GRAMERCY VOLUNTEKR FTRE DEPARTMENT FINANCIAL …app1.lla.la.gov/PublicReports.nsf/072E4B306E817D...gramercy voluntekr ftre department financial report december 31.2013 . gramercy volunteer

GRAMERCY VOLUNTEKR FTRE DEPARTMENT

FINANCIAL REPORT

DECEMBER 31.2013

GRAMERCY VOLUNTEER FIRE DEP ARTMENT

FINANCIAL REPORT

DECEMBER 31.2013

GRAMERCY VOLUNTEER FIRE DEPARTMENT

FINANCIAL REPORT

DECEMBER 31.2013

TABLE OF CONTENTS

Page

Independent Accountant's Compilation Report 1

General Purpose Financial Statements:

Combined Balance Sheet - All Fund Types and Account Groups 2

Statement of Revenues and Expenditures - General Fund 3

Statement of Changes in Fund Balance - General Fund 4

Notes to Financial Statements 5-10

Schedule of Findings and Responses 11

Schedule of Prior Year Findings and Responses 12

Corrective Action Plan 13-14

P&N Postlethwaite & Netterville

A Professional Accounting Corporation Associated Offices in Principal Cities of the United States

www.pncpa.com

INDEPENDENT ACCOUNTANT'S COMPILATION REPORT

To the Fire Chief Gramercy Volunteer Fire Department Gramercy, Louisiana

We have compiled the accompanying combined balance-sheets of Gramercy Volunteer Fire Department, Louisiana, and the related statement of revenues and expenditures, and statement of changes in fund balance as of and for the year ended December 31, 2013, which collectively comprise the Gramercy Volunteer Fire Department's basic financial statements as listed in the table of contents. We have not audited or reviewed the accompanying financial statements and, accordingly, do not express an opinion or provide any assurance about whether the financial statements are in accordance with accounting principles generally accepted in the United States of America.

Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of the financial statements.

Our responsibility is to conduct the compilation in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. The objective of a compilation is to assist management in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications that should be made to the financial statements.

Gramercy Volunteer Fire Department did not adopt the provisions of Governmental Accounting Standards Board Statement No. 34 for the year ended December 31, 2013. The effects of this departure from generally accepted accounting principles has not been determined.

Donaldsonville, Louisiana December 29, 2014

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215 St. Patrick St. • P.O. Box 1190 • Donaldsonville, LA 70346 • Tel: 225.473.4179 • Fax: 225.473.7204

GRAMERCY VOLUNTEER FIRE DEPARTMENT ALL FUND TYPES AND ACCOUNT GROUPS

COMBINED BALANCE SHEET DECEMBER 31.2013

Governmental Fund Type

General

Account Group General Fixed

Assets Total

(Memorandum Only) ASSETS

Cash and cash equivalents Certificates of deposit Fixed assets

$ 71,194 192,039

$

910,603

$ 71,194 192,039 910,603

Total assets $ 263,233 $ 910,603 $ 1,173,836

LIABnJTTES AND FUND EOUITY Liabilities

Accrued expenses $ 774 $ $ 774

Fund Equity Investment in general fixed assets Fund Balance:

Unassigned 262,459

910,603 910,603

262,459 Total equity 262,459 910,603 1,173,062

Total liabilities and fund equity $ 263,233 $ 910,603 $ 1,173,836

See independent accountant's compilation report.

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GRAMERCY VOLUNTEER FIRE DEPARTMENT GOVERNMENTAL FUND TYPE - GEIVERAL FUND

STATEMENT OF REVENUES. EXPENDITURES. AND CHANGES IN FUND BALANCE

YEAR ENDED DECEMBER 31.2013

REVENUES Intergovernmental revenue $ 15,424 Interest revenue 1,172 Other revenue 3,530

Total revenues 20,126

EXPENDITURES Public safety

Auto 1,541 Capital outlay 3,000 Education 0 Insurance 678 Medical Expense 0 Miscelleneous 1,439 Professional fees 58 Office expense 0 Repairs and maintenance 1,826 Supplies 132 Telephone 3,763 Utilities 3,891 Dues 128

Total expenditures 16,456

EXCESS OF REVENUES OVER EXPENDITURES $ 3,670


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GRAMERCY VOLUNTEER FIRE DEPARTMENT GOVERNMENTAL FUND TYPE - GENERAL FUND

STATEMENT OF CHANGES IN FUND BALANCE YEAR ENDED DECEMBER 31.2013

Fund balance as of 12/31/12 $ 258,789

Excess of revenues over expenditures 3,670

Fund balance as of 12/31/13 $ 262,459


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NOTES TO FINANCIAL STATEMENTS DECEMBER 31.2013

1. Summary of Significant Accounting Policies

The accounting policies of the Gramercy Volunteer Fire Department (Fire Department) conform to generally accepted accounting principles as applicable to governments. The Governmental Accounting Standards Board (GASB) is the standard setting body for establishing goverimiental accounting and financial reporting principles.

This financial report has not been prepared in conformity with GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, issued June 1999. GASB Statement No. 34 requires the presentation of the basic financial statements. The basic financial statements include government-wide statements as well as fund financial statements. Additionally, management's discussion and analysis and budgetaiy comparison information are required to be presented for purposes of additional analysis.

These fmancial statements present only the fund financial statements. The government-wide statements have not been presented. Additionally, management's discussion and analysis and budgetary comparison information has been omitted.

The following is a summary of the Fire Department's significant policies.

A. Reporting Entity

The Gramercy Volunteer Fire Department (The Fire Department) is an organization formed on November 23, 1954 to provide fire protection to the citizens within the Town of Gramercy, Louisiana area.

B. Basis of Presentation - Fund Financial Statements

The daily accounts and operations of the Fire Department continue to be organized on the basis of funds and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, equity, revenues, and expenditures. Govermnent resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled.

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. All Governmental Funds are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other fmancial sources) and decreases (i.e., expenditures and other financing uses) in current assets.

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1. Summary of Significant Accounting Policies (continued)

B. Basis of Presentation - Fund Financial Statements ("continued)

Governmental funds are those through which most governmental functions of the Fire Department are financed. The acquisition, use and balances of the Fire Department's expendable financial resources and the related liabilities are accounted for through governmental fiinds. The measurement focus is upon determination of changes in financial position, rather than upon net income determination. The following is the Fire Department's governmental fund type:

General Fund - The General Fund is the general operating fund of the Fire Department. It accounts for all financial resources.

C. Basis of Accounting/Measurement Focus - Fund Financial Statements

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus.

Governmental Funds are accounted for using a current financial resources measurement focus and the modified accrual basis of accounting. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. Operating statements of these funds present increases (i.e., revenues and other financial sources) and decreases (i.e., expenditures and other financing uses) in net current assets.

The following paragraphs describe the revenue recognition practices under the modified accrual basis of accounting:

Revenues

Govermnental fund revenues resulting from exchange transactions are recognized in the fiscal year in which the exchange takes place and meets the government's availability criteria (susceptible to accrual). Available means that the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. Most governmental miscellaneous revenues, including investment earnings are recorded as earned since they are measurable and available. The Fire Department's definition of available means expected to be received within sixty days of the end of the fiscal year.

Revenue from grants, entitlements and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources can be used.

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1. Summary of Significant Accounting Policies (continued')

C. Basis of Accounting/Measurement Focus - Fund Financial Statements (continued')

Expenditures

All expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred if it is expected to be paid within the next twelve months. Liabilities which will not be liquidated with expendable available financial resources are not recorded in the funds.

D. Budget Practices

The Fire Department does not prepare an annual budget.

E. Cash and Cash Equivalents

Cash and certificates of deposit, which include demand deposit accounts and certificates of deposit, are stated at market value. Under Louisiana Revised Statutes 39:1271 and 33:2955, the Fire Department may deposit funds in obligations of the U.S. Treasury and U.S. agencies, demand deposit accounts, interest-bearing demand deposit accounts, money market accounts, and time certificates of deposit with state banks organized under Louisiana law and national banks having principal offices in Louisiana.

The Fire Department considers all cash accounts and all highly liquid deposits with a maturity of three months or less when purchased to be cash and cash equivalents.

F. Fixed Assets

Fixed assets used in govemmental fund type operations (general fixed assets) are accounted for in the General Fixed Assets Account Group and are recorded as expenditures in the govemmental funds when purchased. No depreciation has been provided on general fixed assets, nor has interest been capitalized.

All fixed assets are stated at historical cost.

G. 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 certain reported amounts and disclosures. Accordingly, actual results could differ fi^om those estimates.

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1. Summary of Significant Accounting Policies (continued")

H. Intergovernmental Revenue

The majority of the Fire Department's revenue is intergovernmental revenue that is derived from ad valorem taxes received by St. James Parish. Requests for funding are submitted to St. James Parish periodically in order to fund the operations and asset purchases of the Fire Department.

I. Fund Equity of Fund Financial Statements

Accounting standards require governmental fund balances to be reported in as many as five classifications as listed below:

Nonspendable - represents amounts that are not expected to be converted to cash because they are either not in spendable form or legally or contractually required to be maintained intact.

Restricted -represents balances where constraints have been established by parties outside the Fire Department or imposed by law through constitutional provisions or enabling legislation.

Committed - represents balances that can only be used for specific purposes pursuant to constraints imposed by formal action of the Fire Department's highest level of decision-making authority.

Assigned - represents balances that are constrained by the Fire Department's intent to be used for specific purposes, but are not restricted nor committed.

Unassigned - represents balances that have not been assigned to other funds and that have not been restricted, committed, or assigned to specific purposes within the general fund.

When expenditures are incurred for the purposes for which both restricted and unrestricted amounts are available, the Fire Department reduces restricted amounts first, followed by unrestricted amounts. When expenditures are incurred for purposes for which committed, assigned, and unassigned amounts are available, the Fire Department reduces committed amounts first, followed by assigned amounts and then unassigned amounts.

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2. Cash and Certificates of Deposit

At December 31, 2013, the canying amounts of the Fire Department's deposits were as follows:

Demand deposit accounts $ 71,194

Certificates of deposit 192,039

Total deposits $ 263,233

These deposits are stated at cost, which approximates market.

3. Custodial Credit Risk

Custodial credit risk is the risk that in the event of a financial institution failure, the Fire Department's deposits may not be returned to them. To mitigate this risk, state law requires that these deposits must be secured by either federal deposit insurance by the pledge of securities owned by the fiscal agent financial institution. The market value of the pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent bank. As of December 31, 2013, the Fire Department's bank balance was $263,233. The entire bank balance of the Fire Department was covered by federal depository insurance and there was no exposure to custodial credit risk.

4. Fixed Assets

Fixed assets at December 31, 2013 consist of the following:

Land $ 150,010 Buildings 118,812 Furniture and equipment 641,781

$ 910,603

No depreciation expense has been recorded for the year ended December 31, 2013.

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5. Contributions from Government Agencies

Contributions from government agencies for the year ended December 31, 2013 consist of the following:

St. James Parish $ 15,424

6. Subsequent Events

In preparing the financial statements, Gramercy Volunteer Fire Department has evaluated events and transactions for potential recognition or disclosure through December 29, 2014, and has determined that no events occurred that require disclosure.

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SCTTF.nTJT.F. OF FINDINGS AND RESPONSES DECEMBER 31.2013

MATERIAL WEAKNESS

2013-1 Capital Assets

Finding: The Fire Department does not perform a regular inventory of capital assets.

Recommendation: A regular inventory of capital assets should be performed and documented in order to determine that the Fire Department retains possession of all capital assets that have been purchased. The Fire Department should comply with LA Revised Statute 33:4712 regarding the disposition of capital assets.

Management's Response: We will perform and document an annual inventory of capital assets. We will also comply with LA Revised Statute 33:4712 when disposing of any capital assets.

COMPLIANCE FINDING

2013-2 Annual Financial Statement

Finding: LSA-R.S. 33:463 requires that the Fire Department produce an armual financial statement in accordance with generally accepted accounting principles and that the financial statement be transmitted to the legislative auditor within six months of the close of the fiscal year. The Fire Department did not comply with this statute in a timely maimer.

Recommendation: The annual financial statement should be submitted to the legislative auditor within six months of the close of the fiscal year.

Management's Response: We will submit the armual financial statement to the Louisiana Legislative Auditor within six months of the close of the fiscal year in future years.

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SCHEDULE OF PRIOR YEAR FEVPINGS AND RESPONSES DECEMBER 31.2012

MATERIAL WEAKNESS

2012-1 Capital Assets

Finding: The Fire Department does not perform a regular inventoiy of capital assets. Additionally, several metal doors that were purchased in a prior year have been reported as disposals in the current year. However, there is no evidence of adherence to Louisiana asset management laws regarding this disposal.

Current Status: Similar finding for the current year

COMPLIANCE FmDING

2012-2 Annual Financial Statement

Finding: LSA-R.S. 33:463 requires that the Fire Department produce an annual financial statement in accordance with generally accepted accounting principles and that the financial statement be transmitted to the legislative auditor within six months of the close of the fiscal year. The Fire Department did not comply with this statute in a timely manner.

Current Status: Similar fmding for the current year.

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Gramercy Volunteer Fire Dept.

P.O. Box 386 Gramercy, LA 70032

CORRECTIVE ACTION PLAN

December 29,2014

Louisiana Legislative Auditor

Gramercy Volunteer Fire Department respectfully submits the following corrective action plan for the year ended December 31,2013.

Name and address of independent public accounting firm: Postlethwaite & Netterville, APAC P.O. Box 1190 Donaldsonville, LA 70346

Financial Statement Period: January 1, 2013 - December 31, 2013

The findings from the Schedule of Findings and Responses and Management Letter are discussed below. The findings are numbered consistently with the numbers assigned in the Schedule of Findings and Responses and the Management Letter.

MATERIAL WEAKNESS 2013-1 Capital Assets

Finding: The Fire Department does not perform a regular inventory of capital assets.

Action Taken: We will perform and document an annual inventory of fixed assets. We will also comply with LA Revised Statute 33:4712 when disposing of any capital assets.

COMPLIANCE FINDING

2013-2 Annual Financial Statements

Finding: The Fire Department did not file annual financial statements in a timely manner with Louisiana Legislative Auditor's office.

Action Taken: The Fire Department will submit timely financial statements in future years.

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MANAGEMENT LETTER ML-2013-1 Board Minutes

Finding: The Fire Department was unable to provide minutes for any of the board meetings held during 2012.

Action Taken: The Fire Department will prepare the board minutes before the next meeting. At each meeting, we will also approve the minutes from the previous meeting.

ML-2013-2 Bank Reconciliations

Finding: Bank reconciliations were not prepared monthly. Therefore, any discrepancies between the accounting records and the bank will not be identified in a timely manner.

Action Taken: The Fire Department will reconcile the accounting records to the bank each month.

The above corrective action plan addresses the current year fmdings. If you need additional information concerning the corrective action plan, please contact Alex Gerhold, Treasurer, P. O. Box 386, Gramercy, LA 70052.

Treasurer Gramercy Volunteer Fire Department

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Postlethwaite & Netterville

A Professional Accounting Corporation Associated Offices in Principal Cities of Hie United States

www.pncpa.com

To the Fire Chief Gramercy Volunteer Fire Department Gramercy, Louisiana

We have reviewed the financial statements of the Gramercy Volunteer Fire Department for the year ended December 31, 2013 and have issued our report thereon dated December 29, 2014. Professional standards suggest that we provide you with the following information related to our review.

As stated in our engagement letter dated December 4, 2014, our responsibility, as described by professional standards, is to plan and perform our review in order to express limited assurance that there are no material modifications that should be made to the financial statements in order for the statements to be in accordance with generally accepted accounting principles.

A review does not contemplate obtaining an understanding of the entity's internal control; assessing fraud risk, tests of accounting records by obtaining sufficient appropriate audit evidence through inspection, observation, confirmation, or the examination of source documents (for example, cancelled checks or bank images); and other procedures ordinarily performed during an audit. Accordingly, a review does not provide assurance that we will become aware of all significant matters that would be disclosed in an audit. Therefore, a review provides only limited assurance that there are no material modifications that should be made to the financial statements in order for the statements to be in conformity with generally accepted accoimting principles. During the course of the performance of our review procedures, we noted certain items that have been communicated to management by way of discussion. The following is a description of items that were of such significance to comment in a formal management letter.

ML-2013-1 Board Minutes

Finding: The Fire Department was unable to provide minutes for any of the board meetings held during 2013.

Recommendation: Minutes from the board meetings should be prepared timely and properly retained. Each board meeting should include the approval of the minutes of the previous meeting.

215 St. Patrick St. • P.O. Box 1190 • Donaldsonvilie, LA 70346 • Tel: 225.473.4179 • Fax: 225.473.7204

ML-2013-2 Bank Reconciliations

Finding: Bank reconciliations were not prepared monthly. Therefore, any discrepancies between the accounting records and the bank will not be identified in a timely manner.

Recommendation: Bank reconciliations should be prepared each month to ensure that any discrepancies between the accounting records and the bank will be identified and corrected in a timely manner.

This information is intended solely for the use of the stockholder and management of Gramercy Volunteer Fire Department and should not be used for any other purpose.

Donaldsonville, Louisiana December 29,2014

Documents

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