expenses
The City reports all direct expenses by function in the statement of activities.Direct expenses are those that are clearly identifiable with a function. Indirectexpenses of other functions are not allocated to those functions but are reportedseparately in the statement of activities. Depreciation expense is specificallyidentified by function and is included in the direct expense of each function. Intereston general long-term debt is considered an indirect expense and is reported separatelyon the statement of activities.
D. Assets, Liabilities and Equity
Cash, interest-bearing deposits, and investments
For purposes of the statements of net assets, cash and interest-bearingdeposits include all demand accounts, saving accounts, and certificates of deposits ofthe City. For the purpose of the proprietary fund statement of cash flows, "cash andcash equivalents" include all demand and savings accounts, and certificates ofdeposit or short-term investments with an original maturity of three months or lesswhen purchased. See Note (4) for other GASB No. 3 disclosures.
Investments
Under state law, the City may deposit funds with a fiscal agent organizedunder the laws of the State of Louisiana, the laws of any other state in the union, orthe laws of the United States. The City may invest in United States bonds, treasurynotes and bills, government backed agency securities, or certificates and timedeposits of state banks organized under Louisiana Law and national banks havingprincipal offices in Louisiana. In addition, local governments in Louisiana areauthorized to invest in the Louisiana Asset Management Pool (LAMP), a nonprofitcorporation formed by the State Treasurer and organized under the laws of the Stateof Louisiana, which operates a local government investment pool.
Interfund receivables and payables
During the course of operations, numerous transactions occur betweenindividual funds that may result in amounts owed between funds. Those related togoods and services type transactions are classified as "due to and from other funds."Short-term interfund loans are reported as "interfund receivables and payables."Long-term interfund loans (noncurrent portion) are reported as "advances from and toother funds." Interfund receivables and payables between funds within governmentalactivities are eliminated in the statement of net assets.
22
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Receivables
In the government-wide statements, receivables consist of all revenuesearned at year-end and not yet received. Major receivable balances for thegovernmental activities include ad valorem and sales and use taxes. Business-typeactivities report customer's utility service receivables as their major receivables.Uncollectible utility service receivables are recognized as bad debts through theestablishment of an allowance account at the time information becomes availablewhich would indicated the uncollectiblity of the particular receivable. The allowancefor uncollectibles for customers' utility receivables was $482,653 and $425,933 atJune 30, 2005 and 2004; respectively. Unbilled utility service receivable resultingfrom utility services rendered between the date of meter reading and billing and theend of the month are recorded at year-end.
Capital Assets
Capital assets, which include property, plant, equipment, and infrastructureassets, are reported in the applicable governmental or business-type activitiescolumns in the government-wide financial statements. Capital assets are capitalizedat historical cost or estimated cost if historical is not available. Donated assets arerecorded as capital assets at their estimated fair market value at the date of donation.The City maintains a threshold level of $500 or more for capitalizing capital assets.
The costs of normal maintenance and repairs that do not add to the value ofthe asset or materially extend assets lives are not capitalized. Prior to July 1, 2001,governmental funds' infrastructure assets were not capitalized. These assets havebeen valued at estimated historical cost.
Depreciation of all exhaustible capital assets is recorded as an allocatedexpense in the statement of activities, with accumulated depreciation reflected in thestatement of net assets. Depreciation is provided over the assets' estimated usefullives using the straight-line method of depreciation. The range of estimated usefullives by type of asset is as follows:
Buildings 40 yearsEquipment 5-30 yearsUtility system and improvements 25 yearsInfrastructure 20-50 years
In the fund financial statements, capital assets used in governmental fundoperations are accounted for as capital outlay expenditures of the governmental fundupon acquisition. Capital assets used in proprietary fund operations are accounted forthe same as in the government-wide statements.
23
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Compensated Absences
It is the City's policy to permit employees to accumulate earned but unusedvacation and sick leave benefits. Sick leave vest only upon retirement, therefore anaccrual is made only when an employee is eligible for retirement. Amounts areaccrued when incurred in proprietary funds and reported as a fund liability. Amountsthat are expected to be liquidated with expendable available financial resources isreported as expenditure and a fund liability of the governmental fund that will pay it.
Restricted Assets
Restricted assets include cash and interest-bearing deposits of the proprietaryfund that are legally restricted as to their use. The restricted assets are related to therevenue bond accounts and utility meter deposits.
Long-term debt
The accounting treatment of long-term debt depends on whether the assetsare used in governmental fund operations or proprietary fund operations and whetherthey are reported in the government-wide or fund financial statements.
All long-term debt to be repaid from governmental and business-typeresources are reported as liabilities in the government-wide statements. The long-term debt consists primarily of the revenue bonds payable and utility meter depositspayable.
Long-term debt for governmental funds is not reported as liabilities in thefund financial statements. The debt proceeds are reported as other financing sourcesand payment of principal and interest reported as expenditures. The accounting forproprietary fund long-term debt is the same in the fund statements as it is in thegovernment-wide statements.
Equity Classification
In the government-wide statements, equity is classified as net assets anddisplayed in three components:
Invested in capital assets, net of related debt - Consists of capital assetsincluding restricted capital assets, net of accumulated depreciationand reduced by the outstanding balances of any bonds, mortgages,notes, or other borrowings that are attributable to the acquisition,construction, or improvement of those assets.
Restricted net assets - Consists of net assets with constraints placed onthe use either by (I) external groups such as creditors, grantors,contributors, or laws or regulations of other governments; or (2) lawthrough constitutional provisions or enabling legislation.
24
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Unrestricted net assets - All other net assets that do not meet thedefinition of "restricted" or "invested in capital assets, net of relateddebt."
In the fund statements, governmental fund equity is classified as fundbalance. Fund balance is further classified as reserved and unreserved, withunreserved further split between designated and undesignated. Proprietary fundequity is classified the same as in the government-wide statements.
E. Revenues, Expenditures, and Expenses
Operating Revenues and Expenses
Operating revenues and expenses for proprietary funds are those that resultfrom providing services and producing and delivering goods and/or services. It alsoincludes all revenue and expenses not related to capital and related financing,noncapital financing, or investing activities.
Expenditures/Expenses
In the government-wide financial statements, expenses are classified byfunction for both governmental and business-type activities.
In the fund financial statements, expenditures are classified as follows:
Governmental Funds - By CharacterProprietary Fund - By Operating and Nonoperating
In the fund financial statements, governmental funds report expenditures offinancial resources. Proprietary funds report expenses relating to use of economicresources.
Interfund Transfers
Permanent reallocations of resources between funds of the reporting entityare classified as interfund transfers. For the purposes of the statement of activities,all interfund transfers between individual governmental funds have been eliminated.
F. Revenue Restrictions
The City has various restrictions placed over certain revenue sources fromstate or local requirements. The primary restricted revenue sources include:
Revenue Source Legal Restrictions of Use
Sales tax See Note 3Electricity, gas, water and sewer revenue Debt service and utility operations
25
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
The City uses unrestricted resources only when restricted resources are fullydepleted.
G. Budgets and Budgetary Accounting
The City follows these procedures in establishing the budgetary datareflected in the financial statements:
1. The City Clerk prepares a proposed budget for the fiscal year andsubmits it to the Mayor and Council no later than fifteen days priorto the beginning of each fiscal year.
2. A summary of the proposed budget is published and the public isnotified that the proposed budget is available for public inspection.At the same time, a public hearing is called.
3. A public hearing is held on the proposed budget at least ten daysafter publication of the call for the hearing.
4. After the holding of the public hearing and completion of all actionnecessary to finalize and implement the budget, the budget isadopted through passage of a resolution prior to the commencementof the fiscal year for which the budget is being adopted.
5. Budgetary amendments involving the transfer of funds from onedepartment, program or function to another or involving increases inexpenditures resulting from revenues exceeding amounts estimatedrequire the approval of the Council.
6. All budgetary appropriations lapse at the end of each fiscal year.
7. Budgets for all funds are adopted on a basis consistent with generallyaccepted accounting principles (GAAP). Budgeted amounts are asoriginally adopted or as finally amended by the Council.
H. Use of Estimates
The preparation of financial statements in conformity with generallyaccepted accounting principles requires management to make estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure ofcontingent assets and liabilities at the date of the financial statements and the reportedamounts of revenues and expenditures during the reported period. Actual resultscould differ from those estimates.
I. Report Classification
Certain previously reported amounts for the year ended June 30, 2004 havebeen reclassified to conform to the June 30, 2005 classifications.
26
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
(2) Ad^y_al_grem Taxes
Ad valorem taxes attach as an enforceable lien on property as of January 1 of each year.Taxes are levied by the City on September 1 and are actually billed to taxpayers in November. Thetaxes are generally collected in December of the current year and January and February of thesubsequent year. Property tax revenues are recognized when levied to the extent that they result incurrent receivables.
For the years ended June 30, 2005, and 2004, taxes of 10.31 mills were levied on propertywith assessed valuations totaling $15,289,730 and $14,517,550 and were dedicated as follows:
General corporate purposes 4.20 millsBond indebtedness 6.11 mills
Total 10.31 mills
Total taxes levied at June 30, 2005 and 2004 were $157,271 and $148,661, respectively.There were no ad valorem taxes receivable at June 30, 2005 and 2004.
(3) Dedication of Proceeds and Flow of Funds - Sales and Use Tax Levies
Proceeds of the one percent sales and use tax levied by the City (2005 collections$489,471; 2004 $485,735) are dedicated to the following purposes:
1. Constructing, acquiring, extending, and/or improving public parks andrecreational facilities, drainage facilities, streets and street lighting facilities,sewers and sewerage disposal works, waterworks, natural gas facilities,electrical distribution facilities, public buildings (including a jail and/or firedepartment stations and equipment) and purchasing and acquiring equipmentand furnishings for the aforesaid public works, buildings, improvements andfacilities, title to which improvements shall be in the public.
2. Paying principal and interest on any bonded or funded indebtedness of saidCity or for any one or more of said purposes, and such tax to be subject tofunding into bonds by said City in the manner authorized by Sub Part D, PartI, Chapter 6, Title 33 of the Louisiana Revised Statutes of 1950.
Proceeds of the sales and use tax have been pledged and dedicated to the retirement ofRefunding Certificates of Indebtedness, Series 2002, dated December 2, 2002.
27
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
(4) Cash and Interest-Bearing Deposits
Under state law, the City may deposit funds within a fiscal agent bank organized under thelaws of the State of Louisiana, the laws of any other state in the Union, or the laws of the UnitedStates. The City may invest in certificates and time deposits of state banks organized under Louisianalaw and national banks having principal offices in Louisiana. The City may also invest in shares ofany homestead and building and loan association in any amount not exceeding the federally insuredamount. At June 30, 2005, the City has cash and interest-bearing deposits (book balances) totaling$1,305,013 as follows:
Demand deposits $ 224,796Savings and certificates of deposits 1,080,217
Total $1,305,013
These deposits are stated at cost, which approximates market. Under state law, thesedeposits, (or the resulting bank balances) must be secured by federal deposit insurance or the pledgeof securities owned by the fiscal agent bank. The market value of the pledged securities plus thefederal deposit insurance must at all times equal or exceed the amount on deposit with the fiscal agentbank. These securities are held in the name of the pledging fiscal agent bank in a holding or custodialbank that is mutually acceptable to both parties. Deposit balances (bank balances) at June 30, 2005are secured as follows:
Bank balances $ 1,475,584
Federal deposit insurance 552,059Pledged securities (Category 3) , 923,525
Total insurance and pledged securities $ 1,475,584
Pledged securities in Category 3 include uninsured or unregistered investments for which thesecurities are held by the broker or dealer, or by its trust department or agent, but not in the City'sname. Even though the pledged securities are considered unco 1 lateralized (Category 3) LouisianaRevised Statute 39:1229 imposes a statutory requirement on the custodial bank to advertise and sellthe pledged securities within 10 days of being notified by the City that the fiscal agent has failed topay deposited funds upon demand.
28
$ --9,039572
4,955
$ 14,566
$ 665,581482,653
-1,255-
$1,149,489
$ 665,581482,6539,0391,827
4,955
$1,164,055
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)(5) Receivables
Receivables at June 30, 2005 of $1,164,055 consist of the following:
General Utility Total
AccountsUnbilled revenueStop lossAccrued interest
Other
Totals
(6) Due from Other Governmental Units
Amounts due from other governmental units consisted of the following at June 30, 2005:
Amount due from Kaplan City Court for fines collected at fiscal year ending June 30,2005 $ 1,841
Amount due from the Kaplan Housing Authority for June 30, 2005 3,572
Amount due from the State of Louisiana Department of Transportation at fiscal yearending June 30, 2005 2,303
Amount due from the State of Louisiana Department of Revenue for Beer Taxesowed at fiscal year ending June 30, 2005 2,964
Amount due from the Vermilion Parish School Board for sales taxes owed at fiscalyear ending June 30, 2005 83,127
Amount due form the United States Department of Agriculture at fiscal year endingJune 30, 2005 542,616
$ 636,423
(7) Restricted Assets - Propriety Fund Type (Enterprise Utility Fund)
Restricted assets were applicable to the following at June 30, 2005:
2005 2004
Customers'deposits $ 253,866 $ 238,161Bond sinking fund account 213,693 332,837Bond sinking fund account 50,475 22,662Bond capital addition and contingency fund account 20,601 21,614
Total restricted assets $538,635 $ 615,274
29
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
(8) Capital Assets
Capital asset activity for the year ended June 30, 2005, was as follows:
Balance Balance6/30/2004 Additions Deletions 6/30/2005
Governmental activities:Capital assets not being depreciated:
Land $ 114,547 $ - $ - $ 114,547
Other capital assets:Buildings 1,022,621 15,215 - 1,037,836Infrastructure 8,818,563 - - 8,818,563Equipment, ftirniture and fixtures 1,200,879 122,242 38,605 1,284,516
Totals 11,156,610 137,457 38,605 11,255,462
Less accumulated depreciationBuildings 394,645 28,975 - 423,620Infrastructure 5,136,075 - - 5,136,075Equipment, furniture and fixtures 645,233 96,431 36,437 705,227
Total accumulated depreciation 6,175,953 125,406 36,437 6,264,922
Governmental activities,capital assets, net $ 4,980,657 S 12,051 $ 2,168 S 4,990,540
Business-type activities:Capital assets not being depreciated:
Land $ 179,309 $ - $ - $ 179,309Contraction in progress 384,153 3,738,458 - 4,122,611
Other capital assets:Buildings and systems 15,369,261 25,320 - 15,394,581Machinery and equipment 356,513 25,377 - 381,890Automobiles 156,451 - 4,000 152,451
Total other capital assets 16,445,687 3,789,155 4,000 20,230,842
Less accumulated depreciationBuildings and systems 6,280,419 343,357 - 6,623,776Machinery and equipment 174,781 25,909 - 200,690Automobiles 127,364 14,302 4,000 137,666
Total accumulated depreciation 6,582,564 383,568 4,000 6,962,132
Business-type activities,capital assets, net $ 9,863,123 $ 3,405,587 S - $13,268,710
30
(9)
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Depreciation expense was charged to governmental activities as follows:
General governmentPoliceFireStreetsRecreation
Total depreciation expense
Depreciation expense was charged to business-type activities as follows:
ElectricGasWaterSewer
Total depreciation expense
Accounts and Other Payables
The accounts and other payables consisted of the following at June 30, 2005:
$ 33,36643,26827,17217,5244,076
$ 125,406
$ 68,92679,912
141,54293,188
$383,568
AccountsContract payableRetainage payableClaims in process
Totals
GovernmentalActivities
$ 37,979--
73,232
Business -typeActivities
$ 387,674376,869165,747
-
Total
$ 425,653376,869165,74773,232
$ 111,211 $ 930,290 $1,041,501
(10) Changes in Long-Term Debt
The following is a summary of long-term debt for the year ended June 30, 2005:
Long-term bonds payable, July 1,2005
Additions
Reductions
Long-term bonds payable, June 30, 2005
GovernmentalActivities
$ 575,000
-
(208,000)
$ 367,000
Business-typeActivities
$ 1,315,544
3,141,462
(552,306)
$ 3,904,700
Total
$ 1,890,544
3,141,462
(760,306)
$ 4,271,700
31
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Bonds payable at June 30, 2005, are comprised of the following individual issues:
General Obligation Bonds fG.O. Bonds):
$367,000 General Obligation Refunding Bonds, Series 2005, due in annualinstallments of $29,000 to $46,000 through February 1, 2015; at interest rates of2.40% to 4.30% (to be retired from the proceeds of ad valorem taxes) $ 357 QOO
Revenue Bonds:
$100,000 Utilities Revenue Bonds, Series 1994, due in annual installments of$5,000 to $9,000 through April 1, 2009; interest rate of 5.40% (to be retiredfrom income derived from the acquired or constructed assets)
$875,000 Refunding Revenue Bonds, Series 2002, due in annual installmentsof $160,000 to $185,000 through September 1, 2007; at interest rates of 2.50%to 3.75% (to be retired from excess annual revenue)
$615,000 Certificates of Indebtedness, Series 2005, due in annual installmentsof $20,000 to $190,000 through September 1, 2010; interest rate of 5.90% (tobe retired from excess annual revenue)
$2,720,000 Uitilities Revenue Bonds, Series 2005, due in annual installmentsof $11,914 through June 15, 2045; interest rate of 4.250% (to be retired fromexcess annual revenue)
Total revenue bonds
Net
The bonds are due as follows:
Year EndingJune 30,
20062007200820092010
2011-2045
Totals
$ 33,000
540,000
615,000
is
ount on refunding
Hows:
Governmental ActivitiesPrincipalpayments
20,00029,00032,00035,00035,000
216,000
$ 367,000
Interestpayments
12,15112,56011,77722,594
9,68015,053
$ 83,815
2,720,000
3,908,000
(3,300)
$3,904,700
Business-type ActivitiesPrincipalpayments
230,903237,112243,373220,690218,063
2,757,859
$ 3,908,000
Interestpayments
168,707159,803150,312139,194126,568
2,290,989
$3,035,573
Total
431,761438,475437,462417,478389,311
5,279,901
$ 7,394,388
32
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Defeasance of Debt:
On April 1, 1997, the City issued $1,790,000 of Utilities Revenue Refunding Bonds, Series1997, with an interest rate of 5.00% for the purpose of refunding $1,645,000 of outstanding UtilitiesRevenue Bonds, Series 1990, maturing April 1, 2000 to April 1, 2005, bearing interest at the rates of7.50% to 7.75% and paying the costs of issuance of the bonds. The proceeds of $1,752,261 (afterpayment of $37,739 issuance costs and fees) were deposited into an irrevocable trust with an escrowagent to defease the Utilities Revenue Bonds, Series 1990, on April 1, 1999, at a 1.50% redemptionpremium. As a result, the Utilities Revenue Bonds, Series 1990, maturing April 1, 2000 to April 1,2005, are considered to be defeased and the liability has been removed from the City's books. Thisadvance refunding was undertaken to reduce total debt service payments over the next eight years by$119,417 and resulted in an economic gain (difference between the present value of the debt servicepayments on the old and new debt) of $98,697. The reacquisition price exceeded the net carryingamount of the old debt by $107,261. This amount is being netted against the new debt and amortizedover the new debt's life.
On May 1, 1998, the City issued $1,520,000 of Utility Revenue Refunding Bonds, Series1998, with an interest rate of 6.95% for the purpose of refunding $1,415,500 of outstanding UtilitiesRevenue Bonds, Series 1989, maturing April 1, 1999 to April 1, 2004, bearing interest of 11.00% andpaying the costs of issuance of the bonds. The proceeds of $ 1,495,054 (after payment of $24,946 inissuance costs and fees and deposits) and $26,000 transferred from the Sinking Fund were depositedinto an irrevocable trust with an escrow agent to defease the Utilities Revenue Bonds, Series 1989, onApril 1, 1999, at a 2.00% redemption premium. As a result, the Utilities Revenue Bonds, Series1989, maturing April 1, 1999 to April 1, 2004, are considered to be defeased and the liability has beenremoved from the City's books. This advance refunding was undertaken to reduce total debt servicepayments over the next six years by $60,601 and resulted in an economic gain (difference betweenthe present value of debt service payments on the old and new debt) of $51,474. The reacquisitionprice exceeded the net carrying amount of the old debt by $106,450. This amount is being nettedagainst the new debt and amortized over the new debt's life.
On December 2, 2002, the City issued $875,000 of Refunding Certificates of Indebtedness,Series 2002, with an interest rate of 2.50% to 3.75% for the purpose of refunding $550,000 ofoutstanding Refunding Bonds, Series 1992, maturing December 1, 2003, to December I, 2007,bearing interest of 6.35% to 6.65%, and $300,000 of Certificates of Indebtedness, Series 1997,maturing March 1, 2003 to March 1, 2007, bearing interest of 5.6% to 6.0% and paying the costs ofissuance of the bonds. The proceeds of $860,006, (after payment of $14,994 in issuance costs andfees and deposits) were deposited into an irrevocable trust with an escrow agent to defease theRefunding Bonds, Series 1992, on December 2, 2002, at a 1% redemption premium, and theCertificates of Indebtedness, Series 1997, on December 2, 2002, at the principal amount, thereof plusaccrued interest to the date of redemption. As a result, the Refunding Bonds, Series 1992, maturingDecember 1, 2003, to December 1, 2007, and Certificates of Indebtedness, Series 1997, maturingMarch 1, 2003, to March 1, 2007, are considered to be defeased and the liability has been removedfrom the City's books. This advance refunding was undertaken to reduce total debt service paymentsover the next four years by $48,672 and resulted in an economic gain (difference between the presentvalue of debt service payments on the old and new debt) of $45,035. The reacquisition priceexceeded the net carrying amount of the old debt by $5,500. This amount is being netted against thenew debt and amortized over the new debt's life.
33
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
On March 23, 2005, the City issued $367,000 of General Obligation Refunding Bonds, Senes2005, with an interest rate of 2.40% to 4.30% for the purpose of refunding $335,000 of outstandingGeneral Obligation Bonds, Series 1995 A, maturing February 1, 2015, bearing interest of 5.20% to9.00%, and $200,000 of General Obligation Bonds, Senes 1995 B, maturing February 1, 2015,bearing interest of 5.20% to 9.00% and paying the costs of issuance of the bonds. As a result, theGeneral Obligation Bond, Series 1995 A & B, maturing on February 1, 20015, are considered to bedefeased and the liability has been removed from the City's books. This current refunding wasundertaken to reduce total debt service payments over the next six years by $83,197 and resulted in aneconomic gain (difference between the present value of debt service payments on the old and newdebt) of $36,936.
Bond Covenants:
The various bond indentures identified above contain significant limitations and restrictionson annual debt service requirements, maintenance of and flow of monies through various restrictedaccounts, minimum amounts to be maintained in various sinking funds, and minimum revenue bondcoverage. The City is substantially in compliance with all such significant limitations and restrictionsfor the year ended June 30, 2005.
(11) Compensated Absences
Employees of the City earn sick leave at the rate of one day per month, up to a maximum of120 days. No sick leave is paid upon resignation. Employees separated due to retirement are paid foraccumulated sick leave at the hourly rates being earned by that employee at separation. As of June30, 2005, an accrual of $20,727 for accumulated sick leave has been recorded. The amountsattributable to the governmental activities and business-type activities are $9,229 and $11,498,respectively.
Employees of the City earn vacation when they are hired and it is based upon the number ofyears of full-time service and varies from 5 to 15 days per year. Vacation leave cannot carryover tothe following year. As of June 30, 2005, unpaid accumulated vacation leave totaled $26,828. As ofJune 30, 2005, the amount attributable to the governmental activities and business-type activities are$17,195 and $9,633, respectively, since it is anticipated the liability will be liquidated with availablefinancial resources.
Employees of the City earn paid time off, instead of overtime pay at a rate of time and a halfwhich is based on the employee's hourly rate, up to a maximum of 240 days. Employees separateddue to resignation or termination are paid for the amount of accumulated paid time off they earned bythat employee at separation. As of June 30, 2005, an accrual of $23,956 for accumulated paid timeoff has been recorded. The amounts attributable to the governmental activities and business-typeactivities are $4,823 and $19,133, respectively.
(12) Flows of Funds; Restrictions on Use - Utilities Revenues
Under the terms of the $100,000 Utilities Revenue Bonds, Series 1994, $875,000 RefundingRevenue Bonds, Series 2002 bond indentures dated April 1, 1994 and December 2, 2002, all incomeand revenues of every nature derived from the operation of the system are pledged and dedicated tothe retirement of said bonds.
34
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Bonds and Interest Sinking Fund
The City is required to set aside into a Utilities Revenue Bond Sinking Fund each month asum equal to 1/6 of the interest falling due on the next payment dated plus 1/12 of the principal fallingdue on the next principal payment date. Funds deposited in this account are available only for theretirement of maturing bonds and interest.
Reserve Fund
The Utilities Revenue Bond Reserve Fund is maintained solely for the purpose of paying theprincipal of and interest on bonds payable from the sinking fund as which there would otherwisedefault. The fund is required to be funded in an amount equal to the reserve fund requirement(SI54,646 at June 30, 2005).
(13) Employee Retirement
The City has several pension plans covering substantially all of its employees, as follows:
-Municipal Employees' Retirement System of Louisiana-State of Louisiana - Municipal Police Employees' Retirement System-State of Louisiana - Firefighters' Retirement System-Louisiana State Employees' Retirement System
Substantially all City employees are covered under the Municipal Employees' RetirementSystem of Louisiana except firemen, policemen, and judges, who are covered under the Firefighters'Retirement System, Municipal Police Employees' Retirement System, and Louisiana StateEmployees' Retirement System, respectively. Details concerning these plans follow:
Municipal Employees' Retirement System of Louisiana
Plan description:
The Municipal Employees' Retirement System of Louisiana (the System) is a cost-sharing multiple-employer public employee retirement system (PERS) asestablished and provided for by R.S. 11:1731 of the Louisiana Revised Statutes(LRS). The System is composed of two distinct plans, Plan A and Plan B, withseparate assets and benefit provisions. Employees of the City are members of PlanB.
35
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Membership is mandatory as a condition of employment beginning on the dateemployed if the employee is on a permanent basis working at least thirty-five hoursper week, not participating in another public funded retirement system and underage sixty (60) at date of employment. Those individuals paid jointly by aparticipating employer and the City are not eligible for membership in the System.Under Plan B, employees who retire at or after age 60 with at least 10 years ofcreditable service or at or after age 55 with 30 years of creditable service are entitledto a retirement benefit, payable monthly for life, equal to 2% of their finalcompensation multiplied by the employee's years of creditable service. Finalcompensation is the employee's monthly earnings during the 36 consecutive orjoined months that produce the highest average. The System also provides deathand disability benefits. Benefits are established by State statute.
The Municipal Employees' Retirement System of Louisiana issues a publiclyavailable financial report that includes financial statements and requiredsupplemental information. That report may be obtained by writing to MunicipalEmployees' Retirement System of Louisiana, 7937 Office Park Boulevard, BatonRouge, Louisiana 70809.
Funding policy:
Plan members are required to contribute 5.0% of their annual covered salary and theCity is required to contribute at an actuarially determined rate. The current rate is9.50% of annual covered payroll. The contribution requirements of plan membersand the City are established and may be amended by the System's Board ofTrustees. The City's contributions to the System for the years ended June 30, 2005,2004, and 2003, were $72,647, $62,375, and $53,334, respectively, equal to therequired contributions for each year.
State of Louisiana - Municipal Police Employees' Retirement System
Plan description:
The Municipal Police Employees' Retirement System (the System) is a cost-sharing multiple -employer public employee retirement system (PERS).
Membership is mandatory for any full-time police officer employed by amunicipality of the State of Louisiana and engaged in law enforcement, empoweredto make arrest, providing they do not have to pay social security and providing theymeet the statutory criteria. Employees who retire at or after age 50 with at least 20years of creditable service, or at or after age 55 with at least 12 years of creditableservice are entitled to a retirement benefit payable monthly for life, equal to 3-1/3%of their average final compensation multiplied by the employee's years ofcreditable service. Final compensation is the employee's monthly earnings duringthe 36 consecutive or joined months that produce the highest average. The Systemalso provides death and disability benefits. Benefits are established by Statestatute.
36
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
The Municipal Police Employees' Retirement System issues a publicly availablereport that includes financial statements and required supplemental information.That report may be obtained by writing to Municipal Police Employees'Retirement System, 8401 United Plaza Boulevard, Suite 270, Baton Rouge,Louisiana 70809-7017.
Funding policy:
Plan members are required to contribute 7.5% of their annual covered salary andthe City is required to contribute 21.5% as established by State statute. The City'scontributions to the System for the years ended June 30, 2005, 2004, and 2003,were $17,674, $9,868, and $8,716, respectively, equal to the required contributionsfor each year.
State of Louisiana - Firefighters' Retirement System
Plan description:
The Firefighters' Retirement System (the System) is a cost-sharing multiple-employer public retirement system (PERS), as established and provided for by R.S.11:2251 through 2269 of the Louisiana Revised Statutes (LRS).
Membership is mandatory as a condition of employment beginning on dateemployed if the employee is on a permanent basis as a firefighter, not participatingin another public funded retirement system and under age fifty (50) at date ofemployment. Employees who retire at or after age 50 with at least 20 years ofcreditable service, or at or after age 55 with at least 12 years of creditable serviceare entitled to a retirement benefit payable monthly for life, equal to 3-1/3% oftheir average final compensation multiplied by the employee's years of creditableservice. Final compensation is the employee's monthly earnings during the 36consecutive or joined months that produce the highest average. The System alsoprovides death and disability benefits. Benefits are established by State statute.
The Firefighters' Retirement System issues a publicly available financial report thatincludes financial statements and required supplemental information. That reportmay be obtained by writing to Firefighters' Retirement System, Post Office Box94095 Capitol Station, Baton Rouge, Louisiana 70804-9095.
Fund policy:
Plan members are required to contribute 8.0% of their annual covered salary andthe City is required to contribute at an actuarially determined rate. The current rateis 24% of annual covered payroll. The contribution requirements of Plan membersare established and may be amended by the System's Board of Trustees. TheCity's contributions to the System for the years ended June 30, 2005, 2004, 2003,were $16,102, $20,438, and $10,775, respectively, equal to the requiredcontributions for each year.
37
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Louisiana State Employees' Retirement System
Plan description:
The Louisiana State Employees' Retirement System (the System) is a single-employer public employee retirement system established under the provisions ofTitle II, Section 401, of the Louisiana Revised Statutes of 1991, controlled andadministered by a separate board of trustees.
All State permanent employees are mandated by State Law to participate in theSystem and all elected or appointed officials are eligible to participate in theSystem. Employees who retire at or after age 60 with at least 10 years of creditableservice, at or after age 55 with 25 years of creditable service, or at any age with atleast 30 years of creditable service are entitled to a retirement benefit payablemonthly for life, equal to 2-1/2% of their average annual compensation for everyyear of service plus $300. Average compensation is the employee's monthlyearnings during the 36 consecutive months that produce the highest average.Employees who terminate with at least the amount of creditable service statedpreviously and who do not withdraw their employee contributions, may retire at theages specified previously and receive the benefit accrued to their date oftermination. The System also provides death and disability benefits. Benefits areestablished by State statute.
The Louisiana State Employees' Retirement System issues a publicly availablefinancial report that includes financial statements and required supplementaryinformation. That report may be obtained by writing Louisiana State Employees'Retirement System, Post Office Box 44213, Baton Rouge, Louisiana 70804-4213.
Funding policy:
Plan members (judges) are required to contribute 11.50% of their annual coveredsalary and the City is required to contribute at an actuarially determined rate. Thecurrent rate is 17.8% of annual covered payroll. The contribution requirements ofPlan members and the City are established and may be amended by the System'sBoard of Trustees. The City's contributions to the System for the years ended June30, 2005, 2004, and 2003, were $3,216, $3,320 and $1,359, respectively: equal tothe required contributions for each year.
(14) Litigation and Claims
In August of 1973, a judgment in the amount of $189,540, plus interest, was rendered infavor of the plaintiff in the case of Leroy J. Romero, et al vs. the City of Kaplan. The United StatesFidelity & Guaranty Insurance Company, the City's insurer, has paid its policy limits of $100,000plus interest, leaving an outstanding judgment against the City of Kaplan for $89,540, plus interest.
On January 3, 1994, the City entered into a consent judgment awarding Washington NationalInsurance Company $25,988, plus attorney fees in the amount of $6,000, plus legal interest from May1, 1990 until paid for sums due on the group health and accident insurance policy.
38
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
In the opinion of the City's legal counsel, such judgments operate as an encumbrance againstthe City, although it is judicially unenforceable based on legal precedents, which have held thatproperty, which is owned by the public and is being used for public purposes, is exempt from seizure.However, legal counsel further states that the property owned by a municipality, but which is beingused in a nongovernmental, profit-making way, may be seized.
As a result of this legal opinion, no provisions have been made in the financial statements forthe amount of the outstanding judgments.
The City is also a defendant in various other lawsuits; however, management and counsel forthe City of Kaplan are unable to reasonably estimate at this time the amount of liability in excess ofinsurance coverage which may be incurred if adverse decisions are rendered.
(15) Enterprise Fund Operations
Operations of the City of Kaplan's Utility System consists of electric and gas distributionsystems, and water and sewer utilities. The City purchases electricity and gas for resale in itsdistribution systems from Entergy and Magnum Gas Marketing Company, respectively.
Plant and equipment acquired by the utility fund in years prior to 1975 have not beensegregated on the accounting records in such a manner that the actual investment in each of theoperating utility systems can be determined. For financial statement purposes, depreciation on suchplant and equipment during those fiscal years were allocated to the individual operating departmentson the ratio of gross utility sales in each department. Depreciation on additions to plant andequipment since 1975, have been charged directly to the applicable department. Other operatingrevenues and expenses which cannot be identified as applicable to a single department have beenallocated on the basis of gross utility sales or, if associated with payroll, on the basis of payroll costsin the individual departments.
Operating results of the individual utilities for the year ended June 30, 2005, are as follows:
ElectricDept.
GasDept.
WaterDept.
SewerageDept.
TotalEnterprise
Fund
Operating revenues $ 4,557,364 $945,581 $ 485,966 $ 426,429 $ 6,415,340
Operating expenses :Depreciation 68,926 79,912 141,542 93,188 383,568Other 3,168,114 820,857 291,402 203,748 4,484,121
Total operating
expenses 3,237,040 900,769 432,944 296,936 4,867,689
Operating income $ 1,320,324 $ 44,812 $ 53,022 $ 129,493 S 1,547,651
39
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
(16) Leases
Operating lease:
In fiscal year 2003, the City entered into an operating lease for the use of a John Deere 6410Utility Tractor with a Rhino BD150 Ditch Back Mower. The lease was entered into on May 20,2003, and has a three-year term ending on May 20, 2006. Total expenditures for this lease totaled$14,079 and $14,079 and for the year ended June 30, 2005 and 2004, respectively. The futureminimum payments for this lease are as follows:
Year Ending
June 30 Amount
2006 $11,733
In fiscal year 2004, the City entered into an operating lease for the use of six Dell computersand one laser printer. The lease entered into on September 24, 2003. and has a three year term endingon September 24, 2006. Total expenditures for this lease totaled $5,789 and $4,297 for the yearended June 30, 2005 and 2004, respectively. The future minimum payments for this lease are asfollows:
Year Ending
June 30 Amount
2006 $ 5,789
In fiscal year 2005, the City entered into an operating lease for the use of seven Dellcomputers and one laser printer. The lease entered into on July 26, 2004 and has a three year termending on July 26, 2007. Total expenditures for this lease totaled $4,104 for the year ended June 30,2005. The future minimum payments for this lease are as follows:
Year EndingJune 30 Amount
2006 $ 4,4762007 2,745
Total $7,221
40
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
In fiscal year 2005, the City entered into an operating lease for the use of one Dell computer .The lease was entered into on August 13, 2004 and has a three year term ending on August 13, 2007.Total expenditures for this lease totaled $458 for the year ended June 30, 2005. The future minimumpayments for this lease are as follows:
Year Ending
June 30 Amount
2006 $ 5502007 382
Total $ 932
(17) Compensation of City Officials
A detail of compensation paid to the Mayor and City Council for the year ended June 30,2005, follows:
Levi J. Schexnider, Mayor $ 27,415
City Council:Dolores Broussard 4,200Warren Whaley, Sr. 4,200Jerry Landry 4,200Linda Hardee 4,200Jonathan Perry 4,200
Total $48,415
(18) Risk Management
Effective August 1, 1990, the City established a risk management program for its grouphealth and life insurance coverage and accounts for it in the Group Insurance Fund. This programprovides employees and their dependents health benefits up to $1,000,000 in a lifetime maximum.The City purchases commercial insurance for claims in excess of $35,000 per individual per year ofcoverage provided by the program.
During the fiscal year 1991, the City adopted the provisions of GASB Statement No. 10,Accounting and Financial Reporting for Risk Financing and Related Insurance Issues. As required bythe standard, a reconciliation of claims liabilities is shown below. All funds of the City participate inthe program and make payments to the Group Insurance Fund based on premiums needed to pay priorand current year claims, administrative cost, and commercial insurance premiums. For the yearsended June 30, 2005, 2004, and 2003, the claims liability of $73,232, $57,586, and $151,405,respectively, were reported in the Group Insurance Fund. The claims liability is based on therequirements of GASB Statement No. 10, which are that a liability for claims be reported as of thefinancial statement date if information prior to the issuance of the financial statements indicates that itis probable that a liability has been incurred and the amount of the loss can be reasonably estimated.
41
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
Reconciliation of Claims Liabilities
Unpaid claims at June 30, 2004 $ 57,586Claims incurred 314,455Claims payments (298,809)
Unpaid claims at June 30, 2005 $ 73,232
Claims payable of $73,232 at June 30, 2005 was determined as follows:
A. Claims incurred prior to June 30, 2005 and paidin July, 2005 and August, 2005 $ 63,970
B. Claims incurred prior to June 30, 2005 and pendingat August 31,2005
C. Provision for claims incurred but not reported 9,262
Total claims payable S 73,232
The provision for claims incurred but not reported of $9,262 was calculated utilizinghistorical information adjusted for current trends.
(19) Interfund Transactions
A. Interfund receivables and payables, by fund, at June 30, 2005 are as follows:
Interfund InterfundReceivables Payables
Major funds:Genera! Fund $ 500 $ 217,024
Sales Tax Fund 504,752 -
505,252 217,024
Nonmajor funds:
Police Special Fund - 500
Total governmental funds 505,252 217,524
Proprietary funds;Enterprise fund - 287,728
Total S 505,252 $ 505,252
The amounts due from the General Fund from various other funds are forreimbursements owed for expenditures paid for those funds.
42
CITY OF KAPLAN, LOUISIANA
Notes to Basic Financial Statements (Continued)
B. Transfers consisted of the following at June 30, 2005:
Transfers In Transfers OutMajor funds:
General Fund $ 1,838,401 $ 250,246Capital Project Fund - 1,000,000Sales Tax Fund - 257,659
Total major governmental funds 1,838,401 1,250,246
Proprietary Fund -Enterprise Fund 1,327,458 1,657,954
Total $ 3,165,859 S 3,165,859
Transfers are used to (a) move revenues from the fund that statute or budget requiresto collect them to the fund that statute or budget requires to expend them and to (b) useunrestricted revenues collected in the general fund to finance various programs accounted forin other funds in accordance with budgetary authorizations.
(20) Prior Period Adjustment
Net assets in the Internal Service Fund at the beginning of the fiscal year June 30, 2005 hasbeen adjusted to correct an error in a prior year. In 2004, the stop loss receivable was overstated;therefore a prior adjustment of $61,949 is necessary to decrease net assets.
43
CITY OF KAPLAN, LOUISIANAGeneral Fund
Budgetary Comparison ScheduleFor the Year Ended June 30, 2005
With Comparative Actual Amounts for Year Ended June 30, 2004
2005
Revenues:TaxesLicenses and permitsIntergovernmentalFines and forfeituresMiscellaneous
Total Revenues
Expenditures:Current -
General governmentPublic safetyStreets, bridges, and drainageCulture and recreation
Captial outlay
Total expenditures
Deficiency of revenues overexpenditures
Other financing sources (uses):Transfers inTransfers out
Total other financing sources (uses)
Excess (deficiency) of revenuesand other sources overexpenditures and other uses
Fund balance, beginning
Fund balance, ending
BudgetOriginal
$ 142,250124,90032,00030,00027,000
356,150
567,430920,695451,475
20,05039,290
1,998,940
(1,642,790)
1,940,500(337,000)
1,603,500
(39,290)
(214,524)
Final
$ 142,250124,90032,00030,00027,000
356,150
567,430920,695451,475
20,05039,290
1,998,940
(1,642,790)
1,940,500(337,000)
1,603,500
(39,290)
(214,524)
Variance withFinal Budget
PositiveActual (Negative)
$ 62,778192,05216,62420,575
102,210394,239
559,696879,054437,071
19,53053,217
1,948,568
(1,554,329)
1,838,401(250,246)
1,588,155
33,826
(214,524)
$ (79,472)67,152
(15,376)(9,425)75,21038,089
7,73441,64114,404
520(13,927)
50,372
88,461
(102,099)86,754
(15,345)
73,116
2004Actual
$ 61,039190,98422,56929,47933,541
337,612
604,818934,254473,74539,983
2,052,800
(1,715,188)
1,662,867(260,481)
1,402,386
(312,802)
98,278
$(253,814) $ (253,814) $ (180,698) $ 73,116 $ (214,524)
45
CITY OF KAPLAN, LOUISIANASpecial Revenue Fund
Sales Tax Fund
Budgetary Comparison ScheduleFor the Year Ended June 30, 2005
With Comparative Actual Amounts for the Year Ended June 30, 2004
2005
Revenues:Sales taxIntergovernmental - grantInterest incomeMiscellaneous
Total revenues
Expenditures:
Current -General government
Capital outlay -
Public safety
Streets, bridges, and drainage
Administration
Total capital outlay
Total expenditures
Excess of revenues
over expenditures
Other financing uses:
Transfers out
Excess (deficiency) of revenuesover expenditures and otheruses
Fund balances, beginning
Fund balances, ending
BudgetOriginal
$ 485,000-
1,000
486,000
241,275
43,000
-
24,000
67,000
308,275
Final
$ 485,000-
1,000
486,000
241,275
43,000
-
24,000
67,000
308,275
Actual
$489,471-
2,294
491,765
202,184
42,225
-
22,254
64,479
266,663
Variance withFinal Budget
Positive(Negative)
$ 4,471-
1,294
5,765
39,091
775
-
1,746
2,521
41,612
2004Actual
$485,7357,7831,081
37,398
531,997
205,968
33,350
31,744
33,974
99,068
305,036
177,725 177,725 225,102
(177,725) (177,725) (257,659)
47,377 226,961
(79,934) (185,356)
(32,557) (32,557)
994,626 994,626 994,626 -
41,605
953,021
$ 994,626 $ 994,626 $962,069 $(32,557) $994,626
46
CITY OF KAPLAN, LOUISIANAGeneral Fund
Budgetary Comparison Schedule - RevenuesFor the Year Ended June 30, 2005
With Comparative Actual Amounts for Year Ended June 30, 2004
2005
Revenues:Taxes -
Ad valorem
Licenses and permits:Occupational licensesFranchise feesBeer permitsOther permits
Total licenses and permits
Intergovernmental:Beer tax revenueState revenue sharingOther
Total intergovernmental
BudgetOriginal Final Actual
Variance withFinal Budget
Positive 2004(Negative) Actual
$142,250 $142,250 $ 62,778 $ (79,472) $ 61,039
95,20018,6008,0003,100
124,900
12,0004,000
16,000
32,000
95,20018,6008,0003,100
124,900
12,0004,000
16,000
32,000
161,09621,183
7,2952,478
192,052
11,570-
5,054
16,624
65,8962,583(705)(622)
67,152
(430)(4,000)
(10,946)
(15,376)
161,84217,7428,1603,240
190,984
14,6524,4803,437
22,569
Fines and forfeitures 30,000 30,000 20,575 (9,425) 29,479
Miscellaneous
Total revenues
27,000 27,000 102,210 75,210 33,541
$356,150 $356,150 $394,239 $ 38,089 $337,612
49
CITY OF KAPLAN, LOUISIANAGeneral Fund
Budgetary Comparison Schedule - ExpendituresFor the Year Ended June 30, 2005
With Comparative Actual Amounts for Year Ended June 30, 2004
2005
General government:Legislative -
Salaries - mayor and city councilPayroll taxesRetirementInsurance
Total legislative
Judicial -SalariesPayroll taxesRetirementInsuranceAppropriation to Vermilion Parish Police JuryLegal and accountingMiscellaneous
Total judicial
General and administrative -SalariesPayroll taxesRetirementUnemploymentInsuranceLegal and accountingOffice suppliesTravel and trainingOfficial journal publication and advertisementRepairs and maintenanceComputer servicesDues and subscriptionsTelephone and utilities
Engineering fees
Miscellaneous
Total general and administrative
BudgetOriginal
$ 47,0003,6002,0008,000
60,600
30,9602,2503,420
38,20016,2112,5005,200
98,741
127,9008,600
10,000100
57,87987,80013,0002,500
12,5007,0004,0004,000
28,500
4,400
7,450
375,629
Final
$ 47,0003,6002,0008,000
60,600
24,1712,2503,420
38,20023,0002,5005,200
98,741
127,9008,600
10,000100
57,87987,80013,0002,500
12,5007,0004,0004,000
28,500
4,400
7,450
375,629
Actual
$ 48,4153,6302,5877,543
62,175
15,8521,2573,216
37,82622,744
1204,327
85,342
127,8519,3349,748-
57,56487,88512,6052,710
12,1637,7324,9023,960
28,406
4,133
8,210
377,203
Variance withFinal Budget
Positive(Negative)
$ (1,415)(30)
(587)457
(1,575)
8,319993204374256
2,380873
13,399
49(734)252100315(85)395
(210)337
(732)(902)
40
94
267
(760)
(1,574)
2004Actual
$ 47,4003,5332,0466,771
59,750
29,0022,1523,320
39,69511,4438,0754,197
97,884
124,9788,596
11,9213,970
83,40093,51112,738
1,80214,8425,6305,2155,133
33,353
-
5,596
410,685
(continued)
50
CITY OF KAPLAN, LOUISIANAGeneral Fund
Budgetary Comparison Schedule - Expenditures (continued)For the Year Ended June 30, 2005
With Comparative Actual Amounts for Year Ended June 30, 2004
2005
Civil service -SalariesPayroll taxesRetirementInsuranceLegalOffice suppliesTelephone and utilitiesMiscellaneous
Total civil service
Total general government
Public safety -Police department:
SalariesPayroll taxesRetirementInsuranceTravel and trainingRepairs and maintenanceTelephone and utilitiesPrisoners' boardAuxiliary policeUniforms and suppliesMiscellaneous
Total police department
Fire department:SalariesPayroll taxesRetirementVolunteer fire department retirementInsuranceRepairs and maintenanceMiscellaneous
Total fire department
Total public safety
BudgetOriginal
19,0001,3501,6007,110700500800
1,400
32,460
567,430
412,20032,00017,700133,7906,80051,60020,0509,6004,40010,40022,600
721,140
103,1009,28017,00013,20054,000
7002,275
199,555
920,695
Final
19,0001,3501,6007,110700500800
1,400
32,460
567,430
412,20032,00017,700133,7906,80051,60020,0509,6004,40010,40022,600
721,140
103,1009,28017,00013,20054,000700
2,275
199,555
920,695
Actual
19,8431,4521,9408,589719437672
1,324
34,976
559,696
412,12531,79117,674120,7755,89731,44218,2416,7694,30010,33322,541
681,888
102,9998,86716,10212,77053,940700
1,788197,166
879,054
Variance withFinal Budget
Positive(Negative)
(843)(102)(340)
(1,479)(19)6312876
(2,516)
7,734
7520926
13,015903
20,1581,8092,8311006759
39,252
10141389843060
-487
2,389
41,641
2004Actual
19,5971,3601,497
10,815281942676
1,331
36,499
604,818
398,26632,0969,868
185,1798,77316,89919,72311,3863,31010,83742,167
738,504
93,6657,84520,43811,74762,016
-39
195,750
934,254
(continued)
51
CITY OF KAPLAN, LOUISIANAGeneral Fund
Budgetary Comparison Schedule - Expenditures (continued)For the Year Ended June 30, 2005
With Comparative Actual Amounts for Year Ended June 30, 2004
2005
Streets, bridges, and drainage -SalariesPayroll taxesRetirementInsuranceRepairs and maintenanceTelephone and utilitiesGravel, shell, and suppliesMiscellaneous
Total streets, bridges,
and drainage
Culture and recreation -SalariesPayroll taxesRetirementInsuranceSuppliesRepairs and maintenanceTelephone and utilitiesPark expenseMiscellaneous
Total culture and recreation
Capital outlay
Total expenditures
BudgetOriginal
227,00018,35023,00099,00032,50010,60038,000
3,025
451,475
2702030
2,570-420
4,50011,800
440
20,050
39,290
Final
227,00018,35023,00099,00032,50010,60038,000
3,025
451,475
2702030
2,570-420
4,50011,800
440
20,050
39,290
Actual
226,92816,48921,94598,91828,458
7,28034,790
2,263
437,071
2681921
2,562-416
4,35411,790
100
19,530
53,217
Variance withFinal Budget
Positive(Negative)
721,8611,055
824,0423,3203,210
762
14,404
2198
-4
14610
340
520
(13,927)
2004Actual
222,71915,91516,138
142,60831,714
9,59132,736
2,324
473,745
11,805856919
3,418269870
1,99818,792
1,056
39,983
$ 1,998,940 $1,998,940 $1,948,568 S 50,372 $2,052,800
52
CITY OF KAPLAN, LOUISIANACapital Project Fund
2003 Louisiana Community Development Block GrantBudgetary Comparison Schedule
For the Year Ended June 30, 2005With Comparative Actual Amounts for Year Ended June 30, 2004
2005
Orignial Final Actual
Variance withFinal Budget
Positive(Negative)
2004Actual
Revenues:Intergovernmental -
Federal grant
Expenditures:
Excess of revenues
over expenditures
Other financing uses:Transfer out
Excess of revenues overexpenditures and other uses
Fund balance, beginning
Fund balance, ending
$ 1,000,000 $ 1,000,000 $ 1,000,000
1,000,000 1,000,000 1,000,000
(1,000,000) (1,000,000) (1,000,000)
53
CITY OF KAPLAN, LOUISIANA
Nonmajor Governmental Funds
Combining Balance SheetJune 30, 2005
With Comparative Totals for June 30, 2004
ASSETSCash and cash equivalentsDue from other governmental entitiesAccrued interest receivable
Total assets
LIABILITIES AND FUND BALANCES
Liabilities:Accounts payableDue to other funds
Total liabilities
Special Revenue Debt Service
FireProtection
Fund
$106,093-335
$106,428
PoliceSpecialFund
58,024261237
$8,522
General CertificatesObligation ofRefunding Indebtedness
Bonds Series 1992Series 2005 Sinking
Fund Fund
$30,813 $ ---
$30,813 $ -
Totals2005
$144,930261572
$145,763
2004
$ 277,607602743
$278,952
965 $ -
965
500
500
965500
1.465
500
500
Fund balances:Reserve for debt retirementUnreserved - undesignated
Total fund balances
105.463105,463
8.0228,022
Total liabilities and fund balances $ 106,428 $8.522
30,813
30,813
30,813113.485
144,298
$30,813 $
179,82998.623
278,452
$145,763 $278,952
55
CITY OF KAPLAN. LOUISIANA
Nonmajor Governmental Funds
Combining Statement of Revenues, Expenditures and Changes in Fund BalancesYear Ended June 30, 2005
With Comparative Totals for Year Ended June 30, 2004
Special Revenue Debt Service
Revenues:IntergovernmentalInterest incomeMiscellaneous
Total revenues
Expenditures:Public safety -
Travel and training
Repairs and maintenance
Telephone and utilities
Uniforms and supplies
Equipment
Supplies
Miscellaneous
Capital outlay
Debt service -
Principal retirement
Interest paid
Paying agent fees
Total expenditures
Excess (deficiency) of revenuesover expenditures
Other financing sources (uses):Proceeds of refunding debtPayment of refunding debt
Total other financing sources (uses)
Excess (deficiency) of revenuesand other sources overexpenditures and other uses
Fund balances, beginning
Fund balances, ending
FireProtection
Fund
$ 67,035904
67,939
491
13,732
12,485
6,959
3,156
3,449
8,886
49,158
18,781
-
.
18,781
86,682
$105,463
PoliceSpecialFund
$17,322
17,322
2,837
7.529
10.875
21,241
(3.919)
.
(3,919)
11,941
$ 8,022
GeneralObligationRefunding
BondsSeries 2005
Fund
$ 94,4931,926
96.419
208,000
33,846
3,589
245,435
(149,016)
367,000(367,000)
(149,016)
179,829
$ 30,813
Certificateof
IndebtednessSeries 1992
SinkingFund
$ -
$ -
-
.
-
-
-
$ -
Totals2005 2004
178,8502,830
181,680
(134,154)
367,000(367,000)
$171,1202,154
17.772
191,046
491
13,73212,4856,9593,1562,83710,978
19,761
208,000
33,8463,589
315,834
1,0006,98313,2036,0951,5152,66718,03240,120
35,00032,9702,000
159,585
31,461
(134,154) 31,461
278,452 246,991
$144,298 $278,452
56
NONMAJOR SPECIAL REVENUE FUNDS
To account for the proceeds of specific revenue sources that are legally restricted to expenditures for specificpurposes.
Parish Fire Protection Fund -To account for monies received from the Vermilion Parish Police Jury to defray costs of the fire department.
Police Special Fund -To account for monies received from a 15% dedication of court fines received by the General Fund andused to defray costs of the police department.
57
CITY OF KAPLAN, LOUISIANANonmajor Special Revenue Funds
Parish Fire Protection Fund
Schedule of Revenues, Expenditures, and Changes in Fund Balance -Budget (GAAP Basis) and ActualFor the Year Ended June 30, 2005
With Comparative Actual Amounts for the Year Ended June 30, 2004
2005
Revenues:Intergovernmental -
Appropriation from Vermilion Parish Police JuryFederal sourcesState sourcesInterest incomeOther income
Total revenues
Expenditures:Current -
Public safety - fireTravel and trainingRepairs and maintenanceTelephone and utilitiesUniforms and suppliesEquipmentMiscellaneous
Capital outlay
Total expenditures
Excess of revenues overexpenditures
Fund balance, beginning
Fund balance, ending
Budget
$32,240-
34,800700
-
67,740
64016,00015,0009,0006,5506,550
14,000
67,740
_
86,682
$86,682
Actual
$ 32,240-
34,795904
-
67,939
49113,73212,4856,9593,1563,4498,886
49,158
18,781
86,682
$105,463
Variance -Favorable
(Unfavorable)
t;•S-
(5)204
-
199
1492,2682,5152,0413,3943,1015,114
18,582
18,781
_
$ 18,781
2004Actual
$ 32,24043,605
-650
17,602
94,097
1,0006,983
13,2036,0951,5159,477
40,120
78,393
15,704
70,978
$ 86,682
58
CITY OF KAPLAN, LOUISIANANonmajor Special Revenue Fund
Police Special Fund
Statement of Revenues, Expenditures, and Changes in Fund BalanceBudget (GAAP Basis) and ActualFor the Year Ended June 30, 2005
With Comparative Actual Amounts for Year Ended June 30, 2004
2005
Revenues:Fines - courtIntergovernmental - stateMiscellaneous
Total revenues
Budget
6,20010,000
Actual
$ 4,06113,261
Variance -Favorable
(Unfavorable)
$(2,139)3,261
16,200 17,322 1,122
2004Actual
$ 6,0612,671
8,732
Expenditures:Current -
Public safety - policeSuppliesMiscellaneous
Capital outlayTotal expenditures
Deficiency of revenuesover expenditures
Fund balance, beginning
Fund balance, ending
2,9002,300
11,000
16,200
^
11,941
$11,941
2,8377,529
10,875
21,241
(3,919)
11,941
$ 8,022
63(5,229)
125
(5,166)
3,919
_
$ 3,919
2,6778,555-
11,232
(2,490)
14,431
$ 11,941
59
NONMAJOR DEBT SERVICE FUNDS
To account for the accumulation of resources for, and the payment of, general long-term debt principal,interest, and related costs.
General Obligation Refunding Bonds, Series 2005To accumulate monies for the General Obligation Bonds, Series 1995 A & B issued in the amounts of$500,000 and $300,000, respectively. Debt service is financed by specifically dedicated ad valorem taxlevies.
Certificates of Indebtedness. Series 1992 Sinking Fund -
To accumulate monies for the payment of the Certificate of Indebtedness, Series 1992 issued in the amountof $680,000. The Certificates were issued for the purpose of constructing and acquiring improvements tothe utility system and City jail and to refund the Certificates of Indebtedness, Series 1986. The Certificatesare financed by excess annual revenues.
60
CITY OF KAPLAN, LOUISIANA
Nonmajor Debt Service Funds
Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances -For the Year Ended June 30, 2005
With Comparative Totals for Year ended June 30, 2004
Revenues:Taxes - ad valoremInterest incomeOther income
Total revenues
Expenditures:Debt service -
Principal retirementInterest paidPaying agent fees
Total expenditures
Excess (deficiency) of revenues over
expenditures
Other financing sources (uses):
Proceeds of refunding debt
Payment of refunding debt
Total other financing sources (uses)
Excess (deficiency) of revenues
and other sources over
expenditures and other uses
Fund balances, beginning
Fund balances, ending
GeneralObligationRefunding
BondsSeries 2005
Certificatesof
IndebtednessSeries 1992
SinkingFund
Totals2005 2004
$ 94,4931,926
96,419
208,00033,8463.589
245,435
367,000
(367,000)
(149,016)
179,829
$ 30,813
$ 94,4931,926
96,419
208,00033,8463,589
245,435
367,000
(367,000)
$ 86,5431.504
170
88,217
35,00032,9702,000
69,970
18,247
(149,016) 18,247
179,829 161.582
$ 30,813 $179,829
61
CITY OF KAPLAN, LOUISIANAEnterprise Fund
Utility Fund
Schedule of Number of Utility Customers(Unaudited)
June 30,2005 and 2004
Records maintained by the City indicated the following number of customers were beingserviced during the month of June, 2005 and 2004.
Department 2005 2004
Electric (metered) 2,123 2,095Gas(metered) 1,747 1,752Water (metered) 2,355 2,322Sewerage 2,191 2,169
62
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CITY OF KAPLAN, LOUISIANAEnterprise Fund
Utility Fund
Comparative Departmental Analysis of Revenues and ExpensesYears Ended June 30, 2005 and 2004
Totals
Operating revenues:Customers service charges
Operating expenses:SalariesBenefit payments:
Payroll taxesRetirementInsurance
InsuranceElectricity and gas purchasedOperating suppliesOffice supplies and expensesProfessional feesRepairs and maintenanceTelephone and utilitiesBad debt expenseDepreciationMiscellaneous
Total operating expenses
Net operating income
2005
$ 6,415,340
431,749
30,40536,427100,99984,765
3,431,03277,68215,41959,42481,99791,628
340383,56842,254
4,867,689
$ 1,547,651
2004
$6,025,154
401,430
29,30426,534127,64073,154
3,014,20666,65613,72724,115137,534100,47636,943384,63846,627
4,482,984
$1,542,170
Electricity2005 2004
$4,557,364 $4,325,442
181,660
12,45515,55835,92733,248
2,775,96022,450
8,80919,79029,9964,079
34068,92627,842
173,782
12,74211,22943,15230,961
2,487,78525,523
8,5051,763
23,2721,875
24,38268,64832,403
3,237,040 2,946,022
$1,320,324 $1,379,420
64
Gas Water Sewerage2005 2004 2005 2004 2005 2004
$945_,5_81 $864^633 $ 485,966 $488,200 $426,429 $346,879
72,001 59,378 94,901 86,868 83,187 81,402
5,2726,266
19,91113,784
655,07213,8092,2929,433
20,451140
-79,9122,426
900,769
4,2864,505
30,54521,085
526,42115,1202,524
10,37120,571
3316,650
82,6001,994
786,381
6,5058,922
30,21023,219
-30,246
2,60815,22915,34461,827
-141,542
2,391432,944
6,2495,658
33,41311,418
-13,606
1,6437,266
50,23266,866
3,694141,221
3,266431,400
6,1735,681
14,95114,514
-11,177
1,71014,97216,20625,582
-93,1889,595
296,936
6,0275,142
20,5309,690-
12,4071,0554,715
43,45931,404
2,21792,1698,964
319,181
$ 44,812 $ 78,252 $ 53,022 $ 56,800 $129,493 $ 27,698
65
KOLDER, CHAMPAGNE, SLAVEN & COMPANY, LLCCERTIFIED PUBLIC ACCOUNTANTS
C Burton Kolder, CPA"Russell F. Champagne, CPA" pn Rr,Yinc;cVictor R. Slaven. CPA' r.U. tSOX IUDO
Conrad 0-Chapman CPA' Abbeville, LA 70511 WEBSITE:
r ^fTK H , rBtt- WWW.KCSRCPAS.COMGerald A. Thibodeaux. Jr.. CPA
Phone (337) 893-7944Robert S. Carter. CPA ^X (337) 893-7946 MEMBER OF:
Allen J. UBry, CPA AMERICAN INSTITUTE OFHarry J Uoslio^CPA CERT|RED puBL|C ACCOUNTANTSPenny Angelle Scruggins, CPA
?,n"Str TK ,C?S'n' C.PaA, SOCIETY OF LOUISIANA
*3,7» n ?Tn, CERTIFIED PUBLIC ACCOUNTANTSKelly M. Doucet. CPA
Che"'! JB£!^C£ACVA REPORT ON INTERNAL CONTROL OVER FINANCIALMandy B. se!f. CPA REPORTING AND ON COMPLIANCE AND OTHER MATTERS- A Rota*.* A^n,,^ conx>ra[10n BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
The Honorable Levi Schexnider, Mayorand Members of the City CouncilCity of Kaplan, Louisiana
We have audited the financial statements of the governmental activities, the business-type activities,each major fund, and the aggregate remaining fund information of the City of Kaplan, Louisiana, as of and forthe year ended June 30, 2005, which collectively comprise the City of Kaplan, Louisiana's basic financialstatements and have issued our report thereon dated August 30, 2005. We conducted our audit in accordancewith auditing standards generally accepted in the United States of America and the standards applicable tofinancial audits contained in Government Auditing Standards, issued by the Comptroller General of theUnited States.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the City of Kaplan, Louisiana's internal controlover financial reporting in order to determine our auditing procedures for the purpose of expressing ouropinion on the financial statements and not to provide assurance on the internal control over financialreporting. However, we noted a certain matter involving the internal control over financial reporting and itsoperations that we consider to be reportable conditions. Reportable conditions involve matters coming to ourattention relating to significant deficiencies in the design or operation of the internal control over financialreporting that, in our judgment, could adversely affect the City's ability to record, process, summarize andreport financial data consistent with the assertions of management in the financial statements. The reportablecondition is described in the accompanying current and prior year audit findings and corrective action plan asitem05-l(IC).
A material weakness is a condition in which the design or operation of one or more of the internalcontrol components does not reduce to a relatively low level the risk that caused by error or fraud in amountsthat would be material in relation to the financial statements being audited may occur and not be detectedwithin a timely period by employees in the normal course of performing their assigned functions. Ourconsideration of the internal control over financial reporting would not necessarily disclose all matters in theinternal control that might be reportable conditions and, accordingly, would not necessarily disclose allreportable conditions that are also considered to be material weaknesses. We believe the reportable conditionidentified as item 05-1(IC) in the accompanying current and prior year audit findings and corrective actionplan is a material weakness.
183 South Beadle RoaJ 113 Easi Bridge Street m East Waddil 1234 David Drive, Suite 105 408 W Cotton Street 332 W Sixth Avenue ZOO South Main StreetLalayctie. LA 70508 Breaux Bridge, LA 70517 Maiksville. LA 71351 Morgan City, LA 70380 Ville Plane, UA 71)586 Oberlm. LA 70655 Abbeville. LA 70510Phone (337) 232-4141 Phone (337) 331-4020 Phone (318) 253-9252 Phone (985) 384-2020 Phone (337) 363-2792 Phone (337) 639-4737 Phone (337) 893-7944Fax (337) 232-8660 Fax (337) 332-2367 Fax (318) 253-S681 F;ax (9K5) 384-3020 Fax (337) 363-3049 Fax (337) 639-4568 Fix (337) 89J-7946
67
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City of Kaplan, Louisiana's financialstatements are free of material misstatement, we performed tests of its compliance with certain provisions oflaws, regulations, contracts, and grants, noncompliance with which could have a direct and material effect onthe determination of financial statement amounts. However, providing an opinion on compliance with thoseprovisions was not an objective of our audit, and accordingly, we do not express such an opinion. The resultsof our tests disclosed no instances of noncompliance that are required to be reported under GovernmentAuditing Standards.
This report is intended solely for the information and use of the Mayor, City Council, the City ofKaplan's management, and Louisiana Legislative Auditor and is not intended to be and should not be used byanyone other than these specified parties. However, under Louisiana Revised Statute 24:513, this report isdistributed by the Legislative Auditor as a public document.
Kolder, Champagne, Slaven & Company, LLCCertified Public Accountants
Abbeville, LouisianaAugust 30, 2005
68
KOLDER, CHAMPAGNE, SLAVEN & COMPANY, LLCCERTIFIED PUBLIC ACCOUNTANTS
C Burton Kolder. CPA'
Russell F.Champagne. CPA' D ^ Drtv,inccVictor R. Siaven, CPA' r.U. BOX 1UOO
Conrad O. Chapman. CPA- Abbeville, LA 70511 WEBSITE'
r- l :°r?L !' , ™.- WWW.KCSRCPAS.COMGerald A. Thibodeaux. Jr . CPA'
- Phone (337) 893-7944Raced S. Caner, CPA Fax (337) 893-7946 MEMBER OF:
Allen J LaBry, CPA AMERICAN INSTITUTE OFHarry J^ioslio UPA CERTIFIED PUBLIC ACCOUNTANTSPenny Angelle Scruggins. CPAChnstrne L Coustn. CPA SOC|ETY QJ. LQU|S|ANA
CERTIFIED PUBLIC ACCOUNTANTSnf CPA REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE
y. CPA. CVA TO EACH MAJOR PROGRAM AND INTERNAL CONTROL OVERMandy B. Self. CPA
COMPLIANCE REQUIRED BY OMB CIRCULAR A-133' A Professional Accounting COnjooiian
The Honorable Levi Schexnider, Mayorand Members of the City CouncilCity of Kaplan, Louisiana
We have audited the compliance of the City of Kaplan, Louisiana, with the types of compliancerequirements described in the U. S. Office of Management and Budget (OMB) Circular A-133 ComplianceSupplement that are applicable to its major federal programs for the year ended June 30, 2005. City ofKaplan's major federal programs are identified in the summary of auditor's results section of theaccompanying schedule of findings and questioned costs. Compliance with the requirements of laws,regulations, contracts and grants applicable to each of its major federal programs is the responsibility of theCity of Kaplan's management. Our responsibility is to express an opinion on the City of Kaplan's compliancebased on our audit.
We conducted our audit of compliance in accordance with auditing standards generally accepted inthe United States of America; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates. Local Governments and Non-ProFit Organizations. Those standards and OMB Circular A-133 requirethat we plan and perform the audit to obtain reasonable assurance about whether noncompliance with thetypes of compliance requirements referred to above that could have a direct and material effect on a majorfederal program occurred. An audit includes examining, on a test basis, evidence about the City of Kaplan'scompliance with those requirements and performing such other procedures, as we considered necessary in thecircumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does notprovide a legal determination on the City of Kaplan's compliance with those requirements.
In our opinion, the City of Kaplan complied, in all material respects, with the requirements referred toabove that are applicable to its major federal programs for the year ended June 30, 2005.
Internal Control Over Compliance
The management of the City of Kaplan is responsible for establishing and maintaining effectiveinternal control over compliance with requirements of laws, regulations, contracts and grants applicable tofederal programs. In planning and performing our audit, we considered the City of Kaplan's internal controlover compliance with requirements that could have a direct and material effect on a major federal program inorder to determine our auditing procedures for the purpose of expressing our opinion on compliance and totest and report on internal control over compliance in accordance with OMB Circular A-133.
18.1 Sumh Beudle Road 113 Easl Bridge Slrcel 133 F.asl Waddil 1234 David Drive. Suite 105 4(1 g W Cotton Sired .133 W Sixdi Avenue 200 South Main StreetLafayette. LA 705QS Srcam Bridge, LA 70517 Marksville. LA 71351 Morgan Cily. LA 703811 Ville Plulte. LA 705H6 Oberlin. LA 70655 Abbeville, LA 70510I'liouc (337) 232-4141 Phone (337) 332-4020 phone- (MS) 253-4252 Phone (9S5) 38J-202U Phone I3J7) J03-2792 Phone (337) (.39-4737 Phone (337) 893-7944Fax (337) 232-8660 fax (337) 332-2867 Fax (318) 253-8681 Fax (985) J84-3020 Fax (337) 363-3049 Fax (337) 639-4568 Fix (337) 893-7946
69
Our consideration of the internal control over compliance would not necessarily disclose all matters in theinternal control that might be material weaknesses. A material weakness is a condition in which the design oroperation of one or more of the internal control components does not reduce to a relatively low level the riskthat noncompliance with applicable requirements of laws, regulations, contracts and grants caused by error orfraud that would be material in relation to a major federal program being audited may occur and not bedetected within a timely period by employees in the normal course of performing their assigned functions.We noted no matters involving the internal control over compliance and its operation that we consider to bematerial weaknesses.
This report is intended for the information and use of the Mayor, City Council, the City of Kaplan'smanagement, others within the organization, and federal awarding agencies and pass-through entities and isnot intended to be and should not be used by anyone other than these specified parties. Although the intendeduse of this report maybe limited, under Louisiana Revised Statute 24:513, this report is distributed by theLegislative Auditor as a public document.
Kolder, Champagne* Sloven & Company, LLCCertified Public Accountants
Abbeville, LouisianaAugust 30, 2005
70
CITY OF KAPLAN, LOUISIANA
Schedule of Expenditures of Federal AwardsYear Ended June 30, 2005
Federal Grantor/Pass-Through CFDAGrantor/Program Name Number Expenditures
United States Department of Housing andUrban Development -
Passed through State Department of Transportation and Development:Community Development Block Grants/
State's Program 14.228 1,000,000
United States Department of Agriculture Rural Utilities ServiceRural Utilities Service -
Water and Waste Loan Program 10.760 1,916,761
United States Department of Agriculture Rural Utilities Service
Rural Utilities Service -
Water and Waste Grant Program 10.760 598,616
Total $3,515,377
71
CITY OF KAPLAN, LOUISIANA
Notes to Schedule of Expenditures of Federal AwardsYear Ended June 30, 2005
(1) General
The accompanying Schedule of Expenditures of Federal Awards presents the federal grantand loan activity of the City of Kaplan (the City). The City's reporting entity is defined in Note 1 tothe basic financial statements for the year ended June 30, 2005. All Federal financial assistancereceived directly from federal agencies is included on the schedule as well as federal financialassistance passed through other government agencies. The following programs are considered majorfederal programs of the City: U.S. Department of Agriculture Water and Waste Disposal Loan andGrant Program and 2003 Louisiana Community Development Block Grant.
Basis of Accounting
The accompanying Schedule of Federal Awards is presented using the modified accrual basisof accounting, which is described in Note 1 to the City's financial statements for the year ending June30,2005.
72
CITY OF KAPLAN, LOUISIANA
Schedule of Findings and Questioned CostsYear Ended June 30, 2005
Part I. Summary of Auditor's Results:
1. An unqualified report was issued on the basic financial statements.
2. A reportable condition in internal control was disclosed by the audit of the basic financialstatements.
3. There were no material instances of noncompliance.
4. No reportable conditions in internal control over the major programs were disclosed by theaudit of the basic financial statements.
5. An unqualified opinion was issued on compliance for the major programs.
6. The audit disclosed no findings required to be reported under Section 510(a) of Circular A-133.
7. The following programs were considered to be a major programs:
U.S. Department of Agriculture: State of Louisiana, Office of Rural Development -Water and Waste Disposal Loan Program
U.S. Department of Agriculture: State of Louisiana, Office of Rural Development -Water and Waste Disposal Grant Program
Community Development Block Grants State's Program
8. The dollar threshold used to distinguish between Type A and Type B programs, as describedin Section 520(b) of Circular A-133 was $300,000.
9. The auditee did not qualify as a low-risk auditee under Section 530 of Circular A-133.
Part II. Findings which are required to be reported in accordance with generally accepted GovernmentalAuditing Standards:
A. Compliance Findings -
There were no compliance findings at June 30, 2005.
(continued)
73
CITY OF ICAPLAN, LOUISIANA
Schedule of Findings and Questioned Costs (Continued)Year Ended June 30, 2005
Internal Control Findings -
See internal control finding 05-1(IC) on the Summary Schedule of Current and PriorYear Findings and Corrective Action Plan.
Part III. Findings and questioned costs for Federal awards which include audit findings as defined in SectionSlOfa) of Circular A-133:
There are no findings that are required to be reported at June 30, 2005.
Part IV: Management Letter Items:
There are no management letter items at June 30, 2005.
74
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