town of ridgecrestapp1.lla.state.la.us/publicreports.nsf/f078bce3c24... · management's...

TOWN OF RIDGECREST, LOUISIANA

ANNUAL FINANCIAL STATEMENTS

AS OF DECEMBER 31,2015 AND FOR THE YEAR THEN ENDED

WITH INDEPENDENT AUDITOR'S RETORT

SILAS SIMMONSUP CERTIFIED PUBLIC ACCOUNTANTS and ADVISORS


Annual Financial Statements As of and for the Year Ended December 31, 2015

With Supplementary Information Schedules

TABLE OF CONTENTS

Statement Page

INDEPENDENT AUDITOR'S REPORT 1-2

SECTION I - REQUIRED SUPPLEMENTARY INFORMATION

Management's Discussion and Analysis 3-7

SECTION II - GOVERNMENT-WIDE FINANCIAL STATEMENTS

Statement of Net Position A 8

Statement of Activities- B 9

SECTION III - FUND FINANCIAL STATEMENTS

Governmental Funds:

Balance Sheet C 10

Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Financial Statement of Net Position D 11

Statement of Revenues, Expenditures, and Changes in Fund Balance — E 12

Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities F 13

Proprietary Funds:

Statement of Net Position G 14

Statement of Revenues, Expenses, and Changes in Net Position H 15

Statement of Cash Flows I 16

NOTES TO THE FINANCIAL STATEMENTS 17-25

SECTION IV - ADDITIONAL REQUIRED SUPPLEMENTARY INFORMATION

Budgetary Comparison Schedule - General Fund 26

Budgetary Comparison Schedule - Public Works Fund 27

Notes to the Required Supplementary Information 28


Annual Financial Statements As of and for the Year Ended December 31, 2015

With Supplementary Information Schedules

TABLE OF CONTENTS

Statement Page

SECTION V - REPORTS ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE

Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards 29-30

SECTION VI - SCHEDULE OF FINDINGS

Schedule of Findings 31

Schedule of Prior Audit Findings 32

Current Year Audit Findings 33-34

iLAS SIMMON LLP

RTtFlED PUBLIC ACCOUNTANTS an? ADVISORS 2)8 N. CommeroeStreet

Natchez. Missi^fppi 39121-1027 Telephone: K)1.442.7411 Fax: 601.442.8551

wwv,s//assj'mmons.cDm

INDEPENDENT AUDITOR'S REPORT

Honorable Bobby Sheppard, Mayor and Members of the Boafd of Aldermen Town of Ridgecrest Lou^iana

Report on the Financial Statements

We have audited the accompanying financial statemente of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Ridgecrest, Louisiana as of and for the year ended December 31, 2015, which collectively comprise the Town's basic financial statements, as listed in the table of contents, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or

Auditor's Responsibility

Our r^ponsibility is to e>ipress opinions on these financial statements ba^d on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applKable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statemente, whether due to haud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statemente in order to design audit procedures that are appropriate in the drcumstences, but not for the purpose of expressing an opinion on the effe:tiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating die appropriateness of accounting policies used and the reasonablen^s of significant accounting estimates made 1^ management, as weU as evaluating the overall presentation of the finandal statemente.

We beheve that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Members: American Inotitule of CPAJ, Mbouoippi Socieh} of CPAe, Louuiana Society of CPAo

In our opinion, the financial statements referred to above present fairly, in all material resp^zfe, the respective financial position of the governmentel activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Ridgecrest, Louisiana as of December 31,2015, and the respective changes in financial position for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison information on pages 3 through 7 and pages 26 through 2S be presented to supplement the basic financiarstatemenfcs. Such Information, although not a part of the basic financial statements, is r^uired by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic finandal statements in an appropriate operational, economic, or historical context We have applied certain limited procedure to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial stetements. We do not expr^s an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated June 23,2016, on our consideration of the Town of Ridgecrest, Louisiana's internal control over financial reporting and on our traits of its compliance with certein provisions of laws, regulations, contracts and grant agr^ments, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town's Internal control over financial reporting and compliance.

This report is intended for the information of the Mayor, Members of the Board of Aldermen, and the Legislative Auditor of the State of Louisiana and is not intended to and should not be, used by anyone other tfian these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

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Natchez, Mississippi June 23, 2016

SECTION I REQUIRED SUPPLEMENTARY INFORMATION

MANAGEMENT'S DISCUSSION AND ANALYSIS

TOWN OF RIDGECREST, LOUISIANA MANAGEMENT'S DISCUSSION AND ANALYSIS

DECEMBER 31,2015

The management of the Town of Ridgecrest, Louisiana offers readers of the Town of Ridgecrest, Louisiana's (Town) financial statements this narrative overview and analysis of the financial activities of the Town for the fiscal years ended December 31, 2015 and 2014. We encourage readers to consider the information presented here in conjunction with additional information found within the body of the audit.

FINANCIAL HIGHLIGHTS

• Assets exceeded liabilities by $1,218,900 and $1,198,219 in 2015 and 2014, respectively. • Revenues exceeded expenditures by $20,681 and $56,979 in 2015 and 2014, respectively. • The Town had net plant and equipment of $883,258 and $920,166 in 2015 and 2014, respectively. • The Town had payroll of $98,935 and $98,362 in 2015 and 2014, respectively. .

OVERVIEW OF FINANCIAL STATEMENTS

This discussion and analysis is intended to serve as an introduction to the Town of Ridgecrest's basic financial statements. The Town's basic financial statements comprise three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-wide financial statements. The government-wide financial statements are designed to provide readers with a broad overview of the Town's finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the Town's assets and liabilities, with the difference between the two reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Town is improving or deteriorating.

The statement of activities presents information showing how the Town's net position changed during the most recent fiscal year.

The government-wide financial statements outline functions of the Town that are principally supported by property taxes and intergovernmental revenues (governmental activities). Fixed assets and related debt are also supported by taxes and intergovernmental revenues.

The government-wide financial statements can be found on pages 8 through 9 of this report.

Fund financial statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives.

The basic governmental fund financial statements can be found on pages 10 through 16 of this report.

Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 17 through 25 of this report.


DECEMBERS!, 2015

GOVERNMENT-WIDE FINANCIAL ANALYSIS

The following is a condensed statement of the Town's net position:

Governmental Business-Tyj^ Totals Activities Activities 2015 2014

Current assets $ 310,340 $ 54,134 $ 364,474 $ 305,686 Noncurrent assets -

Transfers Taxes and other 172,541

Total revenues and 235,775 $ 172.108

Total expenses

Net position, January 1 Net position, December 31

1,247;732 S 1,225.852

Current liabilities $ 4,616 S 2,468 $ 7,084 $ 6,703 Long-term liabilities ^ 21,748 21,748 20.930

Totalliabilities | 4.616 $ 24.216 ^ 28,832 | _27,

Net position Invested in capital assete $ 598,486 $ 284,772 $ 883,258 $ 920,lt Restricted for streets and

279,097 - 279,097 220,978 Restricted for meter deposits - 19,856 19,856 18,889 Unassigned 26.627 10.062 36.689 - 38.186

Total net position $ 904.210 5 314.690 S 1.218.900 S 1.198.219

The following is a comparative summary of the statement of activities;

Governmental Business-Type Totals Activities Activities 2015 2014

Revenues: Program revenues $ 33,910 $ 201,432 $ 235,342 $ 233,255

Expenses: General and administrative $ 101,511 $ - $ 101,511 $ 120,133 PubHc safety 16,858 - 16,858 23,465 Street and sanitation 92,104 - 92,104 74,4

S 210,473 S 176.^9 $ 387.202 $ 357.543

$ 25,302 $ 878.908

(4,621) 319,311

$ 20,681 $ 1.198.219

56,979 1.141,240

$ 904.210 S 314,690 $ 1.218.900 $ 1.198.219


DECEMBER 31,2015

GOVERNMENT-WIDE FINANCIAL ANALYSIS (continued)

The following are graphical representatiom of information governmental activities for the year 2015:

presented in flie statement of activities for

Governmental Activities - Revenues

• Licenses - 31,450

• Operating Grants -;

• Fines-$1,261

•Taxes - $156,624

• Other-315,917

Governmental Activities - Expenses

• General Gov-$101,511

•Police "315,058

• Fire-$1,800

ID Street and Sairitation - S

The notes to the finandal statement have additional information presented that is essential to a understanding of the data provided in the government-wide financial statements.

Business-Type Activities

The Town

type activities of the Town are two Imsiness-type activities {water

that charge a fee to customers for the services provided. The sewer), which are accounted for in the enterprise fund.

TOWN OF RIDGECREST, LOUISIANA MANAGEMENrs DISCUSSION AND ANALYSIS

DECEMBER 31, 2015

GOVERNMENT-WIDE EINANCIAI ANALYSIS (continued)

Business-Type Activities (continued)

The following are graphical representations of information in the statement of activiti^ for business-type activities:

Business-Type Activities - Revenues

B Water and Sewer - $201^32

Business-Type Activities - Expenses

B Salaries -$40,225

• Depreciation - $25,842

•Operating - $110,662

The notes to the financial statements have additional information presented that is essential to a understanding of the data provided in the government-wide financial statements.


DECEMBER 31,2015

GOVERNMENT-WIDE FINANCIAL ANALYSIS (continued)

Comments on General Fund Budget Comparisons

The Town of Ridgecresfs general fund budget was amended once during the last year. The budgeted expenditures were $170,231 and the budgeted revenues were $130,530.

Actual revenues were under budgeted amounts by $2,408. Actual expenditures were under budgeted amounts by $25,564.

Comments on Public Worl^ Fund Budget Comparisons

The Town of Ridgecresfs public works fund budget was not amended during the last year. The budgeted expenditures were $21,750 and the budgeted revenues were $85,000.

Actual revenues were under bud^ted amounts by $7,553. Actual expenditures were over budgeted amounts

CAPITAL ASSETS

As of December 31, 2015, the Town had capital assets of $598,486 in the general fund and $284,772 in the proprietary fund. This year the additions were as follows:

Meter - $ 7,c Valve 4,212 Pump 13,900 Bush hog 1.199

Total a 26.657

REQUEST FOR INFORMATION

This financial report is designed to provide our citizens, texpayeis, customers, and creditors with a general overview of the Town's finances and to show the Town's accountability for the money it r&:::elv^. Any questions about this report or request for additional information may be directed to Dorothy Brixey, Town Clerk, 116 Foster Drive, Ridgecrest, Louisiana 71334.

BASIC FINANCIAL STATEMENTS

SECTION II GOVERNMENT-WIDE FINANCIAL STATEMENTS

TOWN OF RIDGECREST, LOUISIANA STATEMENT OF NET POSITION

DECEMBER 31,2014

STATEMENT A

Governmental Activities

Business-I'ype

Activities Total

ASSETS Current as^ts Cash and cash equivalents Receivables, net Due from other govemmenfe

Total current as^fcs

199,344 $ 15,085 19,193

34,278

214,429 19,888

_3i

Noncurrent assets Restricted Cash and cash equivalents R«:eivabl^, net

Capital assets Total noncurrent assets

Total assets

LIABILITIES Current liabilities Accounts and other payables

Total current liabilities

Noncurrent liabilities Customer deposits

Total liabilities

NET POSITION Invested in capital assets Restricted for streets and drainage R^tricted for meter deposits

Total net position

4.616

4,616

598,486 279,097

705,227 1

4,616 1

19,856

284,772

2.468 im

119,856

883,258 304.628 1 1.0D9.855

1.

z. lA

21,748 $ 21.748

284,772 $

19,856 10.062 _

279,097

36,689 314.690 $ 1.218.900

The accompanying note are an integral part of this financial statement.

TOWN OF RIDGECREST, LOUISIANA STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED DECEMBER 31,2015

STATEMENTS

Program Revenues

GOVERNMENTAL ACTIVITIES Expenses

Fines, and Charges for Services

Operating Grants

Net (Expenses) Revenues and Changes in Net Position

Governmental Business-Type Activities Activities Total

General government $ 101^11 $ 1,450 $ 31,199 $ (68,862) $ $ (68,862) Public safety Police 15,058 1,261 (13,797) - (13,797) Fire 1,800 - - (1,800) (1,800)

Sanitation 42,714 - - (42,714) - (42,714) Road maintenance 49390 - - (49.3901 _ (49,3901

Total goveriunental activities $ 210,473 $ 2.711 $ 31199 $ (176,5631 $ $ (176,5631

BUSINESS-TYPE ACTIVITIES Water and sewer $ 176,729 $ 201,432 $ - $ - $ 24,703 $ 24,703

Total S 387,202 $ 204.143 $ 31199 $ (1763631 $ 24,703 $ (151.8601

General Revenues: Taxes Property taxes $ 8,828 $ - $ 8,828 Saks taxes 121,977 _ 121,977 Beer taxes 751 _ 751 Franchise taxes • 25,068 - 25,068

Miarellaneous 15,917 15,917 Transfers 29324 (293241 -

Total general revenues and transfers $ 201,865 $ (29,3241 $ 172,541 Change in net position $ 25,302 $ (4,621) $ 20,681 Net position - January 1,2015 85^,908 319,311 1,198,219 Net position ~ December 31,2015 $ 904.210 $ 314,690 $ 1,218,900

The accompanying notes are an integral part of this financial statement

SECTION III FUND FINANCIAL STATEMENTS

10 STATEMENT C

TOWN OF RIDGECREST, LOUISIANA BALANCE SHEET

GOVERNMENTAL FUNDS DECEMBER 31, 2015

Major Funds Public Works

General Fund Fund Total

ASSETS Cash $ 26,988 $ $ 26,988 Cash - restricted - 272,356 272,356 Receivables: Ad valorem tax 695 _ 695 Sales tax - restricted - 6,741 6,741 Due from other governmental units 3,560 _ 3.560

Total assets S 31.243 ffi 279.097 $ 310.340

LIABILITIES AND FUND BALANCES Liabilities: Accounts and other payables $ 4.616 $ $ 4,616

Total liabilities $ 4.616 $ $ 4.616

Fund balances: Restricted for streets and drainage $ $ 279,097 $ 279,097 Unassigned 26.627 _ 26,627

Total fund balances $ 26.627 $ 279,097 $ 305.724

Total liabilities and fund balances S 31.243 S 279.097 $ 310.340

The accompanymg notes are an integral part of this financial statement.

11 STATEMENT D

TOWN OF RIDGECREST, LOUISIANA RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE GOVERNMENT-WTOE STATEMENT OF NET POSITION DECEMBER 31,2015

Total Fund Balances for Governmental funds (Statement C) S 305,724

Tote! net position reported for governmental activities in the statement of net position is different tecause:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in tlie funds. Those assets consist of:

t: Buildings, net of $50,677 accumulated depreciation 1 Equipment, net of $416,959 accumulated depreciation 29,826 Infrastructure, net of $256,^8 accumulated depreciation 554,635

Total Net Position of Governmental Activities (Statement A) S 9Q4.21Q

The accompanying notes are an integral part of this financial statement.

12 STATEMENT E

TOWN OF RIDGECREST, LOUISIANA STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES

GOVERNMENTAL FUNDS FOR THE YEAR ENDED DECEMBER 31,2015

Major Funds

General Fund Public Works

Fund Total

REVENUES Taxes Licenses and permits Intergovernmental State funds

Fines and forfeitures Other

77,301 1,450

1,261 15.917

79,323 $ 156,624 1450

31,1 1,261

15,917

Total revenues 127,128 1 79323

EXPENDITURES Current General government Public safety: Police

Sanitation Road maintenance

92,878 $

42,714 29.098

92,878

L 42, 29.098

.651 29,09f

Excess {deficiency) of revenues over expenditures ri6.5231 1 50,225 1 33.702

OTHER FINANCING SOURCES Transfers in

Total other financing sources

Net change in fund balance

Fund balances, beginning of year

Fund balances, end of year

21,430 21,430 1

4,907 $

7, 7.894 29,324

58,119 $

26.627 $ 279.097 S • 305.'


13 STATEMENT F

TOWN OF RIDGECREST, LOUISIANA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED DECEMBER 31, 2015

Net change in fund balances, total governmental funds, (Statement E) $ 63,026

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

Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.

This is the amount by which depreciation exceeded capital outlays in the current period:

Depreciation expense (37,724')

Total change in net position per statement of activities, (Statement B) $ 25.302


PROPRIETARY FUNDS

TOWN OF RIDGECREST, LOUISIANA STATEMENT OF NET POSITION

PROPRIETARY FUNDS DECEMBER 31,2015

14 STATEMENT G

ASSETS Current assete

Accounts r^dvable, net of allowance

Total current assets

Noncurrent assets

Cash and cash equivalents Capital assets, net of accumulated depr^iation

Total noncurrent assets

Total assets

Current liabilities (payable from current ^ets) Accounts and other payables

Noncurrent liabilities (payable from restricted assets) Customers' deposits

Total liabilities

NET POSITION Invested in capital assets, net of related debt Restricted for meter deposits Unassigned

Total net position

Utility Fund

15,085 19.193

34.278

304.628

2,^

24.216

284,772 19,856 10.062

The accompanying not^ are an integral part of this financial statement.

STATEMENT H TOWN OF RIDGECREST, LOUISIANA

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS


OPERATING REVENUES Charges for services

income

OPERATING EXPENSES Salaries Operating expenses

Maior Fund Utilitv Fund

201,432 201,432

40,225 110,662 25,842

Operating Income

Other financing expenses

Change in Net Position

Net position, beginning of year

Net position, end of year

24,703

29,324

314.690


16 STATEMENT I

TOWN OF RIDGECREST, LOUISIANA STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS FOR THE YEAR ENDED DECEMBER 31, 2015

Cash Flows from Operating Activities Cash received from customers $ 202,^8 Cash payments to suppliers for goods and services (109,265)

> employees for services (4 Net cash provided by operating activities |___ 52,948

Cash Flows from Noncapital Financing Activities Operating transfers to other funds $ (29324) Increase in consumer deposits

Net cash (used) for noncapital financing activities 1

Cash Flows from Capital and Related Finandrtg Activities Purchase of fixed assets • 1

Net cash (used) for capital activities , $ (26,657)

Net decrease in cash and cash equivalents $ (2,215)

Cash and cash equivalents, beginning of year 37.156

Cash and cash equivalents, end of year S 34.941

Reconciliation of Operating Income to Net Cash lYovided bv Operating Activities

income $ 24,703

Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities Depreciation Change in assets and liabilities

Decrease in accounts receivable 1,006 Increase in accounts payable 1397

Net cash provided by operating activiti^ $


NOTES TO THE FINANCIAL STATEMENTS

17

TOWN OF RIDGECREST, LOUISIANA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2015

INTRODUCTION

1. The Town of Ridgecrest, Louisiana is a municipal corporation governed by an elected mayor.

2. The Town of Ridgecrest, Louisiana was incorporated under the provisions of the Lawrason Act as a Town in 1962.

3. The purpose of the municipality is to provide utility services, public safety (police and fire), streets, sanitation, and general administrative services.

4. The Board of Aldermen consists of five elected members.

5. The Town is located in the northeast portion of Concordia Parish, Louisiana. Concordia Parish is located in east central Louisiana.

6. The population of Ridgecrest, Louisiana is approximately 835 persons.

7. The Town of Ridgecrest, Louisiana has three full-time employees.

8. The Town of Ridgecrest, Louisiana has approximately 300 utility customers.

GASB Statement No. 14, The Reporting Entity, established criteria for determining the governmental reporting entity and component units that should be included within the reporting entity. Under provisions of this statement, the municipality is considered a primary government, since it is a special purpose government that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments. As used in GASB Statement No. 14, fiscally independent means that the municipality may, without the approval or consent of another governmental entity, determine or modify its own budget, levy its own taxes or set rates or charges, and issue bonded debt.

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Government-Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net position and the statement of changes in net position) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function 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 function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

18

TOWN OF RIDGECREST, LOUISIANA NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2015

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

A. Government-Wide and Fund Financial Statements (continued)

^parate financial statements are provided for governmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

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

The government-wide financial statemente are rejx)rted using the ecorromic resources measurement focus and the accrual basis of accounting, as is the proprietary fund financial statements. Revenues are recorded when earned and expenses are ra:orded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current finandal resources measurement focus and the modified accrual basis of acxrounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collortible within the current ^riod or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, franchise taxes, licenses, and Interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Only the portion of special assessment receivables due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measureable and available only when cash is received by the government.

The municipality reports the following major governmental funds:

The General Fund is the municipality's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.

The Public Works Fund is a major fund that provides sales tax funds for construction and maintaining roads and streets in the Town.

The municipality reports the following major proprietary funds:

The Proprietary Fund accounts for all financial resources used m the water and sewer enterprtees operated by the Town.

19

TOWN OF RIDGECREST, LOUISIANA NOTES TO THE HNANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2015

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES (continued)

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

Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, sul^ect to this same limitation. The government has elected not to follow subsequent private-sector guidance.

general rule the effect of interfund activity Exceptions to ihis general rule are

government's enterprise operations. Elimination of t revenues reported for the various functions concerned

has been eliminated from the government-wide finarurial payments-in-lieu of taxes and other charges betw^n the jf these charges would distort the direxrt costs and program

Amounts reported as program revenues Include 1) charge to customers or applicants for goods, services, or privileges provided; 2) operatirg grants and contributions; and 3) capitel grants and contributions, including special assessments. Internally dedicated r^ources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. AU revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

C Deposits and Investments

The municipality's cash and cash equivalents are considered to cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. State law and the municipality's investment policy allow the municipality to invest in collateralize certificates of deposit, government-backed securities, commercial paper, the state-sponsored investment pool, and mutual funds consisting solely of government-backed securities.

D. Receivables and Payables

Activity between funds tliat are representative of lending/borrowing arrangements outstanding at the end of die fiscal year are referred to as either "due to/from other funds" (i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., the noncurrent portion of interfund loans). AU other outstanding balances between funds are reported as "due to/from other funds." Any residual balances outstanding between the governmental activities and business-type activiti^ are reported in die government-wide financial statements

All trade and property tax receivables are shown net of an allowance for uncoUectives. The allowance account is recorded when information is available indicating the uncoUectibility of the particular receivable.



D. Receivables and Payables (continued)

Property taxes are levied on a calendar year basis and become due on January 1 of each year. The foUowing Is a summary of authorized and levied ad valorem taxes:

Audiorized Levied Millage Mdlage

Taxes due for: General alimony 5.48 5,48

The General Fund accounts for the 1% sales tax approved by the voters in 1977. The sales tax was renewed by the voters in January of 1988 and Januaty of ^03 for 15 years. The tax is restricted to the operation of a solid w^te program.

The General Fund also accounts for an additional 1 V2% tax passed in 2005, with collections beginning in 2006, with the proceeds to be used for repayment of construction and maintenance of roads and streets in the Town.

E. Inventories and Prepaid Items

All inventories are valued at cost using the first-in/first-out method. Inventories of the governmental funds are recorded as expenditures when consumed rather than when purchased, Certein paymente to vendors reflect cosfe applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

F. Restricted Assets

R^tricted assete consist of cash deposited by utility customers as meter deposits and cash deposited by the Town for street maintenance,

G. Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure as^ts (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities columns in the government-wide financial statemente. Capital assets are capitalized at historical cost The municipality maintains a threshold level of $1,000 or more for capitalizing capital assets.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset Hv^ are not capitalized.

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

Estimated Description lives

Streets and parking areas 40 years Buildings 40 years Equipment 5-15 years

21



The Town has impiemented GASB Statement No. 16, Accounting for Compensated Absences. Under GASB Statement No. 16, a liability for unpaid vacation that is attributable to services already rendered and that is not contingent on a specific event that is outside the control of the employer and employee is accrued as employees earn tlie rights to benefits.

The entire compensated absence liability is reported on tite government-wide financial statemente. For governmental fund financial statemente, the current portion of unpaid compensated absences is die amount that is normally expected to paid using expendable available financial resources. These amounts are rarorded in the account "compensated absences payable" in the fund from which the employee who have accumulated leave are paid. The noncurrent portion of the liability is not reported. At December 31, 2015, there was no liability for compensated absences recorded.

I. Fund Equity

Beginning with ftecal year 2011, the Town implemented GASB Statement 54 Fund Balance Reporting and Governmental Fund Type Definitions. This statement provides more clearly defined fund balance categories to make the nature and extent of tiie constraints placed on a government's fund balance more transparent. The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:

• Nonspendable fund balance - amounte that are not in a spendable form (such as inventory) or are required to be maintained intact;

• Restricted hind balance - amounts constraii^d to specific purposes by their providers (such as grantors, bondholders, and higher levels of government), tiirough constitutional provisions, or by enabling legislation;

• Committed fund balance - amounte constrained to specific purpose by a government itself, using ite highest level of decision-making authority; to be reported as committed, amounts cannot be used for any other purpose unless the government takes ilie same highest level action to remove or change Bie constraint;

• Assigned fund balance - amounte a government intends to use for a spazific purpose; intent can expressed by the goveming body or by an official or body to which tihe governing body delegates the authority;

• Unassigned fund balance - amounte that are available for any purpose (such as the purchase of fixed assets, construction, debt service, or for other purposes).

The Board of Aldermen establishes (and modifies or rescinds) fund balance commitments by passage of an ordinance or resolution. This is typically done through adoption and amendrnent of the bud^t A fund balance commitment is further indicated in the budget document as a designation or commitment of the fund (such as for special incentives). Assigned fund balance is established by the Board of Aldermen through adoption or amendment of the budget as intended for specific purpose (such as the purchase of fixed assets, construction, debt service, or for other purposes).

In the general fund, the Town strives to maintain an unassigned fund balance to be used for unantteipated emergencies.

22



J, Estimates

The preparation of financial statements in conformity' with accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues, expenditures, and expenses during die reporting period. Actual results could differ from tJio^ estimates.

NOTE 2 - STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

Budget Information - The municipality uses the following budget practices:

1. The Town prepares a proposed bud^t and submits it to the Mayor and Board of Aldermen no later than 15 dayS prior to the beginning of each fiscal year. The Town approves a budget for the general fund only.

2. A summary of the proposed budget is published and the public notified that the proposed budget is available for public inspection. At the same time, a public hearing is called.

3. A public hearing is held on the proposed budget at least tar days after publication of the call for the

4. After the holding of the public hearing and completion of all action necessary to finalize and implement the budget, the budget is adopted through the passage of an ordinance prior to the commencement of the fiscal year for which the budget is being adopted.

5. Budgetary amendments involving the transfer to funds from one department, program, or function to another or involving increases in expenditures resulting from revenues exceeding amounts estimated, require the approval of the Board of Aldermen.

6. All budgetary appropriations lapse at the end of each fiscal year.

7. Budgeta are adopted on a cash basis.

NOTE 3 - CASH AND CASH EQUIVALENTS

The following is a summary of cash and cash equivalents (book balances) at December 31, 2015:

Demand deposits $ 334.285


NOTE 3 - CASH AND CASH EQUIVALENTS (continued)

Th^e deposite are stated at cost which approximates market value. Under state law, Ihese deposits must be secured by f«ieral deposit insurance or the pledge of s^nirities owned by the fiscal agent bank. The market value of the pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent. These securities are held in the name of the pledging fiscal agent bank in a holding or custodial bank that is muixially acceptable to both parties.

At fully

, 2015, • from risk

government has 5336,831 in deposite (collected bank balances). These deposits insurance.

NOTE 4 - RECEIVABLES

The following is a summary of current receivables for December 31,2015:

Governmental Activities

Business-Type ,

Activities Total Ad valorem taxes $ 695 $ $ 695 Utilities - 19,193 19,193 Due from other governments 3360 - 3,560 Sales tax 6.741 - 6.741

Total S 10.996 S 19.193 5 30.189

NOTE 5 - CAPITAL ASSETS

Capital assets and depredation activity as of and for the year ended December 31, 2015, is as follows:

Governmental activities: Capital assets, not being depreciated Land

Total capital assets not being depreciated

Buildings Equipment Streets

Total capital assets being depreciated

accumu.

Equipment Streete

Total accumulated depreciation

Total capital assets being depreciated, net

Governmental activities capital assets

Beginning Balance

63,002 446,785 81L613

$ 1.321.400

(49,952) (400,252)

Increase Decrease

(725) (16,707)

Ending Balance

$ 1.700 $ - $ - $ 1.700 $ 1.700 $ - $ - $ 1,700

63,002 446,785 811.613

1321.^

$ r686,8901 $ f37.724^ S - $ f724,6141

$ 634310 $ 07.7241 $ S 596.786

t ^36.710 ft ^37.7741 ft - ft 59R.4ft6


NOTE 5 - CAPITAL ASSETS (continued)

Depreciation expense of $37,724 for 2015 was charged as follows:

Shreets Total depreciation

Business-type activities: Capital assets, not being depreciated

Land

Equipment

Less accumulated depreciation for

20.292 37.724

lalani^

1,205,418

Total capital assets being depreciated, net

Business-type activities net assets

NOTE 6 ~ PROPERTY TAXES

Properly taxes attach as an enforceable lien on property June 15 of the following year. The Concordia Parish Town Is responsible for billing and collections. The fund.

268.957

283.957

Increase

$ 15.000 1

26,657

(25.8421

Endinj Decrease

15,000

$ 1,232,(

as of January 1. Taxes are levied in prepares a list of property taxes

's total millage is 5.48 mills and is the Town,

to tfie

NOTE 7 - RESTRICTED NET POSITION

Governmental activides: Roads

Business-type activities Customer meter deposits

279.097

NOTE 8 - ACCOUNTS AND OTHER PAYABLES

Accounts and other payables at Decemter 31,2015, are as follows:

General Fund Proprietary

Fund

Payroll tax^

Total $ 4,493 S

123 2,46S $ 6,961

123 $ 4.616 $ 2.468 $ 7.084

25

TOWN OF RIDGBCREST, LOUISIANA NOTES TO THE HNANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31,2015

NOTE 9 - RETIREMENT COMMITMENTS

The Town of Ridgecrest, Louisiana employees are all members of the s(x:ial security system and are memters of no other retirement plan. The expanse of the social security Is reflected in payroll texes in the various statements of income.

NOTE 10 - RISK MANAGEMENT

The Town is exposed to certain risks of losses such as property damage, liability issues, and other potential losses that may occur. The Town minimizes its losses by purchase of commercial insurance. The Town'^s exposure over ttie amount of insurance is considered to be immaterial.

NOTE 11 " COMPENSATION OF THE GOVERNING BOARD

The Governing Board of the Town of Ridgecrest, Louisiana consiste of a Mayor and five Aldermen. For the year ended December 31,2015, the Aldermen's compensation was as foUows:

Maples, Alderman $ 1,? Wanda Smith, Alderperson 150 Rita Bolyer, Alderperson 1,800 Jamie Flarrison, Alderperson • 1,800 Bobby Sheppard, Alderman 150 Darlene Humphries, Alderperson • l,t

1 Total

NOTE 12 - SCHEDULE OF COMPENSATION, REIMBURSEMENTS, BENEFITS, AND OTHER PAYMENTS TO AGENCY HEAD

Agency Head Name: Bobby Sheppard, Mayor

$ 4,050 Reimbursements 26 Registration fees 90 Housing 188

Total

SECTION IV ADDITIONAL REQUIRED SUPPLEMENTARY INFORMATION

26

TOWN OF RIDGECREST, LOUISIANA COMPARISON SCHEDULE - GENERAL FUND

YEAR ENDED DECEMBER 31,201S

Revenues Taxes Licenses and permits Intergovernmental

Miscellaneous Total revenues

Expenditures General goverrunent Public safety:

Fire

(Deficiency) of revenues over expenditures

Other financmg sources: Operating transfers in

Total other financing source

Fund balance, ending

2,500 30,000 3,(

105,000 $

42,000

(25,7561 1

100,000

Net changes in fund balances $ 74,244

22,103

Final

84,100 1,500

30,000 1,500

30 13,400

130,530

114,181 $

170,231 i_

(39,7011 1

60,000 i_

20,299

22,103

Actual

78,296 1,450

31,199 V

15,917

Variance with Final Budget

Positive (Negativel

21,430

2L

-22,

26.9E

$

93,894 $

144,667 S_

(16.5451 S_

(50) 1,199

2,517 OM

20,287

1,591

25,564

(23,1561

38,570

15,414

See Independent Auditor's Report.

TOWN OF RIDGECREST, LOUISIANA BUDGETARY COMPARISON SCHEDULE - PUBLIC WORKS FUND

YEAR ENDED DECEMBER 31, WIS

27

Revenues Taxes and other

Total revenues

Road maintenance Total expenditures

Excess of revenues over expenditures

Other financing sources: Operating transfers (out) in

Total other financing sources

Net changes in fund balance

Fund balance, beginnir^

Fund balance, ending

Budgeted Amounts Original

85.000 1

21,750 1 21,750 $

63,250 1

10,000

10.000

73,250 $

216.113 _

85,000 $

21.750 $ 21,750 1

63.250 1

10,000

IQ.OOQ

73,250 $

216.113 _

289.363 1

7,894

Variance with Final Budget

Positive

77,447 S 77,447 1

29.098 S

1.349 1

7,894

56,243 $

216,113

272.356 $_

(7,553) (7,553)

(7^48) (7348)

(14,901)

(2,106)

(2.106)

(17,007)

(17.007)

iter's Report.

TOWN OF RIDGECREST, LOUISIANA NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION


NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION

Budgetary Comparison Schedule

1. Basis of Presentation

The Budgetary Comparison Schedule presents the original legally adopted budget, the final legally adopted budget, the actual data on the GAAP basis, and variances between the final budget and the actual data,

2. Budget Amendments and Revisions

The budget is adopted by the Board of Aldermen. Amendments can be made on the approval of the Board of Aldermen. A budgetary comparison is presented for the general fund consistent with accounting principles generally accepted in the United States of America. There were no nonmajor funds.

3. Budget/GAAP Basis Reconciliation

The differences between the budgetary basis and the GAAP basis are:

a. Revenues are recorded when received in cash (budgetary) as opposed to when susceptible to accrual (GAAP).

b. Expenditures are recorded when paid in cash (budgetary) as opposed to when susceptible to accrual (GAAP),

The following schedule reconciles net change in fund balances on the budgetary basis schedules to the GAAP basis financial statements:

Fund Fund

Net changes in fund balance - budget basis (deficit) Increase (d«:rease)

Net adjustments for revenue accruals Net adjustments for expenditure accruals

Net change in fund balance - GA AP basis (deficit)

$ 4,885 $ 56,243

(994) 1,876 1,016 -

$ 4.907 S 58.119

SECTION V REPORTS ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE

29

ILAS SIMMON LLP

RTtFIED PUBLIC ACCOUNTANTS anS ADVISORS 209 N. CatlftwrceStreet

Natchez, Mi^isslpd 39121-Tetephone; 601,44^7411 Fax; 601.442.8^1

Hftviv.sr/asstm/ii ons.com

INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT

OF THE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Honorable Bobby Sheppard, Mayor and Members of the Board of Aldermen Town of Ridg^rest, Louisiana

We have audited, in accordance with the auditing standards generally accepted in tfie United States of America and the standards applicable to financial audits contained in Gauemment Auditing Standards issued by tihe Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the Town of Ridgecrest, Louisiana as of and for tlie year ended December 31, 2015, and the related notes to the financial statements, which collectively comprise the Town of Ridgecrest, Louisiana's basic financial statements, and have issued our report thereon dated June 23,2016.

Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Town of Ridgecrest, Louisiana's internal ojntrol over financial reporting (intemal control) to determine the audit procedures tfiat are appropriate in die circumstances for die purpose of expressing an opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town of Ridgecrest, Louisiana's internal control. Accordingly, we do not express an opinion on tfie effectiveness of the Town of Ridgecrest, Louisiana's internal control.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described in the accompanying schedule of findings, we identified certain deficiencies in internal control that we consider to be material weaknesses.

A deficienq/ in intemal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing tiieir assigned functions, to prevent, or det«;t and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such ihat there is a reasonable possibility that a material misstatement of the entity's financial statements will not 1» prevented, or detected and corrected on a timely basis. We consider the deficiencies descrited in the accompanying schedule of findings to he material weaknesses. These findings are described as 2015-1 and 2015-2.

Ahmberj: American Institute of CPA*, MuoioAppi Society of CPAo, Louulana Society of CPA*

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Town of Ridgecrest, Louisiana's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agr^ments, noncompliance with which could have a dir^t and material effect on the determination of financial statement amounte. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do hot express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying schedule of findings and questioned costs as items 2015-3.

Town of Ridgecrest's Response to Findings

The Town of Rldgecrest, Louisiana's response to findings identified in our audit is descril^d in the accompanying schedule of findings. Town of Rldgecrest, Louisiana's response was not subj^ted to ttie auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

Purpose of this Report

This report is intended for the information and use of Management of the Town of Ridgecrest, Louisiana and the Legislative Auditor of the State of Louisiana. However, this report is a matter of public record and its distribution is not limited.

£xiau>U}M), ILf Natchez, Mississippi June 23, 2016

SECTION VI SCHEDULE OF FINDINGS

31

TOWN OF RIDGECREST, LOUISIANA SCHEDULE OF FINDINGS


SECTION 1; SUMMARY OF AUDITOR'S RESULTS

1. Type of auditor's report issued on the financial stetements: Unqualified

2. Internal control over financial reporting:

a. Material weakness(es) identified? b. Significant deflciency(ies) identified that are not

considered to be material weaknesses?

3. Material noncompliance relating to the financial statements?

TOWN OF RIDGECREST, LOUISIANA STATUS OF PRIOR YEAR AUDIT FINDINGS FOR THE YEAR ENDED DECEMBER 31,2014

Ref. No.

Fiscal Year Finding MtiaUy

Occurred De^ription of Finding

Section I ™ Internal Control and Compliance Material to the Financial Statements:

2014-1 Numerous

2014-2 2014

SEGREGATION OF DUTIES We noted that the Town do^ not have adequate segregation of duties. This finding has been reported as a material weakness for many years.

BUDGET LAW VIOLATION Actual spending in the General Fund exceeded the budgeted amount by more than 5%,

Corrective Action Taken

(Yes, No, Partjallvl

No

Yes

Planned Corrective Action/Partial

Corrective Action Taken

Management indicates that it is not cost efficient or feasible to increase the number of employees and had no plans to do so.

Management has monitored its budget closely to comply with the Budget Law.

2014-3 2014 LATE FILING OF AUDIT REPORT The December 31,2014, audit was filed in July 2015, which does not comply with the rales of the Louisiana Legislative Auditor.

Yes Management has worked closely with the external auditors to insure the audited financiai statements are submitted to the Legislative Auditor by the statutory due date-

Section n - Internal Control and Compliance Material to Federal Awards:

None

Section HI - Management Letter:

None

K3

TOWN ON RIDGECREST, LOUISIANA CURRENT YEAR FINDINGS, RECOMMENDATIONS, AND

CORRECTIVE ACTION PLAN FOR THE YEAR ENDED DECEMBER 31,2015

S^tion I - Internal Control and Compliance Material to the Financial Statemenis:

2015-1 Segregation of Dnties (Internal Control Finding)

Condition; There is insufficient segregation of duties necessary to have an effective internal controL One person has complete control over billing customers, collating and depositing all accounts receivable, and compiling subsidiary ledgers. These duties should be broken up and given to more than one person.

Criteria: The important elements of good internal controls require that the same employe does not handle the functions of accounting, billing, coOartions, and receiving.

Cause of Condition: The small ske of the entity and lack of anployees.

Effect of Condition: Material weakness in internal controls.

Recommendation: We recommend an attempt to segregate duties be made by the Town.

R^ponse: Management indicates that it is not feasible or cost efficient to hire any additional employee and plans no change in its operations.

2015-2 Reconcilement of Accounts Receivable (Internal Control Finding!

Condition: Utility fund accounts receivable per the general ledger was not reconciled to the subsidiary ledger during the year because management could not pnaduce an accounts receivable subsidiary report

Criteria: The accounts receivable subsidiary ledger should be reconcEed to the general ledger at least armuaEy.

Cause of Condition: Management is unable to generate an accurate accounts receivable subsidiary.


Recommendation: We recommend that management reconcile the suteidiary ledger to the general ledger monthly and make any nece^ary adjustments to accurately state the accoimts receivable balance at year end. Also, it is recommended diat management retains the records and research to support the correct year-end Imlance where it originates from the subsidiary ledger or to the general ledger with explanations of any reconciliation differences.

W Response: Management will work on this for fiscal year 2016.

TOWN ON RIDGECREST, LOUISIANA CURRENT YEAR HNDINGS, RECOMMENDATIONS, AND

CORRECTIVE ACTION PLAN FOR THE YEAR ENDED DECEMBER 31,2015

Section I - Internal Control and Compliance Material to the Financial Statements (continued):

2015-3 Public Works Fund l&cpenditures (Compliance Finding!

Condition: The Town of Ridgecrest^s Public Works Fund's expenditures exceeded its budgeted amount by 34%. The budgeted amount of expenditures was $21,750, and the actual expenditures were $29,098. Louisiana Revised Statute 39:1311 requires that expenditures not exceed the budget by more than 5%.

Criteria: Louisiana statute says that government's expenditures must not surpass the budgeted amount of 5% or more.

Cause of Condition: There were unanticipated increases in genera! operating expenses that the Town was not able to make adjustments for in time.


Recommendation: We recommend that management review the budget to actual regularly during the year to ensure that the 5% threshold is not surpassed.

Response: Management will work on this for fiscal year 2016.

Section II - Internal Control and Compliance Material to Federal Awards:

None

Sa:tion ni - Management Letter:

None

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