town of eros - louisiana...certified public accountants 302 eighth street jonesboro.la 71251...

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Town of Eros

Eros, Louisiana

Annual Financial Statements

As of and For the Year Ended December31,2010

With Supplemental Information Schedules

Under provisions of slate !aw this report is a public document. Acopy ofthe report has been submitted to the entity and other approp.oate public off'idaiS. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish clerk of court.

Release Date ^ihU

KENNETH D. FOLDEN & CO. CERTIFIED PUBLIC ACCOUNTANTS

302 EIGHTH STREET JONESBORO.LA 71251

(318)259-7316 FAX (318) 259-7315

Town of Eros Eros. Louisiana

Annual Financial Statements As of and For the Year Ended December 31,2010

With Supplemental Information Schedules

CONIENTS

Accountant's Review Report

Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Assets

Statement of Activities

Fund Financial Statements:

Govemmental Funds:

Balance Sheet

Reconciliation ofthe Govemmental Funds - Balance Sheet to the Statement of Net Assets

Statement of Revenues, Expenditures, and Changes in Fund Balances

Reconciliation ofthe Govemmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of

Business-Type Activities

Statement of Net Assets

Statement of Revenues, Expenditures, and Changes in Fund Net Assets

Statement of Cash Flows

Notes to the Financial Statements

Required Supplemental Information:

Budgetary Comparison Schedule

Govemmental Fund

Supplemental Information Schedules:

Schedule of Per Diem Paid Aldermen

Schedule of Findings

Independent Accountant's Report on Applying Agreed-Upon Procedures

Louisiana Attestation Questionnaire

Statement/ Schedule

A

B

C

D

E

F

G

H

I

1

2

3

Page

2

5

6

8

8

9

10

11

12

13-14

16-22

24

26

27

28-29

31-32

Kenneth D. Folden & Co. Kenneth D. Folden. CPA Certified Publ ic AcCOUntautS TedW. Sanderlin.CPA

Members 302 Eighth Street Members Society of Louisiana Jonesboro, LA 71251 American Instihitcof

Certified Public Accountants (318) 259-7316 Certified Public Accountants email: [email protected] FAX (318) 259-7315 email: tsanderiintStfoldencpa.com

ACCOUNTANTS REVIEW REPORT

Mayor and Board of Aldermen Town of Eros Eros, Louisiana

We have reviewed the accompanying financial statements ofthe govemmental activities and each major fimd of the Town of Eros as of and for the year ended December 31, 2010, which collectively comprise the Town's basic financial statements as listed in the Table of Contents, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these fmancial statements is the representation of management ofthe Town of Eros.

A review consists principally of inquiries of the Town of Eros's personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying fmancial statements in order for them to be in confomiity with generally accepted accounting principles.

The budgetary comparison information on page 24, is not a required part ofthe basic financial statements but is supplementary information required by the Governmental Accounting Standards Board. Such information has not been subjected to the inquiry and analytical procedures applied in the review ofthe basic financial statements, but was compiled from information that is the representation of management, without audit or review. Accordingly, we do not express an opinion or any other form of assurance on the supplementary information.

Management has not presented the discussion and analysis information that the Govemmental Accoimting Standards Board has determined is necessary to supplement, although not required to be a part ofthe basic fmancial statements.

In accordance with the Louisiana Governmental Audit Guide and the provisions of state law, we have issued a report dated June 27,2011 on the results of our agreed-upon procedures.

An t u z?. ^ido^, e p ^

Kenneth D. Folden & Co.. CPAs Jonesboro, Louisiana June 27,2011

mailto:[email protected]

GOVERIVMENT-WIDE FINANCIAL STATEMENTS

Statement A

Town of Eros Eros, Louisiana

Statement of Net Assets AsofDecember31,2010

ASSETS

Cash and equivalents Investments Accounts receivable Capital assets (net of ace depr)

TOTAL ASSETS

LIABILITIES Accounts, salaries, and other payables

Payroll taxes payable Customer deposits

TOTAL LIABILITIES

NET ASSETS Invested in capital assets, net of related debt Unrestricted

TOTAL NET ASSETS

Govemmental

S

1=

$

$

Activities

6,589 -

1,175 49,800 57,564

643

3,401 -

4,044

49,800 3,721

53,521

Business-Type

S

$

$

$

Activities

5,876 38,745 5,589

1,115,107 1,165,317

1,109 -

9,187 10,297

1,115,107 39,912

1,155,020

$

S

$

J=

Total

12,465 38,745 6,764

1,164,907 1,222,881

1,752

3,401 9,187

14,341

1,164,907 43,633

1,208,540

See accompanying notes and accountant's report.

5

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FUND FINANCIAL STATEMENTS

Statement C

ASSETS

Cash and equivalents

Receivables, net

TOTAL ASSETS


Balance Sheet - Govemmental Funds AsofDecember31,2010

GENERAL FUND

6,589 1,175 7,765

LLABILITIES AND FUND BALANCE Liabilities:

Accounts payable Payroll taxes payable

TOTAL LIABILITIES

643 3,401

4,044

Fund Balances: Unreserved

TOTAL FUND BALANCE 3,721

3,721

TOTAL LIABILFTIES AND FUND BALANCE 7J65

Statement O

Reconciliation ofthe Govemmental Funds Balance Sheet to the Statement of Net Assets

As of December 31,2010

Total Fund Balances of General Fund at December 31,2010

Total Net Assets reported for Govemmental Activities in the Statement of Net Assets (Statement A) are different because:

3,721

Capital Assets used in Govemmental Activities are not financial resources, and therefore, are not reported in the govemmental fund. 49,800

Net Assets of govemmental activities at December 31,2010 53,521



Statement of Revenues, Expenditures

Statement E

and Changes in Fund Balance - Govemmental Fund 11 For the Year Ended December 31, 2010

REVENUES

Taxes:

Franchise tax Licenses and permits Fines and forfeitures Fees and charges Investment eamings Other Revenues

Rent Grant revenue Other revenues

TOTAL REVENUES

EXPENDFTURES

General govemment: Personal services

Operating services Materials and supplies Other charges

Public safety:

Personal services Operating services Other

TOTAL EXPENDFFURES

Excess (Deficiency) of Revenues Over (Under) Expenditures

Operating transfers in

Total other financing sources (uses)

NET CHANGES IN FUND BALANCES

FUND BALANCES - December 31,2009

FUND BALANCES - December 31,2010


9

GENERAL FUND

$ 5,292 18,275 11,277

142 341

735 791

6,909 43,761

38,780

28,206 230

1,904

12,272 1,228

80 82,700

(38,939)

2,994

2,994

(35,945)

39,666

$ 3.721

Sutement F


Reconciliation ofthe Statement of Revenues, Expenditures, and Changes in Fund Balances of Govemmental Funds to the Statement of Activities

For the Year Ended December 31, 2010

Total net change in fund balances - govemmental funds (Statement E) $ (35,945)

Amount reported for govemmental activities in the Statement of Activities (Statement B) are different because:

Govemmental fimds report capital outlays as expenditures. However, in the Statement of Activities (Statement B), the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which depreciation expense exceeds capital ouday in the current period. (7,734)

Change in net assets of govemmental activities (Statement B) $ (4: ,67Q)


10


Balance Sheet - Proprietary Fund As of December 31,2010

ASSETS

Current Assets:

Cash and equivalents

Investments

Receivables

Total Current Assets Noncurrent Assets:

Capital Assets - net of accumulated depreciation

Total Noncurrent Assets

TOTAL ASSETS

LLVBILFFIES

Current Liabilities:

Accounts payable

Customer deposits TOTAL LL^ILFFIES

NETASSEl'S

Invested in capital assets

Unrestricted

TOTAL NET ASSETS

TOTAL LL^ILITIES AND NET ASSETS

Sec accompanying notes and accountant's report.

II

Statement G

WATER & SEWER FUND

$ 5,876

38,745

5,589 50,209

1,115,107

1,115,107

$ 1,165,317

$ 1,109

9,187 10,297

1,115,107

39,912

1,155,020

$ 1,165,316

Town of Eros, Louisiana Eros, Louisiana

Statement of Revenues, Expenditures, and Changes in Net Assets - Business-Type Activities

For the Year Ended December 31,2010

OPERATING REVENUES Water and sewer sales

Total operating revenues

OPERATING EXPENDITURES Gas and oil Repairs and maintenance Utihties Supphes Office supplies and expense Testing fees Salaries and payroll taxes Fees and dues Advertising Depreciation Miscellaneous expense

Total operating expenses OPERAIING INCOME (LOSS)

NON-OPERATING REVENUES (Expenditures) Investment eamings

Total non-operating revenues (expenditures)

Income (loss) before contributions and transfers

Operating transfers in Operating transfers out Net operating transfers

CHANGES IN NET ASSE IS

TOTAL NET ASSETS - December 31,2009

TOTAL NET ASSETS - December 31,2010


12

WATER AND SEWER FUND

$ 62,547 62,547

1,714 2,698 7,838

450 1,653 1,649

39,545 610 699

89,868 1,318

148,040 (85,493)

553 553

(84,940)

-

(2,994) (2,994)

(87,933)

1,242,953

$ 1,155,020

Statement H

Statement I


Statement of Cash Flows - Business-Type Activities For the Year Ended December 3 U 2010

CASH FLOWS FROM OPERATING ACTIVrriES

Cash received fix)m customers Customer deposit receipts, net Payments to suppliers Payments to employees

Net cash provided by (used for) operating activities

CASH FLOWS FROM NON-CAPTTAL FINANCING State grant Transfers from other funds Transfer to other funds Net cash provided by noncapital financing activities

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVrriES Acquisition of capital assets Grant receivable

Net cash used for capital and related financing activities

CASH FLOWS FROM INVESTING ACTIVITIES Interest earnings on bank deposits

Increase in investments Net cash provided by (used for) investing activiries


$ 60,428 552

(19,150) (39,545)

2,286

(2,994) (2,994)

553 1482)

71

Net increase (decrease) in cash and cash equivalents

CASH AND CASH EQUIVALEJO'S - December 31,2009

CASH AND CASH EQUIVALENTS - December 31,2010

(636)

6,511

5,875

(Continued)


13

Statement I


Statement of Cash Flows - Business-Type Activities For the Year Ended December 31, 2010


RECONCILLVTION OF OPERATING INCOME TO NET PROVIDED BY OPERATION ACTIYTTIES

Operating income (loss) $ (85,493) Adjustments

Depreciation 89,868 Net changes in assets and liabilities:

Accounts receivable (2,119) Due to other fimds Accounts payable (522) Customer deposits 552

Net cash provided by (used for) operating activities $ 2,286

(Concluded)

See accompanying notes and accountant's report

14

Town of Eros, Louisiana Notes to the Financial Statements

December 31,2010

INTRODUCTION

The Town of Eros was incoiporated under the provisions ofthe Lawrason Act. The Town is governed by the mayor-board of aldermen form of govemment. The mayor and five aldermen serve four-year terms which expire on December 31,2014. The aldermen receive $80 per diem for attending each regular and special meeting. The Town provides public safety, general govemment, and water and sewer services to its residents. The Town has an elected Chief of Police and two other fiill-time employees.

GASB Statement No. 14, The Reporting Entity^ established criteria for determining the govemmental reporting entity and component units that should be included within the reporting entity. Under provisions of this Statement, the Town of Eros is considered a primary govemment, since it is a special purpose govemment that has a separately elected goveming body, is legally separate, and is fiscally independent of other state and local govemments. As used in GASB Statement No. 14, fiscally independent means that the mimicipality may, without the approval or consent of another govenmiental entity, determine or modify its own budget, levy its own taxes or set rates or changes, and issue bonded debt. The Town has no component imits.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Government-Wide and Fund Financial Statements

The govemment-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all ofthe activities ofthe Town of Eros. Govemmental activities, which normally are supported by taxes and intergovemmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a given fimclion or segments are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific fiinction or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular fiinction or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate fmancial statements are provided for governmental funds and business-type activities fiinds. All individual governmental fimds and mdividual enterprise fiinds are reported as separate columns in the fund financial statements.

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The govemment-wide fmancial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the business-type fimd financial statements. Revenues are recorded when eamed and expenses are recorded when a liability is incurred, rcgardless ofthe timing of related cash fiows. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Govemmental fimd fmancial statements are reported using the current fmancial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both

16

measurable and available. Revenues arc considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities ofthe current period. For this purpose, revenues are considered to be available if they are collected within 60 days ofthe end ofthe current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accmal accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Sales taxes, franchise taxes, licenses and permits, and interest associated with the current fiscal period are all considered to be susceptible to accmal and so have been recognized as revenues ofthe current fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the Town.

The Town of Eros reports the following govemmental fimds:

General Fund

The General Fund is the general operating fimd ofthe town and accounts for all financial resources of the general govemment.

Capital Projects Fund

The Capital Projects Fimd is used to account for all fmancial resources to be used for the acquisition or constmction of major capital facilities.

The Town of Eros reports the following business-type activity fiind:

Utilities Enterprise Fund

The Utilities Enterprise Fund accounts for the operations ofthe Town's water and sewer systems.

Private-sector standards of accounting and fmancial reporting issued prior to December 1,1989, generally are followed in the govemment-wide and business-type activities fimd fmancial statements to the extent that those standards do not confiict with or contradict guidance ofthe Govemmental Accoimting Standards Board. Govemments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise fimds, subject to the same limitation. The Town has elected not to follow subsequent private-sector guidance.

As a general mle, the effect of interfiind activity is eliminated from the govemment-wide financial statements.

Amoimts reported as program revenues include charges to customers for goods, services, or privileges provided and operating grants. General revenues include all taxes.

Business-type activities funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the fiind's ongoing operations. The Utilities Enterprise Fund's operatmg revenues consist of charges for water and sewer sales and connection fees and meter charges. Operating expenses for enteiprise fimds include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting these defmitions are reported as non-operating revenues and expenses.

C. Deposits and Investments

17

Cash includes amounts in demand deposits, interest-bearing demand deposits, and petty cash. State law allows the Town to mvest in collateralized certificates of deposits, government-backed securities, commercial paper, the state sponsored investment pool, and mutual fimds consisting solely of goveriunent-backed securities. If the original maturities of investments exceed 90 days, they are classified as investments; however, if the original maturities are 90 days or less, they are classified as cash equivalents. At December 31,2010, the Town's investments consist ofnonnegotiable certificates of deposits with original maturities that exceed 90 days that are reported in the accompanying financial statements at cost,

D. Receivables

All receivables are generally shown net to an allowance for uncollectible amounts. These statements contain no provision for uncollectible accounts. The Town is ofthe opinion that such an allowance would be immaterial in relation to the financial statements taken as a whole.

£. Capital Assets

Capilal assets, which include the water and sewer systems and improvements, land, buildings, vehicles, and equipment, are reported in the applicable governmental or business-type activities columns in the govemment-wide fmancial statements. Capital assets are capitalized at historical cost or estimated cost. Approximately 95 percent ofthe town's capital assets have been capitalized at cost and the remaining 5 percent have been capitalized at estimated cost based on the historical cost of similar assets. The Town of Eros maintains a threshold level of $500 or more for capitalizing capital assets. The costs of nonnal maintenance and repairs that do not add to the value ofthe asset or materially extend the asset's life are not capitalized.

All capital assets, other than land, are depreciated using the straight-line method over the following useful lives:

Estimated Lives

Infrastructure - water and sewer system and improvements 25 years Buildings 25-40 years Vehicles and equipment 5-15 years

F. Fund Equity

In the fimd financial statements, govermnental fimds report reservations of fimd balance for amounts that are not available for appropriation or are legally restricted by outside parties for a specific purpose. Designations of fimd balance represent tentative management plans that are subject to change. At December 31, 2010, the Town's governmental fimd balances were unreserved and undesignated.

G. Estimates

The preparation of financial statements in confomiity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, disclosures, and revenues, expenditures, and expenses during the reporting period. Actual results could differ from those estimates.

H. Restricted Net Assets

18

In the govemment-wide and proprietary fimd fmancial statements, net assets are classified into three components:

Invested in capital assets - consists of capital assets, net of accumulated depreciation.

Restricted for capital projects - balance remaining in federal grant fimds received for improvements to water system.

Unrestricted - consists of all other assets.

STEWARDSHIP, COMPLUNCE, AND ACCOUNTABILFTY

A. Budget Information

The Town of Eros uses the following budget practices:

A proposed budget for the General Fund, prepared on the modified accmal basis of accounting, was fonnally adopted by the mayor and board of aldermen at the December 21, 2009 board meeting, and was amended on December 20, 2010. The budget is established and controlled by the mayor and board of aldermen at the object level of expenditure. Appropriations lapse at year-end and must be reappropriated for the following year to be expended. Encumbrance accounting is not utilized by the Town. Budgeted amoimts included in the accompanying financial statements include the original adopted budget amounts and all budget amendments.

DEPOSITS IN FINANCLVL INSTITUTIONS

At December 31,2010, the Town has cash and investments (book balances) as follows:

Checking accounts $ 3,462 Interest-bearing checking accounts 8,948 Petty cash 54 Investments - certificates of deposit 38,745 Total $51,209

These deposits are stated at cost, which approximates market. Under state law, these deposits, or the resulting bank balances, must be secured by federal deposit msurance or the pledge of securities owned by the fiscal agent bank. The market value ofthe pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent. These securities are held in the name ofthe pledging fiscal agent bank in a holding or custodial bank that is mutually acceptable to both parties. At December 31,2010, the Town of Eros has $51,237 in deposits (collected bank balances). These deposits are secured from risk by $250,000 of federal deposit insurance.

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

19

4. RECEIVABLES

The following is a summary of receivables at December 31, 2010:

Water and General Fund Sewer Fund Total

Sales taxes Franchise taxes Fines and forfeiUires Occupational fcenses Water sales Reconnect water fees

AOowance for doubtfiil accounts Total

$

$

-

852 13

310 --

-

1,175

$

$

-

-

-

-

5,489 100

-

5,589

$

$

-

852 13

310 5,489

100 -

6,764

20

CAPITAL ASSETS

Capital assets and depreciation activity as of and for the year ended December 31,2010, is as follows:

Covernmental Activities: Capital assets being depreciated:

Buildings Vehicles and equqjment

Total capital assets being depreciated Less accumulated depreciation for:

Buiklings Vehicles and equq)ment

Total accumulated depreciation Total assets being depreciated, net

Balance at January 1,

2010 Increases Decreases

Balance at December 31,

2010

$

$

53,270 66,471

119,741

32367 29,841 62,208 57,533

$

$

-

-

1,422 6312 7,734

(7,734)

$

S

- $

-

-

-

- $

53,270 66,471

119,741

33,789 36,152 69,941 49,800

Business-Type Activities: Capital assets not being depreciated:

Land Capital assets being depreciated:

Water and sewer systems and improvements Equq)ment

Total capital assets being depreciated Less accumulated depreciation for:

Water and sewer systems and improvements Equqjment

Total accumulated depreciation Total assets being depreciated, net

Depreciation expense of $7,734 for the year ended December 31, 2010 was charged to the following govemmental fimctions:

$

$

$

121

2,190,056 59,580

2,249,636

1,015,666 29,116

1,044,782 1,204,854

S

$

$

-

-

-

82306 7,562

89,868 (89,868)

$

$

- $

-

-

$

-

- $

121

2,190,056 59,580

2,249,636

1,097,972 36,677

1,134,649 1,114,986

General government Public safety - police Total

$ 2,267 5,466

$ 7,734

Depreciation expense of $89,868 for the year ended December 31,2010 was charged to the business-type activities fimction.

21

RISK MANAGEMENT

The Town of Eros purchases commercial insurance to reduce the risk of loss resulting from property damage or liability claims. There have been no significant reductions m insurance coverage from coverage in the prior year. Settlements have not exceeded insurance coverage in any ofthe past three fiscal years.

22

OTHER REQUIRED SUPPLEMENTARY INFORMATION

Town of Eros, Louisiana Budgetary Comparison Schedule - Govemmental Fund

For die Year Ended December 31,2010

Schedule 1

REVENUES

Taxes:

Franchise tax Licenses and permits Fines and forfeimres Fees and charges Investment eamings Other Revenues

Rent Grant revenue Other revenues

TOTAL REVENUES

EXPENDTTURES

General govemment: Personal services

Operating services Materials and supplies Other charges

Public safety:

Personal services Operating services Materials and supplies Other

TOTAL EXPENDITURES

EXCESS (Deficiency) OF REVENUES Over(Under) Expenditures

Operating transfers in Total other fmancing sources (uses)

NET CHANGES IN FUND BALANCES

FUND BALANCES - December 31, 2009 FUND BALANCES - December 31,2010

Original

$ 4,000 17,000 9,000

100 900

800 33,200

-

65,000

35,000

29,800 2,500 3,900

15,000 1,150

350 100

87,800

(22,800)

-

-

(22,800)

39,666 $ 16,866

Final

$ 5,500 18,000 11,500

100 900

800 8,200 7,005

52,005

37,600

24350 250

2,100

12300 1,100

350 100

78,150

(26,145)

-

-

(26,145)

39,666 $ 13,521

Actual Amounts (GAAP Basis)

$ 5,292 18,275 11,277

142 341

735 791

6,909 43,761

38,780

28,206 230

1,904

12,272 1,228

-80

82,700

(38,939)

2,994

2,994

(35,945)

39,666 $ 3,721

Variance with Final Budget-

Favorable (Unfavorable)

$ (208) 275 (223)

42 (559)

(65) (7,409)

(96) (8,244)

(1>180) (3,856)

20 196

28 (128) 350 20

(4,550)

(12,794)

2,994 2,994

(9.800)

-

$ f9.800)


24

SUPPLEMENTAL INFORMATION SCHEDULES

Schedule 2

Town of Eros, Louisiana Schedule of Per Diem Paid Aldermen

For die Year Ended December 31,2010

Irene Baugh AmyCostin Melba Creech GlendaTullos William Wheelis Total

$1,040 1,040

880 1,040

960 $4,960

26

Schedule 3


Schedule of Findmgs For the Year Ended December 3 L 2010

Current Year Findings:

Finding 2010-1: REQUIRED BUDGET NOT PREPARED

The Town of Eros did not prepare an annual budget that was within 5% of revenues collected and 5% of expenditures paid, as required by Louisiana Revised Statute 39:1305.

MANAGEMENT RESPONSE:

A budget will be prepared and approved by the Board of Aldennen as required by Lousiana statute in future years.

Prior Year Findings:

No prior year findings.

27

Kenneth D. Folden & Co. Kenneth D. Folden. CPA Certified Publ ic Accoun tan t s Ted W. Sanderlin. CPA

Members 302 Eighth Street Members Society of Louisiana Jonesboro, LA 71251 American Institute of

Certified Public Accountants (318) 259-7316 Certified Public Accountants email: [email protected] FAX (318) 259-7315 email: [email protected]

INDEPENDENT ACCOUNTANTS REPORT ON APPLYING AGREED-UPON PROCEDURES

Mayor and Board of Aldermen Town of Eros Eros, Louisiana

We have performed the procedures included in the Louisiana Govemment Audit Guide and enumerated below, which were agreed to by the management ofthe Town of Eros and the Legislative Auditor, State of Louisiana, solely to assist the users in evaluating management's assertions about the Town of Eros's compliance with certain laws and regulations during the year ended December 31, 2010 included in the accompanying Louisiana Attestation Questionnaire. Management of Town of Eros is responsible for its financial records and compliance with applicable laws and regulations. This agreed-upon procedures engagement was perfonned in accordance with standards estabhshed by the American Institute of Certified Pubhc Accountants. The sufficiency of these procedures is solely the responsibility ofthe specified users ofthe report. Consequently, we make no representation regarding the sufficiency ofthe procedures described below either for the purpose for which this report has been requested or for any other purpose.

Pubiic Bid Law

1. Select all expenditures made during the year for material and supplies exceeding $30,000, or public works exceeding $150,000, and determine whether such purchases were made in accordance with LSA-RS 38:2211-2251 (the public bid law).

No expenditures were made during the year for materials and supplies exceeding 530,000. There were no expenditures made for public works exceeding $150,000.

Code of Etiiics for Public Officials and Public Employees

2. Obtain from management a list ofthe immediate family members of each board member as defined by LSA-RS 42:1101-1124 (the code of ethics), and a list of outside business interests of all board members and employees, as well as their immediate families.

Management provided us with the required list including the noted mformation.

3. Obtain from management a listing of all employees paid during the period under examination.

Management provided us with the list of employees paid during the period.

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4. Determine whether any of those employees included in the hsting obtained from management in agreed-upon procedure (3) were also included on the listing obtained fix)m management in agreed-upon procediue (2) as immediate family members.

The names ofthe employees provided by management in procedure (3) did not appear on the listing provided by management in procedure (2).

Budgeting

5. Obtained a copy ofthe legally adopted budget and all amendments.

Management provided us with copies ofthe original budget and all amendments for the year ended December 31, 2010, The budget was amended once during the year.

6. Trace the budgets adoption and amendments to the minute book.

We traced the adoption of the original budget, for the year ended December 31,2010, to the minutes of a meeting held on December 21, 2009, which indicated that the budget had been approved by all ofthe aldermen. We U^ced the amendments to the minutes of a meeting held on December 20, 2010, which indicated that the amended budget had been approved by all ofthe aldennen.

7. Compare the revenues and expenditures ofthe final budget to actual revenues and expenditures to detennine if actual revenues failed to meet budgeted revenues by 5% or more or if actual expenditures exceed budgeted amoimts by 5% or more.

We compared the revenues and expenditures ofthe final budgets to actual revenues and expenditures. Actual revenues were less than budgeted revenues by 15.85%, and actual expenditures were more than budgeted expenses by 5.85%.

Accounting and Reporting

8. Randomly select six disbursements made during the period under examination and:

(a) trace payments to supporting documentation as to proper amount and payee;

We examined supporting documentation for each ofthe six selected disbursements and foimd that payment was for the proper amount and made to the conect payee.

(b) determine if payments were properiy coded to the correct fimd and general ledger accoimt; and

The six selected disbursements were properly coded to the correct fimd and general ledger account.

(c) determine whether payments received approval from proper authorities.

The six selected disbursements were traced to the Town's minute book where they were approved by the aldermen.

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Meetings

9. Examine evidence indicating that agendas for meetings recorded in the minute book were posted or advertised as required by LSA-RS 42:1 through 42:12 (the open meetmgs law).

The Town of Eros posts a notice of each meeting and the accompanying agenda on the door ofthe building where meGtings are held. Management has informed us that these documents were properly posted.

Debt

10. Examine bank deposits for the period under examination and determine whether any such deposits appear to be proceeds of bank loans, bonds, or like indebtedness.

We inspected copies of all bank deposit slips for the period under examination and noted no deposits which appeared to be proceeds of bank loans, bonds, or like indebtedness.

Advances and Bonuses

11. Examine payroll records and minutes for the year to determine whether any payments have been made to employees which may constitute bonuses, advances, or gifts.

A reading ofthe minutes ofthe Town for the year indicated no approval for the payments noted. We also inspected payroll records for the year and noted no instances which would indicate payments to the employee which would constitute bonuses, advances, or gifts.

Prior Comments and Recommendations

Our report dated December 31,2009, did not include any comments or unresolved matters.

We were not engaged to, and did not, perform an examination, the objective of which would be the expression of an opinion on management's assertions. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

This report is intended solely for the use of management ofthe Town of Eros and the Legislative Auditor, Stale of Louisiana, and should not be used by those who have not agreed lo the procedures and taken responsibility for the sufficiency ofthe procedures for their purposes. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

Kenneth D. Folden & Co., CPAs Jonesboro, Louisiana June 27.2011

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LOUISIANA ATTESTATION QUESTIONNAIRE (For Attestation Engagements of Government)

Kennelh P. Folden & Co.. CPAS 302 Einhth Street Jonesboro. Louisiana 71251

In connccijon with your review of our financial siaiemenis as of December 31.2010 and forthe year then ended, and as required by Louisiana Revised Statute 2-4:513 and the Lottisiana Governmental Audit Guide, wc make ihe following representations to you. We accept full responsibility for our compliance wiilt ihc followinc Jaivs and rcgubiions and ibc internal controls over compliance with such laws and regulations. We have e\'aluaied our compliance wilh the following laws and regulations prior lo making these rcprcscniailons.

These representations arc based on the infomiation available to us as of (dale ofcomplelion/reprcscntalions).

Public Bid Lnw

It is true that we have complied wilh the public bid law. R.S. Title 38:2211 -2296, and. wlicre applicable, llie regulations ofthe Division of Adinitiisiration and ihe Stale I*urchasing Office.

Yes [ ^ ' N o I J

Code of Ethics for Public Officials and Public Emplovees

It is true that no cuiployees or olTicinls have accepted anjlhing of value, whether in the fonn of a service, loan, or promise, from anyone lliat would conslilulca violation of R.S. 42:1101-1124.

Yes [ J \ No [ J

It is true thai no member ofthe immediate family ofany member ofthe governing authority, or the chief executive ofthe governmenial cniiiy, has been employed by the govemmental entity after April 1, 1980, under circumstances thai would constiluie a violation ofR.S. 42 ; in9 .

Y e s [ u ^ N o [ ]

Budgeting

We have complied with the stale budgeting requirements ofthe Local Govemmenl Budget Act (R.S. 39:1301 -16). R.S. 39:33, or the budget requirvmenls of R.S. 39: i 331 -1342, as applicable.

YesfufNof J

Accounting and Reporting

Ail non-exempt governmental records arc available as a public record and have been retained for at least three years, as required by R.S. 44:1,44:7.44:31. and 44:36.

y e s [ i ^ ' N o [ ]

Wcha\'c filed our annual financial statements in accordance with R.S. 24:514, and 33:463 where applicable.

Y e s [ • ^ N o [ ]

We have had our financial statements reviewed in accord.iiicc wiih R.S. 24:513. V e s [ ^ N o [ ]

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lil'chavtccniplicd With the provmor.n'ribcOpcn Mfc::nj:\ liitt. pin:dcJ i;i K S.-IZ 1 throuj;;!

h 14 true »c ha^c lu ! incuni-vi any :tidriiir*t'>ri*. o'Aia th;in vri-\li; I(»r *J(i dax** or lr%% :»• nulc pUTchaw:* in the ordinary LAHJINC of admmmration. %••< \\i\c uc cn:ac\! in:o r.Tjy lc.i'.c-,-vjr»fuvc airrecnicni*. uuhtrji i ]^ jppfinjl uflhc Siair Ilcnii Conir:ii\*i.>n. a>. pr*»\idcvl Sy •\.ni.,-jc \ II. Section $ (if the W*4 I.t>utM.i.'u C"nnVj:u;iiMi, Aititlc \ 'l. Stvih«n .*. I'l the 1* *4 IA'UIS;;*^^ CtxnanuiHm. and R S .^"M-l|(i.«»I-in oS.

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Advancn and flonuM^

h 1.1 true ttc have no: ;uiv,iih,"i:d MajK i or wiii-'ic^ to cntpltHcv- «: jwid txtiuvcs irt % u*l.i!io:: uf Aniclc VII. Section 14 of ihc W"-i I oji>rjra t\ms:itu:Km. K.S 14 I.'S. aiul AC; opinio.': "o.-jg

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\^'c luvc div;U>^cd to you ;ill Lntmr. ruinionipliancc o[ ihc riiirj;oinj; lav, i anJ icj:ul;i:i.'r.t. a ucll i* j:jy con:rjdimnn\ to ',Uz fo.*q:o;r.i,* rcpTcvtT:i2i;oni Wc Li^c nuitc a^os-jbk lo ;.ou dr«cu:7icntJi'.on rcbiint: u> ;hc :"orci:o:n|; bv* i ijij rcij-ublioni

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town of eros - louisiana...certified public accountants 302 eighth street jonesboro.la 71251...

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