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City of Leesville Leesville, Louisiana
Annnal Financial Report As of and for the Year Ended June 30, 2009
Under provisions of state law, this report is a public document. A copy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the LegislativeAuditor and, where appropriate, at the office of the parish derk of court
Release Date
CITY OF LEESVILLE Leesville, Louisiana
Annual Financial Report
As of and for the Year Ended June 30,2009
Honorable Betty Westerchil DeLain P, Prewitt Mayor City Clerk
City of Leesville Table of Contents
INDEFENDENT AUDITORS' REPORT
REQUIRED SUPPLEMENTAL INFORMATION
Management's Discussion and Analysis (MD&A)
BASIC FINANCIAL STATEMENTS
Govemment-wide Financial Statements (GWFS)
Statement of Net Assets Statement of Activities
Fund Financial Statements (FFS)
Govemmental Funds: Balance Sheet Reconciliation ofthe Govemmental Funds Balance Sheet
to the Statement of Net Assets Combined Statement of Revenues, Expenditures, and
Changes in Fund Balances Reconciliation ofthe Govemmental Fimds Statement of Revalues,
Expenditures, and Changes in Fund Balances to the Statement of Activities
Proprietary Fund Type Statements of Net Assets Statements of Revenues, Expenses, and Changes in Fund Net Assets Statements of Cash Flow
Notes to the Basic Financial Statements Index Notes
REQUIRED SUPPLEMENTAL INFORMATION
Budgetary Comparison Schedules General Fund Sales Tax Special Revenue Fund Public Safety Special Revenue Fund
Notes to the Budgetary Comparison Schedules
Statement
Page 1-2
3
4-11
12
13 14-15
17
C 1849
D 21
E 22-23
F 24
G H I
Exhibit
M 1-2 1-3
25-26 27
28-29
30 31-51
52
53 54 55 56
57-58
City of Leesville Table of Contents
SUPPLEMENTAL INFORMATION Nonmajor Govemmental Funds
Combining Balance Sheet - by Fund Type Combining Statement of Revenues, Expenditures and Changes
in Fund Balances - by Fimd Type
Nonmajor Special Revenue Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes
in Fund Balances
Nonmajor Debt Service Funds Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes
in Fund Balances
Nonmajor Capital Project Fimds Combining Balance Sheet Combining Statement of Revenues, Expenditures and Changes
in Fund Balances
Schedule of Compensation Paid to Council Members
GOVERNMENT AUDITING STANDARDS INFORMATION Report on Intemal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards
Schedule of Findings
OTHER INFORMATION Smnmary of Prior Year Audit Findings Corrective Action Plan for Auditor's Current Year Findings
Exhibit
2
3
4
5
6
7
8
9
10
blatters
Page
59
60
61
62 63
64
65 66
67
68 69
70
71
72
73-74
75-78
79 80-85 86-90
IheCPA. Mever UncterestiiTate Vv! Vdtu^
ALLEN, GREEN & WILLIAMSON, LLP CERTIFIED PUBUC ACCOUNTANTS
P. O. Box 6075
Monroe, l A 71211-6075
Tim CiTcen, CPA
Margie WiUiamson, CPA
AinyTynes,CPA
2441 Tower Drive Monroe, LA 71201
Phone: (318)388-4422 Fax: (318)388-4664
Tolf-free: (888)741-0205
www.allengreencpa. com
INDEPENDENT AUDITORS* REPORT
Aimee Buchanon, CPA Diane Pcncbof? CPA
Joshua Legg, CPA Qaint Martin, CPA
BrioiiMcBridc, CPA Cindy Thomaion. CPA
Angle Williamson, CPA
Entot L Alkn, CFA (Rctffed) 1963 - 2000
Honorable Betty Westercbil and Monbers ofthe City Council
City of Leesville Leesville, Louisiana
We have audited the accompanyiag financial statements ofthe govemmental activities, the business-type activities, each major fund, and the aggregate remaining flmd information ofthe City of Leesville as of and for the year ended Jime 30,2009, which collectively comprise the City's basic financial statements ofthe City's primary govemment as listed in the table of contents. These fmancial statements are the responsibility of the City's management. Our responsibility is to express opinions on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fmancial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial stateanents are free of material misstatement. An audit includes consideration of intemal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness ofthe City's intemal control over financial reporting. Accordingly, we express no such opinion. An audit also includes exanaining, on a test basis, evidence supporting the amounts and disclosures in the financial statemaits, assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.
The financial statements do not include financial data for the City's legally separate component units. Accounting principles generally acc^ted in the United States of America require the financial data for those component tmits to be reported with the fmancial data ofthe City's primary government unless the City also issues financial statements for the financial reporting entity that include the financial data of its con^onent units. The City has not issued such reporting entity financial statements.
In our opinion, because ofthe omission ofthe discretely presented corq)onent units, as discussed above, the financial statements referred to above do not present fairly, in conformity with accounting principles generally accepted in the United States of America, the financial position ofthe aggregate discretely presented component units ofthe City of Leesville, as of June 30, 2009, or the changes in financial position thereof for the year then ended.
Further, in our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position ofthe govemmental activities, the business-type activities, each major fijnd, and the aggregate remaining fimd information for the primary govemment of the City of Leesville, as of June 30, 2009, and the respective changes in financial position and cash flows, where appHcable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.
1 Also Located in Shrevcport, Louisiana
Member AjMrkan InsdMe of Certified PubUc Accountants. Society of Louisiana CerUfied PiA American Instilutc of Certified Public Accountants Division fbi CPA Finns,
Employee Benefit Audit Quality Center, and the Govcnunent Audit Quality Center Equal Opportunity Employer
In accordance with Govemment Auditing Standards, we have also issued our report dated December 31,2009 on our consideration ofthe City's intemal control over financial rq)orting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of intemal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the intemal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Govemment Auditing Standards and should be considered in assessing the results of our audit.
The Management's Discussion and Analysis and the Budgetary Comparison Schedules as listed in the table of contents, are not a required part ofthe basic financial statements but are supplemental information required by the Govemmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of n ianagement regarding the methods of measurement and presentation ofthe required supplemental information. However, we did not audit the information and express no opinion on it.
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City's basic financial statements. The accompanying supplemental information identified in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The accompanying other information, as listed in the table of contents, has not been subjected to the auditing procedures applied in the audit ofthe basic financial statements and, accordingly, we express no opinion on it.
ALLEN, GREEN & WELLLAMSON, LLP
Monroe, Louisiana Dec«nber31,2009
City of Leesville
REQUIRED SUPPLEMENTAL INFORMATION:
MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A)
City of Leesville Management's Discussion and Analysis (MD&A)
June 30,2009
Our discussion and analysis of the City of Leesville's financial performance provides an overview of the City's financial activities for the fiscal year ended June 30, 2009.
The Management's Discussion and Analysis (MD&A) is an element of the new reporting model adopted by the Govenmiental Accounting Standards Board (GASB) in their Statement No. 34 Basic Financial Statements - and Managranent's Discussion and Analysis - for State and Local Govemments issued June 1999. Certain comparative information between the current year and the prior year is required to be presented in the MD&A
The City has two component units, City Marshall and City Judge, in which these componrait units are not presented in the primary government's financial statement Complete financial statements for each ofthe two component units can be obtained from their respective administrative offices.
FINANCIAL HIGHLIGHTS Our financial statements provide these insights into the results of this year's operations:
Total govemmental activities revenues received for Jime 30,2009 were $7,426,545. This is an increase of $571,667 or 8.34% change from the year ended June 30, 2008. This was due mainly to swimming pool grant received of $677,141.
Govemmental activities expenses for 2009 were $7,630,535; this is an increase of $535,453 or 7.55%. Expenses increased fitjm 2008 to 2009 mainly due to public safety department and pubUc works department.
Public safety expenses were $288,155 more in 2009, public works expenses were $222,708 more in 2009, and economic development expenses were $68,893 more in 2009, interest on long-term debt was $57,084 less in 2009.
Total revenues received through business activities for June 30,2009 was $2,508,260; this is an increase of $179,927, or 7.73% between 2008 and 2009. Revenues increased mainly because of LGAP money received for South Tank repairSv
Business activities expenses for 2009 were $2,224,496 which is an increase of $210,382 or 10.45% betweai 2008 and 2009. Expenses increased due to salaries and related benefits along with insurance and utihties at the plant.
For file year ended June 30,2009, the General Fund reported $1,466,979 in revenues, a decrease of $12,763 or 0.86% fix)m revenues received for the year ended Jime 30, 2008. The decrease is due mainly to a decrease in interest and other miscellaneous local revenue.
Expenditures increased $230,862 from tiie year ended June 30, 2008 to June 30, 2009. In 2008, the City reported $2,055,291 in expenditures for the General Fund and $2,286,153 in expenditures for 2009. This change represents an 11.23% increase from 2008 to 2009 and was mainly due to street department.
USING THIS ANNUAL REPORT
The City's annual report consists of a series of financial statements that show information for the City as a whole, and its fimds. The Statement of Net Assets and the Statement of Activities provide information about the activities ofthe City as a whole and present a longer-term view of the City's finances. For our govemmental activities, the fund financial statements teU how we financed our services in the short-terra as well as what remains for future spending. Fimd statements also may give you some insights into the City's overall financial health. Fimd financial statements
City of Leesville Management's Discussion and Analysis (MD&A)
June 30,2009
also report the City's operations in more detail than the govemment-wide financial statements by providing information about the City's most significant funds - the general fimd, sales tax special revenue, public safety special revenue, sales tax sinkmg and 2005 sales tax bond capital project fiinds.
The follov«ng chart reflects the information included in this annual report
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Our auditor has provided assurance in the independent auditor's report, located immediately preceding this Management's Discussion and Analysis, that the Basic Financial Statements are fairly stated. Varying degrees of assurance are being provided by the auditor regarding the Required Supplemental Information, the Supplemental Information, and (5ther Information identified above. A user of this report should read the independent auditor's report carefully to ascertain the level of assurance being provided for each ofthe other parts of this report.
City of Leesville Management^ Discussion and Analysis (MD&A)
June 30,2009
Reporting the City as a Whole
Tfie Statement of Net Assets and the Statement of Activities Our analysis ofthe City as a whole begins with the govemment-wide financial statements. One ofthe most important questions asked about the Ci^s finances is, "Is the City as a whole better off or worse off as a result ofthe year's activities?" The Statement of Net Assets and the Statement of Activities, which appear first in the City's financial statements, report information about the City as a whole and its activities in a way that helps answer this question. We prepare these statements to include all assets and liabilities, using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All ofthe current year's revenues and expenses are taken into account regardless of when cash is received or paid.
These two statements report the City's net assets - the difference between assets and liabilities, as reported in the Statement of Net Assets - as one way to measure the City's financial health, or financial position. Over time, increases or decreases in the City's net assets as reported in the Statement of Activities are one indicator of whether ]Xs financial health is improving or deteriorating. The relationship between revenues and expenses is the City's operating results. However, the City's goal is to provide services to our citizens, not to generate profits as commercial entities do. One must consider other non-financial factors, such as the quality of police and fire protection, the conditions ofthe City's roads, and the quality of water, sewer, and sanitation systems to assess the overall health of the City.
In the Statement of Net Assets and the Statement of Activities, we divide the City into two kinds of activifies:
Govemmental Activities - Most ofthe City's basic services are reported here, including the police, fire, public works, parks and recreation, and general admmistration. Sales taxes, property taxes, fi-anchise fees, and state and federal grants finance most of these activities.
Business-type Activities - The City charges a fee to customers to help it cover all or most of the cost of certain services rt provides. The City's water, sewer, and sanitation systems are reported here.
Reporting the City^s Most Significant Funds
Fund Financial Statements
The City's fund financial statements provide detailed information about the most significant funds but not the City as a whole. Some funds are required to be established by State law. However, the City establishes oflier funds to help it control and manage money for particular purposes (like the capital project fiind) or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money. The City's two kinds of funds - govemmental and proprietary - use different accounting approaches:
Govemmental fimds - Govemmental fund reporting focuses on showing how money flows into and out of funds and the balances left at year-end that are available for spending. They are reported using an accounting metiiod called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fiind statements provide a detailed short-term view ofthe City's operations and the services it provides. Govemmental fimd information helps you determine whether &ere are more or fewer financial resources that can be spent in the near future to finance the City's programs. We describe the relationship (or differences)
City of Leesville Management's Discussion and Analysis (MD&A)
June 30,2009
between govemmental activities (reported in the Statement of Net Assets and the Statement of Activities) and govemmental fimds in the reconciliations (Statements D and E).
Proprietary funds - When the City charges customers for the services it provides, these services are generally reported in proprietary fimds. Proprietary fimds are reported in the same way that all activities are reported in the Statranent of Net Assets and the Statement of Activities. In fact, the City's utility enterprise fimd (a coniponent of proprietary funds) are the same as business-type activities we report in the govemment-wide financial statements but provide more detail and additional information, sudi as cash flows, for proprietary fiinds.
THE CITY AS A WHOLE
Our analysis below focuses on the net assets (Table 1) and changes in net assets (Table 2) ofthe City's govemmental and business-type activities.
Table 1 Net Assets
June 30,2009 and 2008
Govemmental Activities Business-type Activities Total
ASSETS Cunent and other assets Capital assets
Total assets
LIABILITIES Current and other Liabilities payable from
restricted assets Long-terra liabilities
Total liabilities
NET ASSETS Invested in capital assets,
net of related debt Restricted Unrestricted
Tota) net assets
2009
$ 1,787,494 16,934,030 18,721,524
593,061
-5,295,986 5,889,047
12,319,141 853,985
(340,649) $12,832,477
2008
$ 2,545,222 16,487,285 19,032,507
349,077
-5,646,963 5,996,040
11,445,743 1,429,579
161,145 $13,036,467
2009
$ 1,839,594
11,097,529 12,937,123
201,045
131,049 4,119,447 4,451,541
7,179,750 36,588
1,269,244 $ 8,485^82
2008
$ 1,952,961 10,993,426 12,946.387
135,885
328,976 4,279,708 4,744,569
6,695,647 36,588
1,469,583 $ 8^201,818
2009
$ 3,627,088 28,031,559 31,658.647
794,106
131,049 9,415,433
10,340,588
19,498,891 890,573 928,595
$21,318,059
2008
$ 4,498,183 27,480,711 31,978,894
484,962
328,976 9,926,671
10,740,609
18,141,390 1,466,167 1,630,728
$21,238,285
Net assets ofthe City's govemmental activities for June 30,2009 were $ 12,832,477. Unrestricted net assets that are the part of net assets that can be used to fmance day-to-day operations without constraints estabhshed by debt covenants, enabling legislation, or other legal requirements was $(340,649).
The net assets of our business-type activities for June 30,2009 were $8,485,582, in which $1,269,244 is unrestricted.
City of LeesviUe Managements Discussion and Analysis (MD&A)
June 30,2009
Table 2 Changes in Net Assets
For the Years Ended June 30,2009 and 2008
GovenuDcntal Activities Business-type Activities Total
Revenues:
Program revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues
Ad valorem tax
Sales lax
Franchise and miscellaneous taxes
Earning on investments
Other general revenues
Total Revenacs
Functions/Prograra Expenses:
Govemmcntai Activities
General govcmemcnt
Public safety
Public works
Economic development
Culture and reoration
Interest expense
Business-type Activities
Sewer
Water
Total Expenses
Tncrease (decrease) in set assets
Net assets - beginning
Net assets, ending
2009
$ 1,367,524 358,847
684,284
335,107
3^90,756
579,972-
28,981
81,074
7,426,545
886,716
3,965,994
1,471,595
638^65
482,368
185.597
--
7,630,535
(201990)
13,036,467
$ 12,832.477
2008
$ 1,363,600 356,362
100,973
349,199
3,8383'0
581,648
50,618
214,168
6.854,878
877,096
3.677,839
1,248,887
569.372
479,207
242,681
-
7,095,082
(240,204)
13.276.671
$ 13,036,467
2009
$ 1,969,050
-268.174
260,215
--
10,821
-2,508,260
------
807,094
1,417.402
2,224,496
283.764
8.201,818
$ 8,485,582
2008
$ 1,938,965
--
359,614
--
29.754
-2^28333
----
835.494
1,178,620 2,014,114
314.219
7,887,599 $ 8,201,818
2009
$ 3336,574
358,847
952.458
-595.322
3,990,756
579.972
39,802
81,074
9.934,805
886,716
3,965,994
1,471,595
638,265
482368
185397
807,094
1,417,402
9,855.031
79.774
2138,285
$ 21318,059
2008
$ 3302.565
356362
100,973
708.813
3,8383 JO 581,648
80372
214,168
9,183,211
877,096
3.677.839
U48,887
569372
479;i07
242,681
835,494
1,178.620 9,109,196
74,015
21,164.270 $ 21338,285
City of Leesville Management's Discussion and Analysis (MD&A)
June 30, 2009
Governmental Activities
As reported in the Statement of Activities, the cost of all govemmental activities this year was $7,630,535. The amotint that our taxpayers ultimately financed for these activities through City taxes was only $4,905,835 because some ofthe cost was paid by those who directly benefited from the programs ($ 1,367,524) or by other govemments and organizations that subsidized certain programs with grants and contributions ($ 1,043,131). The remaining cost was paid fix>m miscellaneous revenues and fund balance.
Table 3 presents the cost of each ofthe City's govemmental activities as well as each programs net cost (total cost less revenues generated by the activities). The net cost shows the financial burden that was placed on the City's taxpay^s by each of these ftmctions.
Table 3 Govemmental Activities
For the Years Ended June 30,2009 and 2008
Governmental Activities General government Public safety PubUc worics JEconomic development Culture and recreation Interest expense
Total Functions/Program Expenses
Total Cost of Services 2009
$ 886,716 3,965,994 1,471,595
638,265 482,368 185,597
$7,630,535
2008
$ 877,096 3,677,839 1,248,887
569,372 479,207 242,681
$7,095,082
Net Cost of Services 2009
$ 369,893 2,931,867 1,467,285
530,535 (265,297) 185,597
$5,219,880
2008
$ 344384 2,670.002 1,248,887
391,430 376,963 242,681
$5,274,147
Business-type Activities
Revenue ofthe City's business-type activities (see Table 2) for Jime 30,2009 was $2,508,260; this is an increase of $179,927 from 2008 to 2009. Expenses for the year ended June 30, 2009 were $2,224,496 for the City's business-type activities which increased $210,382 from 2008 to 2009.
Business-type activities had an increase in net assets of $283,764 from 2008 to 2009.
THE CrrY*S FUNDS
As the City completed the year, its govemmental fimds reported a combined fimd balance of $1,283,769, which is a decrease of $1,016,374 in fimd balance fix)m last year.
• The general fimd reported a fimd balance of $(5,047); this amount decreased from last year of $324,759. The fimd balance decreased due to greater expenditures in the street department
Sales tax special revenue fimd had a decrease in fimd balance of $277,266 to $220,803. This decrease in fimd balance is maioly due to the purchase of golf carts and equipment at the recreation center.
City of Leesville Management's Discussion and Analysis (MD&A)
June 30, 2009
• For 2009, the public safety special revenue fimd reported a decrease in fimd balance of $58,003 to $(33,814). This amount is mamly due to reimbursement to E911 fimd along with salary and benefit increases.
• Tlie sales tax sinking fund reported a fimd balance of $437,322; this amount increased from last year of $1,399,
• The 2005 sales tax bond capital project fimd had a decrease of $540,612 in fimd balance to $45,901 for 2009. The decrease is due to the swimming pool renovations.
GENERAL FUND BUDGETARY HIGHLIGHTS
The City*s actual revenues equals the final budgeted revenues due to the City adapted the final budget after year end, which is not prohibited by State law.
Overall actual expenditures were $10,006 more than budgeted expenditures. However, budgeted revenue equaled actiwl revenue.
When comparing original budgeted revenues to final budgeted revenues, a decrease of $77,385, which is mainly due to a general overall decrease in revenues due to not budgeting a transfer in from water department The increase of $77,153 in expenditures when comparing original budget to fmal budget is due to increase expenses in insurance liability and annexation cost.
CAPITAL ASSETS
At June 30, 2009 and 2008, the City had invested in the following capital assets (net of depreciation):
Governmental Activities Business-type Activities Total
Land
Construction in progress
Buildings improvements
Equipment and vehicles
Infrastructure
Plant
Total capital assets
2009
$ 303,856
1,259,888
7,572,504
1,477,482
6,320,300
-
$16,934,030
2008
$ 303,856
82,276
7,772,586
1,690,136
6,638,431
-
$16,487,285
2009
$ 157,249
1,701,143
-
62,525
- •
9,176,612
$11,097^29
2008
$ 157,249
1,250,879
-
68,135
-
9,517,163 $10,993,426
2009
$ 461,105
2,961,031
7,572,504
1,540,007
6,320,300
9,176,612
$28,031,559
2008
$ 461,105
1,557,053
7,772,586
1,758,271
6,414,533
9,517,163 $27,480,711
Additional information regarding capital assets can be found in Note 7 ofthe Notes to the Basic Financial Statements.
DEBT ADMINISTRATION At June 30,2009, the City had general obhgations bonds outstandingof $1,635,000 in which Govemmental Funds make the required payments. Govemmental Fimds also make payments for capital leases, balance of $809,889, and sales tax revenue bonds outstanding of $2,170,000. Enterprise Fimds had outstanding revenue bonds of $1,475,000 and general obligation bonds of $1,920,000 at June 30,2009. Additional information regarding long-term debt can be found in Note 10 of the Notes to the Basic Financial Statements.
10
City of Leesville Management's Discussion and Analysis (MD&A)
June 30,2009
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS Our elected and appointed officials and citizens consider many factors when setting the City's budget and tax rates. One ofthe most important factors affecting the budget is our ad valorem and sales tax collections. Approximately, 54% of total revenues in the general fimd is ad valorem and franchise taxes. We have budgeted very little change in fi^anchise and ad valorem tax revenues for the year ending June 30, 2010.
ADDITIONAL INFORMATION For additional information contact DeLain Prewitt, City Clerk, City of Leesville, 101 Lee Street, Leesville, LA 71446 or by telephone at (337) 239-2444.
11
City of Leesville
BASIC FINANCIAL STATEMENTS:
GOVERNMENT-WIDE FINANCIAL STATEMENTS (GWFS)
12
CITY OF LEESVILLE
STATEMENT OF NET ASSETS June 30, 2009
ASSETS Cash and casti equivalents Receivables (net) Internal balances Due from other govemments Prepaid expenses Inventories
Restricted cash and cash equivalents Deferred bond issuance costs Land and construction in progress Capital assets, net of depreciation
GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES
$ 1,183.574 $
566.422
(555.230)
28,336
37.136
89,934
437.322
0
1,563.744
, 15,370.29e
ACTIVITIES
413,340 $
334,809
555,230
0
5,851
0
521,119
9,245
1,858,392
9.239.137
Statement A
TOTAL
1,596,914
901,231
0
28,336
42,987
89,934
958,441
9.245
3.422,136
24,§09.423
TOTAL ASSETS 18.721.524 12.937.123 3-1.658.647
LIABILITIES Accounts and other payables Retatnage payable Claims payable Accrued Interest Other accrued expenses
Liabilities payable from restricted assets Interest General obligation bonds
Long term liabiltties Due within one year Due in more than one year
170,937
56,714
85,602
70,979
8.829
0
0
170.734
9,883
0
17.455
2,973
26.049
105.000
541,671
66.597
85,602
88,434
11,802
26.049
105,000
752.075 4.543.911
322.769 3.796.678
1,074.844
TOTAL LIABILITIES 5.8g9,047 4.451.541 10.340.588
NET ASSETS Invested in capital assets, net of related debt Restricted for:
Capital projects Debt service Capital additions and contingencies
Unrestricted
12,319,141
116.982 737.003
0 f?40.g49)
7.179,750
0 0
36,588
19.498.891
116,982 737,003
36,588
928.595
TOTAL NET ASSETS 12.832.477 $ 8.485.582$ 21.318.059
THE NOTES TO THE BASIC FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT.
13
CITY OF LEESVILLE
STATEMENT OF ACTIVITIES For the Year Ended June 30, 2009
PROGRAM REVENUES
FUNCTIONS/PROGRAMS
Governmental Activities:
General govemment
Public safety
Public works
Economic development
Culture and recreation
Interest on long-term debt
Total Governmental Activities
EXPENSES
$ 886.716 $
3,965,994
1.471,595
638.265
482,368
185.597
7.630.535
CHARGES FOR
OPERATING GRANTS AND
SERVICES CONTRtBUTfOMS
439.899 $
752.204
0 104,897
70,524
0
1,367.524
76.924 $
281.923
0
0
0
0
35e.&47
CAPITAL GRANTS AND
CONTRIBUTIONS
0
0
4.310
2.833
677.141
0
e?4.2e4
Business-Type Activltites:
Sewer
Water
Total Business-Type Activities
807,094
1.417.402
2.224.496
528,141
1.440.909
1.969.050
0
268.174
288-174
Total Primary Go\/ernment •336.574 $ ?^.g47 9^?, ^g
General revenues: Taxes:
Ad valorem Sales tax
Franciiise and miscellaneous taxes Eamings on investments Miscellaneous
Total general revenues and transfers
Changes in net assets
Net assets - beginning of year
Net assets - end of year
THE NOTES TO THE BASIC FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT.
]4
PRIMARY GOVERNMENT
Statement B
NET rEXPENSEl REVENUE AND CHANGES IN NET ASSETS
GovGmmenW Activities
$ (369,893) $
(2.931.867)
(1,467.285)
(530.535)
266,297
(185.597^
f5.219,B80>
0
(5.2:19,980)
8t/s/ness-T/pe Activities
0 $
0
(278,953)
291.681
12.728
12,728
TOTAL
(369,893)
(2,931,867)
(1,467,285)
(530,535)
265.297
f 185,597)
r5.219.88m
(278.953)
291.681
12,728
(5,207 J.521
335,107
3.990.756
579.972 28,981 81.074
5.015.890
(203,990)
13.036.467
260,215
0
0 10.821
0 271.036
283,764
8.201.818
595,322
3.990.756
579.972 39.802 81.074
5.286.926
79,774
21.238.285
1S22.S 21318.059
15
City of Leesville
16
City of Leesville
BASIC FINANCIAL STATEMENTS:
FUND FINANCIAL STATEMENTS (FFS)
17
CITY OF LEESVILLE
GOVERNMENTAL FUNDS Balance Sheet June 30, 2009
ASSETS Cash and cash equivalents Receivables, net Interfund receivables Due from other governments Inventories Restricted assets: Cash
GENERAL
$ 0 $
96,781
0
17.795
89,934
0
SALES TAX PUBLIC SAFETY
SPECIAL
REVENUE
361,881 $
255,262
0
0
0
0
SPECIAL
REVENUE
24.247
127.631
111,260
10,541
0
,„ 0
TOTAL ASSETS 204-510 273.679
LIABILITIES AND FUND BALANCES LIABILITIES
Accounts and contract payables Retalnage payable Accmed expense and other payables Interfund payables
120.116
0
8.829
80.612 ...
5.351
0
0
390,999 ,,
31.992
0
0
275.501
TOTAL LIABILITIES 209.557 396.340 307.493
FUND BALANCES: Reserved for
Debt service Unreserved Unreserved, reported in non-major
Special revenue Capital projects
0 (5,047)
0
Q-
0 220,803
0 0
0 (33.814)
0
iL
TOTAL FUND BALANCE (5.047) 220803 (33.814).
TOTAL LIABILITIES AND FUND BALANCES 204.510 $ ^^Lm.
THE NOTES TO THE BASIC FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT.
18
SALES TAX
SINKING
$ 0 $
0
0
0
0
437.322
4?7.3?2
2005
SALES TAX
BOND
CAPITAL NON-MAJOR
PROJECT GOVERNMENTAL
206,535 $
28,710
80.612
0
0
0
315,857
560,802 $
58,038
0
0
0
0
, ?18.W
Statement C
TQTAf.
1,153,465
566,422
191,872
28,336
89,934
437.322
2.467.351
213,242
56,714
0
0
236
0
0
0
370,937
56,714
8,829
747.102
269.956 2m 1.183.582
437,322
0
0
45.901
299,681
0
737.003
227.843
0
0
437.322
0
0
45.901
247,842
71.081
618,604
247,842
71.081
1.283.769
437.3^2 1 315.857 S ^.497.351
19
City of Leesville
20
CITY OF LEESVILLE
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Assets
June 30,2009 Statement D
Total fund balances - governmental funds $ 1,283,769
The cost of capital assets (land, buildings, furniture and equipment and infrastructure ) purchased or constructed is reported as an expenditure in governmental funds. The Statement of Net Assets includes those capital assets among the assets of the City as a whole. The cost of those capital assets Is allocated over their estimated useful lives {as depreciation expense) to the various programs reported as governmental activities in the Statement of Activities. Because depreciation expense does not affect financial resources, it is not reported in governmental funds.
Costs of capital assets 38,664,695 Depreciation expense to date f21.730.665)
16,934,030
Cost Incurred which benefit more than one period are recorded as an expenditure in the governmental funds when paid. The portion relating to the next fiscal year is reported as prepaid expenses in the Statement of Net Assets. 37,136
Long-term liabilities applicable to the City's governmental activities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities - both current and long term - are reported in the Statement of Net Assets.
Balances at June 30, 2009 are: Interest payable (70,979) Long-term liabilities
Bonds payable (3,805,000) Compensated absences payable (563.497) Leases payable (809.889)
(5,178,386)
Net assets (deficit) of the Internal Service Fund are reported as a Proprietary Type Fund In the fund financial statements but included as govemmental activities in the government-wide financial statement less interfund receivables eliminated in the consolidation into the govemn^ntal activities. (173.093)
Net Assets - Govemmental activities $ 12.832.477
THE NOTES TO THE BASIC FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT.
21
CITY OF LEESVILLE
GOVERNMENTAL FUNDS Combined Statement of Revenues, Expenditures,
and Changes in Fund Balances For the Year Ended June 30, 2009
REVENUES Local sources:
Taxes : Ad valorem Sales tax Franchise and miscellaneous taxes
intergovemmental revenues Fines and fees Licenses and permits Fees, charges and commissions for services Eamings on investments Miscellaneous revenues
Total revenues
GENERAL
SALES TAX PUBLIC SAFETY SPECIAL SPECIAL REVENUE REVENUE
$ 212,611 $
0 579,972 76.924
0 429,481
115.315 7.921
44.755
1.466.979
0 $ 2,659,010
0 0 0 0
70,524 6,596
4.646
2.740,776
0 1,331,746
0 281,923 197.751
0 40,429
651 12.224
1.864.724
EXPENDITURES Current:
General govemment Public safety Public works Economic development Culture and recreation
Capital outlay Debt sen/ice:
Principal retirement Interest and bank charges Total expenditures
EXCESS (Deficiency) OF REVENUES OVER EXPENDITURES
764,604
0 1.216.466 206.421
0 40.219
100,076
0 0 0
401.973
31,525
0 3,171.378
0 0 0
33,504
52.871
6,572 2.286.153
(819.174)
0
0 533.574
2.207,202
78,782
44.073
3.327.737
(1.403.013)
OTHER FINANCING SOURCES (USES) Transfers in Transfers out
TOTAL OTHER FINANCING SOURCES (USES)
NET CHANGE IN FUND BALANCES
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
600.000 (10^.585)
494.415
(324,759)
319.712
(2.263.665)
(2.263.665)
(56,463)
277.266
1,445.000 (39.990)
1,405,010
(58.003)
24.189
THE NOTES TO THE BASIC FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT.
22
SALES TAX
LINKING
2005
SALES TAX BOND
CAPITAL
PROJECT
NON-MAJOR
GOVERNMENTAL
Statement E
TOTAL
$ 0 $
0
0
0
0
0
0
1,397
0
1,397
0 $
0
0
677,141
0
0
0
1,906
20.006
699.053
122,496 $
0
0
7.143
0
0
514,024
10,510
0
654,173
335,107
3.990,756
579,972
1,043,131
197,751
429,481
740.292
28,981
81.631
7.427,102,
0
0
0
0
0
0
0
0
555
0
0
1.239,110
0
538,692
21,343
3,867
0
34.708
864,680
3,710,070
1.238.364
210,288
401,973
1,379.066
130,000
88.663
218.663
. (?17,266) ,
0
0
1.239.665
. (540.612)
165,000
74.074
837.684
(183,511)
426,653
212.382
9.443.476
(1,016.374)
218,665
a. 145,575
Q
2,409,240
(2,409.240).
2^^mL 145.579
1,399
435.923
(540.612)
586.513
(37,936)
656.540
(1,016,374)
2.300.143
45.901 $ 618-604 1.283.769
23
CITY OF LEESVILLE
Reconciliation ofthe Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances
to the Statement of Activities For the Year Ended June 30, 2009 Statement F
Tota! net change in fund balances - governmental funds $ (1,016.374)
Amounts nsported for govemmental activities in the Statement of Activities are different because:
Capital outlays are reported in governmental funds as expenditures. However, in the Statement of Activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation exceeds capital outlays in the period;
Capital outlays $ 1.379,066 Depreciation (931,764) 447,302
Repayment of long-term debt is an expenditure In the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Assets. 426,653
In the Statement of Activities, certain operating expenses-compensated absences (vacations and sick leave) - are measured by the amounts eamed during the year, in the governmental funds, however, expenditures for these items are measured by the amount of financial resources used (essentially, the amounts actually paid). This year,-vacation and sick time eamed $317,650 was more than the amounts used ($234,540) by $83,110. (83,110)
Interest on long-term debt in the Statement of Activities differs from the amount reported in the govemmental funds because interest is recognized as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the Statement of Activities, however, interest expense Is recognized as the interest accrues, regardless of when it is due. 26,785
All revenues, expenses and changes in fund net assets (deficits) of the Intemal Service fund are reported as Proprietary Fund type in the financial statement but included as govemmental activities In the govemment-wide financial statement. (5,628)
The Statement of Activities reflects the effects of the disposition of capital assets during the year. The cost less the depreciation (net value) ofthe items disposed of during the year are not reflected In the fund balance. (557)
Certain timing differences exist between the recognized expenditures in the govemmental funds and the recognition of expenditures in the Statement of Activities.
Prepaid expense 939
Change In net assets of governmental activities. $ (203.990)
THE NOTES TO THE BASIC FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT.
24
CITY OF LEESVILLE
PROPRIETARY FUNDS Statement of Net Assets
June 30, 2009
ENTERPRISE FUNDS SEWER WATER
TOTAL ENTERPRISE
Statement G
INTERNAL SERVICE
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Receivables, net
Interfund receivable
Prepaid expenses
Total current assets
211,044 $
144,537
0
2.926
202,296 $
190,272
873,052
2.925
413,340 $
334,809
873.052
5.851
30.109
0
0
0 358.507 1.268.545 1.627.052 30.109
NONCURRENT ASSETS
Restricted cash and cash equivalents
Deferred bond issuance costs
Land and construction in progress
Capital assets, net of depreciation
Total noncurrent assets
179,616 9,245
119.876 6.660.547
341,503 0
1,738.516 2.578.590
521,119 9,245
1,858,392
9.239.137
0 0 0
0 6.969.284 4.658.609 11.627.893
TOTAL ASSETS 7.327.791 5.927.154 13.254.945 Mm.
LIABILITIES
CURRENT LIABILITIES
Accounts and other payables
Retainage payable
Interfund payables
Claims payable - current
Accrued interest
Other accrued expenses
Compensated absences ~ current
General obligation bonds - current
Liabilities payable from restricted assets
Interest Payable
General obUgation bonds and revenue bonds
Total current liabilities
2,000
0
317,822
0
17.455
0
2,394
280,000
3,215
30.000
652.886
168,734
9,883
0
0
0
2.973
40,375
0
22,834
75.000
.319.799
170,734
9,883
317,822
0
17.455
2,973
42,769
280,000
26,049
105.000
972.685
0
0
0
85.602
0
0
0
0
0
0
85.502
NONCURRENT LIABILITIES
Uabilifies payable from restricted assets
Customer guaranteed deposits
Compensated absences
Claims payable
General obligation bonds and revenue tx>nds
Notes Payable
Total liabilities payable from
restricted assets
0 23,473
0 1,610.000
0
227.806 12,620
0 1,400.000
522,779
227,806 36,093
0 3.010.000
522.779
0 0
117,600 0
0
1.633.473 2.163,205 3.795..g7a. 117.600
TOTAL LIABILITIES 2.286.359 S 2.483.004 $ 4.769.363 $ 203.202
(Continued)
25
CITY OF LEESVILLE
NET ASSETS
Invested in capital assets, net of
related debt
Restricted for:
Capital additions and contingencies
Unrestricted
TOTAL NET ASSETS
PROPRIETARY FUNDS Statement of Net Assets
June 30, 2009
ENTERPRISE FUNDS
$
2 -
SEWER
4.860,423 $
0
181.009
5.041.432 $
WATER
2.319,327 $
36,588
1.088.235
3.444.150 $
TOTAL
ENTERPRISE
7,179,750 $
36,588
1.269.244
8,485.582 $
Statement G
INTERNAL
SERVICE
0
0
(173.093)
n 73.093)
(Concluded)
THE NOTES TO THE BASIC FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT.
26
CITY OF LEESVILLE
PROPRIETARY FUNDS Statement of Revenues, Expenses, and Changes in Fund Net Assets For the Year Ended June 30, 2009 Statement H
ENTERPRISE FUNDS
OPERATING REVENUES Charges of services Other
Total operating revenues OPERATING EXPENSES
Salaries
Employee benefits Office expense Supplies Vehicle expense Utilities/communications Insurance Claims incurred Legal and other professional Repairs and maintenance Depredation expense Amortization Other expenses
Total operating expenses
SEWER WATER TOTAL
528.141 $ 0
528.141
1,440,909 $ 268.174
1.969.050 $ 268.174
1.709.083 2.237.224
741.438 1.363.e43 2.105.086
INTERNAL SERVICE
1.134,260 0
1.134.260
143,832
24.570
0
52,212
10,475
127,867
73,448
0
5,000
60.035
226,892
2,971
14,136
362,006
69,053
11,180
79,909
16,702
208,117
187,754
0
5,000
109,552
313,697
0
678
505.838
93,623
11,180
132,121
27,177
335,984
261.202
0
10,000
169,587
540,589
2,971
14.814
0
0
0
0
0
0
158,529
937,800
0
0
0
0
43.564
OPERATING INCOME (LOSS) (213.g97) 34$i435 132.138 (5.633)
NONOPERATING REVENUES (EXPENSES) Interest income Ad valorem taxes Interest expense and fiscal charges
Total nonoperating revenues (expenses)
CHANGE IN NET ASSETS
NETASSETS-BEGINNING
NETASSETS-ENDING
4,892 260,215 (65.656)
5,929 0
(53.754)
10,821 260,215 (119.410)
199.451
(13.846)
5.055.278
(47.825)
297.610
3.146.540, ,,
151.626
283.764
,, ,9,201.818 .,.
5
(5.628)
(167.465)
£ 5.041.432 $ ^ - . „ (173.09?)
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT.
27
CITY OF LEESVILLE
PROPRIETARY FUND
CASH FLOW FROM OPERA
Receipts from premiums
Receipts from customers
Receipts from others
Payments to employees
Payments to vendors
Payments for benefits
Payments to others
Net cash provided (used)
TINGACTIVl"
for operating
Statement of Cash Flows For the Year Ended June 30,
TIES
activities
—
$
,2009
ENTERPRISE FUNDS SEWER
0 $
498.970
0
(136,601)
(307.675)
0
0
54.694
WATER
0 $
1,472.268
268,174
(361.193)
(1.043,439)
0
0 335.810
TOTAL
0
1,971,238
268,174
(497.794)
(1,351,114)
0
0
390.504..
Statement 1
INTERNAL
SERVICE
$ 1,145,717
0
0
0
(43,564)
(926,293)
(158.529) 17.331
CASH FLOW (USES) FROM NONCAPITAL FINANCING ACTIVITIES: Ad valorem tax receipts
Net cash provided (used) for noncapital financing activities
260.215 260.215
2gQ.21^ 260.215,.
CASH FLOW (USES) FROM CAPITAL AND RELATED FINANCING ACTIVmeS: Proceeds on capital debt Acquisition of capital assets Interest on bonds Payments on notes and bonds
Net cash provided (used) for capital and related financing activities
CASH FLOW FROM INVESTING ACTIVITIES Earnings on investments
Net increase (decrease) in cash and cash equivalents
CASH AND CASH EQUIVALENTS - BEGINNING
CASH AND CASH EQUIVALENTS - ENDING
0 (675)
(68,962) (305.000)
(374.637)
4,692
(54,836)
445.496
? 390,§pO ?
0 (644.017)
(54.720) (75.000)
r773.737>
5.929
(431,998)
975.797
543.799 $
0 (644.692) (123.682) (380.000)
(1.148.374)
10.621
(486,834)
1.421.293
, ??4.459„L„
0 0 0 0
0
5
17.336
12.773
30.109
RECONCILIATION TO BALANCE SHEET Cash and cash equivalents Restricted cash and cash equivalents
211,044 $ 202,296 $ 413,340 $ 30,109 179.616 . 341,50:3 521.119 0.
$ 390,660 $ 543.799 $ 934.459 £ 30.109
(Continued)
28
CITY OF LEESVILLE
PROPRIETARY FUND Statement of Cash Flows
For the Year Ended June 30, 2009 Statement I
ENTERPRISE FUNDS SEWER WATER TOTAL
INTERNAL SERVICE
Reconciliation of operating income (loss) to net cash
provided (used) by operating activities:
Operating income (loss) $
Adjustments to reconcile operating income
to net cash provided (used) for operating activities:
Depreciation
Amortization
(Increase) decrease in accounts receivable
(Increase) decrease in prepaid items
(Increase) decrease in interfund receivables
Increase (decrease) in accounts payable
Increase (decrease) in retainage payable
Increase (decrease) in incurred but not
reported claims
Increase (decrease) In deposits due others
Increase (decrease) in other accrued expenses
Increase (decrease) in compensated absences
Increase (decrease) in interfund payables _
(213,297) $
226.892
2,971
(29,046) 148
0
(598)
0
0
0
0
7,231
60.393
345,435 $ 132,138 $
313,697 0
31,359
148
(439,440)
99.692 (30,537)
0
11,695
2.948 813
Q_
540,589 2,971 2.313
296 (439,440)
99,094 (30,537)
0 11.695 2,948 8.044
60.393
(5.633)
0 0
11.457 0 0 0 0
11,507
0
0
0
0
Net cash provided (used) by operating activities ?3?.919 I 390.504 $ 17.33
(Concluded)
THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT.
29
City of Leesville Notes to the Basic Fmancial Statements
June 30, 2009
INDEX Page
NOTE 1-SUMMARY OF SIGNIFICAKT ACCOUNTING POLICIES 31 A. REPORTING ENTTTY 31 B. FUND ACCOUNTING 31
Govenmiental Funds 32 Proprietary Fxmd Type - Enterprise Funds 32
C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING 32 Fund Financial Statements (FFS) 33 Proprietary Funds 34
D. BUDGET PRACTICES 34 E. CASH AND CASH EQUIVALENTS 34 F. INVESTMENTS 34 G. INTERNAL BALANCES (Due FromA'o Other Funds) 34 H. INVENTORIES AND PREPAID EXPENSES 34 I. CAPITAL ASSETS 35 J. LONG-TERM DEBT 35 K. BOND ISSUANCE COSTS 35 L. COMPENSATED ABSENCES 35 M. RISK MANAGEMENT 35 N. RESTRICTED NET ASSETS 35 O. FUND BALANCES OF FUND FINANCIAL STATEMENTS 36 P. INTERFUND TRANSACTIONS 36 Q. SUPPLEMENTAL WAGES 36 R. USE OF ESTIMATES 36 S, ELIMINATION AND RECLASSIFICATION 36
NOTE 2 - STEWARDSHIP, COMPLIANCE, & ACCOUNTABILITY 36 NOTE 3 ~ CASH AND CASH EQUIVALENTS 37 NOTE 4-RECEIVABLES 37 NOTE 5 - INTERFUND TRANSACTTONS/BALANCES 38 NOTE 6-RESTRICTED ASSETS :....38 NOTE 7-CAPITAL ASSETS 39 NOTE 8-RISKMANAGEMENT 41 NOTE 9-EMPLOYEE BENEFTTS INSURANCE , 41 NOTE 10-LONG-TERM LIABILrriES 42 NOTEll-ON-BEHALFSUPPLEMENTALPAY 48 NOTE 12 - DEDICATION OF PROCEEDS 48 NOTE 13 - PUBLIC EMPLOYEES' RETIREMENT SYSTEMS 48 NOTE 14-DEFINED CONTRIBUTION PLAN 50 NOTE 15-LmCATION AND CLAIMS 50 NOTE 16 - LEVIED TAXES 51
30
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accon^anying financial statements ofthe City of Leesville have been prepared in conformity vi'ith accoiinting princ^les generally accepted in the United States of America (GAAP) as applied to governmental units. The Govenimental Accounting Standards Board (GASB) is the accepted standard-setting body for estabhshing govemmental accounting and financial reporting principles.
A REPORTING ENTITY The City of Leesville was incorporated by proclamation ofthe Governor on February 15, 1900. The City operates under the council-administrator form of government, governed by the mayor and a seven-member board. The City is located in the parish of Vernon and has a population of approximately 6,000.
As the goveming authority ofthe City, for reporting purposes, the City of Leesville is considered a separate financial reporting entity. The fmancial reporting entity consists of (a) the primary govemment (the City), (b) organizations for which the primary government is financially accountable, and (c) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.
Governmental Accounting Standards Board (GASB) Statement No. 14 established criteria for determining which component units should be considered part of the City of Leesville for financial reporting purposes. The basic criterion for including a potential component unit within the reporting entity is financial accountability. The GASB has set forth criteria to be considered in determining financial accountability. This criterion includes:
1. Appointing a voting majority of an organization's governing body, and a. The ability of the municipality to impose its will on that organization and/or b. The potential for the organization to provide specific financial benefits to or impose specific financial
burdens on the City. 2. Organizations for which the City does not appoint a voting majority but are fiscally dependent on the City. 3. Organizations for which the reporting entity financial statements would be misleading if data of the
organization were not included because ofthe nature or significance ofthe relationship.
The City has two component units, which are legally separate fiom the City. The voters ofthe City of Leesville elect the City Marshal and the City Judge. This report does not include these component units. Complete financial statement for each ofthe two component units can be obtained fix)m their respective administrative offices.
The Leesville Housing Authority is accountable to the City since the City Council ^points the Authority's board members. However, since the City does not have the ability to impose it's will on the Authority and no financial benefit/burden relationship exists, the City is not considered financially accountable for the Authority. Accordingly, the Authority is not considered part ofthe City for financial reporting purposes.
B. FUND ACCOUNTING The City uses funds to report on its financial position and the results of its operations. A fimd is a separate accounting entity with a self-balancing set of accounts that comprises its assets, liabilities, fund equity, revenues, and expenditures. Fund accountiDg is designed to demonstrate legal compliance and to aid financial management by segregating transactions relating to certain government functions or activities.
Funds are classified into two categories; govemm^tal and proprietary. Each category, in turn, is divided iato separate "fund types." Govemmental fimds are used to account for a government's general activities, where the focus of attention is on the providing of services to the pubhc as opposed to proprietary fimds where the focus of attention is on the recovering ofthe cost of providing services to the public or other agencies through service charges or user fees.
31
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
Fiduciary funds are used to account for assets held for others. The City's current operations require the use of govemmental and proprietary flmd types described as follows:
Govemmental Funds
General Fund - is the general operating flmd of the City. It accounts for all financial resources, except those required to be accounted for in other fimds.
Sales Tax Special Revenue Fund - accounts for the proceeds of a one-percent (1 %) City sales and use tax. The sales tax was renewed July 1, 2005 for a period of twenty-five (25) years.
Pubhc Safety Special Revenue Fund - accounts for the proceeds of a one-half on one percent (1/2%) sales and use tax. This sales tax was effective April 1,2004 for a period of twelve years. In addition, this fund accounts for public safety grants and various fines and forfeitures.
Sales Tax Sinking Fund - accounts for the debt service principal and interest payments associated with the Sales Tax Bond, Series 2005.
2005 Sales Tax Bond Capital Projects Fund - accounts for the receipt ofthe proceeds ofthe Sales Tax Bond, Series 2005, and subsequent expenditure ofthe funds.
Proprietary Fund - The operations are financed and operated m a manner similar to a private business enterprise, where the intent ofthe goveming body is that the cost (expenses, including depreciation) of providing services on a continuing basis be fmanced or recovered primarily through user charges.
Enterprise Funds
Sewer Fund - accounts for the receipts of charges for services and expenditures associated with the sewer system.
Water Fund - accounts for the operations of the water system which consists of receipts of charges for services and corresponding expenditures.
Internal Service - Employee Benefit Plan - This fund is used to account for the accumulation of resources for and payment of benefits by the City's program.
C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING
Government-Wide Financial Statements (GWFS) The Statement of Net Assets and the Statement of Activities displays information about the reporting govemment as a whole. Fiduciary funds are not included in the GWFS. Fiduciary funds are reported only in the Statement of Fiduciary Net Assets at the fund financial statement level.
The Statement of Net Assets and the Statement of Activities was prepared using the economic resources measurement focus and the accrual basis of accounting. Revenues, expenses, gains, losses, assets, and liabitities resulting firom exchange and exchange-like transactions are recognized when the exchange takes place. Revalues, expenses, gains, losses, assets, and liabilities resulting fi^m nonexchange transactions are recognized in accordance with the requirements of GASB Statement No. 33 "Accounting and Financial Reporting for Nonexchange Transactions."
32
City of LeesviUe Notes to the Basic Financial Statements
June 30, 2009
Program revenues Program revenues include charges to customers or applicants who purchase, use, or directly benefit fi'om goods, services, or privileges provided by a given fimction or segment and grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment Taxes and other items not properly included among program revenues are r^orted instead as general revenues.
Allocation of indirect expenses The City reports all direct expenses by function in the Statement of Activities. Direct exposes are those that are clearly identifiable with a function. Depreciation expense is specifically identified by fimction and is included in the direct expense ofeach fimction. Interest on general long-term debt is considered an indirect expense and is reported separately on the Statement of Activities.
Fund Fmancial Statements (FFS)
Govemmental Funds The accounting and financial reporting treatment applied to a fimd is determined by its measurement focus. Govemmental fund types use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting revenues are recognized when susceptible to accrual (i.e., when they are "measxorable and available"). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to pay liabilities ofthe current period. The government considers all revenues available if they are collected within 60 days after year-end. Expenditures are recorded when the related fund liability is incurred, except for unmatured principal and interest on general long-term debt which is recognized when due. Compensated absences and claims and judgments are reported in a govemmental fund only if the claims are due and payable.
With this measurement focus, only current assets and current liabilities are generally included on the balance sheet. Operating statements of these funds present increases and decreases in net current assets. The govemmental funds use the following practices in recording revenues and expenditures:
Revenues Ad valorem taxes are recorded in the year the taxes are due and payable. Ad valorem taxes are assessed on a calendar-year basis and attach as an enforceable lien and become due and payable on the date the tax rolls are filed with the recorder of mortgages. Louisiana Revised Statute 47; 1994 requires that the tax roll be filed on or before November 15 ofeach year. Ad valorem taxes become delinquent ifnot paid by December 31. The taxes are normally collected in December, January, and February ofthe current year.
Franchise taxes and intergovemmental revenues are recorded when the City is entitled to the funds.
Interest income on time deposits is recorded when the interest has been eamed and the amount is determinable.
Substantially all other revenues are recorded when they are received by the City.
Based on the above criteria, ad valorem taxes, fianchise taxes and intergovernmental revenues have been treated as susceptible to accrual.
Expenditures are generally recognized under the modified accmal basis of accounting when the related fimd liabihty is incurred.
Other Financing Source (Use) Transfers between funds that are not expected to be repaid are accounted for as other financing sources and are recognized when the underlying event occurs.
33
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
Proprietary Funds Proprietary funds are accounted for on the flow of economic resources measurement focus and use the accrual basis of accounting. Under this method, revenues are recorded when eamed and expenses are recorded at the time the liabilities are incurred. With this measurement focus, all assets and aU liabihties associated with the operation of these funds are included on the balance sheet. The City has elected pursuant to GASB Statement No. 20, to apply aD GASB pronoimcements and only FASB pronouncements issued before November 30, 1989.
Operating revenues and expenses Proprietary fund distinguish operating revenues and expenses fiom nonoperating items. Operating revenues and expenses generally result fix)ra providing services in connection with the fund's principal ongoing operations. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
D. BUDGET PRACTICES Budgets are adopted on the modified accrual basis ofaccoimting, as discussed in the govemmental funds. Annual appropriated operating budgets of proposed expenditures and the means of financing them are adopted for the general and special revenue funds. Budgeted amounts are as originally adopted, or as amended fix)m time to time by the Coimcil. Budgets are adopted consistent with accounting principles generally accepted in the United States of Amaica. Budgets for capital projects are adopted on a project-length basis. Because these nonoperating budgets primarily serve as a management control function, no comparison between budgeted and actual amounts for fimds budgeted on this basis is provided in this document.
E. CASH AND CASH EQUIVALENTS Under state law, the City may deposit fimds within a fiscal agent bank organized under the laws ofthe state of Louisiana, the laws of any other state m the imion, or the laws ofthe United States of America. The City may invest in certificates and time deposits of state banks organized imder Louisiana laws and national banks having principal offices in Louisiana.
For purposes ofthe statement of cash flows, cash equivalents include all highly liquid investments with a maturity date of three months or less when purchased.
F. INVESTMENTS Under state law, the City may invest funds in obligations ofthe United States of America, in federally insured investments, or in time deposits with state banks organized under Louisiana law and national banks having principal offices in Louisiana, Investments in marketable securities (United States Treasury Notes) are reported at their cost on Statement A, which is the same as their market value.
G. INTERNAL BALANCES (Due From/To Other Funds) During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as intemal balances on the statement of net assets and as due fi-om/to other funds in the fund financial statements. Amounts reported in the fund financial statements as intCTfiand receivables and payables are eliminated in the govemment-wide govemmental and business-type activities columns ofthe statement of net assets, except for the net residual amoxmts due between govemmental and business-type activities, which are presented as intenoal balances.
H. INVENTORIES AND PREPAID EXPENSES Inventories are valued at cost, which approximates market value, using the first-in/first-out (FIFO) method. All inventories are accounted for in the Gaieral Fund as assets when purchased and recorded as expenditures when consumed. Inventory items consmned by other fimds are recorded through the interfimd receivable/payable accounts.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both govemment-wide and fund financial statements.
34
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
I. CAPITAL ASSETS Capital assets are recorded at either historical cost or estimated historical cost and depreciated over their estimated useful fives (excluding salvage value). Donated capital assets are recorded at their estunated fair value at the date of donation. Although the City does not have a capitalization policy, the City's practice is to capitalize assets with cost of $1,000 or greater and infi^astructure capital assets with a cost of $25,000 or greater. Estimated useflil life is management's estimate of how long the asset is expected to meet service demands. Straight line depreciation is used for govemmental fund-type based on the following estimated usefiil lives:
Land N/A Building and Improvements 20-40 years Furniture and equipment 5-10 years Infrastructure 20-40 years
The capital assets used in the proprietary fund-type operations are included on the balance sheet of the fimd. Depreciation of all exhaustible fixed assets used by the proprietary flmd type operations are charged as an expense against operations. Depreciation is computed using the straight-line method over estimated useful lives.
Production and distribution systems 25-50 years Buildings and improvements 10-25 years Equipment and vehicles 3-8 years
J. LONG-TERM DEBT Long-term liabilities expected to be financed from govemmental funds are not reported in the balance sheet for the fund financial statements; however, such long-term obhgations are rc^rted in the Statement of Net Assets in the Govemment-Wide Financial Statements. Interest expense on long-term debt is recognized in the Government-Wide Financial Statements as the interest accmes, regardless of when it is due. Long-term liabiHties expected to be financed from proprietary fund operations are accounted for in those fiinds.
K. BOND ISSUANCE COSTS In govemmental funds, bond issuance costs are recognized in the current period. Bond issuance costs for proprietary fund types are deferred and amortized over the term ofthe bonds using the bonds-outstanding method, which approximates the effective interest method. Bond issuance costs for proprietary fimd types are recorded as deferred charges.
L. COMPENSATED ABSENCES Vested or accumulated leave is accrued in the period the habihty is incurred. Compensated absences expected to be fmanced from govemmental funds are not reported in the balance sheet ofthe Fund Financial Statements; however, compensated absences are reported in the Statement of Net Assets in the Govemment-Wide Financial Statements. Vested or accumulated leave of proprietary funds is recorded as an expense and habihty of those funds as the benefits accme to employees. No liability is recorded for compensated absences that relate to future services or that are contingent on a specific event that is outside the control ofthe employa- and «nployee.
M. RISK MANAGEMENT The City is exposed to various risks of loss related to torts; theft of, damage to, and destmction of assets; errors and omissions; and injuries to employees. To handle such risk ofloss, the City maintains commercial insurance policies covering its automobiles, professional liability, general liabiHty, and surety bond coverage. There were no significant reductions in insurance coverage during the year ended June 30,2009.
N. RESTRICTED NET ASSETS Certain proprietary fund assets are classified as restricted assets because tiieir use is limited by applicable bond covenants or by Council actioa Various "debt service accounts" segregate resources accumulated for debt service payments of bonds and certificates of indebtedness. "Capital additions and contingencies accounts" are used to report resources set aside to meet unexpected contingencies or to fund asset
35
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
renewals and replacement for the water system. These resources may also be used for debt service if funds are not otherwise available. "Constmction accoimts" are used to report funds received fit)m loan proceeds that are to be used for construction. It is the City's policy to first apply restricted resources when an expenditure is incurred for purposes for which both restricted and unrestricted net assets are available.
O. FUND BALANCES OF FUND FINANCIAL STATEMENTS
Reserves Reserves represent those portions, of fimd equity not appropriable for expenditures or legally segregMed for a specific future use.
Debt Service This amount represents the portion of fund balance that has been reserved in the debt service fund for future payment of principal and interest on bonded debt.
Designated Fund Balance Designations of fiind balance represent tentative management plans that are subject to change.
P. INTERFUND TRANSACTIONS. Quasi-extemal transactions, if any, are accounted for as revenues or expenditures. Transactions that constitute reimbursements to a fund for expenditures, initially made from it that are properly applicable to another fund, are recorded as expenditures in the reimbursing fund and as reductions of Expenditures in the fund that is reimbursed. AU other interfund transactions are reported as transfers,
Q. SUPPLEMENTAL WAGES Certain employees ofthe police and fire departments receive supplemental wages from the State of Louisiana These supplemental w^es are recognized as intergovemmental revenue and public safety expenditures in the Public Safety Special Revenue Fund.
R. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of fte financial statement and tiie reported amounts of revenues and expenditures/expenses durmg the reporting period. Actual results could differ from those estimates.
S. ELIMINATION AND RECLASSIFICATIONS In the process of aggregating data for the statement of net assets and the statement of activities, some amounts reported as interfund activity and balances in fiie funds were eliminated or reclassified. Interfund receivables and payables were eliminated to minhnize the "grossing up" effect on assets and liabilities within the govemment-wide financial statements.
NOTE 2 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY
Deficit Fund Balances The following fimd had a deficit fund balance at June 30, 2009:
Deficit Fund Amount General Fund $ 5,047 PubUc Safety Special Revenue 33,814 hitemai Service Fund 173,093
36
City of LeesviUe Notes to the Basic Financial Statements
June 30, 2009
Expenditures in Excess of Appropriations the following funds had expenditures in excess of appropriations for the year.
Unfavorable Fund Budget Actual Variance Public Safety Special Revenue $3,272,379 $3,297,873 $25,494
NOTE 3 - CASH AND CASH EQUIVALENTS At June 30, 2009, the City's cash and cash equivalents consisted of demand deposits and interest bearing checking accounts as follows:
Govemmental Business-type Activities Activities Totals
Cash and cash equivalents $1,183,574 $413,340 $1,596,914 Restricted cash and cash equivalents 437,322 521,119 958,441
These deposits are stated at cost, which approximates market. Under state law, these deposits (or resulting bank balances) must be secured by federal deposit insurance or the pledge of securities owned by the fiscal agent bank. The market value ofthe pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the agent bank- These securities are held in the name of tiie pledging fiscal agent bank in a holding or custodial bank that is mutually acceptable to both parties.
Interest Rate Risk: The City only invests in savings accounts and certificate of deposits in which their policy does not address interest rate risk.
Credit Rate Risk: The City's investments at June 30, 2009 were only in certificates of deposit which do not have credit ratmgs; however, the City's policy does not address credit rate risk.
Custodial Credit Risk: Custodial credit risk is the risk that in the event of a bank failure, the City's deposits may not be returned. The City follows state law requirements for its custodial credit risk policy. As of June 30,2009, the City's bank balance of $2,917,358 m which $1,227,649 was exposed to custodial credit risk because it was uninsured and collateralized with security held by the pledging financial institutions tmst department or agent but not in the City's name. Even though pledging securities are considered uncollateralized under provisions of GASB Statement 3, Louisiana Revised Statute 39; 1229 imposes a statutory requirement on the custodial bank to advertise and sell the pledged securities within 10 days of being notified by the City that the fiscal agent failed to pay deposited funds upon request
NOTE 4 - RECEIVABLES The following is a summary of receivables at June 30, 2009:
Class of Receivables Accounts
Uncollected cycle billings Estimated billings between cycles
Other Sales taxes Franchise fees Gross receivables Allowance for doubtful accounts
Net total receivables
Govemmental Activities
S -
219,713 255,262
91,447 566,422
-$ 566,422
Business-type
$
_$_
Activities
264,225 140,432
---
404,657 (69,848) 334,809
$
J__
Total
264,225 140,432 219,713 255,262
91,447 971,079 (69,848) 901,231
37
City of LeesviUe Notes to the Basic Financial Statements
June 30,2009
The govemmental activities' accoimts receivables are expected to be collected in fiill; therefore no allowance for doubtful accounts has been recorded.
The business-type activities' accounts receivables are receivables arising fi'om utilities services provided to customers and conisist of uncollected billings rendered to customers on monthly cycle billings, which are estimated services provided to customers between billing cycles. The allowance for doubtfiil accounts represents the estimated uncollectible amounts at June 30,2009.
NOTE 5 - INTERFUND TRANSACTIONS/BALANCES. Individual balances due fix)m/to other fimds at June 30,2009, are as follows:
Receivable Fund Public Safety Special Revenue Fund Water System Fund Water System Fund Water System Fund Sales Tax Capital Projects
These balances represent charges for goods and services between funds. The balances are settled periodically. The amounts here represent activity since the last settlement.
Transfers during the year were as follows:
Pavable Fund Sales Tax Special Revenue Fimd Sales Tax Special Revenue Fund Public Safety Special Revenue Fund Sewer System Fund General Fund
Amount $ 111,260
279,729 275,501 317,822
S0,612 $1,064,924
Traiisfers In General Fund Public Safety Special Revenue Fund Sales Tax Sinking Non-Major Governmental Funds Non-Major Govemmental Funds
Transfers out Sales Tax Special Revenue Fund Sales Tax Special Revenue Fund Sales Tax Special Revenue Fund General Fund Public Safety Special Revenue Fund
Amount $ 600,000
1,445,000 218,665 105,585 39,990
$2,409,240
The transfers are movements of money from one fund to another. These can be required by law or merely service as a means to finance activities in the receiving fund. The transfers are not loans, i.e., the receiving fund does not pay it back.
NOTE 6 - RESTRICTED ASSETS At June 30,2009, restricted assets ofthe Water and Sewer System Enterprise Funds consisted of cash and cash equivalents as follows:
Construction Ad valorem bonds debt service Captial additions and contingencies Customer deposits
Sewer System $ 59,609
93,963 26,044
-
$ 179,616
Water Svstera $
102,919 10,778
227,806 $ 341,503
Total $ 59,609
196,882 36,822
227,806 $ 521,119
Restricted assets, at June 30, 2009, ofthe Sales Tax Sinking Fund was $437,322.
38
City of LeesviUe Notes to the Basic Financial Statements
June 30, 2009
NOTE 7 - CAPITAL ASSETS The following presents the changes in capital assets ofthe govemmental activities
for the year ended June 30,2009:
Govemmeotal activities Non-depreciable capital assets
land
Constmction in progress Total non depreciable assets
Depreciable assets
Buildings and improvements Equipement and vehicles Infixistructure
Total depreciable assets Accumuated depreciation
Buildings and improvements Equipement and vehicles Infrastmcture
Total asccumulated depreciation Total depreciable capital assets, net Net capital assets, net
Beginning Balance
$ 303,856 82,276
386,132
11,012,048 5,176,957
20,720,042 36.909,047
3,239,462 3,486,821
14,081,611 20,807,894 16,101,153
$ 16,487,285
Additions
$ 1,254,575 1,254,575
83,604 97,283 20,567
201,454
283,686 309,380 338,698 931,764
(730,310) $ 524,265
Deletions
$ 76,963 76,963
9,550
9,550
8,993
8,993 557
$ 77,520
Ending Balance
$ 303,856 1,259,888 1,563,744
11,095,652 5,264.690
20,740,609 37,100.951
3,523,148 3,787,208
14,420,309 21,730,665 15,370,286
$16,934,030
Depreciation expense was charged to govemmental activities as follows;
Govennental Activities General and administrative Pubhc safety Public Works Economic development Culture and recreation
Total
$
s
7,040 220,512
202,748 428,277
73,187 931.764
39
City of Leesville Notes to the Basic Financial Statements
June 30,2009
A summary of capital assets ofthe business-type activities is as follows:
Business-type Activities Non-depreciable capital assets
Land Constmction in progress Total assets not being depreciated
Depreciable assets Plant and system Equipment and vehicles Total Other Capital Assets
Accumulated depreciation Plant and system Equipment and vehicles
Total Accumulated Depreciation Total depreciable Capital Assets, Net Capital Assets, Net
Beginning Balance
$ 1 5 7 3 9 1,250,879 1,408,128
17,948,794 567,166
18,515,960
8,431,631 499,031
8,930,662 9,585,298
$10,993,426
Additions
$ 632,803 632,803
182,539 11,889
194,428
523,090 17,499
540,589 (346,161)
$ 286,642
Deletions
$ 182,539 182,539
-
--
$ 182,539
Ending Balance
S 157,249 1,701,143 1,858,392
28,131,333 579,055
18,710.388
8,954,721 516,530
9,471,251 9,239,137
$11,097,529
Depreciation was charged to functions as follows:
Sewer Water
Total Depreciation Expense for Business-type Activities
$ 226,892 313,697
$ 540 589
40
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
NOTE 8 - RISK MANAGEMENT The City is exposed to various risks ofloss related to torts; theft or damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City purchases commercial insurance as set forth in the following table. Settled claims did not exceed commercial coverage for the year ended June 30, 2009.
Limits of Coverage Workmen's con^)ensation Statutory Auto Uability $ 500,000 Commercial general liability 500,000 Public officials' errors and omissions hability (deductible $5,000) 500,000 Law enforcement offices' Uability (deductible $5,000) 500,000 Premises medical - per person 1,000 Premises medical - per accident 10,000 Fire damage per occurrence 50,000 Airport liability 6,051,000 City-owned buildings and equipment - fire, lightning,
and extended coverage (deductible $1,000) 3,766,000 Industrial park buildings - fire, lightning, and extended coverage (deductible $2,500) 2,673,300
Contractor's equipment (deductible $1,000) 1,783,966 John Deere 31OSG (deductible $2,500) 62,838 Automatic Check Signer 25,000 Public Officials Bond 100,000 Notary Bond 10,000 2003 Ferrara Ladder Fke Tmck (deductible $1,000) 650,000 Auto Physical Damage (deductible $500) 609,153
The City covers all other losses, claim settiements, and judgments from General Fund resources. The City currently rq)orts all of its risk management activities in its General Fvind. Claim expenditures and liabiHties are reported when it is probable that a loss has occurred and tiie amount of that loss can be reasonably estunated.
The City is party to legal proceedings involving suits filed against the City for various reasons. Some of these suits claim damages that are material m amoimt. The amoimt of losses, if any, that may arise from these suits cannot be reasonably estimated. Management does not believe that the City is exposed to any material losses not covered by insurance. No provision for losses is included in the financial statements.
NOTE 9 - EMPLOYEE BENEFITS INSURANCE The City maintains an intemal service fimd to finance employee hospitalization/health insurance. Resources accumulated for health coverage in the trust are accounted for in the Employee Benefits Insiarance Fund (an intemal service fund). Under this program, the Employee Benefits Intemal Service Fund normally provides coverage for a maximum of $40,000 for each covered employee's (and dependent's, if applicable) qualifying health claims. The Fund maintains an aggregate retained loss per plan month. The Fimd purchases commercial insurance for healtii claims in excess of coverage provided. Under the terms ofthe agreement, the net assets ofthe Fund may only be used to provide employee benefits.
All funds ofthe City and covered employees participate in the program and make payments to the En4)loyeeBenefits Insurance Fund. The claims hability of $203,202 reported in tiie Fund at June 30, 2009, which $117,600 is considered as long-terai, is based upon GAAP, which requires that a Hability for clauns be reported if hiformation prior to the issuance of the financial statements indicates that it is probable that a liabiHty has been incurred at the date
41
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
of the financial statements and the amount of the loss can be reasonably estimated. This estimate is based on information provided by the third party administrator. Changes in the Fund's claims habihty amoxmt in the fiscal year ending June 30, 2009 and the prior years were as follows:
2009 2008 2007 Balance, begmning of year $ 191,695 $155,697 $ 6,524 Current year claims 824,320 802,778 729,830 Claim payments (812,813) (766,780) (580,657) Balance, end of year $ 203,202 $ 191,695 S 155,697
Of this $203,202, $85,602 is reported as claims payable-current, which accounts for two months claims after year end. The remaining $117,600 is considered long-term, which is determined to be due within one year.
NOTE 10-LONG-TERM LIABELiriES Govemmental activities long-term liabiHties are direct obhgations and pledge the fall faith and credit ofthe City. The City has incurred these liabilities to provide funds for the acquisition and constmction of major capital additions, or to refund general obligation liabilities previously issued for these purposes. In addition, the City's obligation relative to the govemmental funds' liability for compensated absraices is reported as a govemmental activities long-term Hability. The debt obligation payments for the sales tax revenue bonds and general obHgation bonds are made by the debt service fimds. The compensated absence payments are made by the general fimd, the sales tax special revenue fimd and the public safety special revenue fund.
The City has issued two types of revenue bonds. The fu t type is utility revenue bonds whereby the City pledges mcome derived from the acquired or constructed assets to pay debt service. This long-term debt is reported in the business-type activities, in which payments are made by the Sewer and Water fimds. The second type is sales tax revenue bonds whereby the City has pledged revenue from specifically dedicated sales tax collections to pay debt service and is reported as govemmental activities long-term liabilities.
42
City of Leesville Notes to the Basic Financial Statements
J u n e 30,2009
The following is a summary of long-term obligation balances at Jime 30, 2009:
Maturity Dates Interest Rates
Original Amount
Govemment Business-type Activities Activities
Governmental activities General Obligation
Sales Tax Revenue Bonds Public Improv. Bonds, Series 2005
General ObHgation Bonds Refijnding Bonds, Series 2002A
Refunding Bonds, Series 2002B General Obligation, Series 2004
Compensated Absences Claims payable Capital Leases
Police Equipment (2007) Fire Equipment (2008) Public Works Dept. Equipment (2007) Public Works Dept Equipment (2008)
Business-type Acthnities Enterprise Funds
Utilities System Revenue Bonds 2007 Series Water Improvement Bond
Notes Payable Utility Relocation
General Bonds
Sewer System Improvements Refunding bonds, Series 2002C Customer Guaranteed Deposits Compensated Absences
Totals Current Portion
Totals
8/1/2020
8/1/2012 8/1/2012 3/1/2019
9/I/20I2 4/25/2028 11/20/2010 5/5/2013
3.10-4.25% $ 2,500,000 $ 2,170,000
4.95% 0,10-6.50% 4.40-3.63%
6T0% 4.98% 4.25% 4.00%
255,000
375,000
1,800,000
159,583
666,583
62,838 55,967
120,000 175,000
1,340,000 563,497 117,600
101,462
643,527 22,132
42,768
8/1/2022
Open Ended
3/15/2015 8/1/2012
.10-4.70%
None
245% T 0-5.50%
1,550,000
4,710,000 320,000
5,295,986 (752,075)
$ 4,543,911
$ 1,475,000
522,779
1,780,000 140,000 227,806
78,862 4,224,447 (427,769)
i 3;796;678
43
City of LeesviUe Notes to the Basic Financial Statements
June 30, 2009
The general fund and the public safety special revenue fund are obligated to pay the debt payments on capital leases. The following is a listing ofthe capital assets under capital leases:
Capital Lease Type of Capital asset Police Equipment (2007) Police Computer Software Fire Equipment (2008) 2003 Ferrara Fire Truck & 2008 Pumper Truck Public Works Dept. Equipment (2007) 31 OSG Backhoe Loader PubUc Works Dept Equipment (2008) Caterpillar 305C Hydraulic Excavator
The capital leases original leased amount was $944,971, which had a remaining value of $809,889 at fiscal year end June 30,2009. The current year depreciation on these capital leases totaled $ 105,178 with accumulated depreciation of $317,154 at fiscal year end June 30,2009.
The future mmimum lease obligations and the net present value of these minimum lease payments as of June 30, 2009, were as follows:
Year Ending June 30 2010 2011 2012 2013 2014 2015-2019 2020-2024 2025-2028 Total miniraum lease payments Less amount representing Present value of minimum
interest lease payments
Govermental Activities $ 125,500
114,080 108,390 54,980 54,980
274,894 274,894 165,018
1,172,736 (362,847)
$ 809,889
During the year ended June 3 0,2009, the following changes occurred in governmental activities long-term liabilities:
Sales tax revenue bonds
General obligation bonds
Compensated absences
Claims payable Capitalized leases
Total
Beginning Balance
$ 2,300,000
$
1,800,000
480,387
125,034 941,542
5,646,963
Additicms
S
$
-
-
317,650
805,379 -
1,123,029
$
$
Deletions
130,000
165.000
234,540
812,813 131,653
1,474,006
Endfag Balance
$ 2,170,000
$
1.635,000
563,497
117,600 809,889
. ^95 ,986
Due within one year
$
$
140,000
175,000
234,541
117,600 84,934
752,075
44
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
The annual requirements to amortize outstanding govemmental activities long-term debt excluding compensated absences and clauns payable are as follows:
Year Endhig June 30 2010 2011 2012 2013 2014 2015-2019 2020-2024 2025-2028 Total
Principal Payment
$ 399,934 402,720 415,821 391,528 322,848
1,876,397 655,783 149,858
Interest Payments
$ IS9,044 171,003 152.662 133,913 119,571 394,330
88394 15,161
Total
$ 588,978 573,723 568,483 525,441 442,419
2,270,727 744,177 165,019
4,614M9 1,264,078 $ 5,878,967
During the year ended June 30,2009, the following changes occurred in business type activities long-term liabilities:
Revenue bonds Genera] obligation bonds Note payable Compeosated absences Customer guaranteed deposits
Beginning Balance
$ 1,550,000 2,225,000
522,779 70,818
216,111
Additions
$ --
50,813 62,038
Eteletiona $ 75,000
305,000 -
42,769 50,343
Ending Balance
$ 1,475,000 1,920,000
522,779 78,862
227,806
Due within one year
$ 75,000 310.000
-42,769
-
Total $ 4,584,708 $ 112,851 $ 473,112 $ 4,224,447 $ 427,769
The annual requirements to amortize outstanding business-type activities long-term debt excluding customer guaranteed deposits, notes payables, and compensated absences are as follows:
Year Ending June 30 2010
2011 2012 2013 2014 2015-2019 2020-2023 Total
Principal
Payment
$ 385,000
395,000
410,000
430,000
405,000
845,000
525,000
$ 3,395,000
Interest
Payments
$ 114,030
103,545
92,110
79,293
66,449
190,170
50.503
$ 696,100
Total
$ 499,030
498,545
502,110
509,293
471,449
1,035,170
575,503
$ 4,091,100
Business-type Activities Notes Pavable: On July 23, 2003, tiie City entered into an agreement with the Louisiana Department of Transportation and Development for utihty relocation assistance fimding. Issuance of future permits to the City by the Louisiana Department of Transportation and Development for location of additional longitudinal facilities within any state owned right of way is contingent upon repayment of this funding. The City must show a good faith effort to repay the debt by making annual payments to the Department of Transportation and Developmait
45
City of LeesviUe Notes to the Basic Financial Statements
June 30, 2009
of 5% of its gross income or 10% of its outstanding utihty relocation assistance fimding debt. The first payment must be made within one year of tiie date of invoicing to the City by the Department of Transportation and Development, and issuance of permits will remain suspended imtil the first payment is made. The City's payments are due by January 15th ofeach year. As of Jime 30, 2009, the City incurred $522,779 in fimding fiom this agreemait. The relocation project was completed, but invoicing to the City by the Department of Transportation had not occurred as ofJune30,2009.
Business-type Activities:
Sewer Fund ~
General Obligation Bonds Series 1995 of tiie City of Leesville and General Obheation Bonds Series 1995 of Sewer District No. 3 ofthe City of Leesville: The material provisions of these bond covenants are as follows:
1. In compliance with the special election held on November 8, 1994, the City shall levy and collect annually ad valorem taxes in an amount sufHcient to pay, when due, principal and mterest on tiie bonds. The tax shall be expended only for the purpose of paying promptiy when due the principal and interest on the bonds.
2. The City will, in accordance with prudent wastewater utihty treatment practice, (i) at all tunes operate the properties of its System in an efficient manner, (ii) maintain the System in good repair working order and operating condition, and (iii) fi-om time to time make all necessary and proper rq)airs, renewals, replacements, additions, betterments, and improvements with respect to its System so that at all times the business carried on in connection therewith shall be properly and advantageously conducted.
3. The City wiU keep accurate records and accounts for the System separate and distinct fi-om its other records and accounts in accordance with generally accented govemment accounting standards.
4. The City will establish a user charge system to assure that each recipient of wastewater treatment services will pay a proportionate share ofthe costs of operation and maintenance, including any necessary replacement of portions ofthe System.
5. There shall be established a separately identifiable fimd or accoimt to be designated die General Obligation Bond Sinking Fimd. All monies fi'om the collection ofthe ad valorem taxes shall be used solely to pay principal of and interest on the bonds.
6. There shall be established a separately identifiable fund or accoimt to be designated the Sewer System Renewal and Replacement Fund, There shall be transferred to this fimd, on or before the twentieth (20th) day of each month of each year, beginning no later than the first fiiU month after the loan closing, an amount equal to five percent (5%) of net revenues collected in the prior calendar month imtil the balance in the renewal and replacement fund equals to $75,000. All monies in the renewal and replacement fiind maybe drawn on and used by the System for the purpose of paymg the costs of any unusual and extraordinary maintenance and any improvements to the System, which will either enhance its revenue producing capacity or provide a higher degree of service. The balance at the beginning ofthe fiscal year was $25,849; however, the City transferred funds for a sewer project during the year. At June 30, 2009, the account balance was $26,044, which was less tiian the required balance.
46
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
Excess Revenue Refunding Series 2002C Bonds The material provisions for the sewer system refunding bond covenant is as follows:
1. The City will maintain an "excess revenue bonding sinking fund" in amount to pay promptiy and fully the principal of and interest on the bonds by transferring monthly payments on or before the 20"" day ofeach month commencing August 2002 a sum equal to one-sixth (1/6) ofthe next interest payment due and one-twelfth (1/12) ofthe next principal payment due.
Violation of Excess Revenue Refimding Series 2QQ2C Bonds
1. Monthly sinking fimd transfers were not made timely as required by the agreement. At June 30,2009, the sinking fund met the required balance.
Water Fund -
Water Improvement Fund Series 2007 Bonds: The material provisions of water system refimding bond covenants are as follows:
1. The City will maintain an "excess revenue bond sinking fimd'* in amount to pay promptly and fully the principal and interest on the bonds by transferring monthly payments on or before the 20th day ofeach month commencing October 2007 a sum equal to one-sixth (1/6) ofthe next interest payment due and one twelfth (1/12) ofthe next principal payment due.
Violations of the Water Improvement Fund Series 2007 Sinking Fund Requirements:
1. Monthly sinking fund transfers were not made timely as required by the agreement. At June 30,2009, the sinking fund met the required balance.
Govemmental Activities:
Sales Tax Revenue Public Improvement Series 2005 Bonds: The material provisions of sates tax revenue public improvement bond covenants are as follows:
1. The City will maintain a sales tax bond sinking fund sufficient in amount to pay promptly and fully the principal of and interest on the bonds by transferring fiom the sales tax fund monthly payments on or before the 20th day ofeach month commencing August 2005 a sum equal to one-sixth (1/6) ofthe next interest payment due and one-twelfth (1/12) ofthe next principal payment due.
2. The City will establish a sales tax bond reserve flmd by transfCTring, immediately upon dehvery ofthe bonds fi^om bond proceeds, a sum equal to the lesser of (1) 10% ofthe original principal proceeds ofthe bonds or (2) the highest combined principal and interest requirements for any succeeding bond year on the bonds.
Violations of Sales Tax Revenue Pubhc Improvement Scries 2005 Bond Covenants:
1. Monthly transfers to the smking flmd as required by the covenants were not made. Periodic transfers were made to the sinking fund. At June 30, 2009, the sinking fimd was in excess ofthe required balance.
47
City of LeesviUe Notes to the Basic Financial Statements
June 30, 2009
2. Separate bank accounts for the sales tax bond sinking fund and the sales tax bond reserve fund as required by the covenants were not established. Only one bank account was established that contains the deposits for both the sales tax bond sinking fimd and the sales tax reserve fund.
Excess Revenue Refunding Series 2002A and 2002B Bonds The material provisions of excess revenue bond covenants are as follows:
1. The City will maintain an "excess revenue bond sinking fund" in amount to pay promptly and fully the principal and interest on the bonds by transferring monthly payments on or before the 20* day of each mcaith commencmg August 2002 a sum equal to one-sixth (1/6) ofthe next interest payment due and one-twelfth (1 /12) of the next principal payment due.
Violation of Excess Refunding Series 2002A and 2002B Bonds
1. Monthly smking fund transfers were not made timely as requned by the agreement. At June 30,2009, the sinking fund met the required balance.
NOTE 11 - ON-BEHALF SUPPLEMENTAL PAY Certain en:^)loyees meeting statutory qualifications in tiie fire and police departments receive supplemental pay directly fi'om the State of Louisiana, This supplemental pay in the amount of $158,993 is recognized as mtergovemmental revenue and public safety expenditures in the following departments;
Pohce $102,709 Fire 56,284
NOTE 12 - DEDICATION OF PROCEEDS Beginning April 1,2004, the City was autiiorized to levy and coUect a one-half of one percent (1/2%) sales and use tax for a period of twelve years. Proceeds of this one-half of one percent (1/2%) City's sales and use tax are dedicated and used solely for the purpose of improving, operating, and maintaining the public safety services within tiie City of Leesville, specifically:
a. To provide funds to acquire necessary police and fire protection equipment and other facilities so as to increase the level of services and protection in the City.
b. To provide funds for salary increases for poUce and fire departments personnel, including benefits, so as to maintain a consistent level of experience and training within said departments. On September 18,2004 a special election was held whereby a one percent (1 %) sales and use tax was renewed effective July 1,2005 for a period of twenty-five (25) years. The revenues fi:om this sales tax are to be dedicated and used in the following order for the purpose of constructing, improving, extending, and maintaining (1) streets, sidewalks, bridges, drains, subsurface drainage, sewers and sewerage disposal works, (2) fire department stations and facihties, and (3) pubhc parks and recreational facilities, and pmchasing and acquuing the necessary land, equipment and fiimishings for any ofthe aforesaid public works, improvements and fecilities.
NOTE 13 - PUBLIC EMPLOYEES' RETIREMENT SYSTEMS The City contributes to tixree statewide cost-sharing, multiple-employer, defined benefit public employee retirement systems. These consist of the Municipal Police Employees' Retirement System of Louisiana (MPERS), the Firefighters' Retirement System of Louisiana (FRS), and the Municipal Employees Retirement System of Louisiana, Plan A (MERS).
48
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
MPERS: Membership is available for all full-time police officers employed by the City, provided they meet statutory criteria. Any member is eligible for normal retirement benefits after he has been a member ofthe System for one (1) year, if he has twenty-five (25) years of creditable service at any age, or if he has twenty (20) years of creditable service and is age fifty (50), or has twelve (12) years of creditable service and is age fifiy-five (55). Benefit rates are three and one-third percent (3 1/3%) of final compensation per number of years of creditable service not to exceed one hundred percent (100%). State law establishes benefit and contribution requirements. MPERS issues a pubhcly available annual financial report that includes financial statements and required supplementary infomiation. That report may be obtained by writing to Municipal Pohce Employees' Retirement System of Louisiana, P. O. Box 94095, Baton Rouge, LA 70804-9095.
Members are currentiy required to contribute sev^ and one-half percent (71/2%) of tiieir annual salary to the system, including supplemental pay. The City contributes an actuarially determined rate, presently set at nine and three quarter percent (9.75 %) ofthe member's salary, including supplemental pay.
FRS: This Plan is a defmed benefit pension plan covering firemen employed by a municipality, parish, or fire protection district ofthe State hired after December 31,1979. Employees with twenty (20) or more years of service who have attained age fifty (50), employees who have twelve (12) years of service who have attained age fifty-five (55), or employees who have twenty-five (25) years of service at any age are entitled to annual pension benefits equal to three and one-third percent (3 1/3%) of their average final compensation based on the thirty-six (36) consecutive months of highest pay multiplied by their total years of service, not to exceed one hundred percent (100%). Employees may elect to receive their pension benefits in the form of a joint and/or survivor annuity. If employees terminate before rendering twelve (12) years of service, they forfeit the right to receive the portion of thek accumulated plan benefits attributable to their employer's contributions. Benefits are payable over the employees' hves in tiie form of a monthly annuity. State law establishes benefit and contribution requirements. FRS issues a publicly available annual financial report that includes financial statements and required supplemaitary information. That report may be obtamed by writing to Firefi^ters' Retirement System of Louisiana, 3100 Brentwood Drive, Baton Rouge, LA 70809.
Members are currentiy required to contribute eightpercent (8%) of their annual salary, including supplemental pay to the Plan. The City contributes an actuarially determined rate, presently at twelve and one half percent (12.5 %) ofthe member's salary, including supplemental pay.
MERS: Effective May 1, 2006 the City of Leesville became enrolled in participation of Plan A of the MERS.
Membership is available for all employees working at least thirty-five (35) hours per week who are not covered by another pension plan and are paid wholly or in part from City fimds. All elected city officials are eUgible to participate in MERS. Under MERS, Plan A, employees who retire at or after age sixty (60) with at least ten (10) years of creditable service, or at any age with at least twenty-five (25) years of creditable service are entitied to a retirement benefit, payable monthly for Hfe, equal to three percent (3%) of then final-average salary for each year of creditable service. Final-average salary is the employee's average salary over the thirty-six (36) consecutive or joined months that produce the highest average. Employees who terramate with at least the amount of creditable service stated above, and do not withdraw their employee contributions, may retire at the ages specified above, and receive the benefit accrued to then date of termination. MERS also provides death and disability benefits. Benefits are established or amended by state statute. MERS issues a publicly available annual financial report that includes financial statements and required supplementary information. That report may be obtained by writmg to the Municipal Employees Retirement System of Louisiana, 7937 Office Paric Boulevard, Baton Rouge, Louisiana 70809.
49
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
Members are currently required by state statute to contribute nine and one-forth percent (9.25 %) of their annual covered salary. The City is required to contribute based on an actuarially determmed rate. The rate for the year ended June 30,2009 was thirteen and one-half percent (13.5%) of annual covered payroll. The contribution requirements for plan members and the City are established and may be amended by state statute. As provided by Louisiana Revised Statute 11:103, the employer contributions are determined by actuarial valuation and are subject to change each year based on the results ofthe valuation for the prior fiscal year.
Required contributions: The City made the following required contributions to the various pension plans:
Year Ending
6/30/2009 6/30/2008 6/30/2007
FRS $ 53,049
51,224 69,129
MPERS $ 33,065
54,878 75,217
MERS $ 130,347
120,303 154,732
Totals $ 216,461
226,405 299,078
NOTE 14 - DEFINED CONTRIBUTION PLAN The City sponsors a defined contribution pension plan (tiie Plan) to provide benefits at retirement to all full-time employees who elect to participate. Hartford Retirement Plan Services and Nationwide Retirement Solutions administer the Plan. At June 30,2009, there were 12 participants in the Plan. Plan members are required to contribute 5% of their covered salary. The City is required to contribute 9% ofthe participant's covered salary. Plan provisions and contribution requirements are established by and may be amended by the City Council. Participant contributions were $ 12,442 for the year ending June 30,2009. Employer contributions were $16,331 .Participant and employer contributions are recognized in tiie period that the contributions are due.
NOTE 15 - LITIGATION AND CLAIMS
Litigation At June 30, 2009, the City is involved in various litigations. It is the opinion ofthe legal advisor for the City that ultimate resolution of these lawsuits would not materially affect the financial statements.
Construction Projects There are several construction projects in progress at June 30, 2009. These projects are as follows:
• Swimming Pool Project - funded through grants and prior years bond proceeds in the 2005 Sales Tax Bond Capital Project fimd. This project's remaining outstanding construction commitment was approximately $269,955 as of June 30, 2009.
• Downtown Sewer Rehabifitation Project - funded through the sewer fimd. This project had approxknately $153,456 in outstanding construction commitment as of June 30, 2009.
• Water System Improvement Proj ect - funded through new revenue bond and charges for service in water fund. Construction commitment was approximately $158,652 as of June 30, 2009.
• South Plant Water Tank Repair - funded through grant funding and charges for services in water iund. The remaining outstanding construction commitment was approximately $29,996 as of June 30,2009.
Grant Disallowances The City participates in a number of state and federally assisted grant programs. The programs may be subject to compliance audits under the single audit approach. Such audits could lead to requests for reimbursement by the grantor agency for expenditures disallowed under terms of the grants. City management beheves that the amount of disallowances, if any, which may arise fi'om future audits will not be material.
50
City of Leesville Notes to the Basic Financial Statements
June 30, 2009
Tax Arbitrage Rebate Under the Tax Reform Act of 1986, interest eamed on the debt proceeds in excess of interest expense prior to the disbursement of the proceeds must be rebated to the Intemal Revenue Service (IRS). Management believes there is no tax arbitrage rebate liability at year end.
NOTE 16-LEVIED TAXES The City levies taxes on real and business personal pmperty located within flie City's boundaries. Property taxes are levied by the City on property values assessed by the Vernon Parish Tax Assessor and approved by the State of Louisiana Tax Commission.
The City bills and collects property taxes. Collections are remitted to the City monthly.
Property Tax Calendar Assessment date January 01, 2008 Levy date January 01, 2008 Tax bills mailed October 26, 2008 Due date December 31,2008 Collection date December 2008-February 2009 Lien date May 09, 2009 Tax sale - 2007 May 09, 2009
51
City of Leesville
REQUIRED SUPPLEMENTAL INFORMATION
52
City of Leesville Budgetary Comparison Schedules
General Fund and Major Special Revenue Funds with Legally Adopted Annual Budgets
General Fund - Is the general operating fund of the City. It accounts for all financial resources, except those required to be accounted for in otiier fiinds. .
Sales Tax-Special Revenue Fund - This fiind accounts for proceeds of a one-percent (1 %) City sales and use tax. The sales tax was renewed July 1, 2005 for a period of twenty-five (25) years.
Public Safety-Special Revenue Fund - This fimd accounts for proceeds of a one-half on one percent (1/2%) City sales and use tax. This tax was effective on April 1, 2004 for a period of twelve (12) years. In addition, this fund accounts for various public safety grants and fines and forfeitures.
53
CITY OF LEESVILLE
GENERAL FUND Budgetary Comparison Schedule - Non-GAAP Basis
For the Year Ended June 30. 2009
Exhibit 1-1
VARIANCE WITH
FINAL BUDGET
BUDGETED AMOUNTS
ORIGINAL
BUDGETARY FUND BALANCES, BEGINNING $ 298.838 S
Resources (inflows)
Local sources:
Taxes
Intergovernmental revenues
Licenses and permits
Fees, charges and commissions for services
Eamings on Investments
Miscellaneous revenues
Transfers from other funds
Amounts available for appropriations
736.842
0
375,200
59,000
7,500
61,490
940.000
2478.870
FINAL
319.712 $
792,583
76,924
429.481
115.315
7,921
59,549
600.000
2.401.4?5
ACTUAL
AMOUNTS
319.712$
792,583
76,924
429,481
115,315
7,921
59,549
600.000
2.401485
POSITIVE
fNEGATIVE)
0
0
0
0
0
0
0
0
Q,
Charges to appropriations (outflows)
Cun-ent:
General govemment
Public vjorks
Economic development
Capital outlay
Transfers to other funds
892,801
1,078,641
168.269
0
0
764,608
1.059,547
205,173
81.951
105.585
764,604
1.059.546
195,172
81,951
105.585
4
1
10,001
0
0
Total charges to appropriations
BUDGETARY FUND BALANCES, ENDING
2.139.711
339.159 $
2.216.864 2.206.858
184.621 $ 194.627$
10.006
10.006
54
CITY OF LEESVILLE
SALES TAX . SPECIAL REVENUE FUND Budgetary Comparison Schedule - Non GAAP Basis
For the Year Ended June 30, 2009
Exhibit 1-2
BUDGETED AMOUNTS ACTUAL
VARIANCE WITH
FINAL BUDGET
POSITIVE
BUDGETARY FUND BALANCES, BEGINNING Resources (inflows) Local sources:
Taxes Fees, charges and commissions for services Eamings on investments Miscellaneous revenues
Amounts available for appropriations
ORIGINAL
$ 362,384 $
2,535.500 82,000 12,000 6.000
2.997.884
FINAL
277,265 $
2,659.010 70,524 6,596 4.646
3.018.041
AMOUNTS
277,265 $
2,659,010 70,524 6,596 4.646
3.018.041
(NEGATIVE)
0
0 0 0 0
_a
Charges to appropriations (outflov^fs)
Current:
General govemment
Culture and recreation
Capital outlay
Transfers to other funds
109,620
399,397
71,000 1.993.665,,.,
101,577
393,838 33,567
2,263.665
100,076
398,534
33,567 2.263.665
1,501
4
0
0
Total charges to appropriations
BUDGCTARY FUND BALANCES. ENDING
2.^73.^92
424.202 $
2MLML 2.799.1^
220.394 ;21.899
1.505
im.
55
CITY OF LEESVILLE
PUBLIC SAFETY - SPECIAL REVENUE PUND Budgetary Comparison Schedule - Non-GAAP Basis
For the Year Ended June 30,2009
Exhibit 1-3
BUDGETARY FUND BALANCES, BEGINNING Resources (inflows) Local sources:
Taxes Intergovernmental revenues Fines and fees Fees, charges and commissions for services Eamings on investments Miscellaneous revenues Transfers from other funds
BUDGETED AMOUNTS ORrGINAL
$ 34,843 $
1,267,750 237,400 200.000 59,498
1.000 13,000
1.175.000
FINAL
24.189 $
1,331.746 252,323 217,815 44,530
651 12,224
1,445.000
ACTUAL AMOUNTS
24.189 3
1.331,746 277,823 217,815 44,529
651 12.224
1.445.000
VARIANCE WITH FINAL BUDGET
POSITIVE (NEGATn/El
; 0
0 25,500
0
(1) 0 0 0
Amounts available for appropriations 2.988.491 3.328.473 3.353.977 2 M ^
Charges to appropriations (outflows) Current:
Public safety Capital outlay
2,947,066 5.000
3,256,555
15.824 3,282.049
15.824
(25.494)
QL
Total charges to appropriations
BUDGETARY FUND BALANCES, ENDING
2-952.066 3.37?,379 3,297.g73
W04 1
f25.494)
56
City of Leesville Notes to the Budgetary Comparison Schedule
For the Year Ended June 30,2009
A. BUDGETS
Formal budget integration (within the accounting records) is employed as a management control device. All budgets are controlled at the function level. Budget amounts included in the accompanying financial statements include the original adopted budget and all subsequent amendments. These revisions were considensd insignificant by the Council.
Budget Basis of Accounting The major govemmental funds' budgets are prepared on the cash basis of accounting. Budgeted amounts are originally adopted or amended by theCouncil. Legally, the Council must adopt a balanced budget; that is, total budgeted revenues and otiier financing sources including fimd balance must equal or exceed total budgeted expenditures and other financing uses. State statutes require the Council to amend its budgets when revenues plus projected revenues within a fund are expected to be less than budgeted revenues by five percent or more and/or expenditures within a fund are expected to exceed budgeted expenditures by five percent or more. The City approves budgets at the function level and management can transfer amounts between line items within a function.
B. EXCESS OF ACTUAL EXPENDITURES OVER BUDGETED APPROPRIATIONS
For those funds for which a budget to actual comparison was made, 2009 actual appropriations exceeded budgeted appropriations at the level of budgetary control as follows:
Public Safety-Special Revenue Fund Budeet
$3,272,379 Actual
$3,297,873
Unfavorable Variance ($25,494)
57
CITY OF LEESVILLE
Notes to Budgetary Comparison Schedules For the Year Ended June 30, 2009
Note C - Budget to GAAP Reconciliation - Explanation of differences between budgetary inflows and GAAP revenues
GENERAL
FUND
SALES TAX
SPECIAL
REVENUE
FUNP
PUBLIC
SAFETY
SPECIAL
REVENUE
FUND ,
Sources/inflows of resour(;^s: Actual amounts (budgetary basis) "available for appropriation"
from the Budgetary Comparison Schedule - Non-GAAP Basis $ 2,401.485 $ 3.018,041 $ 3,353,977
Tiie fund balance at the beginning ofthe year Is a budgetary resource but is not a current year revenue for financial reporting purposes
Transfers m from other funds are inflows of budgetary resources but
are not revenues for financial reporting purposes The adjustments necessary to present the financials under a
GAAP basis
(319,712) (277,265) (24.189)
(600,000) 0 (1,445,000)
f14.794) 0 f20.064)
Total revenues as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds $ 1.466.979 $ 2.740.776
Uses/outflows of resources: Actual amounts (budgetary basis) "Total charges to
appropriations" from the Budgetary Comparison Schedule $ 2,206.858 $ 2.796,142 $ 3,297,873
Transfers out to other funds are outflov^s of budgetary resources but are not experKlitures for financial reporting purposes
Accrual t>asis - recording of differences between beginning and ending accounts payable
The adjustments necessary to present the financials under a GAAP basis
(105.585)
28,332
156.548
(2.263,665)
0
1.097
0
9,832
20,032
Total expenditures as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds 533.574 $ 3.327.737
58
City of Leesville
SUPPLEMENTAL INFORMATION
59
CITY OF LEESVfLLE
NONMAJOR GOVERNMENTAL FUNDS Combining Balance Sheet - By Fund Type
June 30, 2009 Exhibit 2
ASSETS
Cash and cash equivalents
Receivables, net
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts and other payables
Total Liabilities
SPECIAL
REVENUE
$ 190.040 $
58.038
248.078
236
236
DEBT
SERVICE
299.681 $ 0
0
0
CAPITAL
PROJECTS
71,081 $
0
0
0
TOTAL
560,802
58.038
61?,TO
236
236
Fund Balances: Reserved for Debt Service Unreserved, reported in Special Revenue Capital Projects
Total Fund Balances
TOTAL LIABILITIES AND FUND BALANCES
299,681 299,681
t
247,842
0
247.842
S48.079 $
0
0
299.681
2Q9.?§1 $
0
71.081
71.081
71.081 $
247,842
71.081
618.604
,... 61Q.94Q.
60
CITY OF LEESVILLE
NONMAJOR GOVERNMENTAL FUNDS Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances - By Fund Type
REVENUES
Local sources:
Taxes
Intergovemmental
Fees, charges, and Earnings on investr
Total Revenues
revenues
commissions
nents
For the Year Ended June
$
for services
SPECIAL REVENUE
0
0
514,024
2.536
516.560
$
30, 2009
DEBT SERVICE
122,496 $
0
0
7.974
130.470
CAPITAL PROJECTS
0 $
7,143
0
0
7.143
Exhibit 3
TOTAL
122,496
7,143
514,024
10.510
654.173
EXPENDITURES Current: Public safety Public works Economic development
Capital outlay Debt service; Principal retirement Interest and bank charges
Total Expenditures
EXCESS (Deficiency) OF REVENUES OVER EXPENDITURES
OTHER FINANCING SOURCES (USES) Transfers in
Tota! Other Financing Sources (Uses)
Net Change in Fund Balances
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
538,692
21,343 0
19.420
0
0 0 0
0
0 3,867
15.288
538,692
21,343 3,867
34,708
0 0
579.455
(62.895)
61.340
§1,340
165,000 74.074
239.074
n08.604)
84.235
64,235
0 0
19.155
M2.012)
0
0
165,000 74,074
• 837.684
(183.511^
145.575
145.575
(1.555)
249.397
$ 247 842 $
(24,369)
324.050
299.681 $
(12,012)
83.093 ,
71.081 $
(37.936)
656.540
618,604
61
City of LeesviUe
Nonmajor Special Revenue Funds
MAINSTREET PROGRAM The fund accounts for the activity to foster economic development and stimulate cultural tourism throughout the City's downtown area.
LCDBG ECONOMIC DEVKLOPMENT This fund accounts for the grant and expenditures ofthe Louisiana Community Development Block Grant for economic development.
VERNON COMMUNICATION DISTRICT This fund accounts for the 911 surcharges received and the related expenditures.
62
CITY OF LEESVILLE
NONMAJOR SPECIAL REVENUE FUNDS Combining Balance Sheet
June 30, 2009
ASSETS
Cash and cash equivalents
Receivables, net
TOTAL ASSETS
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts and other payables
Total liabilities
MAINSTREET
PROGRAM
$ 7 $
0
0
0
LCDBG VERNON
ECONOMIC COMMUNICATION
DEVELOPMENT DISTRICT
7,285 $
0
7.285
0
0
182,748 $
58.038
240.786
236
236
Exhibit 4
TOTALS
190,040
58.038
„ , ?48.Q79,
236
236
Fund Balances Unreserved and undesignated 7.^8$ 240.550 247:842
Total Fund Balances 7.285 240.550 247.842
TOTAL LIABILITIES AND FUND BALANCES L 7 $ 7.285 $ 240.786 $ g4?i979
63
CITY OF LEESVILLE
NONMAJOR SPECIAL REVENUE FUNDS Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances For the Year Ended June 30. 2009
Exhibit 5
MAINSTREET
PROGRAM
REVENUES
Local sources:
Fees, charges, and commissions for services $ 0
Earninqs on investments 0
Total revenues 0
ECONOMIC COMMUNICATION DEVELOPMENT DISTRICT
$ 0 $
54
54
514,024 $
2.482
516.506
TOTALS
514,024
2.536
516.560
EXPENDITURES
Current:
Public safety
Public works
Capital outlay
Total expenditures
EXCESS (Deficiency) OF REVENUES
OVER EXPENDITURES
OTHER FINANCING SOURCES (USES)
Transfers in
Total Other Financing Sources (Uses) 1
Net Change in Fund Balances
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING 3
0
21,343
0
21,343
f21.343)
21.350
21.350
7
0
i 7 $
0
0
0
0
54
0
0
54
7.231
7.285 a
538.692
0
19.420
558.112
(41.606)
39.990
39.990
(1.616)
242.166
240.550 $
538,692
21,343
19.420
579.455
(62.895)
61.340
61.340
(1.555)
249.397
247,842
64
City of Leesville
Nonmajor Debt Service Funds
Tlie debt service funds are used to accumulate monies to pay outstanding bond issues. The bonds were issued by the City to purchase, erect, and improve buildings, equipment, and infrastructure.
CERTIFICATE OF INDEBTEDNESS 2002
2004 GOB STREET IMPROVEMENTS
65
CITY OF LEESVILLE
NONMAJOR DEBT SERVICE FUNDS Combining Balance Sheet
June 30, 2009
Exhibit 6
CERTIFICATE
OF
INDEBTEDNESS
2002
2004
GOB
STREET
IMPROVEMENTS TOTALS
ASSETS
Cash and cash equivalents 1 0 6 . 4 ^ 1 193.253 $ g99.691
TOTAL ASSETS 106428 193,2$? 299.681
FUND BALANCES
Unreserved and undesignated 106.428 193.253 299.691
TOTAL FUND BALANCES 106.428 $ 193.253 $ 299.681
66
CITY OF LEESVILLE
NONMAJOR DEBT SERVICE FUNDS Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances For the Year Ended June 30, 2009
REVENUES Local sources:
Taxes Eamings on investments
Total revenues
CERTIFICATE
OF
INDEBTEDNESS
2002
$ 0
2.707
2.707
$
2004
GOB
STREET
iMPROVEMENTS
122,496
5.267
1?7,763
$
Exhibit 7
TOTALS
122.496
7.974
130.470
EXPENDITURES Debt Service:
Principal retirement Interest and bank charges
65.000 19.234
100,000 54.840
165,000
74.074
Total expenditures 94.234 154.840 239.074
EXCESS (Deficiency) OF REVENUES OVER EXPENDITURES (81,527) (27,077) (108.604)
OTHER FINANCING SOURCES (USES) Transfers in 84.235 84.?35
Net change in fund balances
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
2,708
103.720
tgQ,4gg ;
(27,077)
220.330
(24.369)
324.050
193.253 $ 299.681
67
City of Leesville
Nonmajor Capital Project Funds
AIRPORT CONSTRUCTION This fund accoimts for improvements and rehabilitation costs associated with the City's airport which is fimded by state and federal monies.
LOUISIANA COMMUNTTY DEVELOPMENT GRANT This fund accounts for rq^airs to the sewer lines within the City.
68
CITY OF LEESVILLE
NONMAJOR CAPITAL PROJECT FUNDS Combining Balance Sheet
Juno 30,2009
Exhibit 8
ASSETS
Cash and cash equivalents
AIRPORT
CONSTRUCTION
LOUISIANA
COMMUNITY
DEVELOPMENT
GRANT
21.762$ 49.299 L
TOTALS
71.081
TOTAL ASSETS 2im. ^un ,71.09,1
LIABILITIES AND FUND BALANCES
Liabilities:
Accounts and other payables
Total liabilities
Fund Balances
Unreserved and undesignated
Total Fund Balances
0
0
21.782
21.782,
0
0
49.299
49,299
0
0
71.081
71.081
TOTAL LIABILITIES AND FUND BALANCES 21.782$ 49.299 $ 71.081
69
CITY OF LEESVILLE
NONMAJOR CAPITAL PROJECT FUNDS Combining Statement of Revenues, Expenditures,
and Changes in Fund Balances For the Year Ended June 30, 2009
Exhibit 9
REVENUES Local sources:
Intergovernmental
Total revenues
EXPENDITURES Economic development Capital outlay
Total expenditures
Net change in fund balances
FUND BALANCES - BEGINNING
FUND BALANCES - ENDING
AIRPORT
CONSTRUCTION
$ 2.833 $
2.833
0
0
0
2,833
18.949
LOUISIANA
COMMUNITY
DEVELOPMENT
GRANT
, 4,310 $
4.310
3,867
15.288
19.155
(14,845)
64.144
$ 21.782$ 49.299 $
TOTALS
7.143
7.143
3.867
15.288
19.155
(12,012)
83.093
71.091
70
City of LeesviUe Exhibit 10
Schedule of Compensation Paid CooncO Members For the Year Ended June 30,2009
In accordance with the requirements ofthe Office ofthe Legislative Auditor, State of Louisiana, the following report reflects compensation paid to members ofthe City Council, City of Leesville, for the year ended June 30, 2009.
e
yUyox Betty Westerchil $13,000 Council Members
Steve Kennedy 7,540 Milton D. Dowd 7,250 William M. Elliott 7,540 Patricia Martmez 7,540 Joseph P. McKee 7,540 Alice F. Guess 6,380
71
City of Leesville
GOVERNMENT AUDITING STANDARDS INFORMATION
72
The CPA. 4. Never UwiejBsdinace Ttic Vatut^
ALLEN, GREEN & WILLIAMSON, LLP CERTIRED PUBLIC ACCOUNTANTS
P. O. Box 6075
Monroe, LA 7I211-6075
Tim Green, CPA
Margje WiUiamson, CPA
Amy Tyncs, CPA
2441 Tower Drive Monroe. LA 71201
Phone: (318)388-4422 Fax: {318)386-4654
Tolt-free: (888) 741-0205
www.allengreencpa.com
Ainwe Buchanan, CPA Diane Ftrschoft; CPA
Joshua Legg, CPA QumjMartJn^CPA
Brian McBride, CPA Cindy Thomason, CPA
Angie Willianison. CPA
Eroeit L Alha. CTA (Rolrat) 1963 - 2000
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements
Performed in Accordance With Government Auditing Standards
Mayor and Council Members City of Leesville Leesville, Louisiana
We have audited the financial statements ofthe govemmental activities, the business-type activities, each major fund, and the aggregate remaining fimd information of the City of Leesville as of and for the year ended June 30,2009, which collectively comprise the City's basic financial statements and have issued our rqport thereon dated December 31,2009. We issued an adverse opinion on the aggregate discretely presented component units and an unqualified opinion on the governmental activities, the business-type activities, each major fond, and the aggregate remaining fund information. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards appHcable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General ofthe United States.
Intemal Control Over Financial Reporting hi planning and performing our audit, we considered the City's intemal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness ofthe City's intemal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness ofthe City's intemal control over financial reporting.
Our consideration of intemal control over financial reporting was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in intemal control over financial reporting that might be significant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in intemal control over financial reporting that we consider to be significant deficiencies.
A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of perfomung then- assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability to initiate, authorize, record, process, or rqport financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement ofthe entity's financial statements that is more than inconsequential will not be prevented or detected by the entity's intemal control. We. consider the deficiencies described in the accon^ianying Schediole of Findings as items 09-Fl, 09-F2,09-F4, and 09-F5 to be significant deficiencies in intemal control over financial reporting.
A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not he prevented or detected by the entity's intemal control.
73 Also Located in Shrffvcpon, Louisiana
Member Anwricart Institule of Certified Public Acccointarrts, Society of Louisiana Certified Public Accountants, American Institute of Certified Public Accountants Division for CPA Finns.
Employee Benefit Audit Quality Center, and the Government Audit Quality Center Equal Opportunity Employer
Our consideration ofthe intemal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in the intemal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. However, ofthe significant deficiencies described above, we consider items 09'F4 and 09-F5 to be material weaknesses.
Compliance and Other Matters As part of obtaining reasonable assurance about whether the City's financial statements are fi:ee of material misstatement, we performed tests of its compHance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance or other matters that is reqxiired to be r^wrted under Govemment Auditing Standards and which is described in the accompanying Schedule of Findings as item 09-F3.
The City's responses to the findings identified in our audit are described in the accompanying Corrective Action Plan for Auditor's Current Year Findings. We did not audit the City's responses and, accordingly, we express no opinion.
This report is intended solely for the information and use ofthe council members, management, others within the City, federal awarding agencies, and pass-through entities and is not iatended to be and should not be uised by anyone other than these specified parties. Although the intended use of these reports may be limited, under Louisiana Revised Statute 24:513, this report is distributed by the Office ofthe Louisiana Legislative Auditor as a public document.
ALLEN, GREEN & WILLIAMSON, LLP
Monroe, Louisiana December 31, 2009
74
City of Leesville Schedule of Findings
For the Year Ended Jane 30,2009
Reference # and title; 09-Fl Purchasing Poticics and Procedures
Entity-wide or program/department specific: This finding is entity wide.
Criteria or specific reqnirement: The City has written policies and procedures outlining purchasing guidelines which include an approved purchase requisition for all purchases. Also, for purchases in excess of $ 1,000 but less than $10,000, not less than three telephone quotes are to be obtained which should be documented on the purchase requisition and made a part of the purchase file. In addition, good procedures should include timely payments of invoices.
Condition found: There were thirty three vendor disbursements randomly selected for testing to ensure the City's policies and procedures were being properly followed. The following items were noted:
* One disbursement did not have the minimum three telephone quotes required according to the City's policy. * One purchase order was dated after the invoice date, * Three instances where the invoice was not paid tunely, * One payee on the check did not match the vendor name on the invoice, due to company's name was changed and
the City's system was not updated.
When ten travel disbursements were tested, the following items were noted: * The documentation for one hotel room was missing, * Reimbursement for one hotel charge exceeded the actual hotel charge.
When testing credit card accounts, it was noted that small gifts were purchased for each City employee; however the gift was not added to the employees' W-2s.
Possible asserted effect (cause and effect):
Cause: The City did not follow written piux;hasing and polices procedures.
Effect: The City has potential risk of weakened cash management.
Recommendations to prevent future occurrences: The City should establish an intemal control system to ensure that all purchasing policies and procedures are followed. The City should establish procedures to ensure all benefits are reflected on the City employees' W~2s.
Reference # and title: 09-F2 Capital Assets
Entity-wide or program/department specific: This finding is entity-wide.
Criteria or specific requirement: In accordance with LSA-RS 24:515 (b) (1), the head of every auditee subject to audit shall maintain records of all land, buildings, improvements other tiian buildings, equipment and any other general fixed assets which were purchased or otherwise acquired and for which such entity is accountable. Intemal control requires a complete and adequate listing that is updated on a timely basis.
75
City of Leesville Schedule of Findings
For the Year Ended June 30, 2009
Condition found: When tracing items on the asset to the depreciation schedule, it was noted thai descriptions are too vague on the depreciation schedule for some items in order to determine if the asset is still on the listing. Although, the inventory listings kept by the accounts payable clerk has all adequate information, it was noted that not all assets purchased during the year are being added to the listing.
It was also noted in the test of capital assets that new asset purchases are not properly recorded. For govemmental funds, not all purchases are being recorded to capital outlay expense accounts. However, the capital asset purchases for enterprise fimds are being recorded to capital outlay expenditure accounts rathea: than capital assets.
Possible asserted effect (cause and effect):
Cause: The City lacks proper intemal controls to ensure that all capital assets are added to the inventory listings as well as properly recorded.
Effect: Current fixed asset listings are inacciuate and incomplete.
Recommendations to prevent future occurrences: The City should establish procedures to ensure that all assets purchased are properly added to the capital asset listing. The City should also review all general ledger accounts to ensure coital asset purchases are recorded properly.
Reference # and title: 09-F3 FEMA Hurricane Katrina Allowable Costs
Entity-wide or program/department specific: This findhig is program specific deaHng with FEMA grant.
FEDERAL GRANTOR/ CFDA Award PASS-THROUGH GRANTOR/PROGRAM NAME Number Year
Federal Emergency Management Agency Passed Througji Louisiana Department of Ecdnomic Development
FEMA Hurricane Katrina 83 .UNK 2005
Criteria or specific requirement: Entities receiving awards under this program must document compHance with allowable costs.
Condition found: For fiscal year ending June 30, 2006, the City had questioned costs relating to overtime and equipment costs for the PoUce Department associated with Hurricanes Katrina and Rita. There was an overstatement of costs connected with Hurricane Katrina of $51,763 whose reimbursement was requested and received. Therefore the City owed the federal govemment back $51,763 for over stated costs. For the year ended June 30,2007, the City recorded a liability ofthe $51,763 but did not pay these monies back. As of Jime 30,2009 these monies have not been repaid; however, the liability is still reflected in the City's financial statements.
Possible asserted effect (cause and effect):
Cause: The City is waiting on communication from the Federal Emergency Management Agency.
Effect: The City owes Federal Emergency Management Agency (FEMA) for overpaid monies.
76
City of Leesville Schedule of Findings
For the Year Ended June 30, 2009
Recommendations to prevent future occurrences: We recommend that the City refund to the grantor agency the excess funds received for reimbursement of costs not actually incurred and clear the liability on its books.
Reference # and title: 09-F4 Financial Accounting System
Entity-wide or program/department specific: This findmg is entity-wide.
Criteria or specific requirement: The objectives of intemal controls are to provide management with reasonable assurance that assets are safeguarded against loss and that transactions are executed in accordance with management's authorization and recorded properly to p^mit the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America. The City's intemal controls should include procedures to ensure its financial transactions are recorded and reported properly.
Condition found: When reviewing the City's information system, it was noted that the City does not have detailed password protection. Once an employee has accessed into an accounting program, then the employee is allowed to have access to aH fiinctions within that program. Due to full access, change reports should be printing and reviewed to ensure changes are not being made by unauthorized personnel. The City also does not currently have an information system policy nor a recovery plan in the event of a disaster. When reviewing the back up process, it was noted that back up tapes are not stored offsite to ensure information is safeguarded.
It was noted that old outstanding items that were voided were not properly sent to the State's unclaimed property division.
It was noted that an accounts payable listing is not prepared by the City to ensure outstanding liabihties are reflected. The City is relying on the auditor to accme accounts payable and a material journal entry was required.
During the review of compensated absences, it was determined that one City department is not properly accruing sick and vacation time. An adjustment to compensated absences was required to accurately reflect the hability for fmancial reporting. Some employees responsible for tracking compensated absences are unaware ofthe City's poHcies regarding sick and vacation time. In addition, supervisors are keeping up with their own leave and no one is approving supervisor's compensated absences. Per the City charter, specific salary amounts require board approval. All salaries were approved in total by the council; however details should be provided to assist in the approval process.
Possible asserted effect (cause and effect):
Cause: The accoxmting software has not been adapted to limit access to different modules to only those employees needing access. There is currently no information system policy in place to address back ups or a recovery plan in the event of a disaster. There is no log detailing changes to critical data and changes are not approved by City administration.
City employees have not gathered all unclaimed checks that should be forwarded to the State. There are currentiy no procedures hi place to develop an accounts payable hsting. The City's system of tracking the compensated absences is not centralized. It was also noted that not all leave has to be approved before taken.
77
City of Leesville Schedule of Findings
For the Year Ended June 30,2009
Effect: The City's controls over financial accounting and information systems are weakened.
Recommendations to prevent future occurrences: The City should establish procedures to ensure controls over financial accounting and information system are strengthened.
Reference # and title: 09-FS Inventory Controls
Entity-wide or program/department specific: This finding is entity-wide.
Criteria or specific requirement: Good internal controls require that the City maintain a system limiting access to the inventory of suppHes and fuel. Any additions and deletions to inventory should be properly documented and approved. The inventory system along with the accountiag records should be updated to the changes in inventory. At year-end, a physical coimt of inventory should be made and tlie inventory balances should be adjusted to the actual amoimt. Any large fluctuations should be investigated.
Condition found: During the review of inventory, it was noted that the City does not have good controls to ensure inventory is safeguarded and properly reported. It was also noted that the accounting books were not adjusted to the year-end counts for both the materials/supplies and fuel. However, the adjustment necessary to agree the accounting ledger to the actual were material, and could not be explained.
Possible asserted effect (cause and effect):
Cause: The City lacks proper intemal controls to ensure that all inventory is safeguarded and accounted for.
Effect: The City has potential risk of theft, fi:aud, and/or misstated financial reports.
Recommendations to prevent future occurrences: The City should establish procedures to safeguard the inventory. Fuel inventory for the warehouse should be separated on the books fix)m materials and supplies. Additionally a system should be established to ensure all receipts for the fuel are received. Invraitory differences should be investigated and properly recorded.
78
City of Leesville
Other Information
79
City of Leesville Summary of Prior Year Audit Findings
June 30, 2009
Reference # and title: 08-Fl Purchasing Policies and Procedures
Origination date: June 30, 2004.
Entity-wide or program/department specific: This finding is entity-wide.
Condition found: The City has written policies and procedures outlining purchasing guidelines which include an approved purchase requisition for all purchases. According to the policy, purchase orders are issued for all proved purchase requisitions. Invoices must include an approved purchase order number. Invoices received with no approved purchase order are to be returned to the vendor; however, this was changed in anew policy dated January 1, 2008. In addition, good procedures should include timely payment of invoices.
There were thirty-three vendor disbursements random selected for testing to ensure the City's policies and procedures are being properly followed. The following items were noted:
• Four disbursements did not have purchase order numbers on invoices written before January 1, 2008. • One disbursement did not have an approved requisition. • Two disbursements did not include a purchase order. • Three disbursements were not properly approved. • Two disbursements were not paid fi-om the original invoice - invoices were copies. • One disbursement had a purchase order dated afl:er date of purchase. • One disbursement was not paid fixjm the original invoice - invoice was a packing slip. • One disbursement was not paid timely.
When tested ten travel disbursements, the following items were noted: • One disbursement did not have proper receipt fi"ora hotel. • Two disbursements did not have proper supporting documentation to determine necessary meal allowance. • One disbursement was charged to travel yet should have been charged to supplies. • One disbursement was retumed to the City; however the deposit was not recorded in proper account.
During the testing of three vendor files for charge accounts/credit cards, if was noted that purchase orders are not being properly completed, according to the City's poUcy. Purchase orders are being issued and approved without estimating the cost ofthe purchase. Once the purchase is completed, then the actual cost is being added to the purchase order.
Corrective action planned: See current year finding 09-F1.
Reference # and title: 08-F2 Segregation of Duties
Origination date: June 30,2007.
Entity-wide or program/department specific: This finding is entity-wide.
Condition found: Proper intemal controls require that the preparation and posting of manual journal entries to the general ledger be approved by someone other than the preparer of the journal entry. All journal entries should indicate the preparer, the person who approved the journal entry, the person who posted it to the general ledger, and the period it posted to. The approval should take place before it is posted to the general ledger.
80
City of Leesville Summary of Prior Year Audit Findings
June 30,2009
A strong internal control system requires functions to be segregated in preparing payroll and adduig employees. There should be good segregation of duties when adding employees, entering time records, processing payroll, printing and signing checks and payroll bank reconciliations functions. Furthermore, all salary amounts for employees should have proper ^provals documented in employee files.
The City's accounting clerk prepares and posts all manual journal entries to the general ledger without having anyone approve her work. When testing tfie payroll functions, it was noted that one person performs all payroll functions as well as reconciles the bank account containing payroll transactions. In addition, during the test of payroll disbursements, six employees out of thirty did not have proper salary ^provals in the employees file.
Corrective action taken: City management has implemented new procedures in order to aid in the segregation of duties. All journal entries are approved by someone other than the preparer and are approved prior to the posting of the entry. The City finance department operates with an extremely limited staff consisting of two cashiers, one utility billing clerk, one accounts payable clerk, and one accounting/payroll clerk. City management anticipates tiiat this segregation of duties will provide for more adequate intemal controls in this area. This action has cleared the finding.
Reference # and title: 08-F3 Capital Assets
Origination date: June 30, 2007.
Entity-wide or program/department specific: This finding is entity-wide.
Condition found: In accordance with LSA-RS 24:515 (b) (1), the head of every auditee subject to audit shall maintain records of all land, buildings, improvements other than buildings, equipment and any other general fbced assets which were purchased or otherwise acquired and for which such entity is accountable. Intemal control requires a complete and adequate listing that is updated on a timely basis.
When tracing items on the depreciation schedule to the physical asset, it was noted that descriptions are too vague on the depreciation schedule for some items in order to determine if the City still has the asset In addition, the inventory listings kept by the accounts payable clerk only contain a description and a tag number. The listmgs do not contain the purchase date, purchase amount or any other information which would assist in properly tracking fiom the list to the actual asset Currently, there is no way to tie the depreciation schedule to the inventory listing. It was also noted in the test of capital assets that new asset purchases are not properly recorded. For govemmental fimds, not all assets are being recorded to capital outlay accounts. Furthermore, the capital asset purchases for enterprise funds are being recorded to capital outlay expenditure accounts rather than capital assets.
Corrective action planned: See current year fmdmg 09-F2.
81
City of Leesville Summary of Prior Year Audit Findings
June 30,2009
Reference # and title: 08-F4 FEMA Hurricane Katrina Allowable Costs
Origination date: June 30, 2006.
Entity-wide or program/department specific: This finding is program specific dealing with FEMA grant.
FEDERAL GRANTOR/ CFDA Award
PASS-THROUGH GRANTOR/PROGRAM NAME Number Year Federal Emergency Management Agency
Passed Through Louisiana Department of Economic Development FEMA Hurricane Katrina 83.UNK 2005
Condition found: Entities receivmg awards under this program must document compHance with allowable costs.
For die fiscal year ending June 30,2006, the City had questioned costs relating to overtime and equipment costs for the Police Department associated with Hurricanes Katrina and Rita. There was an overstatement of costs connected with Hurricane Katrina of $51,763 whose reimbursement was requested and received. Therefore the City owed the federal govemment back $51,763 for over stated costs. For the year ended June 30,2007, the City recorded a liability ofthe $51,763 but did not pay these monies back. As of June 30,2009 these monies have not been repaid.
Corrective action planned: See current year finding 09-F3.
Reference # and title: 08-F5 Financial Accounting System
Origination date: June 30,2006.
Entity-wide or program/department specific: This finding is entity-wide.
Condition found: The objectives of intemal controls are to provide management with reasonable assurance that assets are safeguarded against loss and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America. The City's intemal controls should include procedures to ensure its financial transactions are recorded and reported properly. In addition, any voided items should be properly defaced and maintained for docinnentation as well as checks written in numerical order.
Good intemal controls also include that all deposits are made timely, (within three business days) and bank reconciliations are performed timely. In addition, old stale dated checks should be researched to determine if stop payments should be done and checks reissued. If checks are valid, yet unable to be sent to vendor properly, dien the City is required to void checks and send the voided funds to the State of Louisiana Unclaimed Property Division.
Good intemal controls require a monitoring system ofthe financial accounting to ensure all accounts and ledgers are up-to-date and accurate in order to submit financial records timely.
As a part ofthe testing ofthe City's intemal control, accounts payable and payroll disbursements, it was noted that checks are sometimes issued out of sequence. The check signing log does not include voided checks or manual checks.
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City of Leesville Summary of Prior Year Audit Findings
June 30,2009
When reviewing the City's information system, it was noted that the City does not have detailed password protection. Once an employee is accessed into an accounting program, then the employee is allowed to have access to all fimctions within that program. The City also does not currently have an information system policy nor a recovery plan in the event of a disaster. When reviewing the back up process; it was noted that back up tapes are not stored in a fire proof vault or offsite to ensure information is safeguarded.
In review of deposits and income, it was noted that some checks written to transfer funds between City accounts were not deposited timely. Furthermore, when reviewing income conceming the collection of fines, it was noted that the April 2008 through June 2008 collections were not deposited until November.
During the review of bank reconciliations, it was noted that old outstanding items that were voided were not properly sent to the State's unclaimed property division.
Due to the timing of financial records received and the necessary adjustments required, the City's audit report was submitted after the required date deadline of six moths after year end.
Corrective action planned: See current year finding 09-F4.
Reference # and title: 08-F6 Inventory Controls
Origination date: June 30, 2008.
Entity-wide or program/department specific: This finding is entity-wide.
Condition found: Good intemal controls require that the City maintain a system limiting access to the inventory of supplies and fuel. Any additions and deletions to mventory should be properly documented and approved. The inventory system along with the accounting records should be updated to the changes m inventory. At year-end, a physical count of mventory should be made and the mventory balances should be adjusted to the actual amount Any large fluctuations should be investigated.
During tfie review of inventory, it was noted that the City does not have good controls to safeguard the inventory. In addition, there are no set procedures in obtaining inventory from the warehouse. Some inventory is signed out according to policy, whereas others are signed out on posted notes.
It was also noted that the accounting books were not adjusted to the year-end counts for both the materials/supplies and fiiel. However, the adjustment necessary to agree the accounting ledger to the actual was significant, but was not researched by management as to the cause.
Corrective action planned: See current year finding 09-F5.
Reference # and titie: 08-F7 Theft of Water Meters
Origination date: June 30,2008.
Entity-wide or program/department specific: This finding is entity-wide.
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City of Leesville Summary of Prior Year Audit Findings
June 30, 2009
Condition found: Good intemal controls require that any items replaced by the City are properly disposed of as well as any items old and no longer of use to the City.
In September 2007, the City approved a contract to replace the water meters throughout the City in order to upgrade to a more advanced system. During the mid-summer of 2008, it was brought to the attention ofthe City that some employees ofthe City PoUce Department along with employees ofthe sub-contractor were not bringing the old meters to the Public Works Department, but were bringing the meters to scrap yards, selling the scrapped brass, and keying the proceeds. The City employees involved have either resigned or were terminated after year-end. During the investigation the Police Department also noted that some employees ofthe Public Works Department were using City equipment for personal use.
Corrective action taken: The contractor on the installation ofthe water meters was responsible for changing the meters and returning them to the City. When City personnel realized that they were not returning the proper numbers the situation was investigated. City employees involved were either terminated or they resigned. Restitution was made in full by the contractor. Proper action has been taken. This finduig has been cleared.
Reference # and titie: Q8-F8 PubUc Bid Law
Origination date: June 30,2008.
Entity-wide or program/department specific: This finding is entity-wide.
Condition found: According to RS 38:2212.1, any purchase of material and supplies that exceed twenty-thousand dollars to be paid with public funds should be advertised and awarded to the lowest responsible bidder. In addition, if a purchase is deemed an emergency, then notice of such should be published in the official journal within ten days of the emergency declaration,
When testing the bids, it was noted that the City is not properly bidding items such as bulk materials and fuel according to the Louisiana Public Bid Law. Additionally, the City declared a purchase of new police vehicle as an emergency, yet did not pubUsh the declaration within ten days in the official journal.
Corrective action taken: City management realizes the importance of proper bid laws, and has taken every precaution to make sure that these are adhered to. This fmding has been cleared.
Reference # and titie: 08-F9 E911 Funds
Origmation date: June 30, 2008.
Enrity-yyide or program/department specific: This finding is entity-wide.
Condition found: According to RS 33:9102-33:9106, proceeds generated by the emergency telephone service charge should be used for the benefit ofthe E911 district. If proceeds exceed the necessary monies needed to fimd the district, then the E911 district goveming authority should reduce the service charge.
84
City of Leesville Summary of Prior Year Audit Findings
June 30, 2009
The Pohce Chief is the Dnector of E911. A small portion of his salary is paid by E911. In October 2007, the City Council approved the purchase of a vehicle for the police department. However, the entire cost ofthe vehicle was charged to the E9il district when the purchase was completed rather than charging the purchase to the police department or prorating the cost ofthe vehicle according to the employee's salary proration.
Corrective action taken: Immediate action was taken to reimburse the E9 U funds the portion ofthe cost fi^m the police department budget. This finding has been cleared.
Reference # and titie: Q8-F10 Professional and Occupational Licenses
Origination date: June 30,2008.
Entity-wide or program/department specific: This finding is entity-wide.
Condition found: In accordance with R. S. 47:341 the City has a right to impose an occupational Hcense tax on any person conductmg business in the City. The application instmctions indicate that each person pursumg any trade, profession, vocation, calling, or business should complete a form for each municipality or parish in which he/she maintains a business location.
The City had ten delinquent licenses at June 30, 2009. Of tiiese ten, three professional licenses were delinquent These professionals were delinquent not only on the current year but had not paid occupational hcense fees for several years.
Corrective action taken: City management realizes the importance ofcoUecting all taxes due the City. Efforts were put into place to collect the taxes. All current year occupational hcaise taxes have been paid. However only one ofthe three that owed prior year taxes have paid. This fmdkig is considered to be cleared.
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City of Leesville Corrective Action Plan for Current Year Audit Findings
June 30,2009
Reference # and titie: 09-Fl Purchasing Policies and Procedures
Entity-wide or program/department specific: This finding is entity-wide.
Condition found: The City has written policies and procedures outlining purchasing guidelines which include an approved purchase requisition for all pmxihases. Also, for purchases in excess of $ 1,000 but less than $ 10,000, not less than three telephone quotes are to be obtained which should be documented on the purchase requisition and made a part ofthe purchase file. In addition, good procedures should include timely payments of iavoices.
There were thirty three vendor disbursements randomly selected for testing to ensure the City's policies and procedures were being properly followed. The following items were noted:
* One disbursement did not have the minimum three telephone quotes required according to the City's policy, * One purchase order was dated after the invoice date, * Three instances where the invoice was not paid timely, * One payee on the check did not match the vendor name on the invoice, due to company's name was changed and
the City's system was not updated.
When ten travel disbursements were tested, the following items were noted; * The documentation for one hotel room was missing, * Reimbursement for one hotel charge exceeded the actual hotel charge.
When testing credit card accounts, it was noted that small gifts were purchased for each City employee; however the gift was not added to the employee's W-2s.
Corrective action planned: City management will review the City's Purchasing Policies and Procedures and plans to implement a revised purchasing policy in the near future. City management has akeady outlined new procedures for reconciluig travel disbursements and does not anticipate having any future issues ui this area. The one occasion reported of a hotel charge being reimbursed at a charge which exceeded the rate charged by the hotel has been reimbursed by the employee, subsequent to the year end. City manageanent understands the importance of complying with the City's Purchasing Policies and Procedures and beheves progress has been made in this area during the past year. City management will continue to improve purchasing guidelines to ensure full compliance with the City's policy in the future
Person responsible for the above corrective actions: DeLain P. Prewitt, City Clerk Phone: (337) 239-2444 City of LeesviUe Fax: (337) 238-0464 101 West Lee Street Leesville, LA 71446
Anticipated completion date: 03/31/2010.
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City of LeesviUe Corrective Action Plan for Current Year Audit Findings
June 30,2009
Reference # and titie: 09-F2 Capital Assets
Entity-wide or program/department specific: This finding is entity-wide.
Condition found: In accordance with LSA-RS 24:515 (b) (1), the head of every auditee subject to audit shall maintain records of all land, buildings, improvements other than buildings, equipment and any other general fixed assets which were purchased or otherwise acquired and for which such entity is accountable. Intemal control requires a complete and adequate listuig that is updated on a timely basis.
When tracing items on the asset to the depreciation schedule, it was noted that descriptions are too vague on the dq)reciation schedule for some items in order to determine if the asset is still on the listing. Although, the inventory hstings kept by the accounts payable clerk has all adequate information, it was noted that not all assets purchased during the year are being added to the listing.
It was also noted in the test of capital assets that new asset purchases are not properly recorded. For govemmental funds, not all purchases are being recorded to capital outiay expense accounts. However, the cerpital asset purchases for enterprise fiinds are being recorded to capital outiay expenditure accounts rather than capital assets.
Correctjye action planned: City management plans to implement a policy by which fixed assets will be capitahzed and will outline a procedure for maintaining a fixed asset inventory. City management understands that establishing a coital asset policy will safeguard and provide control and accountability over capital assets, as well as assist departments in gathering and maintamtng information needed for the preparation of financial statements. City management will ensure the fixed asset policy contams procedures for marking and identifying City owned capital assets.
Person responsible for the above corrective actions: DeLain P. Prewitt, City Clerk Phone: (337) 239-2444 City of Leesville Fax: (337) 238-0464 101 West Lee Street Leesville, LA 71446
Anticipated completion date: 03/31/2010.
Reference # and titie: 09-F3 FEMA Hurricane Katrina Allowable Costs
Entity-vride or program/department specific: This finding is program specific dealing with FEMA grant.
FEDERAL GRANTOR/ CFDA Award PASS-THROUGH GRANTOR/PROGRAM NAME Number Year
Federal Emergency Management Agency Passed Through Louisiana De5)artment of Economic Development
FEMA Hurricane Katrina 83 .UNK 2005
Condition found: Entities receiving awards under this program must document coir^liance with allowable costs.
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City of Leesville Corrective Action Plan for Current Year Audit Findings
June 30,2009
For fiscal year ending June 30,2006, the City had questioned costs relating to overtime and equipment costs for the Police Department associated with Hurricanes Katrina and Rita. There was an overstatemCTit of costs connected with Hurricane Katrina of $51,763 whose reimbursement was requested and received. Therefore the City owed the federal govemment back $51,763 for over stated costs. For the year ended June 30,2007, the City recorded a hability ofthe $51,763 but did not pay these monies back. As of Jime 30, 2009 these monies have not been repaid; however, the liability is still reflected ha the City's financial statements.
Corrective acti'on planned: City management had anticipated receiving information firom FEMA regarding the exact amount due fiTDra the City related to expenses claimed during Hurricane Katrina; however, to date, no dollar amounts due have been received. City management was recently notified that the Legislative Auditor's Office is currently in the process of reviewmg all expense information submitted to FEMA fi'om the City and should be completing the review shortly. The City anticipates that this issue will be resolved hi the very near future and is awaiting the Legislative Auditor's final report indicating the dollar amount owed by the City in regards to the expedited funds received for Hurricane Katrina.
Person responsible for the above corrective actions: DeLain P. Prewitt, City Clerk Phone: (337)239-2444 City of Leesville Fax; (33"^ 238-0464 101 West Lee Street Leesville, LA 71446
Anticipated completion date: 03/31/2010.
Reference # and titie: Q9-F4 Finandai Accounting System
Entity-wide or program/department specific: This finding is entity-wide.
Condition found: The objectives of intemal controls are to provide management with reasonable assurance that assets are safeguarded agamst loss and that transactions are executed in accordance with management's authorization and recorded properly to permit the preparation of financial statements in accordance with accounting principles generally accepted in the United States of America. The City's intemal controls should include procedures to ensure its financial transactions are recorded and reported properly.
When reviewing the City's information system, it was noted that the City does not have detailed password protection. Once an employee has accessed into an accounting program, then the employee is allowed to have access to all functions within that program. Due to fall access, change reports should be printing and reviewed to ensure changes are not being made by unauthorized persormel. The City also does not currentiy have an information system pohcy nor a recovery plan in the event of a disast^. When reviewing the back up process, it was noted that back up tapes are not stored offsite to ensure information is safeguarded.
It was noted that old outstanding items that were voided were not propCTly sent to the State's unclaimed property division.
It was noted that an accounts payable Usting is not prepared by the City to ensure outstanding liabilities are reflected. The City is relying on the auditor to accme accounts payable and a material joumal entry was required.
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City of Leesville Corrective Action Plan for Current Year Audit Findings
June 30, 2009
During the review of compensated absences, it was determined that one City department is not properly accruing sick and vacation time. A material adjustment to compensated absences was required to accurately reflect the liabiHty for financial r^orting. Some employees responsible for tracking compensated absences are unaware ofthe City's policies regarding sick and vacation time. In addition, supervisors are keeping up with their own leave and no one is approving compensated absences. Per the City charter, specific salary amounts require board approval. All salaries were approved in total by the council; however details should be provided to assist in the approval process.
Corrective action planned: The City anticipates purchasing new city-wide financial software that will allow for user defined software access, thus allowing for the granting of individual permissions. Our current software only provides password-protection to access each individual program function. Any upgrades that would enhance security to a higher level are not avaflable through our current software provider. Back-up tapes are currentiy secured and are kept m a fire proof vault. After the purchase of new city-wide fmancial software, the City plans to outline a recovery plan which will be used in the event of a disaster.
City management will begin property reporting old outstanding utility deposit refimds to the State of Louisiana Unclaimed Property Division and in the future will provide a detailed accounts payable listing to our auditors at year-end.
City management will implement a pohcy to insure that all conpensated absences are calculated correctly and that all leave forms for department heads are properly reviewed and approved by the City Administrator. In the future. City management will provide more detailed mformation to the City Council conceming salary increases, as required by the City Charter.
Person responsible for the above corrective actions: DeLain P. Prewitt, City Clerk Phone: (337) 239-2444 City of Leesvflle Fax: (337) 238-0464 101 West Lee Street LeesviUe, LA 71446
Anticipated completion date: 03/31/2010.
Reference # and title: 09-F5 Inventory Controls
Entity-wide or program/department specific: This finding is entity-wide.
Condition found: Good mtemal controls require that the City maintain a system limiting access to the inventory of supplies and fuel. Any additions and deletions to inventory should be properly documented and approved. The inventory system along with the accounting records should be updated to the changes in invraitory. At year-end, a physical count of inventory should be made and the inventory balances should be adjusted to the actual amount. Any large fluctuations should be investigated.
During the review of inventory, it was noted that the City does not have good controls to ensure inventory is safeguarded and properly reported. It was also noted that the accounting books were not adjusted to the year-end coimts for both the materials/supplies and fuel. However, the adjustment necessary to agree the accountmg ledger to the actual were material, and could not be explained.
89
City of Leesville Corrective Action Plan for Current Year Audit Findings
June 30,2009
Corrective action planned: City management realizes the importance of good intemal controls and is presently in the process of constmcting a fuel ticket drop box next to the City's fijel pumps to msure that all fuel tickets are collected timely and are properly accounted for. City management will take appropriate steps to insure that all additions and deletions to the City's inventory are properly documented and approved, which should aid in resolving any inventory discrepancies in the future.
Person responsible for the above corrective actions: DeLam P. Prewitt, City Clerk Phone: (33 7) 239-2444 City of Leesville Fax: (337) 238-0464 101 West Lee Street Leesville, LA 71446
Anticipated completion date: 03/31/2010.
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