WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

A COMPONENT UNIT OF THEWEST FELICIANA PARISH POLICE JURY

ST. FRANCISV1LLE. LOUISIANA

OCTOBER 31,2005 AND 2004

Under provisions of state law, this report is a publicdocument. Acopy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.

Release Date &

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

FOR THE YEARS ENDEDTABLE OF CONTENTS OCTOBER 31,2005 AND 2004

Independent Auditors' Report j

Statement of Net Assets 2

Statement of Activities 3

Statement of Cash Flows 4

Notes to Financial Statements 5-11

Supplemental Information 12 -14

Other Reports Required by Governmental Auditing Standards:. Report on Compliance and on Internal Control over Financial Reporting

Based on an Audit of Financial Statements Performed in Accordancewith Government Auditing Standards 15

Prior Year Findings 16

INDEPENDENT AUDITOR'S REPORT

The Board of CommissionersWest Feliciana Parish HospitalService District No. 1St. Francisville, Louisiana

We have audited the accompanying component unit financial statements of West Feliciana Parish Hospital Service District No. 1 (the"Hospital"), a component unit of West Feliciana Parish Police Jury, State of Louisiana, as of and for the years ended October 31,2005and 2004. These component unit financial statements are the responsibility of the Hospital's management Our responsibility is toexpress 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; the standardsapplicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States,and the provisions of the Louisiana Governmental Audit Guide, published jointly by the Society of Louisiana Certified PublicAccountants and the Louisiana Legislative Auditor. Those standards require that we plan and perform the audit to obtain reasonableassurance 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 financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Webelieve that our audit provides a reasonable basis for our opinion.

In accordance with Government Auditing Standards, we have also issued our report dated January 12, 2006, on our consideration ofthe Hospital's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations,contracts and grants. That report is an integral part of an audit performed in accordance with Government Audit Standards and shouldbe read in conjunction with this report hi considering the results of our audit No compliance items reported in this report had anymaterial effect on the amounts and disclosures reported in these financial statements.

Our audit was performed for the purpose of forming an opinion on the financial statements of the Hospital taken as a whole. Theaccompanying supplemental information, identified in the Table of Contents, is presented for purposes of additional analysis and isnot a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit ofthe financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as awhole.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of WestFeliciana Parish Hospital Service District No. 1, a component unit of West Feliciana Parish Police Jury, State of Louisiana, as ofOctober 31, 2005 and 2004, and the changes in financial position and cash Hows thereof for the year then ended in conformity withaccounting principles generally accepted in the United States of America.

West Feliciana Parish Hospital has not presented a Management's Discussion and Analysis, of which the Governmental AccountingStandards Board has determinedjs necessary to supplement, but not required to be a part of, the basic financial statements.

us & Broussr(A Corporation of Certified Public Accountants)

January 12,2006

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

STATEMENTS OF NET ASSETS OCTOBER 31,

ASSETS

Current AssetsCash And Cash EquivalentsAssets Limited as to Use

CashInvestments

Receivables:Patient Accounts, Less Allowance For Uncollectible AccountsUnsettled Medicare and Medicaid Cost ReportsOther Receivables

InventoriesPrepaid Expenses

Total Current Assets

Capital AssetsLand and Land ImprovementsBuildings and Leasehold ImprovementsEquipmentConstruction In Process

Gross Capital AssetsLess: Accumulated Depreciation

Total Capital Assets, Net of Accumulated Depreciation

TOTAL ASSETS

2005 2004

1,200,546 $ 1,653,232

1,006,8944,394,485

1,416,95950,361

1,263,774229,76857,203

9,619,990

400,2642,022,9504,145,629

12,970

6,581,813(4,130,740)

2,451,073

$ 12,071,063 $

745,2543,866,993

946,137393,213909,717238,99947,385

8,800,930

400,2641,900,2734,066,716

6,367,253(3,802,178)

2,565,075

11,366,005

LIABILITIES AND NET ASSETSCurrent Liabilities

Accounts Payable and Other LiabilitiesCredit Balances in Patient AccountsDeferred Uncompensated Care RevenueDeferred Ad Valorem Tax RevenueAccrued Salaries and WagesAccrued Compensated Absences

Total Current Liabilities

Total Liabilities

Net assetsInvested in Capital Assets, Net of Related DebtRestrictedUnrestricted

Total Net Assets

TOTAL LIABILITIES AND NET ASSETS

$

$

128,927 $15,760

385,011520,491154,70483,725

1,288,618

1,288,618

2,451,0735,401,3792,929,99310,782,445

12,071,063 $

91,31517,098647,093526,038166,88176,504

1,524,929

1,524,929

2,565,0754,612,2472,663,7549,841,076

11,366,005

The notes to the financial statement are an integral part of this statement2

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED OCTOBER 31,

Operating RevenuesNet Patient Service RevenueOther Operating Revenue

Total Operating Revenue

Operating ExpensesSalaries, Wages, and BenefitsProfessional FeesSupplies and OtherProvisions For Bad DebtsDepreciationOther Operating Expenses

Total Operating Expenses

Operating Income

Nonoperating Revenues (Expenses)Interest IncomeInterest ExpenseTax RevenuesOther Nonoperating Revenues (Expenses)

Total Nonoperating Revenues (Expenses)

Change in Net Assets

Total Net Assets, Beginning

Total Net Assets, Ending

2005 Z004

$ 6,833,679 $ 6,859,138101,295 104,536

6,934,974

3,534,6391,573,517849,451848,271432,907830,259

8,069,044

(1,134,070)

157,044(1,200)

1,785,501134,094

2,075,439

941,369

9,841,076

$ 10,782,445 $

6,963,674

3,823,4601,585,554736,885619,027377,500766,643

7,909,069

(945395)

87,604(1,491)

1,771,06587,088

1.944,266

998,871

8,842,205

9,841,076

The notes to the financial statements are an integral part of this statement.3

WEST FEUCIANA PARISH HOSPITAL SERVICE DISTRICT NO. I~ " - — - - - - ,.

STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED OCTOBER 31,

Cash Flows From Operating ActivitiesCash Received from Patients $Cash Payments to Suppliers for Goods and ServicesCash Payments to Employees for Services

Net Cash Provided by Operating Activities

Cash Flows From Noncapital Financing ActivitiesMiscellaneous IncomeTax Receipts and Operating Grants

Net Cash Provided by Noncapital Financing Activities

Cash Flows From Capital and Related Financing ActivitiesAcquisition of Capital AssetsProceeds from the Sale of Capital AssetsInterest Paid

Net Cash Used in Capital and Related Financing Activities

Cash Flows from Investing ActivitiesPurchases of InvestmentsMaturities of InvestmentsInterest Received

Net Cash Provided By (Used In) Investing Activities

Net Increase (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents at Beginning of Year, including $745,254, and $5 10,592 Limited asto Use for 2005 and 2004, respectively

Cash and Cash Equivalents at End of Year, including $1,006,894 and $745,254 Limited as toUse for 2005 and 2004, respectively $

Cash Flows From Operating ActivitiesOperating Income $Adjustments to Reconcile Operating Income

to Net Cash Provided by Operating Activities:DepreciationProvision for Bad DebtsSate of Fixed AssetsLoss on Disposal of Fixed AssetsIncrease in Patient Accounts Receivable(Increase) Decrease in Unsettled Medicare and Medicaid Cost Reports(Increase) Decrease in Other Receivables(Increase) Decrease in Inventories(Increase) Decrease in Prepaid ExpensesIncrease hi Accounts Payable and Other LiabilitiesIncrease (Decrease) in Deferred Uncompensated Care RevenueIncrease (Decrease) in Accrued Salaries and WagesIncrease (Decrease ) in Accrued Compensated Absences

Net Cash Provided by Operating Activities $

2005

5,352,461 $(3,240,292)(3,529,683)

11,417,514)

134,0941,779,954

1,914,048

(324,997)9,065

(1,200)

(317,132)

(1,427,492)900,000157,044

(370,448)

(191,046)

2,398,486

2,207,440 $

(1,134,070) $

432,907848,271

(9,065)6,092

(1,320,431)342,852

(354,057)9,231

(9,818)37,612

(262,082)(12,177)

7,221

(1,417,514) $

2004

6,543,527(3,386,128)(3,848,494)

(691,095)

87,0881,761,171

1,848,259

(623,068)522

(1,491)

(624,037)

(1,969,181)1,100,000

87,604

(781,577)

(248,450)

2.646,936

2,398,486

(945,395)

377,500619,027

(522)

(481,005)(191,702)(145,279)(59,556)14,41435,53160,85834,267(9,233)

(691,095)

The notes to the financial statements are an integral part of this statement.4

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

NOTES TO THE FINANCIAL STATEMENTS OCTOBER 31,2005 AND 2004

NOTE1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Financial Reporting Entity

Qn February 21,1968, the West Feliciana Parish Police Jury passed a resolution creating the West Feliciana Parish Hospital District No. I(the "Hospital") under the authority of Article 6, Section 19, of the 1974 Louisiana Constitution and Chapter 10 of Title 46 of the LouisianaRevised Statues of 1950, as amended. The Hospital is composed of all the territory situated within the limits of the Parish of WestFeliciana.

The governing authority of the Hospital consists of a board of seven commissioners, all of whom are qualified electors of West FelicianaParish. The Commissioners serve with pay, per diem, and reimbursement of actual out-of-pocket expenses incurred in the performance oftheir duties.

The public purpose of the Hospital is to secure, provide for, and protect the public health and welfare by the treatment of human ailmentsthrough the acquisition and construction of projects as authorized by Chapter 10 of Title 46 of the 1974 Louisiana Constitution, and thefinancing and refinancing of indebtedness to acquire, construct, renovate, and improve hospitals, clinics, laboratories, nursing homes, andany other facility, building or structure which may be of use and benefit in the teaching, training or practice of medical science andtreatment of human ailments, or for such other facilities as the Hospital shall find useful in the study o£ research in, or treatment of illnessor infirmities, all as is more folly set out in said Chapter 10 of Title 46 of ihe 1974 Louisiana Constitution,

The Hospital's component unit financial statements are an integral part of the-West Feliciana Parish Police Jury's comprehensive annualfinancial report.

GASB Statement No. 34

During fiscal year 2002 the Hospital elected to early implement GASB Statement No. 34, "Basic Financial Statements, and Management'sDiscussion and Analysis for State and Local Governments," as amended by GASB Statement No. 37 and No. 38, and applied thosestandards on a retroactive basis. GASB Statement No. 34 establishes standards for state and local governments and requires that resourcesbe classified for accounting and reporting purposes into the following three net asset categories.

Invested in capital assets, net of related debt consist of capital assets, net of accumulated depreciation and reduced by outstanding balancesfor bonds, notes, and other debt that are attributed to the acquisition, construction, or improvement of those assets.

Restricted net assets result when constraints placed on net asset use are either externally imposed by creditors, grantors, contributions, andthe like, or imposed by law through constitutional provisions or enabling legislation.

Unrestricted net assets consist of net assets which do not meet the definition of the two preceding categories. Unrestricted net assets oftenare designated, to indicate that management does not consider them to be available for general operations. Unrestricted net assets often haveconstraints on resources which are imposed by management, but can be removed or modified.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimatesand assumptions that affect the reported amounts of assets, liabilities, revenues and expenses during the period. Actual results could differfrom those estimates.

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. I

NOTES TO THE FINANCIAL STATEMENTS OCTOBER 31,2005 AND 2004

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Basis of Presentation

The Hospital's financial statements are reported using the economic resources measurement focus and the accrual basis of accounting.Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows,Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met

As a Proprietary Fund, the Hospital distinguishes operating revenues and expenses from nonopcrating items. Operating revenues andexpenses generally result from providing patient services in connection with a proprietary fund's principal ongoing operations. Theprincipal operating revenues of the Hospital's enterprise fund are charges to customers related patient services. Operating expenses for theHospital's enterprise fiind include patient care expenses, general and administrative expenses, and depredation on capital assets. Allrevenue and expenses not meeting this definition are reported as nonoperating revenues and expenses. Private-sector standards ofaccounting and financial reporting issued prior to December 1, 1989, generally are followed by the Hospital in the financial statements tothe extent that those standards do not conflict with or contradict guidance of the GASB. Governments also have the option of followingsubsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The Hospital haselected not to follow subsequent private-sector guidance.

Charity Care

The Hospital provides care without charge or at amounts less than its established rates to patients who meet certain criteria under its charitycare policy. Because the Hospital does not pursue collection of amounts determined to qualify as charity care, they are not reported asrevenue.

Cash and Equivalents

For the purposes of the statement of cash flaws, the Hospital considers all highly liquid investments purchased with an initial maturity ofthree months or less to be cash equivalents.

State statutes authorize the Hospital to invest in obligations of the U.S. Treasury, certificates or other obligations of the United States ofAmerica, and time certificates of deposit of state banks organized under the laws of Louisiana and national banks having the principal officein the State of Louisiana.

Inventories

Inventories are valued at the lower of cost (First-In, First-Out Method) or market.

Property Taxes

Property taxes were levied on January 1 on property values assessed on that date. Notices of tax liability are mailed on or about November1 of the same year and are due and payable at that time. All unpaid taxes levied become delinquent January 1 of the following year.Property tax revenues are recognized in the same fiscal year within which they are billed because they are considered available in thatperiod. Available includes those property tax receivables expected to be collected within sixty days after year end. However, the receivablefor property taxes is recorded at the January 1 Hen date.

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

NOTES TO THE FINANCIAL STATEMENTS OCTOBER31,2005 AND 2004

NQTE1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

Accounts Receivable

Accounts receivable from patients, insurance companies and third-party reimbursement contractual agencies are recorded at establishedcharge rates. Certain third-party insured accounts (Medicare and Medicaid) are based on cost reimbursement agreements which generallyresult in the Hospital collecting less than the established charge rates with the difference recorded as "contractual adjustments." Finaldetermination of settlement is subject to review by appropriate authorities. Adequate allowances are provided for doubtful accounts andcontractual adjustments. Doubtful accounts are written off against the allowance after adequate collection effort is exhausted and recordedas recoveries of bad debts if subsequently collected. Net operating revenue includes only those amounts estimated by management to becollectible.

Property and Equipment

Property and equipment is stated at cost, except for assets donated to the Hospital. Donated assets are recorded at toe appraised value at thedate of donation.

Depreciation is recorded on a straight-line basis over the useful lives of the assets. Equipment under capital leases is amortized on thestraight-line method over the shorter period of the lease term or the estimated useful life of the equipment Such amortization is included indepreciation and amortization in the financial statements.

Maintenance, repairs, replacements, and improvements of minor importance are expensed. Major replacements and improvements arecapitalized.

Net Patient Service Revenue

Net patient service is reported at the estimated net realizable amounts for patients, third-party payers, and others, for services rendered,including estimated retroactive adjustments under reimbursement agreements with third-party payers. Retroactive adjustments are accruedon an estimated basis in the period the related services are rendered and adjusted -in the future periods as final settlements are determined.

Vacation Pay

Accumulated unpaid vacation is accrued when earned. Employees earn and vest hi vacation leave according to years of service as shownbelow. Employees only vest in vacation leave after one year of employment

Years of Service FullrTJme Employees

Less than 5 years 6.67 hours per monthAfter 5 years 10.00 hours per monthAfter 10 years 13.33 hours per month

NOTE 2 - NET PATIENT SERVICE REVENUE

The Hospital has agreements with third-party payers that provide payments to the Hospital at amounts different from its established rates. Asummary of the payment arrangements with major third-party payers follows:

WEST FELJCIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

NOTES TO THE FINANCIAL STATEMENTS OCTOBER 31,2005 AND2"004"

NOTE 2 - NET PATIENT SERVICE REVENUE - Continued

Medicare

Prior to January 1, 2002, inpatient acute care services rendered to Medicare program beneficiaries were paid at prospectively determinedrates per discharge. These rates varied according to a patient classification system that was based on clinical, diagnostic, and other factors.Inpaticnt nonacutc services, certain outpatient services and defined capital and medical education cost related to Medicare beneficiarieswere paid based on a cost reimbursement methodology and predetermined fee schedules. The Hospital became a "critical access hospital"effective January 1, 2002. This enabled the hospital to receive cost based reimbursement from Medicare on or after January 1,2002. Thehospital is reimbursed at tentative interim rates with final settlement determined after submission of annual cost reports and audits of thesereports by the Medicare fiscal intermediary. The difference between established billing rates and reimbursements are recorded ascontractual adjustments to patient service revenue.

The Hospital's classification of patients under the Medicare Program and the appropriateness of their admission are subject to anindependent review by a peer review organization under contract with the Hospital. The Hospital's Medicare cost report for the fiscal yearsended October 31, 2000,2001, and 2002 have received final settlements from the Medicare fiscal intermediary.

Inpatient and outpatient services rendered to Medicaid program beneficiaries are reimbursed under a cost reimbursement methodology andpredetermined fee schedules. The Hospital is reimbursed at a tentative rate with final settlement determined after submission of annual costreports by the Hospital and audits thereof by Medicaid fiscal intermediary. The Hospital's Medicaid cost reports have been reviewed by theMedicaid fiscal intermediary through October 31,2000. Rural hospitals can be reimbursed up to 100% for uncompensated cost rendered toMedicaid and uninsured patients, commonly referred to as uncompensated care payments.

Blue Cross

Inpatient services rendered to Blue Cross subscribers are reimbursed at prospectively determined rates per day of hospitalization. Theprospectively determined per diem rates are not subject to retroactive adjustments.

The Hospital has also entered into payment agreements with certain commercial insurance carriers, health maintenance organizations andpreferred provider organizations. The basis for payments to the Hospital under these agreements includes prospectively determined rates perdischarge, discounts from established charges and prospectively daily rates.

NOTE 3 - CASH AND INVESTMENTS

At October 31 for the years ended 2005 and 2004, the Hospital's carrying amount of deposits was $2,201,690 and $2,398,486, and the bankbalance was 52,357,634 and $2,531,537 respectively.

Of ti»e bank balance, $400,000 and 5400,000 for the years 2005 and 2004, respectively, were covered by federal depository insurance. Allbut $8,874 of the remaining balance was collateralized with securities held by the pledging financial institutions' trust departments or agentsin the financial institutions' name. This resulted in a total undercollateralization of $8,874.

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

OCTOBER 31,2005 AND 2004

NOTE 3 . CASH AND INVESTMENTS - Continued

Investments consist of certificates of deposits with financial institutions and U.S. Treasury bills. The fair value for these investments is notmaterially different from its reported amounts. Investments are categorized into three categories of credit risk:

1. Insured or registered, or securities held by the Hospital or its agent in the Hospital's name.

2. Uninsured and unregistered, with securities held by the counter-party's trust department or agent in the hospital's name.

3. Uninsured and unregistered, with securities held by the counter-party, or by its trust department or agent but not in theHospital's name.

At October 31,2005, the Hospital's investment balances were as follows:

CATEGORY

I 2

CertificatesofDeposit $ 1,331,977 $ 1,015,296 $

U.S.T-Bills 2.047.212

Total $ 3,379r189 $ 1,015,296 $

NOTE 4 - ACCOUNTS RECEIVABLE - PATIENTS

Accounts Receivable - Patients consists of the following:

Total Patient Accounts ReceivableLess: Allowance for Uncollectible AccountsNet Patient Accounts Receivable

NOTES- ACCOUNTS RECEIVABLE - OTHER

Accounts Receivable - Other consists of the following:

Uncollected Sales Tax Revenue for the months of August, September, andOctober 2005Accrued Maintenance Ad Valorem Tax RevenueAll Other

CARRYING MARKET

3 AMOUNT VALUE

- $ 2,347,273 $ 2,347,273

2,047,212 2,047.212

- $ 4,394,485 $ . 4,394,485

OCTOBER 3 1 , OCTOBER 3 1 ,2005 2004

$ 2,800,281 $ 1,951,376

$ I.401J9? } 946.137

OCTOBER 3 1, OCTOBER 3 1,2005 2004

$ 327,717 $ 338,581519,866 526,27549,981 44,861

Total Accounts Receivable - Other 1,263.774 909.717

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

NOTES TO THE FINANCIAL STATEMENTS OCTOBER 31,2005 AND 2004

WTE6 - ASSETS LIMITED AS TO USE

Assets whose use is limited under agreements with third party payers for funded depreciation are summarized as follows. When bothrestricted and unrestricted resources are available for use, it is the government's policy to use restricted resources first, then unrestrictedresources as they are needed.

OCTOBER31,2005

OCTOBER 31,2004

Investments

U.S. Treasury DirectTreasury Bills

Various banks maturing 11/05/03 to 2/09/0?Average interest rate 2.27%

CashMerrill Lvnch

ML Government FundYielding 0.91%

Savings AccountHancock Bank 0.90%

Total Assets Limited as to Use

2,047,212

2,347.273

4,394,485

1,006,894

1,006,894

5.401,379

1,546,155

2,320,8383,866.993

500,255

244,999745.254

4,612,247

NOTE? - PROPERTY, PLANT AND EQUIPMENT

LandBuilding and ImprovementsEquipmentConstruction in ProgressGross Fixed AssetsAllowance for Depreciation

Total Property, Plant and Equipment

OCTOBER 31,2005

400,2642,022,9504,145,629

12,970

6,581,813(4,130.740)

2.451,073

OCTOBER 31,2004

400,2641,900.2734,066,716

6,367,253(3,802.178)

2,565,075

NOTES - OTHER NONOPERATING REVENUE

The Hospital receives tax revenue from sales tax and property tax collected on purchases and property assessments in West Feliciana Parish.The sales tax is used for the operation of the Hospital and the property tax is to be used for operation and maintenance of the Hospital.

10

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

NOTES TO THE FINANCIAL STATEMENTS OCTOBER 31,2005 AND 2004

NOTE 9 - RETIREMENT PLAN

•The Hospital has executed the Variable Annuity Life Insurance Company (VALIC) prototype Profit Sharing Plan with Cash or DeferredArrangement Option Non Standardized Adoption Agreement No. 3. The defined contribution plan (457) provides benefits to substantiallyall employees, The Hospital matches dollar for dollar of contributions made by an employee up to four percent of the employee'scompensation. Total payroll for the fiscal years ended October 31,2005 and 2004 was $2,959,443 and $3,277,060, respectively. Coveredpayroll was $2,982,008 and $3,122,857, for the years 2005 and 2004, respectively . Total pension expense was $94,615 and $73,694 forthe 2005 and 2004 years ended October 31, respectively.

NOTE 10 - DIRECTOR'S FEES

The following is a schedule of Director's fees paid by the Hospital for the year ended October 31,:

2005 2004

Mitch BrashierWalter WellerSara Wilson-WrightRaymond MinorJohn ThompsonDale PlaucheDr. Chaillie DanielTom Flynn

Total Director's Fees

320

360

400360440

240

320

48048056032052080480280

2.440 $ 3.200

JTE11 - INSURANCE RISK

The Hospital is exposed to various risks of loss related to torts; theft o£ damage to, and destruction of assets; errors and omissions; injuriesto employees; and natural disasters. The Hospital is a member of two separate trust funds established by the Louisiana Hospital Associationthat encompasses self insurance of (1) hospital professional liability and comprehensive general liability, and (2) statutory workers'compensation. The Hospital carries commercial insurance for all other risks of loss. As of the balance sheet date, the Hospital has nomalpractice claims exceeding its coverage.

!12- CONCENTRATIONS OF CREDIT RISK

The Hospital is located in St Francisvillc, Louisiana, and grants credit without collateral to patients, most of whom are local residents andare insured under third-party payer agreements. Net Patient Revenue from patient and third party payers were as follows:

MedicareMedicaidOther

YEAR ENDEDOCTOBER 31,

2005

26.92%27.49%45.60%100.00%

YEAR ENDEDOCTOBER 31,

2004

32.22%27.12%40.66%100.0(1%

11

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. I

SUPPLEMENTAL INFORMATION FOR THE YEARS ENDED OCTOBER 31,

PATIENT SERVICE REVENUE

Nursing servicesEmergency servicesEmergency services - physician's feesCentral servicesLaboratoryBlood bankRadiology - diagnosticAmbulance serviceRespiratory therapyPharmacyPhysical therapyElectrocardiologyOccupational therapy / clinical servicesSpeech therapyUltrasoundDr. Nwabueze's officeDr. Harris1 officeAll other

Gross Patient Service RevenueLess Contractual Adjustments

Net Patient Service Revenue before Uncompensated CareUncompensated Care Income

Net Patient Service Revenue

SALARIES. WAGES. AND BENEFITS

NursingLaboratory techniciansDietary managementRespiratory therapyRadiologyBusiness OfficeAdministrativePlant operationsMedical recordsHousekeepingAmbulanceUtilization reviewDoctor's offices

All other salaries and benefits

Total Salaries, Wages, and Benefits

2005

412,524897,780899,685234,512

1,672,24122,467

584,489605,717847,823457,403617,723157,47044,141

2,184191,093

285

892.692

8,540,229(2.690.281)

5,849,948983,731

6.833,679

2004

434,468806,760749,264223,711

1,410,19713,410

498,752735,721894,907406,989617,206130,48831,851

1,924156,738596,390301,111214,742

8,224,629(2,435,298)

5,789,3311,069,807

6,859,138

3,534,639

$

$

803,675207,005103,535158,369164,611295,411114,621131,55585,60470,343483,74143,560532,383629,047

3,823,460

12

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

SUPPLEMENTAL INFORMATION

PROFESSIONAL FEES

PharmacyRespiratory therapyLaboratoryAdministrativeLaundry/linenEKGPlant operationsRadiologyPhysical therapyUltrasoundDietaryBusiness officeOccupational therapyDoctor's officesER Physician FeesAH other

Total Professional Fees

SUPPLIES AND OTHER EXPENSES

LaboratoryNursingRadiologyPharmacyCentral servicesBusiness officeDietaryPlant operationsHousekeepingAmbulancePhysical therapyAdministrativeRespiratory therapyDoctor's officesSurgeryAll other

Total Supplies and Other expenses

FOR THE YEARS ENDED OCTOBER 31,

2005

$ 46.2003,013

105,41852,65267,92477,53658,183

1,893235,72577,0084,662

18,01021,85510,509

726,33666,593

$ 1,573,517

$ 184,60726,24526,437

144,811125,48535,20555,33764,44517,90451,952

29828,74930,8115,0242,480

49,661

$ 849,451

2004

$ 50,4003,874 •

83,853111,74359,17450,86550,040

351250,74083,2005,040

21,02214,42011,610

707,79681,426

$ 1,585,554

$ 141,75331,02125,199

120,17549,52719,99350,93180,03517,01167,0464,463

25,95626,99848,473

52027,784

$ 736,885

13

WEST FELICIANA PARISH HOSPITAL SERVICE DISTRICT NO. 1

SUPPLEMENTAL INFORMATION FOR THE YEARS ENDED OCTOBER 31,

OTHER OPERATING EXPENSES

AmbulanceLaboratoryRadiologyPharmacyNursing servicesMedical recordsPlant operationsCollection feesAudit and legal feesPostageEquipment rentalDues and subscriptionsPhysician recruitment and other officeAdministrativeAll other

Total Other Operating Expenses

2005

1,4537,917

26,0383,279

16,3852,795

137,63142,88644,4357,320

147,406(7,197)16,00090,332

293,579

2004

830,259

$

$

2,80311,073

681710

10,1474,490

110,50338,43149,7977,980

110,91764,20124,90886,924243,078766,643

14

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIALREPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Board of CommissionersWest Feliciana Parish HospitalService District No. 1St. Francisville, Louisiana

We have audited the financial statements of West Feliciana Parish Hospital Sen/ice District No. 1, a component of the WestFeliciana Parish Police Jury, state of Louisiana (District), as of and for the years ended October 31, 2005 and 2004,respectively, and have issued our report thereon dated January 12,2006.

We conducted our audit in accordance with generally accepted auditing standards of the United States and the standardsapplicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the UnitedStates.

COMPLIANCE

As part of obtaining reasonable assurance about whether the District's financial statements are free of material misstatement,we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance withwhich could have a direct and material effect on the determination of financial statement amounts. However, providing anopinion on compliance with those provisions was not an objective of our audit andf accordingly, we do not express such anopinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under GovernmentAuditing Standards. However, certain instances of immaterial noncompliance have been communicated to the Hospital'smanagement in a separate letter dated January 12,2006.

INTERNAL CONTROL OVER FINANCIAL REPORTING

In planning and performing our audit, we considered the District's internal control over financial reporting in order todetermine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provideassurance On the internal control over financial reporting. Our consideration of the internal control over financial reportingwould not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. Amaterial weakness is a condition in which the design or operation of one or more of the internal control components does notreduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financialstatements being audited may occur and not be detected within a timely period by employees in the normal course ofperforming their assigned functions. We noted no matters involving the internal control over financial reporting and itsoperation that we consider to be reportable conditions. However, certain immaterial internal control issues have beencommunicated to the Hospital's management in a separate letter dated January 12,2006.

This report is intended for the information of West Feliciana Parish Hospital Service District No. 1, the legislative Auditor ofthe State of Louisiana, federal awarding agenctes^md pass-through entities and is not intended to be and should riot be used byanyone other than these specified parties.

IS&BRJSfied Public Accountants

West Feliciana Parish HospitalP.O Box 36.H • 5266 Commerce Struct-SL Francisvillc, [.A 71)775 -Phone (225) 635-3811 -Fax (225) 784-346]

Legislative Audit Advisory CouncilState of Louisiana .P.O. Box94397Baton Rouge, La 70804-9397

. Re: Prior Year Audit FindingsOctober 31,2005

To Whom It May Concern:

Listed below are the prior year audit findings and the status on such findings.

FINANCIAL COMPLIANCE VIOLATION

It was noted that the maintenance supervisor contracted his services to a vendor of thehospital to perform services at the hospital. This violation has been resolved.

Sincerely

Mark ChustzAdministrator