Recreation District 6 of St. Tammany...

RECREATION DISTRICT NO. 6 OF ST. TAMMANY PARISH

Annual Financial Statements

December 31, 2011

LAPORTE

Contents

Independent Auditor's Report 1 - 2

Required Supplemental Information (Part I) Management's Discussion and Analysis 4 - 5

Basic Financial Statements

Government-Wide Financial Statements Statement of Net Assets 7 Statement of Activities 8

Fund Financial Statements Governmental Funds

Balance Sheet 10 Statement of Revenues, Expenditures and Changes in

Fund Balances 11 Reconciliation of the Statement of Revenues, Expenditures

and Changes in Fund Balances of Governmental Funds to the Statement of Activities 12

Notes to Financial Statements 13-19

Other Supplemental Information Schedule of Governing Board 21

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Basic Financial Statements Performed in Accordance with Government Auditing Standards 22 - 23

Summary Schedule of Findings and Responses 24

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Independent Auditor's Report

To the Board of Commissioners Recreation District No. 6 of St. Tammany Parish Covington, Louisiana

We have audited the accompanying financial statements of the governmental activities and each major fund of Recreation District No. 6. of St. Tammany Parish {the District), a component unit of the St. Tammany Parish Government, as of and for the year ended December 31, 2011, which collectively comprise the District's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the District's management. Our responsibility is to express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental activities and each major fund of Recreation District No. 6 of St. Tammany Parish as of December 31, 2011, 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.

In accordance with Government Auditing Standards, we have also issued our report dated June 26, 2012, on our consideration of the District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements 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 the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit.

N E W O R L E A N S HOUSTON BATON ROUGE COVINGTON

All Independently Owned Meinber, McGladrey Alliance The McGJsdrHV Allrante ia a prariiar affillHlion of IndependBni accDunliiH entl conBUllingfiiTra, The- McGLidray Allianca iriamber Imna maintain their nsimB, ayloTKjmy snd IndspendencB ond Sf^ rsBporisiDie t<;r thetr own cte^vt t ^ errengam^ts, 'defii/ary at serv>c>se and n^lnrEnsfKa ^ dieni mlalionBhipiS.

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Management has not presented the budgetary comparison information that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board (GASB), who considers it be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 4 through 5 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures 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 statements. We do not express 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.

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District's basic financial statements. The accompanying other supplemental information is presented for the purpose of additional analysis and is not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

A Professional Accounting Corporation

June 26, 2012

REQUIRED SUPPLEMENTAL INFORMATION (PART I) MANAGEMENT'S DISCUSSION AND ANALYSIS


Management's Discussion and Analysis For the Year Ended December 31, 2011

As management of Recreation District No. 6 of St. Tammany Parish {the District), we offer this discussion and analysis of the District's financial activities for the year ended December 31, 2011.

As with other sections of this financial report, the information contained within this Management's Discussion and Analysis (MD&A) should be considered only a part of the greater whole. The readers of this statement should take time to read and evaluate all sections of this report, including the footnotes.

Financial Highlights This annual report consists of a series of financial statements. The Statement of Net Assets and the Statement of Activities (on pages 7 and 8) provide information about the activities of the District as a whole and present a longer-term view of the District's finances. Fund financial statements begin on page 10. These statements detail how these services were financed in the short-term as well as what remains for future spending. The District is a component unit of the St. Tammany Parish Government. Its main operations are conducted through a general fund.

A summary of the basic government-wide financial statements is as follows:

SUMMARY OF STATEMENTS OF NET ASSETS

2011 2010 Change

Assets Current Assets $ 367,783 $ 383,280 $ (15,497) Capital Assets 1,604,811 1,715,904 (111,093)

Total Assets

Liabilities Current Liabilities Non-Current Liabilities

Total Liabilities

Net Assets Invested in Capital Assets,

Net of Related Debt (235,189) (189,096) (46,093) Restricted - Construction Restricted - Debt Service Unrestricted

1,972,594

97,465

1,770,000

1,867,465

2,099,184

95,165

1,840,000

1,935,165

(126,590)

2,300

(70,000)

(67,700)

23,724

245,344

71,250

40,164

243,780

69,171

(16,440)

1,564

2,079

Net Assets $ 105,129 $ 164,019 $ (58,890)


Management's Discussion and Analysis For the Year Ended December 31, 2011

SUMMARY OF STATEMENTS OF ACTIVITIES

2011 2010 Change

Revenues Governmental Activities

Recreation Charges for Services Operating Grants and Contributions

General Revenues Property Taxes Other

Total Revenues

Expenses Recreation Interest on Long-Term Debt

Total Expenses

Changes in Net Assets

$ 104,970 6,159

156,197 4,015

271,341

243,197 87,034

330,231

$ (58,890)

$ 128,264 -

207,383 820

336,467

234,294 92,334

326,628

$ 9,839

$ (23,294) 6,159

(51,186) 3,195

(65,126)

8,903 (5,300)

3,603

$ (68,729)

Capital Assets and Debt In 2011, capital assets decreased by $111,093, which was the result of depreciation expense. Non-current liabilities decreased by $65,000 due to payment of bond principal.

Economic Factors and Next Year's Budget and Rates The District has authority to levy millage rates up to 11 mills for payment of general obligation bonds. The 2011 rates were levied at 11 mills for payment of general obligation bonds.

Requests for Information This financial report is designed to provide a general overview of the District's finances for all those with an interest in the District's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Mr. Donald Sharp, Chairman, P. O. Box 1590, Covington, LA 70434.

BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS

RECREATION DISTRICT NO. 6 OF ST. TAMMANY PARISH Statement of Net Assets December 31, 2011

Governmental Activities

Assets Cash and Cash Equivalents $ 164,750 Property Taxes Receivable, Net 183,999 Bond Issuance Cost, Net of Amortization 19,034 Capital Assets, Net 1,604,811

Total Assets 1,972,594

Liabilities Accrued Interest 27,465 Bonds Payable

Due Within One Year Due in More than One Year

Total Liabilities

Net Assets Invested in Capital Assets, Net of Related Debt Restricted - Construction Restricted - Debt Service Unrestricted

Total Net Assets

70,000 1,770,000

1,867,465

(235,189) 23,724

245,344 71,250

$ 105,129

The accompanying notes are an integral part of these financial statements.

RECREATION DISTRICT NO. 6 OF ST. TAMMANY PARISH Statement of Activities For the Year Ended December 31, 2011

Functional Programs

Governmental Activities Recreation Interest on Long-Term Debt

Total

General Revenues Property Taxes Other Income

Total General Revenues

Change in Net Assets

Net Assets, Beginning of Year

Net Assets, End of Year

S

s

Expenses

243,197 87,034

330,231

S

$

Program Revenue Charges

for Services

104,970

104,970

Operating Grants and

Contributions

$

S

6,159

6,159

Net (Expenses) Revenues and

Changes in Net Assets

$ (132,068) (87,034)

(219,102)

156,197 4,015

160,212

(58,890)

164,019

$ 105,129


BASIC FINANCIAL STATEMENTS FUND FINANCIAL STATEMENTS

GOVERNMENTAL FUNDS

RECREATION DISTRICT NO. 6 OF ST. TAMMANY PARISH Balance Sheet Governmental Funds December 31 , 2011

Assets Cash and Cash Equivalents Property Taxes Receivable, Net Due from Other Funds

Total Assets

Liabilities Due to Other Funds

Total Liabilities

General Fund

S

S

s

79,150

1,000

80.150

469

469

<

S

s

s

Debt Service Fund

62,345 183,999

246.344

1,000

1,000

Capital Projects

Fund

S 23,255

469

S 23.724

S

Total Governmental

Funds

S

s

s

164,750 183,999

1,469

350.218

1,469

1,469

Fund Balances Restricted for:

Capital Projects Debt Service

Unassigned 79.681

23.724 245.344

23,724 245,344 79.681

Total Fund Balances 79,681 245.344 23.724

Total Liabilities and Fund Balances $ 80,150 $ 246,344 $ 23,724

348.749

Amounts reported for governmental activities in the Statement of Net Assets are different because:

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds.

Long-term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds.

Debt issuance costs are reported as expenditures in the governmental funds when those costs are first incurred because they require the use of current financial resources; hovêver, debt issuance costs must be included as a deferred charge in the government-wide financial statements.

Accrued interest on long-term liabilities is not reported in the governmental funds.

Net Assets of Governmental Activities

1.604.811

(1,840,000)

19,034

(27,465)

$ 105,129


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RECREATION DISTRICT NO. 6 OF ST. TAMMANY PARISH Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Year Ended December 31, 2011

Revenues Property Taxes Concession and Gate Fees Sports Registration Fees Sponsorship Income Other Income

Total Revenues

Expenditures Recreation General and Administration Concessions Capital Outlay Debt Service - Principal Debt Sen/ice - Interest

Total Expenditures

Net Change in Fund Balances

Fund Balances, Beginning ofYear

Fund Balances, End ofYear

General Fund

$ 55,238 38,536 11,196 10,174

115,144

69,299 22,244 17,554 5,478

--

114,575

569

79,112

S 79,681

Debt Service Fund

$ 156,197 ----

156,197

-1,089

--

65,000 88,544

154,633

1,564

243,780

$ 245,344

Capital Projects

Fund

S ----

---

16,440 --

16,440

(16,440)

40,164

$ 23,724

Total Governmental

$

$

Funds

156,197 55,238 38,536 11,196 10,174

271,341

69,299 23,333 17,554 21,918 65,000 88,544

285,648

(14,307)

363,056

348,749


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RECREATION DISTRICT NO. 6 OF ST. TAMMANY PARISH Reconcil iat ion of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Act ivi t ies For the Year Ended December 31, 2011

Net Change in Fund Balances - Total Governmental Funds $ (14,307)

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 through depreciation expense. This is the amount by which depreciation exceeded capital outlays in the current period. ( I l l ,093)

The issuance of long-term debt (e.g., bonds and certificates of indebtedness) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect of issuance costs, premiums, discounts, and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. This amount is the net effect of these differences in the treatment of long-term debt and related items. 63,810

Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 2,700

Change in Net Assets of Governmental Activities $ (58,890)


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Notes to Financial Statements

Note 1. Summary of Significant Accounting Policies

The mission of Recreation District No. 6 of St Tammany Parish (the District) is to acquire, construct, operate and maintain recreation facilities in the area of St. Tammany Parish (the Parish), which includes Covington, Louisiana. The District was created in 2008, by Ordinance of the St. Tammany Parish Council (the Council). The District is governed by a Board of Commissioners, which is appointed by the Council. The District consists of up to seven (7) Commissioners who serve staggered terms.

Reporting Entity Governmental Accounting Standards Board (GASB) Statement No. 14 established criteria for determining which component units should be considered part of an entity for financial reporting purposes. The basic criterion for including a potential component unit with the reporting entity is financial accountability. As such, the District has no component units under the criteria established.

The District is a component unit of the Parish because the Council appoints all members of the District and, as such, is financially accountable for the District. The accompanying financial statements present information only on the funds maintained by the District and do not present information on the Council, the general government services provided by that governmental unit, or the governmental units that comprise the financial reporting entity. The accounting and reporting policies of the District conform to accounting principles generally accepted in the United States of Amenca applicable to governmental entities. The following is a summary of significant accounting policies:

Basis of Presentation The accompanying basic financial statements of the District have been prepared in conformity with governmental accounting principles generally accepted in the United States of America. GASB is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The accompanying basic financial statements have been prepared in conformity with GASB Statement No. 34, Basic Financial Statements - and Management's Discussion and Analysis - for State and Local Governments, issued in June 1999.

Government-Wide Financial Statements The government-wide financial statements (i.e., the Statement of Net Assets and the Statement of Activities) report information on all of the non-fiduciary activities of the District. 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.

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Note 1. Summary of Significant Accounting Policies (Continued)

Basis of Presentation (Continued)

Government-Wide Financial Statements (Continued) 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.

Separate financial statements are provided for the governmental funds.

Fund Financial Statements The District uses funds to maintain its financial records during the year. Fund accounting is designed to demonstrate legal compliance and to aid management by segregating transactions related to certain District functions and activities. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts. The various funds of the District are classified as governmental. The emphasis on fund financial statements is on major funds, each displayed in a separate column. A fund is considered major if it is the primary operating fund of the District, or the total assets, liabilities, revenues, or expenditures of the individual governmental fund is at least 10 percent of the corresponding total for all governmental funds.

The District reports the following major governmental funds;

General Fund - The General Fund is the primary operating fund of the District. It accounts for all the financial resources except those that are required to be accounted for in other funds.

Debt Service Fund - The Debt Service Fund accounts for the remainder of the proceeds of ad valorem millage of 11 mills, restricted for debt service.

Capital Projects Fund - The Capital Projects Fund accounts for the proceeds of the 2008 general obligation bonds, which will be used for construction of facilities.

Measurement Focus / Basis of Accounting The amounts reflected in the governmental fund financial statements are accounted for using a current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. This approach is then reconciled, through adjustment, to the government-wide financial statements.

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Measurement Focus / Basis of Accounting (Continued) The amounts reflected in the governmental fund financial statements use the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). Measurable means the amount of the transaction can be determined, and available means collectible within the current period, or soon enough thereafter to pay liabilities of the current period. The District considers all revenues available if they are collected within 60 days after the fiscal year-end. Expenditures are recorded when the related fund liability is incurred, except for interest and principal payments on general long-term debt, which are recognized when payment is due, and certain compensated absences and claims and judgments, which are recognized when the obligations are expected to be liquidated with expendable available financial resources.

The government-wide financial statements are accounted for using an economic resources measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net assets and financial position.

The government-wide financial statements are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used, regardless of the timing of related cash flows.

Budgets and Budgetary Accounting The District is required to adopt an annual budget for the General Fund on a modified accrual basis of accounting. However, a budget was not adopted as required by the District See item number 2011 - 1 in the accompanying schedule of findings and responses.

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

Under state law, the District may invest in United States bonds, treasury notes, or certificates. These are classified as investments if their original maturities exceed 90 days; however, if the original maturities are 90 days or less, they are classified as cash equivalents. Investments are stated at market.

Receivables Receivables are reported net of estimated uncollectible amounts. The allowance for uncollectibles was $25,914 for the year ended December 31, 2011, which represents 12% of the total ad valorem tax assessed. This estimate is based on the District's history of collections within this revenue stream.

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Capital Assets All capital assets of the District are recorded at historical cost in the government-wide financial statements. Depreciation of all exhaustible capital assets is charged as an expense against their operations.

In the fund financial statements, capital assets used in the governmental fund operations are accounted for as capital outlay expenditures upon acquisition.

The costs of normal maintenance and repairs that do not add to the value of the assets or materially extend the assets' lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related fixed assets, as applicable. The District capitalizes equipment and furniture in excess of $2,500. The following estimated useful lives and methods are used to compute depreciation:

Recreational Facilities 10 or 15 Years Straight-Line Equipment 5, 7 or 10 Years Straight-Line

Long-Term Obligations In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable Statement of Net Assets. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt using the straight-line method, which doesn't materially differ from the effective interest method.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources, while discounts on debt issuances are reported as other financing uses.

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

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

b. Restricted net assets - consist of net assets with constraints placed on their use either by external groups or law.

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

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Equity Classifications (Continued) Governmental Fund Balances - During fiscal year ended December 31, 2011, the District adopted GASB 54, Fund Balance Reporting and Governmental Fund Type Definitions, which significantly changed the reporting of fund balance in the balance sheets of governmental type funds.

In the governmental fund financial statements, fund balances are classified as follows:

a. Restricted Fund Balance - amounts that can be spent only for specific purposes because of state or federal laws or restrictions externally imposed by grantors, creditors, or citizens.

b. Unassigned Fund Balance - all amounts not included in other spendable classifications.

Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect 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 the reporting period. Actual results could differ from those estimates.

Use of Restricted/Unrestricted Net Assets When an expense is incurred for purposes for which both restricted and unrestricted net assets are available, the District's policy is to apply restricted net assets first.

Note 2. Cash and Cash Equivalents

Custodial Credit Risk - Custodial credit risk is the risk that in the event of a bank failure, the District's deposits may not be returned to it. The District does not a have a deposit policy for custodial credit risk.

Under state law, demand deposits (or the resulting bank balances) must be secured by federal deposit insurance or the pledge of securities owned by the fiscal agent bank. The market value of the pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent bank. These securities are held in the name of the pledging fiscal agent bank in a holding or custodial bank that is mutually acceptable to both parties.

At December 31, 2011, the carrying amount of the District's bank deposits was $164,750, which includes petty cash of $1,487, and the bank balance was $164,239. These demand deposits are secured from risk by federal deposit insurance.

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Note 3. Capital Assets

Capital assets activity for the year ended December 31, 2011, was as follows:

Capital Assets Being Depreciated Recreational Facilities Equipment

Total Capital Assets Being Depreciated

Less Accumulated Depreciation for: Recreational Facilities Equipment

Total Accumulated Depreciation

Total Capital Assets Being Depreciated, Net

Beginning Balance

$1,939,237 16,490

1,955,727

(236,088) (3,735)

(239,823)

$1,715,904

Increases

$ 13,800 8,118

21,918

(129,994) (3,017)

(133,011)

$ (111,093)

Decreases

$

$

-

-

Ending Balance

$1,953,037 24,608

1,977,645

(366,082) (6,752)

(372,834)

$1,604,811

Note 4. Long-Term Debt

The following is a summary of long-term debt activity for the year ended December 31, 2011:

General Obligation Bonds

Payable at January 1,2011 $ 1,905,000

Issued Retired

Payable at December 31, 2011

Due Within One Year

$2,000,000 General obligation bonds dated May 1, 2008; due in 20 annual installments due March 1, 2028, with semi-annual interest payments at4.10% to 6.00%. $ 1,840,000

$

$

(65,000)

1,840,000

70,000

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Note 4. Long-Term Debt (Continued)

The following is a schedule of future principal debt service requirements:

General Obligation Bonds Year Ending December 31,

2012 2013 2014 2015 2016

2017-2021 2022 - 2026 2027 - 2028

Total

Note 5. Interfund Recelvables/Payables

Principal

$ 70,000 75,000 80,000 80,000 85,000

500,000 645,000 305,000

$1,840,000

Interest

$ 84,494 80,238 75,881 71,581 67,303

269,520 143,830

13,838

$ 806,685

The primary purpose of interfund receivables/payables is to loan monies between funds to cover current expenditures. All interfund receivables/payables are considered short-term, as they are expected to be repaid within the next fiscal year.

Note 6. Ad Valorem Taxes

Property taxes for the bond debt service of the District are levied each November 1 *̂ on the assessed value listed as of the prior January 1̂ ^ for all real property, merchandise and movable property located in the Parish. Assessed values are established by the St. Tammany Parish Assessor's Office and the State Tax Commission at percentages of actual value as specified by Louisiana law. A reevaluation of all property is required to be completed no less than every four years. The November 18, 2008 list was the most recent list reevaluated. Taxes are due and payable December of the following year.

The following is a summary of authorized and levied ad valorem taxes:

Authorized Levied Expiration

Payment of General Obligation Bonds 11.0 mills 11.0 mills 2029

On April 21, 2012, voters approved a 6 mills property tax for acquiring, constructing, improving, maintaining, operating and/or supporting parks, playgrounds, recreation centers and other recreational facilities in Recreation District No. 6 beginning with the year 2012 and ending with the year 2021.

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OTHER SUPPLEMENTAL INFORMATION

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Schedule of Governing Board December 31, 2011

Board of Commissioners Compensation

Donald Sharp $-0-17455 Sam's Branch Lane Covington, LA 70435

Lynette M. Stermer -0-20441 Stermer Road Bush, LA 70421

Jerry N. Granger -0-80249 Woodland Drive Bush, LA 70431

John Travers -0-P.O. Box 1590 Covington, LA 70433

Nicole Goodwin -0-P.O. Box 1590 Covington, LA 70433

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REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF THE BASIC

FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Board of Commissioners Recreation District No. 6 of St Tammany Parish Covington, Louisiana

We have audited the financial statements of the governmental activities and each major fund of Recreation District No. 6 of St. Tammany Parish (the District), a component unit of the St. Tammany Parish Government, as of and for the year ended December 31, 2011, which collectively comprise the District's basic financial statements, and have issued our report thereon dated June 26, 2012. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States of America.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the District's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the District's internal control over financial reporting.

Our consideration of internal control over financial reporting was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control over financial reporting that might be significant deficiencies or material weaknesses and, therefore, there can be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been identified. However, as described in the accompanying schedule of findings and responses, we identified certain deficiencies in internal control over financial reporting that we consider to be material weaknesses.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. We consider the deficiency described in the accompanying schedule of findings and responses as item 2011 -1 to be a material weakness.

N E W O R L E A N S HOUSTON BATON ROUGE COVINGTON

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http://9S5.S92.5850

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the District's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance that is required to be reported under Government Auditing Standards and is described as item 2011 - 1 in the accompanying schedule of findings and responses.

The District's responses to the findings identified in our audit are described in the accompanying schedule of findings and responses. We did not audit the District's response and, accordingly, we express no opinion on it.

This report is intended solely for the use of the Board of Commissioners, management and the Louisiana Legislative Auditor, and is not intended to be, and should not be, used by anyone other than these specified parties. Under Louisiana Revised Statute 24:513, this report is distributed by the Louisiana Legislative Auditor as a public document.

A Professional Accounting Corporation

June 26, 2012

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RECREATION DISTRICT NO. 6 of ST. TAMMANY PARISH

Summary Schedule of Findings and Responses For the Year Ended December 31, 2011

2011 -1 Budget Violation

Criteria:

Condition:

Cause:

The Local Government Budget Act (LRS 39:1301-1315) states that all political subdivisions of the state must prepare a comprehensive budget presenting a complete financial plan for each fiscal year for each general fund and special revenue fund.

The District failed to prepare a budget for the fiscal year ended December 31, 2011.

The condition noted above appears to be caused by management oversight.

Effect- Non-compliance with LRS: 39:1301-1315.

Recommendation: We recommend the District prepare a comprehensive budget for each fiscal year as defined by LRS: 39:1301-1305.

Management's Response: The District will adopt, implement and amend a budget for the General

Fund going forward per the guidance of the Local Government Budget Act.

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