Village of Grayson - app1.lla.state.la.usapp1.lla.state.la.us/PublicReports.nsf/00A948A7B37... · VILLAGE OF GRAYSON Grayson, Louisiana Table of Contents As of and for the Year Ended

VILLAGE OF GRAYSONGrayson, Louisiana

Report On AuditOf

Basic Financial StatementsFor The Year EndedDecember 315 2005

Release Date_Jll̂ Z_^L4

Jimmie Self, CPAA Professional Accounting Corporation

2908 Cameron Street, Suite CMonroe, Louisiana 71201

Phone 318/323-4656 • FAX 318/388-0724


Report On AuditOf

Basic Financial StatementsFor The Year EndedDecember 31,2005



Phone 318/323-4656 • FAX 318/388-0724


Table of ContentsAs of and for the Year Ended December 31,2005

Exhibit Page

Independent Auditor's Report 1 -2

Required Supplementary Information (Part 1)

Management Discussion and Analysis 4-10

Basic Financial StatementsGovernment-Wide Statements:

Statement of Net Assets A 12

Statement of Activities B 13

Fund Financial StatementsGovernmental Funds:

Balance Sheet - Governmental Funds C 15

Reconciliation of the Balance Sheet to theStatement of Net Assets - GovernmentalFund C-l 16

Statement of Revenues, Expenditures, andChanges in Fund Balances - GovernmentalFunds D 17

Reconciliation of the Statement of RevenuesExpenditures, and Changes in Fund Balances ofGovernmental Funds to the Statement of Activities D-l 18

Proprietary Funds:

Statement of Net Assets - Proprietary Funds E 19

Statement of Revenues, Expenses, andChanges in Fund Net Assets - ProprietaryFunds F 20

Statement of Cash Flows - Proprietary Funds G 21


Table of ContentsAs of and for the Year Ended December 31, 2005

Notes to Financial Statements Schedule Page

Notes 23-37

Required Supplementary Information (Part IDStatement of Revenues, Expenditures, andChanges in Fund Balances Governmental FundsBudget (GAAP Basis) to Actual 1 39

Other Supplemental Information

Schedule of Compensation Paid Elected Officials 41

Report on Compliance and on Internal ControlOver Financial Reporting Based on an Audit ofFinancial Statements Performed in Accordance withGovernment Auditing Standards 42 - 43

Schedule of Findings and Questioned Costs andPrior Year Findings and Questioned Costs 44

Management's Corrective Action Plan 45



Phone 318-323-4656 Fax 318-388-0724

Independent Auditor's Report

To the Honorable Mayor andThe City CouncilVillage of GraysonGrayson, Louisiana

I have audited the accompanying financial statements of the governmental activities andthe business-type activities, as of and for the year ended December 31,2005 whichcollectively comprise the Village's basic financial statements as listed in the table ofcontents. These financial statements are the responsibility of Village of Grayson,Louisiana's management. My responsibility is to express opinions on these financialstatements based on my audit.

I conducted my audit in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that I plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. I believe that my audit provides areasonable basis for my opinions.

In my opinion, the financial statements referred to above present fairly, in all materialrespects, the respective financial position of the governmental activities, the business-type activities, and each major fund of the Village of Grayson, as of December 31,2005,and the respective changes in financial position and cash flows, where applicable, thereoffor the year then ended in conformity with accounting principles generally accepted inthe United States of America.

The Management Discussion and Analysis and the schedules presented therewith are nota parts of the basic financial statements, but are supplementary information required bythe GASB. I have applied certain limited procedures, which consisted principally ofinquiries of management regarding the methods of measurement and presentation of thesupplementary information. However, I did not audit any of the supplementaryinformation and express no opinion on it.

In accordance with Government Auditing Standards, I have also issued my report datedJune 30,2006, on my consideration of the Village of Grayson's internal control overfinancial reporting and my tests of its compliance with certain provisions of laws,

GRAYOSIndAudRep

regulations, contracts, and grants. That report is an integral part of an audit performed inaccordance with Governmental Auditing Standards and should be read in conjunctionwith this report in considering the results of my audit.

Jimmie Self, CPAMonroe, LouisianaJune 30, 2006

GRAYOSIndAudRep

Required Supplementary Information(Parti)

Management Discussion and Analysis

VILLAGE OF GRAYSONGRAYSON, LOUSIANA

Management Discussion and AnalysisDecember 31,2005

As management of the Village of Grayson, Louisiana (the "Village"), we offer readers ofthe Village's financial statements this narrative overview and analysis of the financialactivities for the fiscal year ended December 31, 2005. The Management Discussion andAnalysis ("MD&A") is designed to provide an objective and easy to read analysis of theVillage's financial activities based on currently known facts, decisions, and conditions. Itis intended to provide readers with a broad overview of Village finances. It is alsointended to provide readers with an analysis of short-term and long-term activities of theVillage based on information presented in the financial report and fiscal policies thathave been adopted. Specifically, this section is designed to assist the reader in focusingon significant financial issues, provide an overview of the financial activity, identifychanges in the Village's financial position (its ability to address the next and subsequentyear challenges), identify any material deviations from the financial plan (the approvedbudget), and identify fund issues or concerns.

As with other sections of the financial report, the information contained within theMD&A should be considered only a part of the greater whole. The readers of thisstatement should take time to read and evaluate all sections of this report, including thefootnotes (Notes to the Financial Statements) and the other Required SupplementaryInformation (Financial Schedules and reports) that is provided in addition to thisManagement Discussion and Analysis.

Overview of Financial Statements

This discussion and analysis is intended to serve as an introduction to the Village'sfinancial statements. The basic financial statements consist of the following components:

1. Government-Wide Financial Statements2. Fund Financial Statements3. Notes to the Financial Statements4. Other Supplementary Information, which is in addition to the basic financial

statements themselves.

1. Government-Wide Financial Statements

Government-Wide Financial Statements are designed by GASB Statement No. 34 tochange the way in which government financial statements are presented. It now providesreaders for the first time a concise "entity-wide" Statement of Net Assets and Statementof Activities, seeking to give the user of the financial statements a broad overview of theVillage's financial position and results of operations in a manner similar to a private-sector business.

A. The Statement of Net Assets presents information on all the Village's assets andliabilities using the accrual basis of accounting, which is similar to the accounting usedby most private-sector companies. The difference between the assets and liabilities isreported as net assets. Over time, increases or decreases in net assets may serve as a

GRAY05MD&A



useful indicator of whether the financial position of the Village is improving orweakening.

B. The Statement of Activities presents information showing how government's netassets changed during the most recent fiscal year. All changes in net assets are reportedas soon as the underlying event giving rise to the change occurs, regardless of the timingof related cash flows. Thus, revenues and expenses are reported in this statement forsome items that will only result in cash flow in future fiscal periods (e.g., uncollectedtaxes).

The government-wide financial statements further assist the reader in their evaluation bydistinguishing functions of the Village into:

A. Governmental activities that are principally supported by taxes andintergovernmental revenues, and

B. Business-type activities that are intended to recover all or a significant portion oftheir costs through user fees and charges.

Government-Wide Financial Analysis

As noted earlier, net assets may serve over time as a useful indicator of a government'sfinancial position. The Village's assets exceeded its liabilities at the close of the previousfiscal year ended December 31, 2004 by $1,659,465. Of that total amount, $54,847 wereunrestricted net assets. The net assets were comprised of $471,031 from GovernmentalActivities and $1,188,433 from Business-Type Activities.

During the present year ended December 31,2005, the Village's assets exceeded itsliabilities by $1,928,797. Of that total amount, $110,834 are unrestricted net assets. Thenet assets are comprised of $559,130 from Governmental Activities and $1,369,667 fromBusiness-Type Activities.

By far, the largest portion of the Village's net assets (90 percent) reflects its investment incapital assets (e.g., land, buildings, machinery & equipment, vehicles, etc.), less anyrelated debt used to acquire those assets that is still outstanding. The Village uses thesecapital assets to provide services to citizens; consequently, these assets are not availablefor future spending. Although the Village's investment in its capital assets is reported netof related debt, it should be noted that the resources needed to repay this debt must beprovided from other sources, since capital assets themselves cannot be used to liquidatethese liabilities.

An additional portion of the Village's net assets (4 percent) represents resources that aresubject to external restrictions on how they may be used. The remaining balance (6percent) in unrestricted assets may be used to meet the government's ongoingobligations to citizens and creditors.

GRAY05MD&A



At the end of the current fiscal year, the Village is able to report positive balances in bothcategories of net assets, both for the government as a whole, as well as for its separategovernmental and business-type activities.

Governmental Activities

The Governmental Activities of the city include General Government, Public Safety,Public Works, Community Development, and Miscellaneous Programs. Sales taxes,property taxes, as well as licenses, permits, and fines fund most of these governmentalactivities.

Here we show the Village's expenditures related to those functions typically associatedwith governments. In the chart below, General government includes the followingdepartments: Legislative (Town Council), Executive, Financial, Building, and otherGeneral Administration. Public Safety encompasses the police and fire protectiondepartments. Public Works is made up of Water, Sewerage, and street departments.

Governmental Activities Expenditures 2004 2005

General GovernmentPublic SafetyPublic WorksPaid on Long-Term Debt

Total Governmental Activities

$72,217563

16,55615,204

681

1615

73,78556982100

$104,540 100 $75,175

98010100

100

General revenues are those available for the city to use to pay for the governmentalactivities as described above.

General Revenues 2004 2005

Property TaxesContributionsOccupational LicensesFranchise FeesFinesMiscellaneousFire Assessment

$6,2471,627

24,7898,8566,0804,81823,069

82331286

31

8,8381,799

23,1649,4873,834430

25,538

122

311351

34

GRAY05MD&A



Interest Income - - 2,054

Total General Revenues $75,486 100 $75,143 100

For the year ended December 31, 2004, Occupational licenses were the largest revenuesource for the Village comprising 31 % of total governmental revenue. Fireassessments revenues in the amount of $23,069 are the second largest revenue source forthe Village comprising 31% of the total governmental revenue. Property taxes for theyear were in the amount of $6,247. The total revenue from fines was in the amount of$6,080.

For the year ended December 31,2005, Fire Assessments were the largest revenue sourcefor the Village comprising 34 % of total governmental revenue. Occupational licensesare the second largest revenue source for the Village comprising 31% of the totalgovernmental revenue. Property taxes for the year were in the amount of $8,838. Thetotal revenue from fines was in the amount of $3,834.

Business-Type Activities

The Business-Type Activities of the Village are those fees to customers that help coverall or most of the cost of the services it provides. The Village water and sewerdepartments are reported here.

Business Type Activities - Water and Sewer2004 2005

Revenues Expenses Revenues Expenses

$175,668 $206,995 $178,586 $198,149

2. Fund Financial Statements

A fund is a grouping of related accounts that is used to maintain control over resourcesthat have been segregated for specific activities or objectives. The Village, like any otherstate or local governments, uses fund accounting to ensure and demonstrate compliancewith finance-related legal requirements. All of the funds of the Village can be dividedinto two categories: governmental funds and proprietary funds.

A. Governmental funds are used to account for most of the Village's basic services asreported as governmental activities in the government-wide financial statements.However, unlike the government-wide financial statements, governmental fund financial

GRAY05MD&A



statements focus on how money flows into and out of those funds and the balances left atyear-end that are available for spending. Those funds are reported using modified accrualaccounting that measures cash and all other financial assets that can readily be convertedto cash. The governmental fund statements provide a detailed short-term view of theVillage's general governmental operations and basic services it provides. Governmentalfund information helps you determine whether there are more or fewer financialresources that can be spent in the near future to finance the Village's programs.

Because the focus of governmental funds is narrower than that of the government-widefinancial statements, it is useful to compare the information presented for governmentfunds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-termimpact of the government's near-term financing decisions. Both the governmental fundBalance Sheet and the governmental fund Statement of Revenues, Expenditures, andChanges in Fund Balances provide a reconciliation to facilitate this comparison betweengovernmental funds and governmental activities. These reconciliations are located onpages 16 and 18.

The Village maintains two individual governmental funds. Information is presentedseparately in the governmental fund Balance Sheet and in the governmental fundStatement of Revenues, Expenditures, and Changes in Fund Balances for the GeneralFund. The basic governmental fund financial statements can be found on pages 15 and17 of this report

Financial Analysis of Government Funds

At the close of the previous fiscal year ended December 31,2004, the Village'sgovernmental funds reported combined ending fund balances of $27,022. There were noreserved fund balances.

At the close of the current fiscal year ended December 31, 2005, the Village'sgovernmental funds reported combined fund balances of $106,541. There weree noreserved fund balances.

CHANGES IN FUNDBALANCES

Fund Balance Date General and Fire Fund Water and Sewer Fund

December 31,2004 $ 89,573 $ 1,188,433

December 31,2005 $ 106,541 $ 1,369,667

GRAY05MD&A



B. Proprietary Funds - Enterprise funds are used to report the same functions presentedas business-type activities in the government-wide financial statements. The Village usesenterprise funds to account for its Water and Sewer Department. Proprietary fundsprovide the same type of information as the government-wide financial statements, onlyin more detail. The proprietary fund financial statements provide separate informationfor the Water and Sewer Department. The basic proprietary fund financial statements canbe found on pages "Basic Financial Statements" section of this report.

3. Notes to the Financial Statements

The Notes to the Financial Statements provide additional information that is essential fora full understanding of the data provided in the government-wide and financialstatements. The notes to the financial statements can be found immediately following thesection entitled "Basic Financial Statements."

4. Other Supplementary Information

In addition to the basic financial statements and accompanying notes, this report alsopresents certain required supplementary information. Required supplementaryinformation can be found beginning with a section entitled "Required SupplementaryInformation - Part I."

A. Budgetary Comparison Schedule - The Village adopts an annual appropriated budgetfor its general fund. A budgetary comparison schedule (Schedule 1 in the RequiredSupplementary Information Part II section) has been provided for these funds todemonstrate compliance with the adopted budget and state laws.

B. Analysis of Significant Budget Variances in the General Fund.

Budget Variances - General Fund 2004 2005

Revenues $(545) unfavorable $(6,147) unfavorable

Expenditures $5470 favorable $12,744 favorable

5. Combining Statements for the non-major Governmental Funds - N/A

6. Other Supplementary Schedules are included in this report.

Capital Assets and Debt Administration

1. Capital AssetsThe Village's investment in capital assets, net of accumulated depreciation, as ofDecember 31, 2004 in its governmental activities is $359,178 and in business-type

GRAY05MD&A 9



activities is $1,466,082 which totals $1,825,260 for the Village. For the current yearended December 31,2005, the Village's investment in capital assets, net of accumulateddepreciation, in its governmental activities is 452,589 and in business-type activities is$71,649,403 which totals $2,101,992 for the Village. The investment in governmentalactivities assets includes land, buildings and systems, machinery and equipment, parksand landscaping. The investment in assets for business-type activities includes the waterand sewer system and treatment plants. Additions to governmental activities assetswithin the year in the amount of $116, 536 included a new fire station remodeling andrepairs to town hall. Additions to business-type activities assets (water and sewer system)in the amount of $256,601 include a new pavilion, repairs to a water well and relocationof utilities.

2. Long-Term DebtAt the end of the previous fiscal year ended December 31, 2004, the Village had arevenue bond indebtedness of $365,158. At the end of the current fiscal year endedDecember 31, 2005, the Village had a revenue bond indebtedness of $356,808. Thisindebtedness was undertaken by the Village as Sewer Revenue Bonds in August of 1991and is scheduled to be paid in full in the year of 2029.

This financial report is designed to provide a general overview of the Village's financesfor all those with an interest in the government's finances. Questions concerning any ofthe information provided in this report or requests for additional financial informationshould be addressed to Ellen Scribner, Town Clerk, Village of Grayson, P. O. Box 8,Grayson, LA 71378.

GRAY05MD&A 10

Basic Financial Statements

VILLAGE OF GRAYSON, LOUISIANA

STATEMENT OF NET ASSETS

December 31,2005

GOVERNMENTAL BUSINESS-TYPE

ACTIVITIES ACTIVITIES

EXHIBIT A

TOTAL

(MEMORANDUMONLY)

Assets:Cash and Cash Equivalents

Investments

Receivables, Net

Restricted CashCapital Assets, Net (See NOTE ITotal Assets:

I.A.4.)

$

$

73,874 $41,3861,155

-452,589569,004 $

38,728-

19,55780,371

1,649,4041,788,060

$ 112,60241,38620,71280,371

2,101,993$ 2,357,064

Liabilities:Accounts and Other PayablesPayable from Restricted Assets:

Customer DepositsAccrued Liabilities

Current portion of long-term obligationsNon-Current Portion of long-term obligations

Total Liabilities:

Net Assets:Invested in Capital Assets, Net of Related Cost

RestrictedUnrestricted

Total Net AssetsTotal Liabilities and Net Assets

9,874 $ 10,963 $ 20,837

$

$

----

9,874 $

452,589

-

106,541559,130569,004 $

35,055

7,594

7,974356,807

418,393 $

1,285,00380,371

4,2931,369,6671,788,060 $

35,055

7,5947,974

356,807428,267

1,737,59280,371

110,8341,928,7972,357,064

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS REPORT

GRAYOSStmtNetAssets 12

VILLAGE OF GRAYSON, LOUISIANAStatement of ActivitiesFor the Year ended June 30, 2005

EXHIBIT B

Functions/Programs

Program Revenues TotalOperating Capital

Expenses Charges for Grants and Grants and Governmental Business-type Net ExpensesServices Contributions Contributions Activities Activities /Revenue

Primary GovernmentGovernmental ActivitiesGeneral GovernmentPublic SafetyPublic WorksTotal GovernmentalActivities

$ (117,818) $(105,003)

(821)

$ (223,642) 3

. 25,967 $

: 25,967 $

- $ 94,256 5

- $ 94,256 3

i 2,405 $(105,003)

(821)

1 (103,419) $

- $

- $

2,405(105,003)

(821)

(103,419)

Business Type ActivitiesWaterSewer

Total Business TypeActivities

Total Primary Government

$ (139,636)(58,513)

$ (198.149)

$ (421,791)

$ 132,35446,232

$ 178,586 $

$ 204,553 $

245,874 $ - $

- $ 245,874 $ - $

- $ 340,130 $ (103,419) $

238,592 $ 238,592(12,281) (12,281)

226,311 $ 226,311

226,311 $ 122,892

General RevenuesTaxes:Property TaxesFranchise Fees/Licenses

Investment IncomeGain on Sale of Fixed AssetsFranchise feeFinesTransfersRelocation RefundsOther Misc ellaneous IncomeInterest ExpenseFrom EscrowContributions

Total General Revenues

Change in Net AssetsNet Assets, Beginning

Net Assets, Ending

$ 8,838 $23,1642,054

-9,4873,834

17,000----

1,79966,176

(37,243)596,373

- $--

810--

(17,000)(13,291)

2,788(18,473)

89-

(45,077)

181,2341,188,433

8,83823,1642,054

8109,4873,834

-(13,291)

2,788(18,473)

89

1,79921,099

143,9911,784,806

$ 559.130 $ 1.369.667 $ 1.928.797


GRAYOSStmtActi vities

Fund Financial Statements

VILLAGE OF GRAYSON, LOUISIANABALANCE SHEET

Governmental Funds

December 31,2005

EXHIBIT C

Total Governmental

Funds

Assets:

CashInvestmentsReceivables-(net, where applicable, of

allowance for doubtful accounts)Total Assets:

Liabilities and Fund Balance

Liabilities:Accounts and Other Payables

Total Liabilities

Fund Balances:Unreserved-undesignated (deficit)

Total Equity & Other CreditsTOTAL LIABILITY, EQUITY AND OTHER CREDITS

General Fire (MemorandumFund Fund Only)

$ 1,073 $ 72,801 $41,386

1,155

$ 2,228 $ 114,187 $

73,874

41,386

1,155116,415

$

$

4,8334,833

(2,605)(2,605)2,228

$ 5,041 $5,041

109,146109,146

$ 114,187 $

9,8749,874

106,541106,541116,415

Note: Amounts reported for governmental activities inthe statement of net assets (Exh A) are different because:

Capital assets used in governmental activities are notfinancial resources and therefore are not reported _in the funds. 452,589


GRAYOSBalShtGovFnds 15

VILLAGE OF GRAYSON, LOUISIANA EXHIBIT C-1Reconciliation of the Balance Sheet

to the Statement of Net AssetsGovernmental Funds

For the Year ended December 31, 2005

Fund Balances - Total Governmental Funds $ 106,541

Amounts reported for governmental activities in the statement ofnet assets are different because:

Capital assets, net of accumulated depreciation of $452,589 are 452,589not financial resources, therefore are not reported in thegovernmental funds.

Net Assets of Governmental Activities $ 559.130


GRAY05ReconBalShtToStmtNetAsstGovFnds 16

VILLAGE OF GRAYSON, LOUISIANAStatement of Revenues, Expenditures,

and Changes in Fund BalancesGovernmental Funds


EXHIBIT D

TotalGovernmental

Revenues:Property TaxesOccupational LicensesContributionsFire AssessmentFranchise FeeFinesInterest IncomeMiscellaneousTotal Revenues

Expenditures:General GovernmentPublic SafetyPublic WorksInterestTotal Expenditures

Excess (Deficiency) ofRevenues over expenditures

Other Financing Sources/UsesTransfers InTotal - Other Financing Sources

Excess (Deficiency) of RevenuesOver Expenditures

Fund Balance - Beginning of YearFund Balance - End of Year

GeneralFund

$ 8,838 $23,164

9,4873,834

43045,752

61,055

;61,055

(15,303)

17,00017,000

1,697

(4,302)$ (2,605) $

FireFund

1,79925,538

--

2,054

29,391

12,731569821

14,120

15,271

-

15,271

93,875109,146

Funds(Memorandum only)

$ 8,83823,164

1,79925,538

9,4873,8342,054

43075,143

73,785569821

75,175

(32)

17,00017,000

16,968

89,573$ 106,541


G RAYOSStmtRevExpChng Fnd BalGovFnds 17

VILLAGE OF GRAYSON. LOUISIANA EXHIBIT D-1Reconciliation of the Statement of Revenues,

Expenditures, and Changes in Fund Balances ofGovernmental Funds to the Statement of Activities


Net Change in Fund Balances - Total Governmental Funds $ 16,971

Amounts reported for governmental activities in the statement of activitiesare different because:

Governmental funds report capital outlays as expenditures. However,in the statement of activities, the cost of those assets is allocated overtheir estimated useful lives as depreciation expense, This is the amountby which capital outlays exceeded depreciation in the current period.

CAPITAL GRANTS $ 94,256CAPITAL OUTLAY (116,536)DEPRECIATION (31,932)

$ (54.212) (54,213)

Change in Net Assets of Governmental Activitie; $ (37,242)

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT

GRAYOSReconStmtRevExpChngFndBalGovFndsToStmtActiv 18

VILLAGE OF GRAYSON, LOUISIANASTATEMENT OF FUND NET ASSETSPROPRIETARY FUNDSJune 30, 2005

EXHIBIT E

ASSETSCurrent Assets:

Cash and Cash EquivalentsAccounts Reveivable, NetTotal Current Assets

Non-Current Assets:Restricted Assets: Cash and Cash Equivalents

Capital Assets:Land, Buildings, and EquipmentAccumulated DepreciationTotal Capital AssetsTotal Assets

LIABILITIESCurrent Liabilities

Accounts PayableCustomer DepositsAccrued Bond InterestBonds Payable, current

Total Current Liabilities

Non-Current LiabilitiesBonds Payable

Total Long-Term LiabilitiesTotal Liabilities

Net AssetsInvested in Capital Assets, Net of Related DebtRestricted

Total Net Assets

Total Liabilities and Net Assets

Business-Type ActivitiesEnterprise Funds

$

$

$

WaterFund

17,299 $15,74733,046

17,196

813,819(210,095)603,724653,966 $

8,285 $35,055

43,340

-43,340

603,7236,903

610,626

SewerFund

21,4293,810

25,239

63,175

1,689,918(644,238)

1,045,6801,134,094

2,678

7,5947,974

18,246

356,807356,807375,053

681,28077,761

759,041

Totals

$ 38,72819,55758,285

80,371

2,503,737(854,333)

1,649,404$ 1,788,060

$ 10,96335,0557,5947,974

61,586

356,807356,807418,393

1,285,00384,664

1,369,667

$ 653,966 $ 1,134,094 $ 1,788,060


GRAY05StmtFundNetAsstsPropFnds 19

VILLAGE OF GRAYSON, LOUISIANASTATEMENT OF REVENUES, EXPENSES, AN!CHANGES IN FUND NET ASSETSPROPRIETARY FUNDSFOR THE YEAR ENDED DECEMBER 31,200:

OPERATING REVENUESCharges for ServicesInterest IncomeMiscellaneous Income

Total Operating Revenues

OPERATING EXPENSESSalaries ExpenseAuto ExpenseClericalRepairCrossroads - Water DeoartmentInsuranceTractor ExpenseOffice ExoensePostage ExpenseRetirement ExpensePayroll TaxesTelephone ExpenseUtilitiesMiscellaneousMaterials & SuppliesDepreciationOxidation PondOxidation Pond Materials and Supplies

Total Operating Expenses

OPERATING INCOME (LOSS):

NON-OPERATING REVENUES (EXPENSES:Income from Sale of Fixed AssetsTransfers to General FundIncome from Deposit CollectionsRelocation Funds

Total Non-operating Revenues and ExpensesIncome (Loss) Before Contributions

Grant Income for Capital AssetsEscrow AccountInterest Expense

Total Non-operating Revenues (Expenses)

Changes in Net Assets

TOTAL NET ASSETS BEGINNINGTOTAL NET ASSETS ENDNG

EXHIBIT I

WaterFund

$ 124,774 $383

7,197132,354

51,0146,072752335

6.7696,434647

5.1621,0064,167

-2,12014,0506,476

1634,617

-

-139,636

SewerFund

44,346139

1,74746,232

480--

241.

6,258-

1.762-

5437

-4,499

94538,663884

4,69058,513

Total(MEMORANDUM

ONLY)

$ 169,120522

8,944178,586

51,4946,072752576

6.76912,692647

6.9241,0064,221

372,12018,5496,476961

73,280884

4,690198,149

(7,282)

810(17,000)2,788

(13,291)

-(26,693)(33,975)

245,87489

245,963

211,988

398,638$ 610,626 $

(12,281)

---

(18,473)(18,473)(30,754)

--

-

(30,754)

789,795759,041

(19,563)

810(17,000)2,788

(13,291)(18,473)(45,166)(64,729)

245,87489

245,963

181,234

1,188,433$ 1,369,667

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT.

GRAYOSStmtRevExpChngFndNctAsstsPF 20

VILLAGE OF GRAYSON, LOUISIANAStatement of Cash FlowsProprietary Funds

For the Year Ended December 31, 2005

EXHIBIT G

Business-Type ActivitiesEnterprise Funds

Cash Flows from Operating Activities:Receipts from CustomersPayments to SuppliersPayments to EmployeesInterest IncomeMiscellaneous IncomeNet Cash Provided by Operating Activities

Cash Flows from non-capital financing activities:Cash Flows from Financing Activities:Transfers to Other Funds/AcctsIncome from Deposit CollectionsRelocation Reimbursements

Net Cash Provided (used) by Non-Capital Activities

Cash Flows from capital and related financing activities:Gain from sale of Fixed AssetsAcquisition and Construction of Capital AssetsPrincipal Paid on Revenue BondsInterest Paid on BondsCapital Grants Received

Net Cash Provided (used) by Capital and Related Financing Activities:Net Increase (Decrease) in Cash and Cash EquivalentsCash and Cash Equivalents at January 1, 2005 - Beginning of YearCash and Cash Equivalents at December 31, 2005 - End of Year

Reconciliation of Operating Income (Loss) to Net CashProvided (Used) by Operating Activities:

Operating Income (Loss)Adjustments to Reconcile Operating Income(Loss) toNet Cash Provided by Operating Activities:DepreciationIncrease (Decrease) in Accounts ReceivableIncrease (Decrease in Accounts PayableMiscellaneous

Net Cash Provided by Operating operations

Water Fund

$ 124,374(54,004)(51,014)

3837,46427,203

(17,000)2,824

(13,291)(27,467)

810(254,763)

--

245,874(8,076)(8,313)25,625

$ (8,079)

Sewer Fund

$ 44,400(19,337)

(480)139

1,74726,469

(3,519)--

(3,519)

(1,838)(7,974)(18,473)

-(28,285)(5,335)26,380

$ 21,045

Total

$ 168,774(73,341)(51,494)

5229,21153,672

(20,519)2,824

(13,291)(30,986)

810(256,601)(7,974)(18,473)245,874(36,361)(13,648)52,005

$ 12,966

(7,282) $ (12,281) $ (19,563)

34,617400

(532)

38,663(54)33

108

73,280346

(499)108

27.203 $ 26,469 $ 53.672


GRAYOSStmtCshFlowsPropFnds 21

Notes to Financial Statements


NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005

INTRODUCTION

The Village of Grayson, Grayson, La., was incorporated under the provision of the Lawrason Act (LouisianaRevised Statutes [LSA - R.S. 33.321 - 463] and operates under a Mayor-Board of Aldermen/Women formconsisting of 4 compensated members of government. It provides the following services to its residents:public safety (police); highways and streets; gas, water, sewer, and sanitation facilities through the utilityfund; culture/recreation; and general administrative services.

NOTE I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting and reporting policies of the municipality conform to generally accepted accounting principlesas applicable to governments. Such accounting and reporting procedures also conform to the requirements ofLouisiana Revised Statutes 24:517 and to the industry audit guide, Audits of State and Local GovernmentalUnits.

LA. BASIS OF PRESENTATION

The accompanying financial statements of the Village of Grayson, Grayson, La., have been prepared inconformity with generally accepted accounting principles (GAAP) as applied to governmental units. TheGovernmental Accounting Standards Board (GASB) is the accepted standard setting body for establishinggovernmental accounting and financial reporting principles.

I.B. REPORTING ENTITY

As the municipal governing authority, for reporting purposes, the Village of Grayson, Louisiana is considereda separate financial reporting entity. The financial reporting entity consists of (a) the primary government,(municipality), (b) organizations for which the primary government is financially accountable, and (c) otherorganizations for which nature and significance of their relationship with the primary government are such thatexclusion would cause the reporting entity's financial statements to be misleading or incomplete.

Governmental Accounting Standards Board (GASB) Statement No. 14 established criteria for determiningwhich component units should be considered part of the Village of Grayson, Louisiana for the financialreporting purposes. The basic criterion for including a potential component unit within the reporting entity isfinancial accountability. The GASB has set forth criteria to be considered in determining financialaccountability. This criteria includes:

1. Appointing a voting majority of an organization's governing body, and

A. The ability of the municipality to impose its will on that organization and /or

B. The potential for the organization to provide specific financial benefits to or impose specificfinancial burdens on the municipality.

2. Organizations for which the municipality does not appoint a voting majority but are fiscallydependent on the municipality.

3. Organizations for which the reporting entity financial statements would be misleading if data ofthe organization is not included because of the nature or significance of the relationship.

GRAY05Notes 23



No component units are included in this report, since there are none. All portions of the Village's financialactivities which might be otherwise considered as component units are managed as a portion of the centralizedgovernmental and proprietary activities and are included in this report.

LC. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

I.C.I. Government-wide Financial Statements

The government-wide financial statements include the Statement of Net Assets and the Statement ofActivities. These statements report financial information for the Village as a whole excluding fiduciaryactivities such as employee pension plans. The primary government is presented separately within thefinancial statements with the focus on the primary government. Individual funds are not displayed but thestatements distinguish governmental activities, generally supported by taxes and Village general revenues,from business-type activities, generally financed in whole or in part with fees charged to external customers.The Statement of Activities reports the expenses of a given function offset by program revenues directlyconnected with the functional program. A function is an assembly of similar activities and may includeportions of a fund or summarize more than one fund to capture the expenses and program revenues associatedwith a distinct functional activity. Program revenues include: (1) charges for services which report fees, finesand forfeitures, and other charges to users of the Village's services; (2) operating grants and contributionswhich finance annual operating activities including restricted investment income; and (3) capital grants andcontributions which fund the acquisition, construction, or rehabilitation of capital assets and include fees todevelopers. These revenues are subject to externally imposed restrictions to these program uses. Taxes andother revenue sources not properly included with program revenues are reported as general revenues.

I.C.2. Fund Financial Statements

The Village of Grayson uses funds to report on its financial position and the results of its operations. Fundaccounting is designed to demonstrate legal compliance and to aid financial management by segregatingtransactions relating to certain government functions or activities.

A fund is a separate accounting entity with a self-balancing set of accounts.

Funds of the Village of Grayson are classified into two categories, governmental and proprietary. Eachcategory, in turn, is divided into separate fund types. The fund classifications and a description of eachexisting fund type follow:

Fund financial statements are provided for governmental, proprietary, and fiduciary funds. Major individualgovernmental and enterprise funds are reported in separate columns with composite columns for non-majorfunds.

I.D. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENTPRESENTATION

I.D.I MEASUREMENT FOCUS/ BASIS OF ACCOUNTING

GRAYOSNotes 24



Measurement focus is a term used to describe "which" transactions are recorded within the various financialstatements. Basis of accounting refers to "when" transactions are recorded regardless of the measurementfocus applied.

Measurement Focus

On the Government-wide Statement of Net Assets and the Statement of Activities, both governmental andBusiness-like activities are presented using the economic resources measurement focus as defined in item b.below.

In the fond financial statements, the "current financial resources" measurement focus or the "economicresources" is used as appropriate.

a. The governmental fund utilizes a "current financial resources" measurement focus. Only currentfinancial assets and liabilities are generally included on the balance sheet. The operating statementpresents sources and uses of available spendable financial resources during a given period. Thisfund uses fund balance as its measure of available spendable financial resources at the end of theperiod.

b. The government-wide financial statement utilizes an "economic resources" measurement focus.The accounting objectives of this measurement focus are the determination of operating income,changes in net assets (or cost of recovery) and financial positioa All assets and liabilities (whethercurrent or non-current) associated with its activities are reported. Government-wide fund equity isclassified as net assets.

I.D.2. Financial Statements

The financial statements of the Village are prepared in accordance with generally accepted accountingprinciples (GAAP). The Village's reporting entity applies all relevant Governmental Accounting StandardsBoard (GASB) pronouncements and applicable Financial Accounting Standards Board (FASB)pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30,1989,unless they conflict with GASB pronouncements. The Village's reporting entity does not apply FASBpronouncements or APB opinions issued after November 30, 1989.

The government-wide statements report using the economic resources measurement focus and the accrualbasis of accounting generally include the reclassification or elimination of internal activity (between or withinfunds). However, internal eliminations do not include utility services provided to Village's departments.Reimbursements are reported as reductions to expenses. Proprietary and fiduciary fund statements alsoreport using this same focus and basis of accounting although internal activity is not eliminated in thesestatements. Revenues are recorded when earned and expenses are recorded when a liability is incurred,regardless of the timing of related cash flows. Property tax revenues are recognized in the year for which theyare levied while grants are recognized when grantor eligibility requirements are met.

Governmental fund financial statements reports use the current financial resources measurement focus and themodified accrual basis of accounting. Revenues are recognized when they are both measurable and available.Available means collectible within the current period or soon enough thereafter to pay current liabilities.The Village considers revenues to be available if they are collected within 60 days of the end of the fiscal

GRAYOSNotes 25



year. Expenditures are recorded when the related fund liability is incurred, except for general obligation bondprincipal and interest which are reported as expenditures in the year due.

Pension trust funds recognize employer and participant contributions in the period in which contributions aredue and the Village has made a formal commitment to provide the contributions. Retirement benefits andrefunds are recognized when due and payable in accordance with the terms of the plan.

Major revenue sources susceptible to accrual include sales and use taxes, property taxes, franchise taxes(fees), intergovernmental revenues, and investment income. In general, other revenues are recognized whencash is received.

Operating income reported in proprietary fund financial statements includes revenues and expenses related tothe primary, continuing operations of the fund. Principal operating revenues for proprietary funds are chargesto customers for sales or services. Principal operating expenses are the costs of providing goods or servicesand include administrative expenses and depreciation of capital assets. Other revenues and expenses areclassified as non-operating in the financial statements.

When both restricted and unrestricted resources are available for use, it is the Village's policy to userestricted resources first, then unrestricted resources as needed.

I.D.3. Total Columns on Combined Statements

Total columns on the combined statements are captioned Memorandum Only to indicate that they arepresented only to facilitate financial analysis. Data in these columns do not present financial position, resultof operations, or changes in financial position in conformity with generally accepted accounting principles.Neither is such data comparable to a consolidation. Inter-fund eliminations have not been made in theaggregation of this data.

I.E. MAJOR FUNDS

I.E.I. Governmental Funds

The Village reports the following major governmental funds:

General Fund - reports as the primary fund of the Village. This fund is used to account for all financialresources not reported in other funds.

Fire Fund - accounts for operating activities of the fire department

I.E.2. Proprietary Fund

The Village reports the following enterprise funds:

Water Fund - accounts for the operating activities of the Village's water utilities services. This is amajor fund.

Sewerage Fund - accounts for the operating activities of the Village's sewer utility services. This is amajor fund.

GRAYOSNotes 26



I.F. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY

I.F.I. Cash and Investments

The Village maintains and controls cash and investments, some of which are restricted. Legal restrictions andthe Village's policies governing deposits and investments are discussed in Notes in. A.I.

The Village's reporting entity considers highly liquid investments (included restricted assets) with an originalmaturity of three months or less when purchased to be cash equivalents.

Investments are reported at fair value that is determined using selected bases. Short-term investments arereported at cost that approximates fair value. Securities traded on a national or international exchange arevalued at the last reported sales price at current exchange rates. Managed funds related to the retirementsystems not listed on an established market are reported at estimated fair value as determined by therespective fund managers based on quoted sales prices of the underlying securities. Cash deposits arereported at carrying amount that reasonably estimates fair value.

I.F.2. Capital Assets

Capital Outlays are recorded as expenditures of the General Special Revenue and Capital Projects Funds andas assets in the government-wide financial statements to the extent the Village's capitalization threshold ismet. In accordance with GASB Statement No. 34, infrastructure has not been capitalized due to an existingexception for Phase-Three local governments with annual revenues of less than $10 millioa Neither isdepreciation of infrastructure fixed assets required for a Phase-Three Government entity.

Depreciation is recorded on general fixed assets on a government-wide basis. Capital outlays for ProprietaryFunds are recorded as fixed assets and depreciated over their estimated useful lives on a straight-line basisand government-wide basis. All fixed assets are valued at their estimated fair market value on the datedonated. The following table shows the projected useful lives of certain items utilized by the water andsewer utilities. These estimates demonstrate the period of time over which the item is depreciated.

PROJECTED USEFUL LIVESWater Utility Projected Useful Life

Wells 20 yearsStorage tanks 40 years

Purification plant 33 yearsLines and meters 40 years

Sewerage Utility Projected Useful LifePump stations 40 yearsLines 40 yearsAutos and trucks 5 yearsOther equipment 10 years

Maintenance, repairs, and minor equipment are charged to operations when incurred. Expenditures thatmaterially change capacities or extend useful lives are capitalized. Upon sale or retirement of land, buildings,

GRAYOSNotes 27



and equipment, the cost and related accumulated depreciation, if applicable, are eliminated from therespective accounts and any resulting gain or loss is included in the results of operations.

I.F.3. OBLIGATIONS- Long-Term

In the government-wide financial statements, long-term debt is reported as liabilities in the applicablegovernmental activities statement of net assets.

In the fund financial statements, governmental fund types recognize debt issued reported as other financingsources. Repayment of the principal and interest is shown as an expenditure.

I.F.4. Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in theUnited States of America, require management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenue, expenditures, and expenses during the reporting period.Actual results may differ from those estimates.

I.F.5. EQUITY CLASSIFICATIONS

In the government-wide statements, equity is classified as net assets and displayed in three components:

a. Invested in capital assets, net of related debt, consists of capital assets including restricted capitalassets, net of accumulated depreciation and reduced by the outstanding balance of any bonds,mortgages, notes, or other borrowings that are attributable to the acquisition, construction orimprovement of those assets.

b. Restricted net assets consist of net assets with constraints placed on their use either by (1) externalgroups such as creditors, grantors, contributors, or laws or regulations of governments:; or (2) lawthrough constitutional provision or enabling legislation.

c. Unrestricted net assets consist if all other net assets that do not meet the definition of "restricted"or "invested in capital assets, net of related debt."

I.G. REVENUES, EXPENDITURES, AND EXPENSES

I.G.I Proprietary Funds

Operating revenues and expenses for proprietary funds are those that result from providing services andproducing and delivering goods and/or services. It also includes all revenue and expenses not related tocapital and related non-capital financing or investing activities

I.G.2. Ad Valorem Taxes

GRAYOSNotes 28



Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied by the Village inSeptember or October and are actually billed on October 1, and are mailed to the taxpayers in November.Billed taxes become delinquent on January 1 of the following year. Revenues from ad valorem taxes arebudgeted and the year billed. The revenue derived from this tax is not dedicated to any specific purpose

The Village bills and collects its own property taxes using the assessed value determined by the tax assessorof Franklin Parish. Property tax revenues are recognized when they become available. Available includesthose property tax receivables elected to be collected within sixty days after year-end. Delinquent taxes areconsidered fully collectible and therefore an allowance for uncollectible taxes is provided..

I.G.3. Expenditures/Expenses

In the government-wide financial statements, expenses are classified by function for both governmental andbusiness-type activities.

In the fund financial statements, expenditures are classified as follows:

Governmental Funds - By CharacterProprietary Funds - By Operating and Non-operating

In the fund financial statements, governmental funds report expenditures of financial resources. Proprietaryfunds report expenses relating to use of economic resources.

I.G.4. Compensated Absences

Village employees are entitled to ten days of compensated absences. However, compensated absences donot vest or accumulate and are recorded as expenditures when they are paid.

NOTE II. BUDGETARY INFORMATION

II.A. BUDGET POLICY AND PRACTICE

The Village Clerk submits an annual budget to the Village council in accordance with applicable statutes andpolicies. The budget is presented to the Council for review, and public hearings are held to address prioritiesand the allocation of resources. In December, the Village Council adopts the annual fiscal year budgets forVillage operating funds. Once approved, the Village Council may amend the legally adopted budget whenunexpected modifications are required in estimated revenues and appropriations.

II.B. BASIS OF BUDGETING

The Village of Grayson (Mayor and Council) uses the following budget practices:

(1) Prior to December 31 of each year, the town Clerk submits to the Mayor and Council Members aproposed operating budget for the fiscal year commencing the following January 1. The operatingbudget includes proposed expenditures and the means of financing them for the upcoming year. Thebudget is submitted in summary form. In addition, more detailed line item budgets are included foradministrative control. The level of control for the detailed budgets is at the departmenthead/function level.

GRAYOSNotes 29



(2) Public hearings are conducted to obtain taxpayer comment.

(3) During the month of January the budget is legally enacted through passage of an ordinance.

(4) Formal budgetary integration is employed as a management control device during the year forthe General Fund.

(5) Budgets for the General Fund, are adopted on the GAAP basis.

(6) Appropriations lapse at the end of each fiscal year.

(7) The Mayor and Council Members authorize supplemental appropriations during the year.Supplemental appropriations were made during the fiscal year.

II.C. INTERFUND TRANSACTIONS

Legally authorized transfers are treated as interfund transfers and are included in the results of operations ofboth governmental and proprietary funds.

INTERFUND TRANSFERS Transfers In Transfers Out

General Fund $ 17,000 $Water Fund 17.000Totals $ 17,000 $ 17,000

II.D. ENCUMBRANCE ACCOUNTING

Encumbrance accounting is not utilized by the Village.

NOTE III. DETAILED NOTES ON FUNDS

III.A. ASSETS

III.A.1. Cash and Cash Equivalents

Cash includes amounts in demand deposits, interest-bearing demand deposits, and money market accounts.Cash equivalents include amounts in time deposits and those investments with original maturities of 90 daysor less. Under state law, the Village of Grayson may deposit funds in demand deposits, interest-bearingdemand deposits, money market accounts, or time deposits with state banks organized under Louisiana lawand national banks having their principal offices in Louisiana.

At December 31,2005, the Village had cash totaling $234,359 as follows:

General Fund Enterprise Fund TotalDemand Deposits - Book Balances 73,874 38,728 $ 112,602

GRAY05Notes 30



Restricted Cash and Investments 41,386 80,371 121,757Total 115,260 119,099 $ 234,359

Under state law, the Village of Grayson may invest in United States bonds, treasury notes, or certificates.These are classified as investments if their original maturities exceed 90 days. However, if the originalmaturities are 90 days or less, they are classified as cash equivalents. Investments are stated at cost. Cashand investments are secured as follows:

Citizen's Bank Homeland BankBank Balances $ 178,656 $ 55,155Federal Deposit Insurance (100,000) (100,000)Pledged Securities (Market Value) 74,431 (92,520)Under-collateralized (This has been corrected) (4,225)Collateral Sufficient $ 44,845

The Village's bank accounts are now sufficiently collateralized.

Even though the pledged securities are considered uncollateralized (Category 3) under the provisions ofGASB Statement 3, Louisiana Revised Statute 39:1229 imposes a statutory requirement on the custodial bankto advertise and sell the pledged securities within 10 days of being notified that the fiscal agent bank hasfailed to pay deposited funds upon demand..

III.A.2. Receivables

The receivables of $20,712 at December 31,2005 are as follows:

General Fund $ 1,155Enterprise Fund 19,557TOTAL RECEIVABLES $ 20,712

No allowance for doubtful accounts has been established.

III.A.3. Restricted Assets

Certain proprietary fund assets are restricted for construction funded through long-term debt. Net assetsrestricted for debt service include the excess of assets over certain liabilities restricted for the debt service onrevenue bonds. Restricted assets are also reported in various funds for case deposited in bank accountslegally restricted for specified uses such as the payment of debt service and fiscal fees on long-term debt ormortgage loans, and certificates of deposit (CD) issued in the Village or trust name and deposited with theVillage Treasurer in lieu of project retainages. Proceeds of restricted CD's on deposit with the VillageTreasurer are payable as liabilities payable from restricted assets. When both restricted and unrestrictedresources are available for use, it is the Village's policy to use restricted resources first, the unrestrictedresources as needed.

III.A.4. Capital Assets

GRAYOSNotes 31



Capital outlays are recorded as expenditures of the General Special Revenue and Capital Projects Funds andas assets in the government-wide financial statements to the extent the village's capitalization threshold ismet. In accordance with GASB Statement No. 34, infrastructure has not been capitalized due to an existingexception for local governments with annual revenues of less than $10 million.

Depreciation is recorded on general fixed assets on a government-wide basis. Capital outlays for ProprietaryFunds are recorded as fixed assets and depreciated over their estimated useful lives on a straight-line basisand government-wide basis. All fixed assets are valued at historical or estimated historical cost if actual costwas not available. Donated fixed assets are valued at their estimated fair market value on the date donated.

Maintenance, repairs, and minor equipment are charged to operations when incurred. Expenditures thatmaterially change capacities or extend useful lives are capitalized. Upon sale or retirement of land, buildings,and equipment, the cost and related accumulated depreciation, if applicable, are eliminated from therespective accounts and any resulting gain or loss is included in the results of operations.The following is a summary of the changes in capital assets for the fiscal year ended June 30,2005.

(THIS PORTION OF THIS PAGE IS INTENTIONALLY LEFT BLANK)

GRAYOSNotes 32

VILLAGE OF GRAYSONGrays on, Louisiana


Capital Assets and depreciation activity as of and for the year ended December 31, 2005 for the Village of

Grayson are as follows:

CAPITAL ASSETS

GOVERNMENTAL ACTIVITIES

Capital Assets

Land

Buildings

Furniture/Fixtures

Total Capital Assets

Less - Accumulated Depreciation

BuildingsFurniture/Fixtures

Total Accumulated Depreciation

Capital Assets, Net

CAPITAL ASSETS

BUSINESS-TYPE ACTIVITIES (PROPRIETARY FUND) WATER SYSTEM AND SEWER SYSTEM

Buildings and Equipment

Water System

Sewer System

TOTAL

Less - Accumulated Depreciation

Water System

Sewer System

Total Accumulated Depreciation

Capital Assets, Net

Balance

12/31/04

3,600

397.712

97,342

498.654

97,79534,874

130,669

Additions Deletions

105,806

10,730

116.536

13,513

18,419

31,932

Balance

12/.31/05

3,600

503,518

615.190

109,308

53,293

162,601

367,985 148,468 452,589=^^^^^^

587,694

1,688,088

2,275,775

204,117

605,575

809,692

254,763

1,838

256,601

34,616

38.663

73,279

(28,639)

(28,639)

(28,639)

(28,639)

813,818

1,689,918

2,503,736

210,095

644.238854,333

1,466,083 183,322 1,649,403

TOTAL CAPITAL ASSETS, NET

Governmental Capital Assets, Net 452,589

Business-Type Capital Assets, Net 1.649.403

TOTAL (Exhibit A) 2,101.992

III.B. DEBT

III.B. Changes in Long-Term DebtThe following is a summary of the Village's long-term debt at December 31,2005, composed of thefollowing;

GRAYOSNotes 33


NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31,2005

2004 Paid 2005212,700 Sewer Revenue bond (Bond R-l) dated August 4,

1989; due in annual installments of $12,500; dueAugust 4, 1991-2029; Interest at 5% 176,111 3,767 172,344

237,500 Sewer Revenue Bond (Bond R-2) dated August 4,1989; due in annual installments of $13,958; dueAugust 4, 1991-2029; Interest at 5% 196,644 4,206 192,438

372,755 364,782Less Current Portion: 7,597 7,974

TOTAL LONG-TERM DEBT 365,158 356,808

The annual requirements to amortize all long-term debt outstanding beginning December 31,1995, are asfollows:

Year

20062007200820092010

2011-2029

RevenueBonds

26,45826,45826,45826,45826,458

502,709

Under the terms of the bond indenture on outstanding sewer revenue bonds, dated August 4,1989, all incomeand revenues (hereinafter referred to as income) of every nature, earned or derived from operations of thesewer system are pledged and dedicated to the retirements of said bonds, and are to be set aside in thefollowing funds:

a. Each month there will be set aside into a fund called the "Sinking Fund" an amount constituting 1/12of the next maturing installment of principal and interest on the outstanding bonds. Such transfersshall be fully sufficient to assure prompt payment of principle and interest installments as theybecome due, and may be used only for such payments.

The following is a schedule of deposits that should be made to the sinking fund:

PERIOD MONTHLY INSTALLMENTS08/20/04 THROUGH 07/20/05 2204.86

b. There shall be set aside in a Reserve Fund an amount equal to 5% of the principle and interestpayments required during the month until there shall have been accumulated in the reserve account anamount equal to $38,202.

The following is a schedule of payments that should be made to the Reserve Fund:GRAYOSNotes 34



PERIOD MONTHLY DEPOSITS08/20/04 through 07/20/05 $ 176.23 per month must be

deposited into the fond until$42,294 has beenaccumulated.

c. Monthly deposits of $112 should also be made for the period of August 20, 1990 through July 20,2029 to the Contingency Fund.

III.B.2 Short-Term Debt

Short-term liabilities are paid as they accrue and become payable. They are paid on a monthly basis asapproved by the mayor and council for payment.

NOTE IV. OTHER

IV.A. PROPERTY TAX REVENUES

The year ended December 31,2005. Taxes of 5.49 mills were levied on property with assessed valuationstotaling $1,213,893 and were deducted as follows:

General corporate purposes 5.49 mills

IV.B. RESTRICTIONS ON USE OF UTILITIES REVENUES

Funds provided by utilities revenue is to be used in the following manner before they are available for otherlawful purposes:

1. Operating expense of utility system.2. Revenue bond service funds.3. Revenue bonds reserve funds.4. Revenue bond depreciation and contingencies fund.

IV.C. PENSION PLAN

Substantially all employees of the Village of Grayson, are members of the following statewide retirementsystems: Municipal Employees Retirement System of Louisiana, Municipal Police Employees RetirementSystem of Louisiana, or Firefighters' Retirement System of Louisiana. These systems are cost-sharing,multiple-employer defined benefit pension plans administered by separate boards of trustees. Pertinentinformation relative to each plan follows:

A. Municipal Employees Retirement System of Louisiana

Plan Description. The system is composed of two distinct plans, Plan A and Plan B, with separateassets and benefit provisions. All employees of the municipality are members of Plan A. Some

GRAYOSNotes 35


NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31,2005

employees of the municipality are members of Plan A and Plan B. All permanent employees workingat least 35 hours per week who are not covered by another pension plan and are paid wholly or inpart from municipal funds and all elected municipal officials 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 ator after age 55 with at least 30 years of creditable service are entitled to a retirement benefit, payablemonthly for life, equal to 3 percent of their final-average salary. Furthermore, employees with atleast 10 years of creditable service, but less than 30 years, may take early retirement benefitscommencing at or after age 60, with the basic benefit reduced 3 percent for each year retirementprecedes age 62, unless he has at least 30 years of creditable service. In any case, monthlyretirement benefits paid under Plan B cannot exceed 100 percent of final-average salary.] Final-average salary is the employee's average salary over the 36 consecutive or joined months thatproduce the highest average. Employees who terminate with at least the amount of creditable servicestated above, and do not withdraw their employee contributions, may retire at the ages specifiedabove and receive the benefit accrued to their date of termination. The System also provides deathand disability benefits. Benefits are established or amended by state statute.

The system issues an annual publicly available financial report that includes financial statements andrequired supplementary information for the System. That report may be obtained by writing to theMunicipal Employees Retirement System of Louisiana, 7937 Office Park Boulevard, Baton Rouge,

Louisiana 70809, or by calling (225) 925-4810.

Funding Policy. [Under Plan B, members are required by state statue to contribute 5.0 percent oftheir annual covered salary and the Village of Grayson is required to contribute at an actuariallydetermined rate. The current rate is 3.75 percent of annual covered payroll.] Contributions to theSystem also include one-fourth of one percent (except Orleans and East Baton Rouge parishes)of thetaxes shown to be collectible by the tax rolls of each parish. These tax dollars are divided betweenPlan A and Plan B based proportionately on the salaries of the active members of each plan. Thecontribution requirements of plan members and the Village of Grayson are established and may beamended by state statute. As provide by Louisiana Revised Statue 11:103, the employercontributions are determined by actuarial valuation and are subject to change each year based on theresults of the valuation for the prior fiscal year. [Village of Grayson contributions to the Systemunder Plan Bfor the years ending December 31, 2005, 2004, and 2003, were $4167, $ 5,741, and$4,755, respectively, equal to the required contributions of each year.] Employer rate wasincreased in 3rd Quarter 03.

IV.D. ACCOUNTS, SALARIES, AND OTHER PAYABLES

Accounts, salaries, and other payables of $49,117 are as follows:

PAYABLESAccounts Payable - General Fund 9,874Accounts Payable - Enterprise Fund 10,963Customer Deposits 35,055

TOTAL $ 55,892

GRAY05Notes 36



IV.E. INTER-FUND TRANSACTIONS

During the course of normal operations, the Village has numerous transactions between funds includingexpenditures and transfers of resources primarily to provide services. The governmental funds financialstatements generally reflect such transactions as transfers.

IV.F. CONTINGENCY

IV.F.a. According to the attorney acting on behalf of the Village, there were no pending litigations or claimsas of December 31,2005. There have been no subsequent legal actions to date.

IV.F.b. The Village received funds from federal and state governmental agencies in the form of grants, whichis subject to audit by the federal or state government. The ultimate determination of amounts received underthese programs is generally based upon allowable costs reported to and audited by the government. Untilsuch audits have been completed and final settlements reached, there exists a contingency to refund anyamount received in excess of allowable costs. Management is of the opinion that no material liability willresult from such audits.

IV.G. SUBSEQUENT EVENTS

There were no subsequent events noted which would affect the financial statement.

IV.H. POST-RETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS

The Village of Grayson has no retired employees as of December 31, 2005.

IV.I. SEGMENT INFORMATION

The Village has issued revenue bonds to support a variety of public services. The fund financial statementsreport major funds with revenue supported debt for the water and sewer funds. Services provided by thesefunds are described in NOTE I.E.2. and also included in the basic financial statements.

IV.J. LEASE

The Village of Grayson (Grayson Police Department) leases equipment from Applied Concepts, Inc. (DBAStalker Radar and Video), one (1) Stalker Deal SLSDSL2KA. This lease requires a monthly payment of$54.03 for 36 months.

GRAYOSNotes 37

Required Supplementary Information(Part II)

VILLAGE OF GRAYSON, LOUISIANAStatement of Revenues, Expenditures,

and Changes In Fund BalancesGovernmental FundsBudget (GAAP Basts) and Actual


Schedule 1

Revenues:Property TaxesOccupational Licenses

Fire AssessmentFranchise FeeFinesMiscellaneousInterest IncomePolice Jury 2% taxContributions

Total Revenues

Expenditures:General GovernmentPublic SafetyPublic WorksTotal Expenditures

Excess {Deficiency) ofRevenues over expenditures

Other Financing Sources/Uses:Transfers in

Total Other Financing Sources/UsesExcess (Deficiency) ofRevenues Over Expenditures

Fund Balance Beginning of Year-Originally stated

Fund Balance-End of Year

GENERAL FUND

OriginalBudget

FinalBudget

Variance withFinal BudgetFavorable

Actual (Unfavorable)

6,86224,789

8,8576.0802,645

$ 6,900 $ 8,838 $24,000 23.164

12.0006,0003,000

9.4873.834

430

1,938(836)

(2,513)(2,166)(2,570)

49.233

66,520

66,520

51,900

73,799

73,799

45.753 $

61,055

61,055

(6,147)

12,744

12,744

(17,287)

-

(21,899)

-

(15,302)

17,00017.000

6,597

17,00017,000

(17,287)

17,287$ - $

(21,899)

4,30226,201 $

1.698

(4.302)(2,604) $

23,597

23.597

FIRE FUNDVariance withFinal Budget

Original Final FavorableBudget Budget Actual (Unfavorable)

23,069 24,000 25,538 1,538

3.728---

2,0002,2001,800

50

-2,054

-1,799

(2,000)(146)

1.8001,849

26,797 30,050 29,391 $ (659)

24,7834.239778

35.5241,900800

12,731569820

22.7931,331(20)

29,800 38.224 14,120 24.104

(3,003) (8,174) 15,271 (23.445)

4,571

6.058

(8.174)

93.875

15,271

93.875

(23,445)

$ 85,701 $ 109.146 S (23,445)


GRAYOSStmtRevExpChngFndBatGovFndsBudgAct 39

Other Supplemental Information

VILLAGE OF GRAYSONSchedule of Compensation Paid to the Mayor and Councilmen/Women

For the Year Ended December 31, 2005

BUDDY NUGENT, MAYOR $2564.00P.O. Box 252Grayson, La. 71435318-649-5361Salary - $ 221.17 per mo.

CHRISTY BAILEY, COUNCILWOMAN $1339.20P.O. Box 681Grayson, La. 71435318-649-2152Salary-$ 111.60 per mo.

JEANIE MCCOY, COUNCILWOMAN $1339.207710 Hwy. 165Columbia, La. 71418318-649-5948Salary - $ 111.60 per mo.

RAYMOND CRUSE, COUNCILMAN $1339.20P.O. Box 309Grayson, La. 71435318-649-7117Salary-$ 111.60 per mo.

Total $6581.60

GRAYOSBoardMentComp 41


2908 Cameron St, Suite CMonroe, LA 71201

Phone (318)-323-4656 • Fax (318)388-0724

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

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To The Honorable MayorAnd the Board of CommissionersVillage of Grayson, Louisiana

I have audited the financial statements of the governmental activities, the business-typeactivities, and each major fund, of the Village of Grayson, Louisiana as of and for theyear ended December 31,2005, which collectively comprise the Village of Grayson,Louisiana's basic financial statements and have issued my report thereon dated June 30,2006. I have conducted my audit in accordance with auditing standards generallyaccepted in the United States of America and the standards applicable to the financialaudits contained in Government Auditing Standards issued by the Comptroller General ofthe United States.

Compliance

As part of obtaining reasonable assurance about whether Town of Grayson, Louisiana'sfinancial statements are free of material misstatement, I performed tests of its compliancewith certain provisions of laws, regulations, contracts, and grants, noncompliance withwhich could have a direct and material effect on the determination of financial statementamounts. However, providing an opinion on compliance with those provisions was notan objective of my audit, and accordingly, I do not express such an opinion. The resultsof my tests disclosed no instances of noncompliance that are required to be reportedunder Government Auditing Standards.

Internal Control Over Financial Reporting

In planning and performing my audit, I considered Town of Grayson, Louisiana's internalcontrol over financial reporting in order to determine my auditing procedures for thepurpose of expressing my opinions on the financial statements and not to provideassurance on the internal control over financial reporting. My consideration of theinternal control over financial reporting would not necessarily disclose all matters in theinternal control over financial reporting that might be material weaknesses. A materialweakness is a condition in which the design or operation of one or more of the internal

GRAYOSComplianceGAS 42

control components does not reduce to a relatively low level the risk that misstatementsin amounts that would be material in relation to the financial statements being auditedmay occur and not be detected within a timely period by employees in the normal courseof performing their assigned functions. I noted no matters involving the internal controlover financial reporting and its operation that I considered to be material weaknesses.

This report is intended solely for the information and use of the management, LouisianaLegislative Auditor, and federal awarding agencies and pass-through entities and is notintended to be and should not be used by anyone other than these specified parties.Under Louisiana Revised Statute 24:513, this report is distributed by the LegislativeAuditor as a public document.

Jimmie Self, CPAMonroe, LouisianaJune 30,2006

GRAY05ComplianceGAS 43

VILLAGE OF GRAYSONSchedule of Findings and Questioned Costs

For the Year Ended December 31. 2005

Finding:

2005-1 Condition - Under state law, all funds on deposit must be secured byfederal deposit insurance or the pledge of securities owned by the fiscal agent bank. AtDecember 30, 2005, the village did not have all their bank balances secured by pledgedsecurities.

Recommendation - The Village of Grayson should establish procedures to ensurethe bank provides the required pledged securities.

Schedule of Prior Year Findings and Questioned CostsFor the Year Ended December 31, 2004

There were no prior year findings.

GOODOSFirelingj 44

VILLAGE OF GRAYSONP. O. Box 8

Grayson, LA 71435

June 30,2005

Jimmie Self, CPA, APAC2908 Cameron StreetMonroe, LA 71201

RE: Management's Corrective Action PlanFYE December 31,2005

The Village of Grayson's response to the Schedule of Findings and Questioned Costs forthe year ended December 31,2005:

Response Finding 2005-1 - The Village of Grayson has contacted its fiscal agentbank concerning the lack of an adequate pledge of securities to cover all ofthe bank balances of the Village. The fiscal agent bank has pledged thenecessary additional securities and has provided the Village withappropriate documentation.

Recommendation - In order to ensure that the fiscal agent bank providesthe required pledge security, a review of the securities will be added to themid-year checklist on June 30 and the end of the calendar year closingactivities checklist providing for twice-yearly confirmation. In addition,our fiscal agent bank is providing an over-pledge of securities to providecoverage for unexpected increases in collection.

Sincerely yours,

Susan RobinsonVillage Clerk

GRAYOSMngmtCorrActPlan

Documents

Village of Grayson - app1.lla.state.la.usapp1.lla.state.la.us/PublicReports.nsf/00A948A7B37... · VILLAGE OF GRAYSON Grayson, Louisiana Table of Contents As of and for the Year Ended