^ ^ e^^
lOWN OF MERRYVTLLE, LOUISIANA
\ N N I ; A L FINANCIAL S'fATEMENTS WITH AUDrrOR\S REPORT
JUNE 30, 2011
•Jnder provisions cf state law, this report is a public (jocuTient Acopy ofthe report has been submitted to the ent!r>' and otner appropnate public officials. The report is available for public inspection at the Baton Rouge office ofthe Legislative Auditor and. where appropnate, at the office ofthe pahsh clerk of court.
Release Date ' " t u U l ZU lZ
Tabic ofC'ontcnts
INDEPENDENT AUDITOR'S REPOR'f
BASIC FINANCIAL STATEMENTS: Statement of Net Assets Statement of Activities Balance Shed Governmental l-'unds Reconciliation ofthe Govemmental Funds Balance Sheet
to Statement of Net Assets Statement of Revenues, E.xpenditures and Changes
in Fund Balances - Governmental Funds Reconciliation ofthe Statement of Revenues
Expenditures and Changes in Fund Balance of Governmental Funds to the Statemeni of Activities
Statenieni of Net Assets - Proprietary Fund Statement of Ficvcnues, Expenses and Changes
in Net Assets - Proj^rietary Fund
Statement of Cash flows - Proprietary Fund
Notes lo the Financial Statements
Required Supplemental Inibrmation General Fund Statement of Revenues. Expenditures
and Changes in Fund Balances -• Budget and Actual Special Revenue Fund — Sales Tax Fund - Statement of
Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 2 29
Other Supplemental In formation Schedule of Per Diem Paid to Board Members 3 31
Other Reports Schedule ofi'rior Year Audit Findings 4 33 Schedule of'CuiTcnt Year .Audit Findings iind
Management's Response ."i 34-35
Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of 1-inaneial Statements Performed in Accordance With (jovcrnmcnt .'Inditing Standard.^ - 36-37
Statement
-
A B C
D
E
F G
11
I
-
Schedule
1
Page(s)
1-2
4 s 6
7
8
9 10
11
12-13
14-25
Pagc(s}
27-28
John A. Windham, CPA A Professional Corporation
1620 North Pine Street John A. Windham, CPA DeRidder, LA 70634 Tel: (337) 462-3211 Fax:(337)462-0640
INDEPENDENT AUDITOR'S REPORT
The Honorable Larry CaiToll, Mayor and .Members of [he Board of Aldermen
Town of .VIerrvville, Louisiana
1 was engaged lo audit the accompanying Hnaneial statements ofthe govemmental activities, the business-tv^pe activities and each major fund ofthe Town of Merryvilte, Louisiana, as of and for the year ended June 30, 2011, which collectively comprise the Town's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Town of .Vlcrryvillc. Louisiana's management. My responsibility would have been to express opinions on these financial statements based on the audit 1 would have conducted.
The Town of Merryville, Louisiana had two separate administrations during the year under audit and a third administration subsequent to the year end June 30. 2011 and prior to the audit report release date. Inuring the.se administrations numerous allegations and accusations of wrong doing have arisen. Also, the Loiusiana Coniplianee Questionnaire was not adopted by the Board until the December 2011 meeting. The questionnaire had been debated by the Board in previous and special meetings as to whether it was answered correctly. Due to the uncertainties of compliance with laws and regulations etTecting the Hnaneial statements, and the uncertainties from the allegations and accusations that have been made, 1 am unable to express and I do not express an opinion on the financial statements referred to in the first paragraph.
In accordance with Government Auditing Standnrds, I have also issued my report dated October 1S, 201 1 on my consideration ofthe Town of .Vlcrryvillc, Louisiana's intemal control over financial repotting and my tests of its compliance with certain provisions of laws, regulations, contracts and grant agieemcnts and other matters. 'I he purpose of that report is lo dcseritx' the scope of my testing of intemal 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 wilh Government Auditing Standards and should have been considered in assessing the results ofthe audit that I would have conducted.
Accounting principles generally accepted in the United States of America require that the budgetary comparison information on pages 27 through 29 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 fJoard, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or histoncal context. I have applied certain limited procedures to the required supplcmcnlary 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 infomiation for consistency with management's responses lo my inquiries, the basic financial statements, and other knowledge I obtained. 1 do not express an opinion or provide any assurance on the information because the limited procedures do not provide me with sufficient evidence to e.\p("css an opinion or provide any assurance.
'I he llonorable Lariy (Carroll, Mayor and Mcml)cis ofthe Board of Aldermen
The Town of MciTvville, Louisiana, has not presented management's discussion and analysis that accounting principles generally accepted in the United States of America has determined is necessary to supplement, although not required to be part of, the basic financial statements.
We were engaged for the purpose of forming opinions on the financial statements that collectively comprise the 'fown of Merryville. Louisiana's financial statements as a whole. The schedule of per diem paid lo board members is presented for puiposes of additional analysis and is not a required part ofthe financial statements. Because ofthe significance ofthe matter described above, it is inappropriate to and I do not express an opinion on the supplementary infomiation referred to above.
• . /^^^Xo^ cpfi
DeRidder, Louisiana October 18.2011
^^^^^^HVAXCIAI -STAT
To\\n <if .Vlcrrv\illc, Louisiana Statement A
ASSETS
Statement oi' Net Assets .Iunc30, 2011
Governmental
Activities
Primary Go\ernment
Business-type Activilies Total
Cash and cash equivalents Receivables:
Ad valorem Sales taxes Franchise taxes Occupational licenses Accounts Intergovernmental:
.Mcohol taxes State mowing contract Federal grant
Due from utility fund Prepaid insurance Restricted cash and cash equivalents Capital assets not being depreciated Capital assets being depreciated, net
Total assets
LIABILIflES Accounts payable Payroll taxes payable Due to general fund .Accrued interest payable Customer deposits
46.421
S-037 2S,644
S.4S5 5.S23
114,786
17.40S
161,207
8.037 28,644
S,4S5 5,823
17.40S
s
$
4SS 3,170 2,150 1,470
11,169 81.937
2,600 315,173 615.567
24,707
3.338 ---
S
S
--------
132.194 S
14,699 S 1.430 1,470 9.516 17.241
488 3,170 2,150 1,470 11,169
81,937
2,600
315.173 747,761
39,406 4.768 I.47U 9.516 17.241
Noncurrent liabilities: Due within one year Due in more than one year
Total liabilities
NH I" ASSFTS Invested in capital asset, net of related debt Restricted for:
Revenue bond retiremenl Sales tax dedications
Unrestricted fotal net a.s.sets
Total liabilities and net assets
s
s
S
s
--
28,045
317,773
.
1 14.498 155.251 587,522
6I5,.567
S
S
s
s
23,000 191,375 258,731
2.467,573
68,126 -
131.523 2,667,222
2.925,953
S
S
S
S
23,000 191,375
286,776
2.785,346
68,126 114,498 286,774
3.254,744
3,54L.520
The accompanying notes ate an integral part of this statement.
Town oIMciTvvillc, Louisiasia Statciiiciii B
Si;itt;iiieiit of Aciivities For the Year Ended June 30. 2011
Program Revenue;
Program .Aciivities Govemmcnial aciivilii-vi:
Gc[icriil j:overnineni and administration
Public sal'i-'iy Public works
Total jzovcmmenlal aciiviii'j.s
Business-type activities. Water and .iewer
Total noveinnient
l:.\penscs
Fees, Fme.s iind Operating Grant Charges tor and
Services Contributions
Net (E.xpeiises) Revenues and Changes in Net .As.=;eis
Capital Grants Governmental Business-type and Coniributions Activities Activities Total
s
s
1X4.663 183.267
20-1.642
.S72.572
S
S
295.4.S2
31.750
.127.202
373.7tl4 192.443
946,276 S 519.645 S
5.S75
5.S75
(jcneral revenues: Ta.xes:
Ad valorem Sale.s Alcohol Fninchi.se G a mini);
Occupational licenses and permits Investment earnings Gain on sale uf assets Rentals .Miscellaneous 'transfers
fotal general revenues and transfers C'hange in net assei.s
Net assets at beyinnitii! of year Net assets at end of vear
34,'>75
(IS4.663) S
118,060
(137.917)
.U.975 (204.;i20) S
433.709
S (1S4.663) 11S.060
(137,917)
252.44S
5.S75 $ 468,684 S (204,520) % 2.52,448 S
(2(14.520)
25:,44S
47.928
s
23.740
290,600 2,657
42.533 2.418
57,098
-SX2
4.464
3.353
(79.3 11) 348,494 143,974
443.548 587.522 S
--
486
79,311 71,71,7
332.245 2,334.977 2,667,222 S
23.740
2')0,660 2,657
42,533 2.418
57,098 486 882
4.464
3,353
428,291 476.219
2.778.525 3,254,744
•fhe aceompanyiny notes are an integral part ofthe siateinem. 5
Town of Merrvvillc. Lou Statemeni C
Balance Sheet Governmental Eunds
June 30.2011
ASSETS
Cash and cash equivalents Receivables:
Ad valorem taxes Sales taxes Eranchise taxes Occupational licenses
Intergovernmental: Alcohol taxes State mowing contract Federal grant
Due from utility fund r*tcpaid insurance Restricted cash and cash equivalents
Total assets
S
s
General
146,421
8,037 -
8,485 -
488 3,170 2,150 1,470
11,169 -
181,390
Sp
Sa
S
s
Major Fund L'cial Revenue
l-'und
Ies Tax Fund
_
-28.644
-5.823
-----
81,937 116,404
Go^
S
S
'fotal /crnmcntal Funds
146,421
8,037 28,644
8,485 5,823
488 3.170 2.150 1,470
11,169 81.937
297,794
LIABILITIES AND FUND BALANCES
Liabilities: Accounts payable Payroll taxes payable
Total liabilities
S 22,801 3,338
S 26,139
1.906
1,906
24,707 3,338
28.045
Fund Balances: Nonspendable
Not in spendable form Restricted Unassigned
'Total fund balances
Total liabilities and fund balances
s
s
s
11,169
144,082 155,251
181,390
114.498
114.498
116,404
s
s
s
11,169 114,498 144,082 269,749
297,794
'The accompanying notes are an integral part of this statement. 6
' fown of .Vlcrryville, Louisiana Statement D
Reconciliation ofthe Governmental Funds Balance Sheet
to Statement of Net Assets
.lune 30. 2011
Total fund balance - total governmental funds S 269,749
Amoimts reported for governmental activities in the statement of net assets are different because:
Capital a.ssets used in governmental activities are not
financial resources and therefore are not reported in
the governmental funds balance sheets. 317,773
Net assets of governmental activities S 587,522
The accompanying notes are an integral part of this .statement.
7
Town of Merryville, Louisiana Statement E
Statement of Revenues. Expenditures and Changes in Fund Balances Governmental Funds
For the Year Ended June 30. 2011
Major Fund
Revenues Taxes:
Ad valorem Sales Alcohol Franchise Gaming
Charges for services Intergovernmental:
Federal grants State grants
Occupational lieen.scs and permits Fines and forfeitures Rentals Other revenues
Total revenues
Expenditures General government Public safety Public works Capital outlay
Total expenditures
General Fund
S 23,740 -
2,657
42,533
2,418
31,750
5.875
34.975
24.690
295.452
4,464
3,354
S 471.908
S 168,882
164.673
201,562
45.129
S 580,246
Speei al Revenue
Fund
Sales Tax Fund
$
S
S
s
290.660 ----
_ -
32,408 ---
323.068
6,103 ---
6,103
G(
S
S
S
s
Total
Dvernmental
Funds
23,740
290,660 2.657
42,533
2,418
31,750
5,875
34,975
57,098
295,452
4,464
3.354
794,976
174.985
164,673
201-562
45,129
586,349
Excess (deficiency) of revenues over expenditures (108,338) S 316,965
Other tlnancing sources (uses) Transfer in Transfer out
Gain on sale of assets
Total other financing sources (uses)
Net change in fund balance
Fund balances at lieginning of year
Fund balances at end of year
S
S
S
S
16S,32y
-882
169,211
60,873
94.378
155,251
208,627
S - S 168,329 (247,641) (247,641)
882 S (247,641) S (78,430)
S 69,324 S 130.197
45,174 139.552
114,498 S 269,749
The accompanying notes are an integral part of this statement.
'Town of Merryville, Louisiana Statement F
Reconciliation ofthe Statement of Revenues, Expenditures
and Changes in Fund Balance of Governmental Funds to the
Statement of Activities
For the Year Ended June 30, 201 1
Net change in fund balances - total governmental funds S 130,197
Amounts reported for governmental activities in the
statement of activities arc different because:
Governmental funds report capital outlays as expenditures. However,
in the government-wide statement of activities and changes in
net assets, the cost of those assets is allocated over their estimated
useful lives as depreciation expense. This is the amount ofcapital
assets recorded in the current period. 45,129
Depreciation expense on capital assets is reported in the government-
wide statement of activities and changes in net assets, but they
do not require the use of current financial resources. Therefore,
depreciation expense is not reported as an expenditure in governmental ftinds. (31,352)
Change in net assets of governmental activities S 143,974
The accompanying notes are an integral part of this statement.
9
fown of Merrvvillc. Louisiana Statement G
Statement of Net Assets Proprietary Fund
June 30, 201 I
Assets Current Assets
Cash and cash equivalents Receivables:
Accounts Prepaid insurance
Total current assets Noncurrent Assets
Restricted cash and cash equivalents Capital assets nol being depreciated Capital assets being depreciated, net
Total noncurrent assets
Toiiil assct<i
Liabilities Current Liabilities
Accounts payable Customer deposits Payroll taxes payable Due to general fund
Total current liabilities .
Liabilities payable from restricted assets Accrued interest payable Current portion of revenue bonds payable
Total liabilities payable from restricled assets
Noncurrent L^iabilities Revenue bonds payable
Total liabilities
Net Assets Invested in capital assets, net of related debt Restricted for:
Revenue bond retiremenl Unrestricted
Total net assets
Total liabilities and net assets
Business-type Activities -
Enterprise Fund Water and
Sewer
114.786
s
s
s
s
17,408 11,169
143.363
100,642
37,666 2.644,282 2,782.590
2,925,953
S
s
S
s
14,699 17.241 1,430 1,470
34,840
9,516
23,000
32,516
191,375
255,731
2,467,573
s
5
68,126
131,523
2,667,222
2.925,953
The accompanying notes are an integral part of this statemeni. 10
Town of Merryville, Louisiana Statement II
Statetiient of Revenues, Expenses and Changes in Net Assets
Proprietary Fund
For the Year Ended June 30. 201 1
Business - type
Activities -
Enterprise Eund
Operating revenues Charges for services
Operating expenses
Personal services
Supplies
Contractual services
Depreciation
Total operating expenses
Income (loss) from operations
Nonoperating revenues (expenses)
Investment income
Interest expense
'foial nonoperating revenues (expenses)
Income (loss) before contributions
and transfers
Transfers in
Capital contributions
Change in net assets
Net assets at beginning of year
Net assets at end of year
S
s
s
s
S
S
s
s
s
S
Water and
Sewer
192,443
85,076
34,136
105.508
138,140
362.860
(170,417)
486
(10,844)
(10,358)
(180,775)
79.311
433.709
332,245
2,334,977
2,667.222
The accompanying notes are an integral part of this statement.
I I
fown of .Merryville, Louisiana Statement I
Statement of Cash Flows Proprietary Fund
For the Year Ended June 30. 201 1
Business-type Activities -
Enterprise Fund
Cash flows from operating aciivities: Cash received from customers Cash payments to suppliers
for goods and services Cash payments to employees for services
Net cash used by operating activities
Cash flows from noncapital financing activities: Transfers from other funds Payments from other funds
Net cash provided by noncapital tlnancinti activities
Water and Sewer
192,203
s
S
S
(136,760) (85,725) (30.282)
79,3 11 6.318
85,629
Cash flows from capital and related financing activities: Acquisition and construction ofcapital assets Interest paid on bonds Retirement of bonds Capital contributions received
Net cash used by capital and related financing aciivities
S (685,092) (11,819) (22,000) 512,775
S (206,136)
Cash flow from investing activities: Interest on cash and investments
Net increase (decrease) in cash and cash investments
Cash and Cash investments, July I Cash and Cash investments, June 30
486
S (150,303) 365,731
215.428 (Continued)
The accompanying notes are an integral part of this statement.
Town of Mcrrvville, Louisiana Statement I
Statement of Cash Flows Proprietary Fund
For the Year Ended June 30, 201 I
Reconciliation of (loss) from operations to net cash used by operating activities:
Business-type Activities -
Enterprise Funds
Water and Sewer
Loss from operations (170,417)
Adjustments to reconcile income (loss) from operations to net cash used by operating activities:
Depreciation 138,140
Change in assets and liabilities: Increase in accounts receivable Decrease in payroll taxes payable Increase in accounts payable Increase in customer deposits payable increase in prepaid insurance
(958) (649)
10,795 718
(7,911)
Net cash used by operating aciivities (30.282)
(Concluded)
The accompanying notes arc an integral patt of this statement. 13
NO'TES TO FINANCIAL STATEMENT
14
Town of MeiTyvillc, Louisiana
Notes to the Financial Stateinents As of and for the Year Ended June 30, 201 1
INTROOUCIION
The Town of Merryville was incorporated under the provisions of ihc Lawrason Act. The Town operates under a Mayor-Board of .'\Idermen form of govemment.
The accounting and reporting policies ofthe Town of MeiTyville confoim to generally accepted accounting principles as applicable to governments. Such accounting and reporting procedures also conform to the requirements of Louisiana Revised Statutes 24:517 and to the guides set forth in the Louisiana Municipal .Audit and Accountinu Guide, and to the industry audit guide, Au<Iiis of State and Local Governmental Units.
'The Town maintains various funds that provide services and benefits to its citizens including repairs and maintenance of approximately 15 miles of roads and streets, and water, sewer, and garbage collection services to approximately 600 residents.
The Town is located within Beaufcgard Parish in the southwestern part ofthe Slate of Louisiana and is comprised of approximately 1.200 residents. The governing board is composed of five elected aldermen that are compensated for regular and special board meetings. There are approximately six employees who maintain the water and sewer systems and handle the clerical work for the Town. The police department consists of an elected chief of police and approximately four patrolmen.
GASB Statement No. 14. The Reporting Entity, established critena for determining the governmental reporting entity and component units that should be included within the reporting entity. Under provisions of this Statemeni, the municipality is considered a primary government, since it is a special purpose govemment that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments. As used in G.ASB 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.
1. SUMMARY OF SIGMFICAM ACCOUNTING POLICIES
.A. Covcrnnicnt-Widc and Fund Financial Statements
The govemmenl-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all the nonfiduciary activities ofthe primary govemment. For the most part, the effect of interfund activity has been removed from these staicments. Governmental activities, which normally are supported by taxes and intergovemmental revenues, arc reported separately from business-type activities, which rely to a significant extent on fees and charges for support.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by prograin revenues. Direct expenses are those that arc 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 arc restricted to meeting the operational or capital requirements of a particular function or seginent. 'faxes and other items not properly included among program revenues are reported instead as general revenues.
Separate financial statements are provided for govemmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the funds financial statements.
B. .Measurement Focus„ Ba.sis of Accounting;, and Financial Statement Presentation
'The government-wide financial statements arc reported using the economic resources measurement focus and the accrual basis of accounting, as is the proprietary fund financial statements. Revenues arc recorded when earned and expenses are recorded when a liability is incurred, regardless ofthe titning of related cash fiows. Property taxes are recognized as revenues m 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.
15
'Town of .Merryville. Louisiana
Notes to the Financial Stalemcnts (Continued)
Governmental fiind financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues arc recognized as soon as they are both measurable and available. Revenues are considered to be available when they arc collectible within the current period or soon enough thereafter to pay liabilities of ihe cunent period. For this purpose, the govemment considers revenues to be available if they are collected within 60 days ofthe end ofthe current fiscal period. Expenditures generally arc 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 cunent fiscal period are all considered lo be susceptible to accrual and so have been recognized as revenues ofthe cuirent fiscal period. All other revenue items are considered to be measurable 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 for those in another fund.
The Special Revenue Fund accounts for and reports the proceeds of specific revenue sources, in the town's case, sales taxes, that are restricted, or committed to expenditures for specific purposes other than debt service or capital projects.
'The municipality reports the following major proprietary fund:
The Proprietary Fund accounts for operations (a) where the intent ofthe governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges, or (b) where ihc governing body has decided that periodic determination of revenues eamed, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes.
Private-sector standards of accounting and financial teporling issued prior to December 1, 1989, generally arc followed in both the govemment-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance ofthe Govenimenial Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The govemment has elected not to follow subsequent private-sector guidance.
As a general rule the effect of interfund activity has been eliminated from the govemment-wide financial statements. Exceptions to this general rule are paymcnts-in-Iicu of taxes and other charges between the governments' enterprise operations. Elimination ofthese charges would distort the direct costs and program revenues repoilcd for the various functions concerned.
>\mounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources arc reported as general revenues rather than as program revenues. Likewise, general revenues include all ta.xcs.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses geneially result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. Charges for services of providing water and sewer services to residents comprise the operating revenue ofthe Town's enterprise fund. Operating e,\penses for the enterprise fund includes the cost of sales and services, administrative expense, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources arc available for use, it is the municipality's policy to use restricted resources first, then unrestricted resources as they arc needed.
'fhe municipality has not established a policy for use of its unrestricted fund balance, therefore it considers coitimitted fund balances to be used first, then assigned fund balances to be used nc.Kt and finally the unassigned fund balance will be used.
fown of Merryville, Louisiana
Notes to the Financial Stalemcnts (Continued)
C. Deposits and Investments
The municipality's cash and cash equivalents ate considered to be cash on hand, demand deposits, and short-tenn 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 collateralized certificates of deposits, government backed securities, commercial paper, the .stale sponsored investment pool, and mutual funds consi.sting solely of govemment backed securities.
D. Receivables and Payables
Activity between funds ihat are representative of lending/boiTOwing arrangements outstanding at the end ofthe fiscal year arc refened to as either "due to/from other funds" (i.e., the cunent portion of interfund loans) or "advances to/from other fund.s" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds arc'reportcd as "due to/from other funds." Any residual balances outstanding between the governmental aciivities and business-type aciivities arc reported in the govemmeni-wide financial statements as "intemal balances."
Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable govemmental funds to indicate that they arc not available for appropriation and are not expendable available financial resources.
The Town levies taxes on real and business personal property located within the boundaries ofthe 'Town. Property taxes are levied by the Town on property values assessed by the Beauregard Parish Tax .Assessor and approved by the Slate of Louisiana 'Tax Commission.
The Beauregard Parish SherilT and Ex-Officio 'Tax Collector bills and collects property taxes for the Town. Collections arc remitted to the Town monthly. The "Town recognizes property tax revenues when levied.
Property Tax Calendar
Assessment date January 1. 2010 Levy date June 30, 2010 Tax bills mailed October 15, 2010 Total taxes are due December 31. 2010 Penalties & interest due January 31, 201 I Lien date January 31, 201 1 Tax sale May 15.2011
For the year ended June 30, 201 I, ta.xcs of S.34 mills were levied on properly with an assessed valuation totaling S 1,900,539, and were dedicated as follows:
Authorized Levied Expiration Miliage Millatie Date
Taxes due for: Renewed General corporate tax 8.34 8.34 Annually
All trade and property tax receivables are shown net of an allowance for uncollectibles. Property taxes are collected and remitted by the local sheriff, if taxes are not paid, a sheriffs sale is held and the property is sold to satisfy the ta.xes due on that property. Due to this, the majority, if not all property taxes are collected; therctbre no allowance account for luicollcctibles has been established. Water and sewer charges have customer deposits that have been collccled in advance therefore the majority of all water and sewer billing is collected or taken out ofthe customer's dcpo.sil, any allowance account would be immaterial, therefore one has not been established.
17
Town of Merryville, Louisiana
Notes to the Financial Statements (C-ontinued)
The following arc the principal taxpayers and related property tax revenue for the municipality:
% of'Total Ad Valorem "Tax Assessed Assessed Revenue for
'Taxpayer 'Type of Business Valuation Valuation Municipality Central Louisiana Electric, Co. Utility $ 129,220 6.80% S 1.078
iS'fl/i'.V y'c/.YL'.V
'The Town of Merryville receives a three-percent sales tax, which is dedicated to the maintenance ofthe sewer system (1%), repair and mainlcnance of streets and roadways (1%), and the collection and disposal of solid waste (i'^'i.)-
K. Prepaid Items
Certain payments lo vendors reflect cost applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.
F. Restricted Assets
Certain proceeds of enterprise fund revenue bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants.
Bond rcseiAc fund - The Utility Revenue Bonds dated .Augu.st 10, 1978 require that a reserve fund be established. Money in the.se accounts is used to pay the maturing principal and interest on the bonds.
Depreciation and contingency fund - The Utility Revenue Bonds dated August 10. 1978 require that a depreciation and contingency fund be established. Money in this account is used for extensions, additions, improvements and replacements necessary to properly operate the system.
C. Capital .Assets
Capital as.scts, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), arc reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Caf)ital assets are capitalized at histoncal cost or estimated cost if hi.storical cost IS not available. Donated assets arc recorded as capital assets at their estimated fair market value at the date of donation. The municipality maintains a threshold level of S5,000 or more fbr capitalizing capital assets.
According to GASB 34 the Town of Merryville was not required to retroactively report infrastructure assets in its financial statements, therefore, fhc.sc assets have nor been reported in the financial .statements.
The costs of nonnal maintenance and repairs that do not add to the value ofthe asset or materially extend assets lives are not capitalized.
Major outlays for capital assets and improvcinents are capitalized as projects arc constructed. Interest incurred during the construction pha.se ofcapital assets of business-type activilies is included as part ofthe capitalized \'alue ofthe assets constructed. The total interest expense included during the cuircnt fiscal year was SIO,844. No interest was included as part ofthe cost ofcapital assets under construction in construction projects.
.All capital assets, other ihan land, are depreciated using the straight-lnic method over the following useful lives:
Description Estimated l.ivcs Roads, bndges, and infrastructure 40-50 years Land improvements 40-50 years Buildings and building improvements 40-50 years Fumiture and fixtures 5-15 years V'ehicies 5-10 years Equipment 3-15 years
IS
Town of Merryville, Louisiana
Notes to the Financial Statements (Continued)
II. Compensated .Absences
The municipality has the Ibilowing policy relating to vacation and sick leave:
Each fulilimc and pari tiitic pennanent niunici})a! employee shall cam annual vacation and sick leave as follows:
Vacation • Five (5) days wilh pay afler one (I) year employment. • Ten (10) days with pay after two (2) years employment.
Vacation days cannot be carried over from year to year.
'The least amount of vacation taken at one lime is one half (1/2) day.
'The board may, in its discretion, pay as rcrniinal pay all accumulated unused annual leave lime up to a maximum often (10) days of such annual leave upon the retirement or resignation of an employee. An employee dismissed for cause shall not be paid for any accumulated annual leave.
Employees required to work on an observed holiday shall receive compen.satory time off Holidays observed by the municipality shall not be counted as vacation leave.
Leave from work with pay may be charged as sick leave if the absence is due to sickness, bodily injury, quarantine, required physical or denial examinations, or treatment, exposure to a contagious disca.sc when continued work might jeopardize the health of others, illness in the immediate family ofthe employee which requires the care of the employee. .All such absences, except those resulting from inteinperance or immorality, shall be charged against the sick leave credit ofthe employee. Immediate family as used here shall consist ofthe husband or wife, as the ca.sc may be the father or mother, or children ofthe employee whether half or full blood.
Each employee shall cam two and one half {2 V'l) days after six (6) months of employment and two and one half (2 '/!:) days will be earned every six months thereafter with a maximum of Cwe (5) days per year being earned.
'The least amount of time taken fbr sick leave is one half (1. 2) day.
Sick leave may not be accurnulated for an indefinite period, and there is no maximum amount of sick leave, which may be accumulated.
'fhe supervising board or official shall determine when a certificate from a doctor is required to substantiate the necessity of sick leave, provided that sick leave claimed for diree days or less .shall not require such certificate. T^cpartmcni heads and.-br the board are responsible for the application of this provision so that there will be no abuse of sick leave privileges.
'There will be no pay for uiuused sick leave upon resignation or retirement of an employee
Sick leave may be used as maternity leave.
I. Long-Term Obligations
In the govcmmcnt-wide financial statements, and the proprietary funds types in the fund financial statcmcnis, long-term debt and other long-temi obligations are reported as liabilities in the applicable govemmental activities, busincs.s-typc activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, arc deferred and amortized over the life ofthe bonds using the effective interest method. Bonds payable arc reported net ofthe applicable bond premium or di.scount. Bond issuance costs are reported as deferred charoes and amorti/:ed over the term ofthe related debt.
Town of VIerrvville, Louisiana
Notes to the Financial Statements (Continued)
In the fund financial .statements, governmcntai fund types recognize bond premiums and discounts, as well as bond issuance costs, during the curreni period. 'The face amount ofthe debl issued is reported as other financing sources. Premiums received on debt issuances arc reported as other financing sources while discounts on debt issuances arc reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
J. Fund Equity
In the fund financial statetnents, governmental funds report reservations of fund balance for amounts that are not available fbr appropriation or are legally restricted Liy outside parties for use for a specific purpose. Designations o^ fund balance represent tentative management plans that are subject to change.
K. Extraordinary and Special Items
F^xlraordinary items are transactions or events that are both unusual in nature and infrequent in occurrence Special items arc transactions or events within the control ofthe municipality, which arc either unusual in nature or infrequent in occurrence
L. 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 affeci the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenues, expenditures, and expenses during the reporting period. Actual results could differ from those estimates.
M. Nonspendable Fiiiid Balance
The nonspendable fund balance classification includes amounts that cannot be spent tiecause they are cither (a) not in spendable form or (b) legally or contractually required to be maintained intact. The "not in spendable fortii" criterion includes items ihat are not expected to be converted to cash, for example, inventories and prepaid amounts, .^s for the 'Town of .Vlcrryvillc the nonspendable fund balance consist of prepaid amounts of insurance premiums.
STFAVARDSIIIP. COMPLIANCE AND ACCOUM ABILIi V
iUJDGETINFORMATION The municipality uses the following budget pracliccs:
1. The Town Clerk and .Vlayor prepare a proposed budget and submit it to the Board of Aldermen no later than fifteen days prior to the beginning of each fiscal year.
2. A summary ofthe proposed budget is published and the public notified that the propo.sed budget is available fbr public inspection. At the .same lime, a public hearing is called.
3. A public hearing is held on the proposed budget at least ten days after the publication ofthe call for the hearing.
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 passage of an ordinance prior to the commencement ofthe fiscal year for which the budget is being adopted.
5. Budgetary amcndinents involving the transfer of funds from one department, program or function to another or involving increases in expenditures resulting frotn revenues exceeding amounts eslimaied require the approval ofthe Board of .Aldermen. These amended amounts are shown in the financial .statements.
6. .All budgetary appropriations lapse at the end of each fiscal vear.
Town of .Merryville. Louisiana
Notes to the Financial Statements (Continued)
7. The budgets for the General Fund and Special Revenue Fund are adopted on a basis consistent with generally accepted accounting principles {G.A AP). Budgeted amounts or as originally adopted, or as amended from time to time by the Board of .Aldermen.
EXCESS OE EXi'ENOnVRES OVER APFROERIA TIONS 'Ihc following individual funds had actual expenditures over budgeted appropriations for the year ended June 30, 2011.
Original Unfavorable
Fund Bud act Final Budget Actual Variance
Sales Tax Fund S 263.000 S 250,000 S 253,744 S 3,744
General Fund 379.722 568,422 580.246 11,824
CASH AND CASH LQUIVALENTS
At June 30, 2011, the municipality has cash and cash equivalents (book balances) totaling 5443,786 as follows:
Demand deposits S 237.340
Petty cash 200 Monev market investment accounts 206.246
Total S 443,786
fhcsc deposits arc stated at cost, which approximates market, ijndcr state law, these deposits (or the resulting bank balances) must be secured L')y federal deposit insurance or the pledge of securities owned by the fiscal agent bank. 'The market value ofthe pledged .securities plus the federal deposit insurance must at all limes equal the amount on deposit with the fiscal agent. These securities are held in the naine ofthe pledging fiscal agent bank in a holding or custodial bank that is mutually acceptable to both parties.
At June 30, 2011, the municipality has S46L116 in deposits (collected bank balances). These deposits are secured from risk by S449,183 of federal deposit insurance and $1 1,933 of pledged securities held by the custodial bank in the name ofthe fiscal agent bank (G.ASB Category 3).
Even though the pledged securities are considered uncollateralized (Category 3) under the provisions of G.ASB Statement 3, R.S. 39:1229 imposes a statutory requirement on the custodial bank to advertise and sell the pledged securities within 10 days of being notified by the municipality that the fi.scal agent has failed to pay deposited funds upon demand.
RECEIVABLES
'Ihc receivables ofS74,205 at June 30, 201 I, arc as follows:
('lass of receivable 'Taxes:
Ad valorem Sales and use Franchise Occupational licenses
Intergovernmental Accounts
Total
General Fund
S
S
8,037 -
8.485 -
5.808 -
22,330
Spec
S
S
ial Revenue Fund
-28.644
-5.823
--
34.467
Proprietary I'und
s ----
17,408 S 17.408
S
s
Total
8,037 28,644
8,485 5,823 5,808
17,408 74,205
21
5.
'Town of Merryville, Louisiana
Notes to the Financial Statements (Continued)
CAPITAL ASSETS
Capital asscis and depreciation activity as of and for the year ended June 30, 2011, for the primary govemment is as follows:
Beginning Balance Increases Decreases
Ending Balance
Governmental activities: Capital assets, not being depreciated
Land
Capital assets being depreciated Buildings Vehicles Improvements other than buildings Machinery and equipment
Total capital assets being depreciated
Less accumulated depreciation for: Buildings Vehicles Improvements other than buildings Equipment
Total accumulated depreciation
Total capital a.ssets being depreciated, net
Business-type activities: Capital assets, not being depreciated
Land Construction in progress
Total capital assets being depreciated Capital assets not being depreciated
Buildings Improvements other than buildings Machinery and equipment Vehicles
Total capital assets being depreciated
Less accumulated depreciation for: Buildings Improvements other than buildings Machinery and equipment Vehicles
Total accumulated depreciation
'Total business-type assets being depreciated, net
.600 ,600
163,091 99,647
269,535 200,008 732.281
77,569 62,513
135,599 155,204 430,885
S 301,396
Beginning Balance
S 37,666 321,356 359.022
18,328 4,733,540
211.229 17.907
4.981.004
776 2.839,356
95,608 17,907
2.953,647
S 2.027.357
34.975 10,154 45.129
4,615 11,955 7,069 7.713
31.352
S 13,777
Increases
S 433.709 433,709
-
459 113.391 24,290
138.140
S (138,140)
S
S
_S_
-
-
-
-
Decreases
-
-
-
-
-
-
_
l(i3,091 99,647
304,510 210,162 777,410
82,184 74.468
142.668 162.917 462,237
S 315,173
Ending Balance
S 37,6)66 755,065 792.731
18.328 4,733,540
211,229 17,907
4.981,004
1.235 2,952.747
119,898 17.907
3.09 L7S7
S L8S9,217
9?
'fown of Merryville. Louisiana
Notes to the Financial Statements (Continued)
Depreciation expense of 531,352 for the year ended June 30, 2011, was charged to the following governmcntai functions:
Public works S 3,080 Public safety 18,594 General administration 9,678
Total S 31,352
6. CONSTRUCTION COMMITMENTS
'The municipality has active construction projects as of June 30, 2011. The fown of Merryville has a wastewater improvement project in progress that will upgrade and add to the current wastewater system. At year end the commitments wilh contractors are as follows:
Remaining Pfoiect Spent to Date Commitment
Wastewater Improvement Project S 755,065 S 244.935
7. INTtRIUNI) RECEIVABLES, P.VVABLES, AND TRANSFERS
The Town of .MeiTyville has a three-percent sales tax that is collected and deposited into a special revenue sales tax fund. The money is then transferred out ofthe sales lax fiind and split between the general fund and proprietary fund according to the percentage found in the sales lax resolution, 'fhcsc transfers are completed on a monthly basis and are routine transfers for the town.
Special revenue
General fund
Proprietary fund
Total
General fund
Proprietary fund
Total
fund
1
S
s
S
s
Vansfer in
168.329
79,311
247,640
Due To
1,470
1.470
Transfer out
S 247.640
S 247,640
Due From
S 1.470
S 1.470
8. ACCOUN IS AND OTIIER PAYABLES
'The payables of 544,174 at June 30, 2011, arc as follows:
/ithholdings xcounts Total
General Fund
5 3.338
22,801 S 26,139
Special
Revenue
Fund
S 1,906
S 1,906
Proprietary
Fund
5 1,430
14.699
5 16.129
5
5
Total
4,768
39,406 44.174
23
'fown of .Vlcrryvillc, Louisiana
Notes to the Financial Stalemcnts (Continued)
LONG-TERM OBLIGAI IONS
'The following is a summary ofthe long-lenn obligation transactions for the year ended June 30, 2011
Bonded Dclit Long-lenn obligations at beginning of year Additions Deductions Long-term obligations at end of year
S 236,375
(22,000) 5 214.375
'The following is a summary of the current (due in one year or less) and the long-term (due in more than one year) portions of long-term obligations as of June 30, 2011:
Current portion Long-term portion
'Total
Bonded Debt S 23.000
I9L375 S 214,375
.All municipal bonds outstanding al June 30, 201 I, for 5214,375, are revenue bonds with maturities from 2011 to 20IS and the interest rate at 5%. Bond principal and interest payable in the next fiscal year are 523.000 and 510,719, respectively, 'fhe individual issues arc as follows:
Original Bond Issue
Utilities Revenue Refunding Bonds Series 1978 S 550,000
Year Ending June 30, 2012 2013 2014 2015 2016
2017-2019 'Total
Final Interest Rate Payment
5%
S
S
Due
8/10/2018
Principal Payments
23,000 24.000 25,000 26,000 27,000 89,375
214,375
5
5
Interest to .Maturitv
5 50,703
Interest Payments
10,719 9,569 8,369 7,119 5,819 9,108
50.703
Principal Outstanding
S 214,375
Total 5 33,719
33.569 33,369 33,119 32,819 98,483
5 265,078
Funding Source
Water revenues
In accordance with R.S. 39:562, the municipality is legally restricted from incurring long-term bonded debt in excess of 35% ofthe assessed value of taxable property. At June 30, 2011, the statutory limit is 5665,189 and outstanding bonded debt totals 5214.375.
24
Town of Merryville, Louisiana
Notes to the Financial Statements (Concluded)
10. RESTRICTED RETAINED EARNINGS/FUND BALANCES
'The Proprietary Fund - The Utility Fund had restricted net assets available as follows:
Restricted assets: Reserve and conlingeney accounts _5 100,642
Less: Liabilities payable from restricted assets:
Customers deposits 5 Current portion of bond Accrued interest on bond
'fotal
Restricted net assets
The Special Revenue Fund - The Sales Tax Fund had rcslrictcd fund l^alances available as follows:
Restricted a.ssets: Sales tax cash account 5 81.937 Sales taxes receivable 28,644 Occupational licenses receivable 5,823
'Total 5 116,404
5
5
23,000 9.516
32,516
68,126
Less: Liabilities payable from restricted assets:
Accounts payable _S 1.906
Restricted fund balance S 1 14,498
Z-i
REQUIRED SUPPLEMCN'TAL INFORMATION
Town orMcrrvvillc, Louisiana .Schodutc I
General I'und
St.iiumcnl of Revenues, Expendiuircs and Changes in 1-und rtaianccs
Uudgcl and Actual
I"or the Year Ended June 30. 2011
Budiiet to GAAP
Revenues
Ta-xes.
Ad valorem
Alcohol
'I'obacco
Franchise fees
Gaming
Charge.'; for-iorvicei;
Inicrijovcnimcnlal:
Federal grams
Slate grants
l-oca! grants
C)ccu[iaiional licctiser; and purmits
Fines and forfcittires
Rentals
Other revenue
Total revenues
[Judi-'Cied Anmuni
Oriii inal
S 25,000
2.500
1.706
40.000
2.000
21.440
5.000
12.000
500
25
SO.OOO
3.125
1,100
S 1"4..V)6
\-
S
s
s
inal
30.000
2.500
1.706 34.000
2,000
24.440
35.0(tO
500
24,000
2'.»0,000
4,000
I.IOO
44tJ.246
.•\ctual Amount
lUiduelarv Hasis
S
S
23,740
2,657
42.533
2.41S
31.750
5,S75
34,<J75
-24,6^0
2^^5.452
4.464
3.354
471.90S
differences
over (under)
S (6,260)
157
(1,706)
S.533
418
7.310
5.S75
(25)
(500)
690
5,452
464
2.254
S 22.662
Acttwl Amount
GAAP Basis
S 23.740
2,6. ^7
-42.533
2.4 IS
31.750
5.S75
34.975
-24,6'JO
295.452
4,464
3.3-M
% 471,90s
Fxpenditures
General government
andadmini.straiinn
Public saiety
l*ubtic works
Capital oiiilav
'I'oial e.xpenditures
l:.\cess fdeficiencv) o f revenues
over e.\penditures
S
s
^
165.328
111.144
103,150 100
379.722
(K'i5,326)
S
S
s
175,044
162.244
196.034
35,100
5{.S,422
(110. ]?(,)
S
s
%
16S.8S2
164,673
201,562
45.129
5R0.246
(IOS,33Sl
S
s
s
6.162
(2,429)
{5.52S)
(10.029)
(11,824)
10.838
S
s
%
I6S.SS2
164.673
201.562
45.12')
5S0.246
(108,335)
Town oCMerryvil lo. Louisiana Schedule
Cien'jral l-'und
Statement o f Revenues. R.\pendiiures and Changes in Fund Balances
Budget and .Attual
Foi the Year landed June 30, 2011
Other fin.incing ,^c.nlrtes:
Transfer in
Gain on sale o f assets
total other financing sources
Net change in fund balance
Fund balances at beginning o f vear
I'und balances at end o f year
5
S
.S
S
iJudiiete
Orii:inal
191.000
191.000
5.674
92.002
')7.676
d Amounts
1-
S
%
^
%
tnal
170.000
170.000
^0.824
y4.3"'8
145,202
Act
Bud
S
s
s
s
tial Amount
uetarv Basis
168.329
SS2
169,211
—
60,873
94.378
155.251
Budge'
d i l l
over
S
s
s
s
1 to GAAP
erenccs
(under)
(1.671)
882
(789)
10,049
10.049
/
S
_s
s
s
(Continued)
lettial Amount
GAAP Basis
168,329
882
169.211
60.873
94.378
155.251
(Concluded)
'I'own of .Mcrrvville. l.ouisian:i Schedule 2
Special Revenue Fund
Sales Ta.\ Fund Statement of Revenues. E.\penditures and Changes in Fund Balances
Buiiget and .Actual
For the \'ear Ended June 30. 2011
Revenues Ta.xes:
Sales Occupalional licenses and permits
Total revenues
Expenditures Ciencral government
and administration
l-;xcess (deficiency) of revenues over expenditures
Other llnancing sources (uses): Transfers out
Net change in fund balance
Fund balances at beginning of year
l-'und balances at end of vear
Budyeted .Amounts Oriiiinal
Budget to GAAP .Actual Amount dilfcrences Actual Amount
Final Budgetary Basis over (under) G.A.M' Basis
$ 223,220 S 290.000 .S 290,660 S
40.201 30.000 32.408
5.000 S 5.000 S
258.421 S 315.000 % 316,965 S
48,420 S .5.174 .•> 114,4')8 S
660 S 290.660
2.408 32.408
263,421 S 320.001) S 323.068 S 3,06S S 323.068
6.103 % (1.103) S 6,103
l.')65 S 316,965
S (258.000) S (245.000) S (247.641) S (2.641) S (247.641)
S 421 S 70.000 .S 09.324 S (676) S 69.324
47,99'> 45,174 45.174 - 45.174
(67f.) S 1I4.4*J8
OTHER SUPPLEMENTAL INFORMATION
30
Town of Merryville, Louisiana Schedule 3
Schedule of Per Dicm Paid to Board Members Year Ended June 30. 201 I
L oard Members
Elton Havens
Teresa TIavens
Beaver Knighton
Sarah Whitehead
Tami I.ongoria
Brenda Jeans
5
5
'fotal Paid
1.250
650
L250
1,250
1,250
600
6,250
31
OTHER REPORTS
32
Town of Merryville, Louisiana Schedule 4
Schedule of Prior Year Audit Findings YearEnded June 30, 2011
Findinus- Financial Statement Audit
'fhcrc were no prior year audit findings as of June 30. 2010.
33
'Town of Merryville, Louisiana
Schedule of Current Year Audit Findings and Management's Response Year Ended June 30, 2011
Schedule 5
Findings - Financial Statement .Audit
Audit Finding No. 2011-1
Sale of .scrap iron not deposited to public funds account.
Condition:
Criteria:
Cause of Condition;
Effect of Condition;
Recommendation;
The town sold scrap iron for cash. The cash was kept on hand and not tlepositcd to a public funds account. 'The cash was used to pay for employee's nicals.
The Louisiana Constitution prohibits the use of public funds for private purposes. Also generally accepted accounting principles relating to intemal controls arc deficient when cash is not timely deposited to the fown's bank account.
The mayor and town clerk did not reali/.e that this violated the Louisiana Constitution for use of public funds, or that it created a significant deficiency in intemal control.
The Louisiana Constitution for the use of public funds has been violated along with other state .statutes. A significant deficiency in interna! controls over public funds e.\ist.
I reeomniend that all public funds from whatever source be deposited into the public funds checking account and these funds only be used for public purposes.
34
Schedu l e 5
T D W N O F MERRYVILLE MERRYVILLE, LOUISIANA 7 0 6 9 3
December 22.2011
Mr. Oaryl G. Purpera, CPA, Ci"E LouisiLina Legislative Auditor P.O. Box 94397 Baton Rouge, 1 .a 70804-9397
Dear Mr. Eurpcrn.
We recently tlni.shcd our i nniiiil audit and one finding was noted.
.Vvidit finding No.. 2011-1
The Town of Mcro'ville collccled scrape iron that was placed by the side ot the road by residents to be picked up. The Town of Merryville sold ihe scrape iron Tor eayh. The money was placed in a baij and was used lo pay for employee meals during the lioliday.s. Aller ihe money was ." pcnt, tlie reeeipicd were then dispo.sed of.
Oi;r response to ;hc Imding is .slated below:
We did not realize ihat we etjuid not iLse the money collected from the scrape iron for employee meals. In ihe future all money collected from ihe sell of .scrape iron will be deposited into ihe (ieneral Fund account for public purposes and all receipts from the .sale of iron will be kept on file.
I, the Mayor of Merryville. have been made aware ol'siliiaiion and will monitor the sell of scrape iron more closely to make sure ihal this does not happen again.
Sincerely yours
Earry Carroll, Mayor Town of Merry vilie
35
John A. Windham, CPA A Professional Corporation
1620 North Pine Street John A. Windham, CPA DeKidder, LA 70634 Tel: (337) 462-3211 Fax: (337) 462-0640
REPORT ON IN'TERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STA'TEMENTS PERFORMED IN ACCORDANCE WITII GOVERNMENT AUDITING STANDARDS
The Honorable Lairy Carroll, Mayor and the .Members ofthe Board of Aldermen
Town of Mcnyvillc, Louisiana
I was engaged to audit the financial staicments ofthe govemmental activities, the business-type activities and each major fund ofthe "Town of Merryville, Louisiana, as of and for the year ended June 30, 2011, which collectively comprise the Town of Merryville. Louisiana's basic financial statements and have issued my repon thereon dated October IS, 2011,1 would have conducted my 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 Geneial of the United States.
Internal Control Over Financial Reporting
In planning and performing my audit that I would have conducted, I considered the 'Town of Merryville, Louisiana's intemal contiol over financial reporting as a basis for designing my procedures for the puiposc of expressing my opinions on the Iinancial statements, but not for the puipose of expressing an opinion on the effectiveness ofthe Town of Merryville, Louisiana's internal control over financial reporting. Accordingly, I do nol express an opinion on the effectiveness ofthe Town of MeiTyville, Louisiana's intemal control over financial reporting.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the nonnal course of performing their assigned functions, to prevent, or dciecl 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 ofthe entity's financial statements will not be prevented, or detected and corrected on a timely basis.
My consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or materia! weaknesses. I did not identify any deficiencies in mtcmal control over financial reporting that we consider to be material weaknesses, as defined above. However, I identified certain deficiencies in intemal control over financial reporting, described in the accompanying schedule of current year audit findings and management's response that 1 consider to be significant deficiencies in intemal control over financial reporting. Audit Finding No- 2011 -1. A significant deficiency is a deficiency, or a combination of deficiencies, in intemal control that is less severe than a material weakness, yet important enough to merit ancntion by those charged with governance.
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The Honorable Larry Carroll, Mayor Town of Merryville, Louisiana Page 2
Compliance and Other Malters
As part of obtaining reasonable assurance about whether the 'Town of MeiTyville, Louisiana's financial staicments are free of material misstatement, 1 performed tests of its compliance with cenain 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 tho.sc provisions was not an objective ofthe audit I would have conducted and, accordingly, I do not express such an opinion. The results of my lesls di.scloscd an instance of noncompliance or other matters that is required to be reported under Governmeni Auditing Standard and which is described in the accompanying schedule of cuircnt year audit findings and management's response as Audit Finding No. 2011-1.
'Town of MeiTyville, Louisiana's response lo the finding identified is described in the accompanying schedule of current year audit findings and management's response. 1 did not audit the Town of MeiTyville. Louisiana's respon.se and, accordingly, I express no opinion on it.
'fhis report is intended solely for the information and use of management, others within the organization, the Board of Aldermen, and the Louisiana Legislative Auditor and is not intended lo be and should not be u.sed by anyone other than these specified parties, although under Louisiana Revised Statute 24:513, this report is distributed by the Louisiana Legislative Auditor as a public document.
M/ - IdM^, cpfi DeRidder. Louisiana October IS, 2011
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