Morehouse Sales and Use Tax Commissionapp1.lla.la.gov/PublicReports.nsf/F2D68AC8007097D...Net assets - beginning 180,293 201,204 Prior period adjustment ^_ { 9,680) Net assets - ending

$Page 1: Morehouse Sales and Use Tax Commissionapp1.lla.la.gov/PublicReports.nsf/F2D68AC8007097D...Net assets - beginning 180,293 201,204 Prior period adjustment ^_ { 9,680) Net assets - ending$
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MOREHOUSE SALES AND USE TAX COMMISSION BASTROP, LOUISIANA

FINANCIAL REPORT

June 30, 2009

Under provisions of state law, this report is a public document.Acopy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office ofthe LegislativeAuditor and, where appropriate, at the office of the parish clerk of court.

Release Date_ jiji^jof

HILL, INZINA & COMPANY Certified Public Accountants • A Professional Corporation

701 East Madison Avenue • Bastrop, Louisiana 71220 Telephone 318-281-4492 • Fax 318-28M087 • E-mail [email protected]

mailto:[email protected]

C O N T E N T S

Page(s)

INDEPENDENT AUDFTOR'S REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION 1 and 2

REQUIRED SUPPLEMENTARY INFORMATION (Part 1 of 2)

Management's discussion and analysis 3 - 7

BASIC FINANCIAL STATEMENTS

Govemment-wide financial statements: Statements of net assets - govemmental activities 8 Statement of activities - govemmental activities 9

Fund fmancial statements: Balance sheet - govemmental fund - general fund 10 Statement of revenues, expenditures, and changes in fund balance -govemmental fund - general fund 11

Reconciliation of govemmental fund balance sheet to govemment-wide statement of net assets 12

Reconciliation of govemmental fund statement of revenues, expenditures, and changes in fund balance to govemment-wide statement of activities 13

Statement of fiduciary fund net assets - agency fund 14

Notes to financial statements 15-26

REQUIRED SUPPLEMENTARY INFORMATION (Part 2 of 2)

Budgetary comparison schedule - govemmental fund - general fund 27 and 28

INDEPENDENT AUDFTOR'S REPORT ON INTERNAL CONTROL OVER FINANCLVL REPORTING AND ON COMPLL^NCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 29 and 30

SCHEDULE OF FINDINGS AND QUESTIONED COSTS WFTH MANAGEMENT'S RESPONSE AND PLANNED CORRECTIVE ACTION 31 and 32

SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS 33

fflLL, INZINA & COMPANY

INDEPENDENT AUDFTOR'S REPORT ON FINANCL^L STATEMENTS AND SUPPLEMENTARY INFORMATION

Board of Commissioners Morehouse Sales and Use Tax Commission Bastrop, Louisiana

We have audited the accompanying financial statements ofthe govemmental activities and the major fund of Morehouse Sales and Use Tax Commission (the "Commission"), as of and for the year ended June 30,2009, which collectively comprise the Commission's basic fmancial statements as listed in the table of contents. These financial statements are the responsibility of the Commission'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 financial audits contained in Govemment Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fmancial statements. An audit also includes assessing the accounting principles used and 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.

In our opinion the financial statements referred to above present fairly, in all material respects, the respective financial position of the govemmental activities and the major fund of the Commission as of June 30,2009, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance with Govemment Auditing Standards, we have also issued our report dated September 15, 2009 on our consideration of the Commission's intemal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, 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.

-1 -Certified Public Accountants • A Professional Corporation

701 East Madison Avenue • Bastrop, Louisiana 71220 Telephone 318-281^1492 • Fax 318-281-4087 • E-mail [email protected]


Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Commission's basic financial statements. Management's discussion and analysis and the budgetary comparison schedule, presented as required supplementary information, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation ofthe required supplementary information. However, we did not audit the information and express no opinion on it.

s/Hill, Inzina & Co.

September 15, 2009

REOUIRED SUPPLEMENTARY INFORMATION (Part 1 of 2)


MANAGEMENT'S DISCUSSION AND ANALYSIS As of and for the Year Ended June 30, 2009

As management of Morehouse Sales Tax and Use Tax Commission (the "Commission"), we offer readers of the Commission's financial statements this narrafive overview and analysis of the fmancial activities ofthe Commission for the fiscal year ended June 30, 2009. This discussion and analysis of management is designed to provide an objective and easy to read analysis of the Commission's financial activities based on currently known facts, decisions, or conditions. It is intended to provide readers with a broad overview ofthe Commission's finances. It is also intended to provide readers with an analysis ofthe Commission's short-term and long-term activifies based on informafion presented in the financial report and fiscal policies that have been adopted by the Commission. Specifically, this section is designed to assist the reader in focusing on significant fmancial issues, provide an overview ofthe Commission's financial activity, idenfify changes in the Commission's fmancial posifion (its ability to address the next and subsequent years' challenges), identify any material deviations from the financial plan (approved budget), and identify individual fund issues or concems.

As with other secfions of this financial report, the informafion contained within this discussion and analysis of management should be considered only a part ofthe greater whole. The readers of this statement should take time to read and evaluate all secfions of this report, including the notes to financial statements and the required supplementary information that is provided in addition to this discussion and analysis of management.

Overview ofthe Financial Statements

This discussion and analysis is intended to serve as an introducfion to the Commission's financial statements. The Commission's basic financial statements consist ofthe following components:

1. Govenunent-wide financial statements

Govemment-wide financial statements are designed by GASB Statement No. 34 to change the way in which govemmental financial statements are presented. It now provides readers for the first time with a concise "entity-wide" statement of net assets and statement of activities, seeking to give the users of the financial statements a broad overview of the Commission's financial posifion and results of operations in a manner similar to a private-sector business.

•3-

The statement of net assets present informafion on all of the Commission's assets and liabilities using the accmal basis of accounfing, which is similar to the accounfing used by most private-sector companies. The difference between the assets and liabilities is reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position ofthe Commission is improving or weakening. Evaluation ofthe overall economic health ofthe Commission would extend to other nonfinancial factors in addition to the financial informafion provided in this report.

The statement of acfivifies present informafion showing how the Commission's net assets changed during the current fiscal year. All current year revenues and expenses area included regardless of when cash is received or paid. An important purpose of this statement is to show the financial refiance of the Commission's disfinct activifies or funcfions on revenues provided by the users of its services.

The govemment-wide financial statements report govemmental activities ofthe Commission that are principally supported by charges for services. Govemmental activifies include general govemment only.

2. Fund financial statements

A fund is an accountability unit used to maintain control over resources segregated for specific acfivifies or objectives. The Commission uses funds to ensure and demonstrate compliance with finance-related laws and regulafions. All ofthe funds ofthe Commission are govemmental funds that are used to account for all ofthe Commission's basic services and are reported as govemmental activities in the govemment-wide financial statements. However, the focus is very different with fund statements providing a disfincfive view ofthe Commission's govemmental funds. These statements report short-term fiscal accountability focusing on the use of spendable resources during the year and balances of spendable resources available at the end of the year. They are useful in evaluating annual financing requirements of govemmental programs and commitment of spendable resources for the near-term.

3. Statement of fiduciary fund net assets

Fiduciary (agency) funds are used to account for resources held for the benefit of taxing bodies. As these resources are not available to support the Commission, the fiduciary (agency) fund is not reflected in the govemment-wide fmancial statements. The Commission however benefits by maintaining these funds in the form of fees.

4. Notes to financial statements

The accompanying notes to the fmancial statements provide informafion essenfial to a full understanding of the govemment-wide and fund financial statements.

In addition to the basic financial statements, the Commission also includes in a subsequent secfion of this report addifional information to supplement the basic financial statements.

Govemment-Wide Financial Analysis

The following provides a summary ofthe net assets ofthe Commission's govemmental acfivifies as of June 30:

Current and other assets Capital assets

Total assets

Other liabilities Long-term liabilifies

Total liabilifies

Net assets: Invested in capital asset Unrestricted

Total net assets

As noted earlier, net assets may serve over time as a useful indicator of the Commission's financial posifion. The Commission will use the unrestricted net assets to meet the ongoing obligafions to users of its services and creditors.

By far the largest portion of the Commission's net assets as of June 30, 2009 (91.1%) consists of unrestricted net assets. The remaining portion reflects the Commission's investment in capital assets (fumiture, equipment, and a vehicle). The Commission uses these capital assets to provide services to users of it services; consequenfiy, these assets are not available for future spending.

$

$

$

$

$

$

2009

175,350

16.307

191.657

_

8,391

8.391

16,307

166,959

183.266

$

2_

$

$

$

$

2008

159,694

25.358

185,052

4,758 _

4,758

25,358

154,936

180.294

The following summarizes the Commission's net asset changes as of June 30:

2009 2008 Revenues: Program revenues:

Charges for services $ 257,280 $ 233,437 General revenues:

Interest and miscellaneous 2.998 5,715 Total revenues $ 260,278 $ 239,152

Expenses: Current:

General govemment 257,305 250,382

Change in net assets $ 2,973 $( 11,230)

Net assets - beginning 180,293 201,204

Prior period adjustment ^_ { 9,680)

Net assets - ending $ 183.266 $ 180.294

The Commission's program revenues increased by $21,126 with the total cost of all programs and services also increasing by $6,923.

Program revenues derive directly from the program itself and as a whole, reduce the cost of the function to be financed from the Commissions' general revenues.

Financial Analysis of Governmental Funds

As of June 30, 2009 the Commission's govemmental fund reported an ending fund balance of $175,350, an increase of $20,414 from $154,936 as of June 30, 2008. The fund balance was unreserved and undesignated for both years.

General Fund Budgetary Highlights

The Commission made no amendment to its original budget and there were no unfavorable variances of 5% or more with the final budgeted amounts.

Capital Assets

The Commission's investment in capital assets, net of accumulated depreciafion, for its govemmental acfivities as of June 30,2009 was $16, 307 compared to $25,358 as of June 30,2008. The Commission's only capital asset addition during the current fiscal year was the purchase of a computer system.

Economic Factors and Next Year's Budget

The Commission foresees some changes in operations for the next fiscal year; therefore, the budget adopted for the fiscal year ending June 30, 2010 was decreased to $242,675 from $255,688 adopted for the year ended June 30, 2009. Sales tax collecfions were adjusted for tax rate changes, business closures, and new exempfions and exclusions. The adopted budget for the year ending June 30,2010 included no available fund balance while $175,350 was actually available.

Requests for Information

This financial report is designed to provide a general overview ofthe Commission's finances for all those with an interest in the Commission's finances. Quesfions concerning any of the informafion provided in this report or requests for additional financial information should be addressed to Ron Carter, Administrator, Post Office Box 672, Bastrop, Louisiana 71221-0672.

• 7 -

BASIC FINANCIAL STATEMENTS


STATEMENT OF NET ASSETS - GOVERNMENTAL ACTIVmES June 30, 2009

ASSETS

Cash Certificates of deposit Capital assets, net of depreciation

75,350

100,000

16,307

Total assets $ 191.657

LL^BILFTIES

Long-term liabilifies: Due within one year Due in more than one year

Total liabilifies

1,663 6.728 8.391

NET ASSETS

Invested in capital assets Unrestricted

Total net assets

Total liabilities and net assets

16,307

166,959

183,266

191,657

See notes to financial statements.


STATEMENT OF ACTIVITIES - GOVERNMENTAL ACTrVITIES As of and for the Year Ended June 30, 2009

Expenses: Current:

General govemment: Personal services $ 186,392 Operating services 42,196 Professional services 9,678 Travel and education 8,840 Depreciation 10.199

Total expenses $ 257,305

Program revenues: Charges for services 257,280

Net program revenue $( 25)

General revenues: Interest and miscellaneous 2.998

Change in net assets $ 2,973

Net assets - beginning 180.293

Net assets - ending $ 183,266


-9-


BALANCE SHEET - GOVERNMENTAL FUND - GENERAL FUND June 30, 2009

ASSETS

Cash $ 75,350

Certificates of deposit 100.000

Total assets $ 175.350

FUND BALANCE Unreserved and undesignated $ 175.350


10-


STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE - GOVERNMENTAL FUND - GENERAL FUND

As of and for the Year Ended June 30, 2009

Revenues: Charges for services $ 257,280 Interest and miscellaneous 2,998

Total revenues $ 260.278

Expenditures: Current:

General govemment: Personal services Operating services Professional services Travel and education

Capital outlay Total expenditures

Net change in fund balance

Fund balance - beginning

Fund balance - ending


$

$

$

$

178,001

42,196

9,678

8,840

1.148

239.863

20,415

154.935

175.350


RECONCILIATION OF GOVERNMENTAL FUND BALANCE SHEET TO GOVERNMENT-WIDE STATEMENT OF NET ASSETS


Total fund balance - govemmental fund balance sheet $ 175,350

Amounts reported for govemmental acfivities in statement of net assets are different because:

Capital assets used in govemmental activities are not financial resources and therefore are not reported in the fund. 16,307

Long-term liabilifies are not due and payable in the current period and therefore are not reported in the funds. _[ 8.391)

Total net assets of govemmental activities - govemment-wide statement of net assets $ 183,266


12-


RECONCILIATION OF GOVERNMENTAL FUND STATEMENT OF REVENUES, EXPENDFTURES, AND CHANGES IN FUND BALANCE TO GOVERNMENT-WIDE STATEMENT OF ACTIVFTIES


Net change in fund balance - govemmental fund $ 20,415

Amounts reported for govemmental acfivifies in statement of activities are different because:

Govemmental funds report capital outlays as expenditures. However, in the statement of acfivities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which depreciafion expense ($10,199) exceeded capital oufiays ($1,148) in the current period. ( 9,051)

Compensated absences reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in the govemmental funds. _( 8.391)

Change in net assets - govemment-wide statement of activifies $ 2,973


13-


STATEMENT OF FIDUCL\RY FUND NET ASSETS - AGENCY FUND June 30, 2009

ASSETS

Cash $ 7.260

LIABILiriES

Due to taxing bodies $ 7.260


14-


NOTES TO FINANCIAL STATEMENTS As of and for the Year Ended June 30, 2009

Note I. Organizafion and Summary of Significant Accounfing Policies

Morehouse Sales and Use Tax Commission (the "Commission") was created by joint agreement ofthe sales and use taxing bodies of Morehouse Parish, Louisiana, on May 7, 1992, in accordance with Louisiana Revised Statute 33:2844. The purpose of the Commission is to provide centralized collecfion, enforcement, and administrafion of sales and use taxes within Morehouse Parish. The goveming body of the Commission is comprised of nine non-compensated board members which are appointed as follows:

Members Appointed

Morehouse Parish School Board 2 Morehouse Parish Police Jury 1 Sheriff of Morehouse Parish 1 City of Bastrop 2 Village of Mer Rouge 1 Village of Bonita 1 Village of Collinston 1

Each appointee of Morehouse Parish School Board and City of Bastrop, as well as the appointees of Morehouse Parish Police Jury and Sheriff of Morehouse Parish, have one full vote as a commissioner and the appointees from Village of Mer Rouge, Village of Bonita, and Village of Collinston have one-third vote each as a commissioner. Each appointed commissioner serves a one year term ending on June 30th of each year.

On December 21, 1999, the Commission entered into a joint agreement with Morehouse Parish Tourism Commission to collect, enforce, and administer the respecfive hotel/motel occupancy tax as authorized and levied by Morehouse Parish Tourism Commission within the boundaries of Morehouse Parish. The joint agreement also authorizes the Commission to insfitute suits in the name of Morehouse Parish Tourism Commission to enforce the collecfion of such tax.

The joint agreement with Morehouse Parish Tourism Commission was renewed effective May 1,2006 and runs in perpetuity provided, however, that either party may withdraw from the agreement upon 90 day written notice to the authorized representative. For services performed by the Commission under the joint agreement, Morehouse Parish Tourism Commission pays the Commission $50 per month for collecfion often and under account

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NOTES TO FINANCLVL STATEMENTS

transactions of any tax acfivity. If the number of tax account acfivifies exceeds the maximum often accounts, the collecfion fee will be negofiated between the two parties and attached as an amendment to the agreement.

Govemmental Accounfing Standards Board (GASB) Statement No. 14, The Reporting Entity, established criteria for determining the govemmental reporting enfity and component units that should be included within the reporting entity. Under provisions of this statement, the Commission is a jointly appointed stand-alone govemment, as it meets neither the criteria of a primary govemment, nor a component unit, since its goveming board is not elected, and it is not fiscally dependent upon any of the consfituent govemments. As used in GASB Statement No. 14, fiscally independent means that the Commission may, without the approval or consent of another govemmental entity, determine or modify its own budget and set its own rates or charges. The Commission has no component units, defined by GASB Statement No. 14 as other legally separate organizafions for which the appointed Board of Commissioners are financially accountable.

The more significant ofthe Commission's accounting policies are described below:

Govemment-Wide Financial Statements:

The govemment-wide financial statements include the statement of net assets and the statement of acfivifies. These statements report financial informafion for the Commission as a whole.

The statement of activities reports the expenses of a given function offset by program revenues direcfiy connected with the funcfional program. A function is an assembly of similar acfivities summarizing the fund to capture the expenses and program revenues associated with a distinct functional activity. Program revenues include charges for services which report charges to users ofthe Commission's services. These revenues are subject to extemally imposed restrictions to these program uses. Other revenue sources not properly included within the program revenues are reported as general revenues.

Fund Financial Statements:

Fund financial statements are provided for govemmental funds with the major govemmental fund reported in a single column.

-16-

NOTES TO FINANCIAL STATEMENTS

Statement of Fiduciary Fund Net Assets

Fiduciary (agency) funds are used to account for resources held for the benefit of taxing bodies. These resources are not available to support the Commission.

Basis of Accounting, Measurement Focus, and Financial Statement Presentation;

The financial statements ofthe Commission are prepared in accordance with generally accepted accounting principles (GAAP).

The govemment-wide statements report using the economic resources measurement focus and the accmal basis of accounting. Revenues are recorded when eamed and expenses are recorded when a liability is incurred, regardless ofthe timing of related cash flows.

Govemment fund financial statements report using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when they are both measurable and available. Available means collecfible within the current period or soon enough thereafter to pay current liabilifies. Expenditures are recorded when the related fund liability is incurred. There are no major revenue sources susceptible to accmal.

Fiduciary fund reporting focuses on net assets and changes in net assets. These funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Consequently, fiduciary funds have no measurement focus, but use the modified accmal basis of accounfing.

Fund Type and Major Fund:

The Commission reports the General Fund as a major govemmental fund. The General Fund is the general operating fund ofthe Commission and accounts for all financial resources.

The only fund accounted for as a fiduciary fund by the Commission is an agency fund. This fund accounts for assets held by the Commission as agent for various taxing bodies.

17-


Budgets and Budgetary Accounting;

The budget for the General Fund was proposed by the Commission's administrator and formally adopted by the Board of Commissioners on June 17, 2008. The annual budget is prepared in accordance with the basis of accounting utilized by the fund. The Commission's administrator is authorized to transfer budgeted amounts within the functions; however, any revisions that alter total expenditures, resulting from revenues exceeding amounts estimated, require approval of the Commissioners. All annual appropriations lapse at the end of each fiscal year.

Use of Esfimates;

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 from those estimates.

Cash:

Cash includes amounts in interest bearing demand deposits. Under state law, the Commission may deposit funds in demand deposits, interest-bearing demand deposits, or time deposits with state banks organized under Louisiana law or any other state of the United States, or under the laws ofthe United States.

Certificates of Deposit:

State statutes authorize the Commission to invest in United States bonds, treasury notes and bills, or certificates or time deposits of state banks organized under Louisiana law and nafional banks having principal offices in Louisiana. If the original maturifies of time deposits exceed 90 days, they are classified as certificates of deposit; however, if the original maturities are 90 days or less, they are classified as cash equivalents. Nonparticipating investment contracts, generally certificates of deposit, are reported at cost, which approximates market value.

Capital Assets and Depreciafion:

The Commission's fumiture, equipment, and vehicle with useful lives of more than one year are stated at historical cost. Capital assets are comprehensively reported in the govemment-wide financial statements.


The Commission generally capitalizes assets with cost of $ 1,000 or more as purchase outlays occur. The costs of normal maintenance and repairs not adding to an asset's value or materially extending its useful life are not capitalized. Capital assets are depreciated using the straight-line method over estimated useful lives of five years. Upon disposition of capital assets, the cost and applicable accumulated depreciation are removed from the respective accounts, and the resulting gain or loss is recorded in operations.

Accumulated Compensated Absences:

Allowable annual vacation and sick leave is prescribed by the Commission's personnel policy, based on length of continuous employment by the Commission, accmed on an employment anniversary basis, and accmed to specified maximums. Hourly employees may elect compensatory time in lieu of overtime pay with proper documentation and approval by the Commission's administrator. Compensatory fime is granted to supervisory personnel in lieu of overtime pay.

The Commission's recognition and measurement criteria for compensated absences follows:

GASB Statement No. 16, Accounting for Compensated Absences, provides that vacation leave and other compensated absences with similar characteristics should be accmed as a liability as the benefits are eamed by the employees if both of the following conditions are met:

1. The employees' rights to receive compensation are attributable to services already rendered.

2. It is probable that the employer will compensate the employee for the benefits through paid fime off or some other means, such as cash payments at termination or retirement.

GASB Statement No. 16 provides that a liability for sick leave should be accmed using one ofthe following approaches:

1. An accmal for eamed sick leave should be made only to the extent it is probable that the benefits will result in tennination payments, rather than be taken as absences due to illness or other contingencies, such as medical appointments and funerals.

-19-


2. Alternatively, a govemmental entity should estimate its accmed sick leave liability based on the sick leave accumulated at the balance sheet date by those employees who currently are eligible to receive termination payments as well as other employees who are expected to become eligible in the future to receive such payments.

Annual vacation time should be taken in the year following that in which it was accmed but if not, a maximum of five days can be carried forward to use during the next year. If an employee is unable to utilize any vacation days over the maximum that may be carried forward, then the unused portion will be credited as extended sick leave.

Estimated accmed compensated absences resulting from unused vacation and compensatory time at the end of the fiscal year are recorded as long-term liabilifies in the govemment-wide financial statements. No liability is recorded for nonvesting accumulating rights to receive sick pay benefits. Compensated absences are paid from the fund responsible for the employee's compensation.

Equity Classifications:

In the govemment-wide financial statements, equity is classified as net assets and further classified as invested in capital assets (consists of capital assets net of accumulated depreciation) or unrestricted (consists of all other assets).

Revenue Recognition:

Fees for the collection of sales and use taxes are recorded when the Commission is entitled to the funds which is normally the same month the taxes are collected by the Commission.

-20-


Note 2. Cash and Certificates of Deposit

As of June 30, 2009, the Commission had cash and certificates of deposit (book balances) as follows:

Interest-bearing demand deposits $ 82,410 Certificates of deposit 100,000 Petty cash 200

$ 182.610

The deposits are stated at cost, which approximates market. Under state law, the deposits (or the resulting bank balances) must be secured by federal deposit insurance or the pledge of securities owned by the fiscal agent bank. 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. These securities are held by the Commission or its agent in the name of the Commission in a holding or custodial bank that is mutually acceptable to both parties.

As of June 30, 2009, the Commission had $189,611 in deposits (collected bank balances). These deposits were secured from risk by federal deposit insurance.

Although the Commission is compliant with state imposed investment restrictions, it has not formally adopted deposit and investment pohcies.

There were no repurchase or reverse repurchase agreements as of June 30, 2009.

-21

NOTES TO FINANCL\L STATEMENTS

Note 3. Capital Assets

Capital asset and depreciafion acfivity for the year ended June 30,2009 ofthe Commission is as follows:

Capital assets being depreciated:

Fumiture and equipment Vehicle

Total capital assets being depreciated

Balance July 1, 2008

$ 43,068 $ 18,784

Increases Decreases

148 $

$ 61.852 $ 1.148

Balance June 30,

2009

$ 44,216 18.784

$ 63.000

Less accumulated depreciafion:

Fumiture and equipment Vehicle

Total accumulated depreciation

Total capital assets being depreciated, net

$( 26,023) $( 6,442) $ ( 10,471) ( 3,757)

$r 36.494) $( 10.199) $

$ 25,358 $( 9.051) $

$( f

$f

$

32,465) 14,228)

46,693)

16,307

Note 4. Long-Term Liabilities

The following is a summary ofthe transactions ofthe Commission's long-term liabilities for the year ended June 30, 2009:

Balance-July 1,2008 Additions

Compensated Absences

$ 8391

Balance - June 30, 2009 8.391

•22-


The following is a summary ofthe current (due within one year) and long-term (due within more than one year) portions of long-term liabilities as of June 30, 2009:

Compensated Absences

Current portion $ 1,663 Long-term portion 6.728

Totals $ 8.391

As of June 30, 2009, employees of the Commission had accumulated and vested compensated absences which were computed in accordance with GASB Statement No. 16. The total amount accmed as of June 30, 2009 is reported in the statement of net assets as long-term liabilities.

Note 5. Pension Plan

Plan Description:

All full-time employees of the Commission are members of Municipal Employees' Retirement System of Louisiana (the "System"), a cost-sharing, multiple-employer, defined benefit pension plan administered by a separate board of tmstees. The System is composed of two distinct plans. Plan A and Plan B, with separate assets and benefit provisions. All employees ofthe Commission are members of Plan A.

Employee Eligibility Requirements:

All permanent employees working at least 35 hours per week who are not covered by another pension plan and are paid wholly or in part from Commission funds are eligible to participate in the System. Under Plan A, employees who retire at or after age 60 with at least 10 years of creditable service, at or after age 55 with at least 25 years of creditable service, or at any age with at least 30 years of creditable service are entitled to a retirement benefit, payable monthly for life, equal to 3% of their final-average salary for each year of creditable service. Final-average salary is the employee's average salary over the 36 consecutive or joined months that produces the highest average. Employees who terminate with at least the amount of creditable service stated above, and do not withdraw their employee contributions, may retire at the ages specified above and receive the benefit accmed to their date of termination. The System also provides death and disability benefits. Benefits are established or amended by state statute.

•23-


The System issues an annual publicly available financial report that includes fmancial statements and required supplementary information for the System, That report may be obtained by writing to Municipal Employees' Retirement System of Louisiana, 7937 Office Park Boulevard, Baton Rouge, Louisiana 70809, or by calling (225) 925-4810.

Funding Policy:

Under Plan A, members are required by state statute to contribute 9.25% of their annual covered salary and the Commission is required to contribute at an actuarially determined rate. The current rate is 13.5% of annual covered payroll. Contributions to the System also include 1/4 of 1% (except Orleans and East Baton Rouge Parishes) ofthe taxes shown to be collectible by the tax rolls of each parish. These tax dollars are divided between Plan A and Plan B based proportionately on the salaries ofthe active members of each plan. The contribution requirements of plan members and the Commission 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 of the valuation for the prior fiscal year.

The Commission's contributions to the System under Plan A for the years ended June 30, 2009, 2008, and 2007 were $17,472, $17,268, and $19,735, respectively, equal to the required contributions for each year.

Note 6. Post-Employment Health Care Benefits

The Commission provides certain continuing health care insurance for its retired employees. Substantially all of the Commission's employees become efigible for this benefit if normal retirement age is attained while employed by the Commission. This benefit for retirees and a similar benefit for active employees are provided through an insurance company whose monthly premiums are paid by City of Bastrop with the Commission making reimbursement payments. There were only two retirees receiving benefits as of June 30,2009. The Commission's costs of providing the retirees' health care benefits were recognized as expenditures when the monthly premiums were due and totaled approximately $5,055 for the year ended June 30, 2009. Postemployment benefits are not considered significant in relafion to the Commission's financial statements taken as a whole.

•24-


Note 7. Changes in Due to Taxing Bodies

Balance July 1,2008 $ 21.605

Collecfions: Sales and use tax Hotel/motel occupancy tax Interest Total collections

Remittances: Taxes distributed: Morehouse Parish School Board Morehouse Parish Police Jury Morehouse Parish Sheriff City of Bastrop City of Bastrop Sales Tax District No. 1 Village of Mer Rouge Village of Bonita Village of Collinston East School District Morehouse Parish Tourism Commission

Refunded sales and use tax Deposit applied Bank fees Duplicate disbursement Reimbursed Commission's costs Collecfion fee to Morehouse Sales and Use Tax Commission

Total remittances

Interest not distributed

Balance June 30, 2009

$

L

$

I. ^

L

15,646,926 53,710

1,283 15,701,919

5,959,601 1,489,831 1,489,834 4,965,702

922,131 236,983

31,669 20,958

382 53,810

260,654 7,500 4,093 4,035

24,597 245,767

15.717,547

1.283

7,260

•25-

NOTES TO FINANCL\L STATEMENTS

Note 8. Contingencies and Risk Management

The Commission is exposed to various risks of loss related to torts; theft of, damage to, and destmction of assets; errors and omissions; injuries to employees; and natural disasters. The Commission carries commercial insurance for all risks of loss, including workers' compensation and employee health and accident insurance. There have been no significant reductions in the insurance coverage from coverage in the prior year. Settlements have not exceeded insurance coverage for each ofthe past three fiscal years.

As of June 30,2009, the Commission had received a claim for refund with the matter taken under consideration and the appropriate course of action not yet determined. The Commission's legal counsel had the understanding that the claimant was not the proper party to make the refund claim and that for other reasons a portion ofthe refund had either prescribed or would be dismissed.

-26-

REOUIRED SUPPLEMENTARY INFORMATION (Part 2 of 2)


BUDGETARY COMPARISON SCHEDULE - GOVERNMENTAL FUND As of and for the Year Ended June 30, 2009

GENERAL FUND

Revenues: Charges for services Interest and miscellaneous

Total revenues

Expenditures: Current:

General govemment: Personal services: Salaries Contract labor Retirement Group health insurance Payroll taxes Workers' compensafion

insurance Unemployment insurance

Total personal services

Operafing services: Dues and subscription Printed forms Postage and permits Telephone Office rent and utilities Repairs and maintenance Office supplies Computer upgrades

Total operating services

$

^

$

L

$

i .

Budget Original

252,388 3.300

255,688

135,273 6,400

18,262 23,580

2,163

1,180 1,000

187.858

1,000 2,000 4,000 5,000

11,500 4,000 3,000 3.000

33,500

$

$

$

$

$

$

Final

252,388 3.300

255.688

135,273 6,400

18,262 23,580

2,163

1,180 1,000

187.858

1,000 2,000 4,000 5,000

11,500 4,000 3,000 3,000

33.500

$

$

$

$

$

$

Actual

257,280 2.998

260,278

133,423 2,850

18,141 20,511

2,326

750 -

178.001

1,112 2,914 4,640 4,610

11,477 4,672

10,614 2,157

42,196

Variance -Favorable

(Unfavorable)

$

( $

$

(

$

$( ( (

( (

$(

4,892 302)

4,590

1,850 3,550

121 3,069

163)

430 1.000 9.857

112) 914) 640) 390 23

672) 7,614)

843 8,696)

(confinued)

-27-


BUDGETARY COMPARISON SCHEDULE ~ GOVERNMENTAL FUND - GENERAL FUND (Continued)


Professional services: Bank charges Legal Audit Insurance

Total professional services

Travel and education

Capital outiay

Total general fund expenditures

let change in fund balance

und balance - beginning

und balance - ending

$

$

$

$

$

!_

Budget Original

30 10,000 5,000 3,500

18,530

13,800

2,000

255,688

-

$

$

$

$

$

$

$

Final

30 10,000 5,000 3.500

18.530

13.800

2,000

255,688

-

$

$

$

$

$

$

t_

Actual

6,805 2,873 9.678

8.840

1.148

239.863

20,415

154.935

175,350

Variance -Favorable

(Unfavorable)

$

(

$

$

$

$

$

$

30 10,000 1,805)

627 8,852

4.960

852

15.825

20,415

154,935

175.350

-28-

HILL, INZINA & COMPANY

INDEPENDENT AUDFrOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER

MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WIFH GOVERNMENT AUDITING STANDARDS


We have audited the financial statements ofthe govemmental activities and the major fund of Morehouse Sales and Use Tax Commission (the "Commission"), as of and for the year ended June 30, 2009, which collectively comprise the Commission's basic financial statements and have issued our report thereon dated September 15, 2009. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States.

Intemal Control Over Financial Reporting

In planning and performing our audit, we considered the Commission'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 Commission's intemal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Commission's intemal control over financial reporting.

A control deficiency exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Commission's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Commission's financial statements that is more than inconsequential will not be prevented or detected by the Commission's intemal control. We consider the deficiency described in the accompanying schedule of findings and questioned costs as item 2009-1 to be a significant deficiency in intemal control over financial reporting.

-29-Certified Public Accountants • A Professional Corporation

701 East Madison Avenue • Bastrop, Louisiana 71220 Telephone 318-281-4492 • Fax 318-281-4087 • E-mail [email protected]


A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement ofthe financial statements will not be prevented or detected by the Commission's intemal control.

Our consideration of 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 intemal control that might be significant deficiencies and, accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses. We did not identify any deficiencies in intemal control over financial reporting that we consider to be material weaknesses, as defined above.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Commission's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determinafion 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 no instances of noncompliance or other matters that are required to be reported under Govemment Auditing Standards.

# We also noted certain insignificant deficiencies in intemal control and instances of

noncompliance that we have reported to management of the Commission in a separate letter dated September 15, 2009.

The Commission's response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. We did not audit the Commission's response and, accordingly, we express no opinion on it.

This report is intended solely for the information and use of management and the Board of Commissioners and is not intended to be and should not be used by anyone other than these specified parties.


September 15, 2009

•30-


SCHEDULE OF FINDINGS AND QUESTIONED COSTS WITH MANAGEMENT'S RESPONSE AND PLANNED COREiECTIVE ACTION


We have audited the financial statements of the govemmental activities and the major fund of Morehouse Sales and Use Tax Commission (the "Commission"), as of and for the year ended June 30, 2009, which collectively comprise the Commission's basic financial statements and have issued our report thereon dated September 15, 2009. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. Our audit of the financial statements as of June 30, 2009 resulted in an unqualified opinion.

Section I - Summary of Auditor's Report

Report on Intemal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Govemment Auditing Standards

Intemal Control Significant Deficiencies s Yes • No Material Weaknesses • Yes H No

Compliance Material to Financial Statements • Yes H No

Section n - Financial Statement Findings

2009-1 Inadequate Segregation of Dufies (initially cited in first audit conducted by our firm as of and for the year ended June 30, 1994)

Criteria; Adequate segregation of duties is essential to a proper intemal control stmcture.

Condition: The segregafion of dufies is inadequate to provide effective intemal

control.

Cause: The condifion is due to economic limitations.

Effect: Not determined.

Recommendation: No action is recommended.

-31-

Management's response and planned corrective action: We concur in the finding, but it is not economically feasible for

corrective action to be taken.

Section m - Management Letter

Issued.

-32-


SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS As of and for the Year Ended June 30, 2009

Section I - Financial Statement Findings

2008-1 Inadequate Segregation of Duties

Adequate segregation of duties is essential to a proper intemal control. Unresolved-2009-:

2008-2 Implementation and Improvement of Controls Over Expenditures/Disbursements

Management is responsible for establishing and adhering to intemal control policies and procedures that provide reasonable assurance that assets are safeguarded against loss resulting from unauthorized use and that transactions are executed in accordance with management's authorization. Resolved.

Section n - Management Letter

None issued.

•33-

HILL, INZINA & COMPANY

MANAGEMENT LETTER


We have audited the financial statements ofthe govemmental activities and the major fund of Morehouse Sales and Use Tax Commission (the "Commission"), as of and for the year ended June 30,2009, which collecfively comprise the Commission's basic financial statements and have issued our report thereon dated September 15, 2009. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Govemment Auditing Standards, issued by the Comptroller General of the United States. Also as part of our examination, we have issued our report on intemal control and on compliance and other matters dated September 15, 2009.

During the course of our examinafion, we became aware of the following matters which represent deviations of compliance and/or are suggestions for improved intemal controls.

2009-1 $100 more of hotel/motel tax was distributed during the year ended June 30, 2009 than was collected while also approximately $4,000 of sales taxes were distributed than were collected

2009-2 $4,551 of hotel/motel tax collections were coded as sales tax collections

2009-3 distributing the prior three years' of interest eamed on the disbursement account was approved by the Board of Commissioners in October 2008 but such distribution had not yet been made as of June 30, 2009

2009-4 four 'voided' receipts were examined with 75% only having three ofthe four copies ofthe receipt retained and intact in the spiral-bound book

2009-5 a formal deposit and investment policy has not been adopted by the Commission

Certified Public Accountants • A Professional Corporation 701 East Madison Avenue • Bastrop, Louisiana 71220

Telephone 318-281-4492 • Fax 318-28M087 • E-mail [email protected]


2009-6 The Commission's personnel policy specifically lists twelve holidays that will be paid to all full-time employees each calendar year. The policy further states that addifional holidays may be granted at the discretion ofthe Administrator of the Commission and the Chairman of the Board of Commissioners. During the year ended June 30,2009, employees ofthe Commission were granted four holidays in addition to those specifically stated in the policy without documentation as to the consent of the Chairman of the Board of Commissioners. • Upon inquiry of the Administrator, he stated that he normally follows the holiday schedule of the parish sheriffs office. A review of the sheriffs holiday policy did not denote that the sheriffs office observed either ofthe four additional holidays taken by the employees ofthe Commission. The Board of Commissioners should revise the policy to include the additional holidays, if any, meeting their approval

We recommend that management of the Commission address the foregoing issues as an improvement to operations and the administration of public programs. We are available to further explain the suggestions or help implement the recommendations.


September 15, 2009

l l / i a . / 2 O 0 g 13:57 3152336183 SALESTIAX PAGE 01

Ron Carter Admini'^l^ato^

Morehouse Sales & Use Tax Commission 123 Ea.̂ i Madison • P.O. Bo^672 • Bastrop. LA71221-0672

Phono: (31 SI 2R3-,i9.^7 • Fo.x: (3 18) 283-6183 " email; mp5tct'*bt:ll,si.)Uth.nci .Vlcmbcr Q\ Louisiana .Asvooanon ofTax Administratnni

Visii our weh.ute: ''̂ ww. laota.com

November 10, 2009

To Whom It Mav Concern

Re: Response to Management Letter

The following is Managements response to the Management Letter for the financial audit of Morehouse Sales and Use Tax Commission for the year ending June 30. 2009;

2009-1 - The 5100 more of Hotel/Motel Tax was a typing error on the spread sheet used for recording the Hotel tax and carried over when the check was wrote. The approximately $4000 in sales tax was caused by overpaying a entity but when re-entered in the sales tax software it did not carry through causing a double payment to one entity. The Hotel was corrected in October 2009 and will correct the sales tax manually soon.

2009-2 - Although the S4551 was coded as sales tax in QuickBooks it was distributed as Hotel/Motel lax and we have corrected the coding of this deposit.

2009-3 - The prior three years of interest will be distributed after 2009-1 above is corrected.

2009-4 - Have instructed all workers that if a receipt Is voided, that all receipts are to remain in the spiral bound book.

2009-5-Stfll working on the deposit and investment policy, should be ready before year end.

2009-6 - At the Board meeting on September 24, 2009, Jeff Winnon, Chairman, stated that he had been contacted and agreed to the four additional holidays that were taken during the year ending June 30, 2009. Jeff, also stated that he had not spoken with the Auditor even though she had tried to call him. The Board decided in the September 24, 2009 meeting to have a holiday schedule approved each year when the budget is approved.

W. Ron Carter, Administrator

Proudly Serving Morehouse School Board • Morehou.se Sheriff Department • Morehouse Police Jiiry Ciiy of ea*;!:rop • Village of Mer Rouge • Village of Ronita • Village of CoHin.'vton

http://laota.com

Documents

Morehouse Sales and Use Tax Commissionapp1.lla.la.gov/PublicReports.nsf/F2D68AC8007097D...Net assets - beginning 180,293 201,204 Prior period adjustment ^_ { 9,680) Net assets - ending