KENNETH D. FOLDEN & CO.app1.lla.state.la.us/PublicReports.nsf/221961FC... · KENNETH D. FOLDEN & CO. CERTIFIED PUBLIC ACCOUNTANTS 302 EIGHTH STREET, JONESBORO, LA 71251 (318)259-7316

TOWN OF HAYNESVILLEHaynesville, Louisiana

Annual Financial StatementsWith Independent Auditor's Report

As of and For the Year EndedJune 30, 2007

With Supplemental Information Schedules

Under provisions of state law, this report is a publicdocument. A copy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office cMhe i egtslative Auditor and, whereappropriate, at the office of the parish clerk of court

Release Date

KENNETH D. FOLDEN & CO.CERTIFIED PUBLIC ACCOUNTANTS

302 EIGHTH STREET, JONESBORO, LA 71251(318)259-7316

FAX (318) 259-7315

TOWN OF HAYNESVILLEHaynesvllte, Louisiana


As of and For the Year Ended June 30, 2007With Supplemental Information Schedules

CONTENTS

Statement

Independent Auditor's Report 4

Required Supplementary Information - Part I

Management's Discussion and Analysis 6

Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Assets A 11

Statement of Activities B 12

Fund Financial Statements:

Governmental Funds:

Balance Sheet C 13

Reconciliation of the Governmental FundsBalance Sheet to the Statement of Net Assets D 14

Statement of Revenues, Expenditures, andChanges in Fund Balances E 15-16

Reconciliation of the Governmental Funds Statementof Revenues, Expenditures, and Changes in FundBalances to the Statement of Activities F 17

Proprietary Funds:

Statement of Net Assets G 18-19

Statement of Revenues, Expenditures, andChanges in Fund Net Assets H 20

Statement of Cash Flows I 21-22

Notes to the Financial Statements 23-35

TOWN OF HAYNESVILLEHaynesvllte, Louisiana


As of and For the Year Ended June 30, 2007With Supplemental Information Schedules

CONTENTS (CONTINUED)

Required Supplementary Information - Part II

Schedule of Revenues, Expenditures, and Changes inFund Balances - Budget and Actual:

General Fund

Sales Tax Fund

Fire Protection District No. 3

Recreation District - Wards 2 & 3

Notes to the Schedule of Revenues, Expenditures, andChanges in Fund Balances - Budget and Actual

Schedule Page

A

B

C

D

36

37

38

39

40

Independent Auditor's Report on Internal Control andOn Compliance and Other Matters:

Independent Auditor's Report on Internal Control OverFinancial Reporting and on Compliance and Other MattersBased on an Audit of Financial Statements Performed inAccordance With Government Auditing Standards 41 -42

Supplemental Information Schedules:

Schedule of Findings and Questioned Costs

Schedule of Compensation Paid Councilpersons

1

2

43

44

Kenneth D. Folden. CPA

Kenneth D. Folden & Co.Certified Public Accountants Ted W. Sanderlin. CPA

MembersSociety of Louisiana

Certified Public Accountantsemail: kfoldenfgjfoldencpa.com

302 Eighth StreetJonesboro, LA 71251

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

MembersAmerican Institute of

Certified Public Accountantsemail: [email protected]

Independent Auditor's Report


We have audited the accompanying financial statements of the governmental activities, thebusiness-type activities, and each major fund of the Town of Haynesville as of June 30, 2007, and forthe year then ended, which collectively comprise the Town's basic financial statements as listed inthe table of contents. These financial statements are the responsibility of the Town of Haynesville'smanagement. Our responsibility is to express opinions on these financial statements based on ouraudit.

We conducted our audit in accordance with U. S. generally accepted auditing standards and thestandards applicable to financial audits contained in Government Auditing Standards, issued by theComptroller General of the United States. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overall financialstatement 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, therespective financial position of the governmental activities, the business-type activities, and eachmajor fund of the Town of Haynesville as of June 30, 2007, and the respective changes in financialposition and cash flows, where applicable, thereof for the year then ended in conformity with U. S.generally accepted accounting principles.

In accordance with Government Auditing Standards, we have also issued our report dated December21, 2007, on our consideration of the Town of Haynesville's internal control over financial reportingand on our tests of its compliance with certain provisions of laws, regulations, contracts, and grantagreements and other matters. The purpose of that report is to describe the scope of our testing ofinternal control over financial reporting and compliance and the results of that testing, and not toprovide an opinion on the internal control over financial reportin g or on compliance. That report is anintegral part of an audit performed in accordance with Government Auditing Standards and should beconsidered in assessing the results of our audit.

Management's discussion and analysis and the budgetary comparison information on pages 6through 10 and 36 through 40, respectively, are not a required part of the basic financial statementsbut are supplementary information required by U. S. generally accepted accounting principles. Wehave applied certain limited procedures, which consisted principally of inquiries of managementregarding the methods of measurement and presentation of the required supplementary information.However, we did not audit the information and express no opinion on it.

Our audit was conducted for the purpose of forming opinions on the financial statements thatcollectively comprise me Town of Haynesvflte*s basic financial statements. The supplementalInformation schedule fisted in the table of contents is presented for the purpose of additional analysisand is not a required part of the baste financial statements. Such information has been subjected tothe auditing procedures applied in the audit of the basic financial statements and, in our opinion, isfairly stated in all material respects in relation to the baste financial statements taken as a whole,

HV**-- £December 21,2007Jonesboro, Louisiana

REQUIRED SUPPLEMENTARY INFORMATION

PARTI

TOWN OF HAYNESVILLEMANAGEMENTS DISCUSSION AND ANALYSIS

AS OF AND FOR THE YEARENDED JUNE 30, 2007

As Management of the Town of Haynesville, we offer readers of the Town of Haynesville 's financialstatements this narrative overview and analysis of the financial activities of the Town of Haynesville asof and for the fiscal year ended June 30, 2007. We encourage readers to consider the informationpresented here in conjunction with the Town's basic financial statements and supplementaryinformation provided in this report in assessing the efficiency and effectiveness of our stewardship ofpublic resources.

OVERVIEW OF THE FINANCIAL STATEMENTS

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

Government-wide financial statements. The government-wide financial statements are designedto provide readers with a broad view of the Town of Haynesville's finances, in a manner similar to aprivate-sector business.

The statement of net assets presents information on all of the Town of Haynesville assets andliabilities, with the difference between the two reported as net assets. Over time, increases ordecreases in net assets may serve as a useful indicator of whether the financial position of the Townof Haynesville is improving or deteriorating.

The statement of activities presents information showing how the government's net assets changedduring the most recent fiscal year. All changes in net assets are reported as soon as the underlyingevent giving rise to the change occurs, regardless of timing of related cash flows. Thus, revenuesand expenses are reported in this statement for some items that will only result in cash flows in futurefiscal periods (for example, earned but unused vacation leave).

The government-wide financial statements can be found on pages 11 -12 of this report.

Fund financial statements. The fund financial statement focus on current available resources andare organized and operated on the basis of funds, each of which is defined as a fiscal and accountingentity with a self-balancing set of accounts established for the purpose of carrying on specificactivities or attaining certain objectives in accordance with special regulations, restrictions, orlimitations. All of the funds of the Town can be divided into two categories: governmental funds andproprietary funds.

Governmental funds. Governmental funds are used to account for essentially the same functionsreported as governmental activities in the government-wide financial statements. However, unlike thegovernment-wide financial statements, governmental fund financial statements focus on near-terminflows and outflows of spendable resources, as well as on balances of spendable resourcesavailable at the end of the fiscal year. Such information may be useful in evaluating a government'snear-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financialstatements, it is useful to compare the information presented for governmental funds with similarinformation presented for governmental activities in the government-wide financial statements. Bydoing so, readers may better understand the long-term impact of the government's near-termfinancing decisions. Both the governmental fund balance sheet and governmental fund statement ofrevenues, expenditures, and changes in fund balances provide a reconciliation to facilitate thiscomparison between governmental funds and governmental activities.

The Town of Haynesville maintains five individual governmental funds. Information as of and for theyear ended June 30, 2007, is presented separately in the governmental fund balance sheet and in thegovernmental fund statement of revenues, expenditures, and changes in fund balances for theGeneral Fund and the Sales Tax Fund, Fire Protection District No 3 Fund, Recreation District Wards2 and 3 Fund, which are considered to be major funds, and the Capital Projects Fund.

The Town of Haynesville adopts an annual appropriated budget for the general fund and the specialrevenue funds. A budgetary comparison statement is provided for the major funds to demonstratecompliance with this budget.

The governmental fund financial statements can be found on pages 13-17 of this report.

Proprietary funds. The Town's maintains one type of proprietary fund. Enterprise funds are used toreport the same functions presented as business-type activities in the government-wide financialstatements. The Town uses its enterprise funds to account for its sewer and water and solid wasteoperations.

Proprietary funds are used to account for activities that function in a manner similar to commercialenterprises. Proprietary fund financial statements typically provide more detail presentation of theinformation reported in the business-type activities portion of the government-wide financialstatements. The proprietary funds financial statements provide separate information for all of theenterprise funds, which are considered to be major funds of the Town.

The proprietary fund financial statements can be found on pages 18-22 of this report.

Notes to the Financial Statements. The notes provide additional information that is essential to afull understanding of the data provided in the government-wide and fund financial statements. Thenotes to the financial statements can be found on pages 23 - 35 of this report.

Supplemental information. In addition to the basic financial statements and accompanying notes,this report also presents required supplemental information concerning the Town of Haynesville *scompliance with budgets for its major funds. Also, other supplemental information schedules areincluded in the report.

FINANCIAL HIGHLIGHTS

The assets of the Town exceeded its liabilities at June 30, 2007 by $6,137,267.

The Town's net assets increased by $153,801 as a result of this year's operations. The netassets of the governmental activities increased by $112,481 (4%) from operations, the netassets of the business-type activities increased by $41,320 (1%).

At June 30, 2007, the Town's governmental funds reported total ending fund balances of$1,287,681, an increase of $182,384, from June 30, 2006. The entire balance is available forspending at the Town's discretion.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

NET ASSETS

Current and otter asseBCapital asseb, net

Total assets

Current and other liabdtfesLong-term liabilifes

Total Sahilifes

Net assets:Invested in capital assets, net

of related debtResticted for debt service

UnrestrictedTotal net assets

Governmental Activities2007 | 2006

Business-Type Activities2007 I 2006

Totals2007 | 2006

$ 1,371,710 $ 1,178,152 $ 742,776 $ 708.656 $ 2,114,486 $ 1,886,8081,560,772 1,630,834 2,731,351 2,795,801 4,292,123 4,426,6352.932,482 2.808.986 3.474.127 3,504.457 6.406,609 6,313.443

84,0319,62293,653

82,636

82,636

175,691

175,691

205,74541,596247,341

259,7229,622

269,344

288,38141,596329,977

1,560,772 1,630,834

1.278.059 1.Q95.S16

2,679,39851,953

567,085

2,660,802

596.314

4,240,170

51,9531,845.144

4,291,636

1.691,830$ 2.838,831 $ 2.726,350 $ 3.298.436 S 3,257.116 $ 6,137,267 S 5,983.466

As noted earlier, net assets 'may serve over time as a useful indicator of a government's financialposition. At the close of the most recent fiscal year, assets of the Town of Haynesville exceededliabilities by $6,137,267. A significant portion (69%) of the Town of Haynesville's net assetsreflects its investments in capital assets (e.g., land, building, and improvements and equipments,net of accumulated depreciation), less any related debt used to acquire those assets that is stilloutstanding. These assets are not available for future spending. Although the investment incapital assets is reported net of related debt, the resources needed to repay this debt must beprovided from other sources.

CHANGE IN NET ASSETS

REVENUESGeneral revenues:

Taxes:Ad valoremSales taxesFranchise taxOfwr taxes

Licenses and perm toFines, forfetores, and court costsIntergovernmental

Governmental Actlvitiw2007 I 2006

Business-Type Activities2007 I 2006

Totals2007 I 2006

Donated capital assebOtter

Business revenues:Charges for servicesMbcefeneous

Total revenues

410,055466,087

85,751

5,026100,34372,96043,93855,675

120,586

383,195473,19086,6005,735

93,392100,86014,89840,589

105,546

1,180

21,617 17,179

410,055

466,08785,7515.026

100,34372,96045,118

77,292

120,586

383,1%

473,19086,600

5,73593,392100,86014,89857,768

105,546

1. 0.421

~

1,304,005

793,839962

817.598

819,3436.417

842.939

793.839962

2,178,019

819,3436.417

2,146.944

EXPENDITURES

Current:

General government

Public safety

Public works

Parks and recreation

Sewer user

Utility

Total expenditures

Excess (Deficiency) of revenues

over expenses

Capital contributions

Transfer of capital assets

Change in Net Assets

Net assets, beginning

Total net assets

Governmental Activities

2007 2006

Business-Type Activities2007 2006

Totals

2007 | 2006

395,706559,959163,209107,066

-

-1,225,940

134,481

.

(22,000)

112,481

2,726,350

394,593483,473174,34894,212

-

-1,146,626

157,379

.

-

157,379

2,568,971

----

193,301 223,804604,977 581,907798,278 805,711

19,320 37,228

22,000

-

41,320 37,228

3,257,116 3,219,888

395,706559,959163,209107,066193,301604,977

2,024,218

153,801

22,000(22,000)

153,801

5,983,466

394,593

483,473174,34894,212223,804581,907

1,952,337

194,607

.

-

194,607

5,788,859

$ 2,838,831 $ 2,726,350 $ 3,298,436 $ 3,257,116 $ 6,137,267 $ 5,983,466

Governmental activities. The most significant revenues of the governmental activities aregeneral taxes (71%), which include ad valorem taxes (30%), sales taxes (34%), and franchiseand other taxes (7%).

Public safety expenses are the most significant (46%) of all governmental activities expenses,followed by general government expenses (32%). Depreciation expense is included in theseamounts.

Governmental activities revenues increased $56,416 in the current year as compared to the prioryear. The increase was primarily attributable to an increase an increase in ad valorem taxes of$26,860, and an increase in intergovernmental revenues of $29,040.

Governmental activities expenses increased $79,314 in the current year as compared to the prioryear. The increase was primarily attributable to a increase in Public Safety of $76,486.

Business-type activities. The operations of the business-type activities increased the Town's netassets by $41,320. The business-type revenue exceeded the business-type expenses by $19,320.

FINANCIAL ANALYSIS OF THE TOWN'S FUNDS

As noted earlier, the Town uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. The focus of the governmental funds is to provide information on near-term inflows, outflows, and balances of expendable resources. Such information is useful inassessing the financing requirements. In particular, unreserved fund balance may serve as a usefulmeasure of a government's net resources available for spending at the end of the fiscal year.

Governmental funds. As of June 30, 2007, the combined governmental fund balances of$1,287,681 reflect a increase of $182,384 from June 30, 2006. The entire fund balance isunreserved, which is considered available for appropriation.

The increases in the revenues and expenses of the governmental funds were described in the aboveGovernment-Wide Financial Analysis section.

Proprietary funds. The Town's proprietary funds provide the same type of information found in thegovernment-wide financial statements, but in more detail.

The Sewer User Fund's net assets decreased $2,855 in the current year. The decrease was primarilydue to expenses exceeding revenues by $13,855 offset by transfer from other funds of $11,000.

The Utility Fund's net assets increased $44,175 in the current year. The increase was primarily dueto revenues exceeding expenses by $33,175 and a transfer from other funds of $11,000.

GENERAL FUND BUDGETARY HIGHLIGHTS

General Fund actual revenues exceeded final budgeted revenues by $30,780, which resultedprimarily from an increase in intergovernmental revenues. General Fund final budgeted expenseswere less than actual expenses by $3,433.

CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital assets. As of June 30, 2007, the Town of Haynesville's investment in capital assets for itsgovernmental activities amounts to $1,560,772 (net of accumulated depreciation), and its investmentin capital assets for its business-type activities amounts to $2,653,898 (net of accumulateddepreciation). This investment includes land, buildings and improvements, furniture, and equipment.

Long-term debt. At the end of the fiscal year, the Town of Haynesville had total long-term debt of$9,622. The long-term debt consisted of compensated absences of $9,622.

ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES

The fiscal year 2008 budget is forecast to provide $3,689,289 in estimated surplus and revenues tofund costs of $2,645,190.

Capital outlay is budgeted in the amount of $425,000.

REQUESTS FOR INFORMATION

This financial report is designed to provide a general overview of the Town of Haynesville's financesfor all those with an interest in the government's finances. Questions concerning any of theinformation provided in this report or request for additional financial information should be addressedto Penny Fields, City Clerk, 1711 Main Street, Haynesville, Louisiana 71038.

10

BASIC FINANCIAL STATEMENTS


Statement of Net AssetsJune 30, 2007

Statement A

ASSETS

Cash and equivalents

Investments

Accounts Receivable

Prepaid expenses

Cash and equivalents-restricted

Capital assets (net of ace depr)

TOTAL ASSETS

LIABILITIES

Accounts, salaries, and other payables

Current liabilities payable from restricted

assets - tenant security depositsLong-term liabilities:

Due within one year

Due in more than one year

TOTAL LIABILITIES

NET ASSETS

Invested in capital assets, net of reltd debt

Restricted for debt serviceUnrestricted

TOTAL NET ASSETS

GovernmentalActivities

$

$

961,761

343,129

66,820

0

0

1.560,7722,932,482

Business-TypeActivities

$ 318,699

175,965

164,688

574

82,850

2,731,351$ 3,474,127

Total

$ 1,280,460

519,095

231,508

574

82,850

4.292.123$ 6,406,610

84,031 $

1,560,772

40,888 $

82,850

2,653,897

124,918

82,850

0

9,622

93,652

51,953

0

175,691

51,9539,622

269,343

4,214,669

01,278,059

$ 2,838,831 $

51,953592,585

3,298,436 $

51,9531,870,644

6,137,267

The accompanying notes are an integral part of this financial statement.11

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Statement DTOWN OF HAYNESVILLE

Haynesvflle, Louisiana

Reconciliation of the Governmental FundsBalance Sheet to the Statement of Net Assets

June 30, 2007

Total Fund Balances at June 30, 2007 - Governmental Funds $ 1,287,681

Capital assets used in governmental activities are not

financial resources and, therefore, are not reported in

governmental funds, net of depreciation

1,560,772

Certain liabilities are not due and payable in the current period

and therefore are not reported in the funds:

Compensated absences (9,622)

Net Assets at June 30, 2007 $ 2,838,831


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69

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69

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Statement F


Reconciliation of the Governmental FundsStatement of Revenues, Expenditures, and Changes

In Fund Balances to the Statement of ActivitiesFor the Year Ended June 30, 2007

Total net change in fund balances - governmental funds (Statement E) $ 182,384

Amounts reported for governmental activities in the Statement

of Activities are different because:

Capital outlays are reported in governmental funds as expenditures. However,

in the Statement of Activities, the cost of those assets is allocated over

their estimated useful lives as depreciation expense. This is the amount by

which capital outlays exceed depreciation in the period (69,904)

Change in net assets of governmental activities (Statement B) $ 112,480

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

17

TOWN OF HAYNESVILLEHaynesvllle, Louisiana

Statement of Net AssetsProprietary Funds

June 30, 2007

Statement G

Business-type ActivitiesEnterprise Funds

SewerUser Fund

UtilityFund

TotalEnterprise

Funds

ASSETS

Current Assets:

Cash and equivalents

Investments

Receivables (net of allowances for uncollectibles)

Prepaid expenses

Total Current Assets

Restricted Assets:

Cash and cash equivalents

Total Restricted Assets

Noncurrent Assets:

Capital assets:

Land

Buildings and equipment (net of accum. depr.)

Total Non-Current Assets

Total Assets

$ 103,109 $

175,965

38,726

0317,800

0

0

215,590 $

0

125,962

574342,126

82,850

82,850

318,699

175,965

164,688

574659,926

82,850

82,850

25,500

1,935.425

1,960,925

2,278,725

0

770.426

770,426

1,195,402

25,500

2,705.851

2,731,351

3,474,127

(Continued)

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

18


Statement of Net AssetsProprietary Funds

June 30, 2007

Statement G

LIABILITIES

Current Liabilities:

Accounts payable

Accrued salaries and withholdings

Capitalized lease obligation

Total Current Liabilities

Current Liabilities payable from

restricted assets - tenant security deposits

Non-Current Liabilities:

Total Liabilities

NET ASSETS

Invested in capital assets, net of related debt

Reserved for debt serviceUnrestricted

TOTAL NET ASSETS

Business-type ActivitiesEnterprise Funds

SewerUser Fund

UtilityFund

TotalEnterprise

Funds

21,484

1,960,925

154.207

718,473

$ 19,441 $

2,043

0

21,484

0

13,877 $

5,527

51.953

71,357

82.850

33,318

7,570

51,953

92.841

82.850

175,691

2,679,397

0296,316

$ 2,257,241 $

51,953270,769

1,041,195 $

51,953567,085

3,298,436

(Concluded)

The accompanying notes to the financial statements are an integral part of this statement.19

Statement H

TOWN OF HAYNESVILLEHaynesvllle, Louisiana

PROPRIETARY FUNDStatement of Revenues, Expenditures, and

Changes in Fund Net AssetsFor the Year Ended June 30, 2007

OPERATING REVENUES

Charges for services

Miscellaneous

Total operating revenues

OPERATING EXPENDITURES

Personal services

Supplies

Utilities

Repairs and maintenance

Contractual services

Other supplies and charges

Depreciation

Total operating expenditures

Operating income (loss)

NON-OPERATING REVENUES (Expenditures)

Interest earnings

Interest expense and fiscal charges

State grantTotal non-operating revenues (expenditures)

Income (loss) before contributions and transfers

Transfers in

CHANGES IN NET ASSETS

TOTAL NET ASSETS - BEGINNING

TOTAL NET ASSETS - ENDING

Business-type Activities -Enterprise Funds

SewerUserFund

UtilityFund

TotalEnterprise

Funds

$ 169,166 $

0

169,166

54,713

29,164

19,894

24,482

0

10,197

54,851

193,301

(24,135)

10,280

0

0

10,280

(13,855)

11,000

(2,855)

2,260,096

$ 2,257,241 $

624,673 $

962

625,635

230,115

134,193

8,058

0

157,604

6,061

54,552

590,583

35,052

11,337

(14,394)

1,180

(1,877)

33,175

11,000

44,175

997,020

1,041,195 $

793,839

962

794,801

284,828

163,357

27,952

24,482

157,604

16,258

109,403

783,884

10,917

21,617

(14,394)

1,180

8,403

19,320

22,000

41,320

3,257,116

3,298,436

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

20

Statement I


PROPRIETARY FUNDStatement of Cash Flows

For the Year Ended June 30, 2007

CASH FLOWS FROM OPERATING ACTIVITIES

Cash received from customers

Cash payments to suppliers for goods and services

Cash payments to employees for services

Net cash provided by (used for) operating activities

CASH FLOWS FROM NON-CAPITAL FINANCING

State grant

Transfers from other funds

Net cash provided by noncapital financing activities

CASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESAcquisition of capital assets

Payments on capital leases

Interest expense

Net cash used for capital and related financing activities

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of investment securities

Proceeds from sale of investment securities

Interest earnings

Net cash provided by (used for) investing activities

Net increase (decrease) in cash and cash equivalents

CASH AND CASH EQUIVALENTS - BEGINNING OF THE YEAR

CASH AND CASH EQUIVALENTS - END OF THE YEAR


SewerUserFund

UtilityFund

TotalEnterprise

Funds

27,381

0

11,000

11,000

167,384 $ 637,660 $ 805,044

(87,864) (309,722) (397,586)

(52,139) (231,616) (283,755)

96,322

1,180

11,000

12,180

123,703

1,180

22,000

23,180

(17,354)

0

0

(17,354)

(175,965)

167,528

10,280

1,843

22,870

80,239

$ 103,109 $

(16,000)

(82,144)

(14,394)

(112,538)

0

0

11,885

11,885

7,849

290,591

298,441 $

(33,354)

(82,144)

(14,394)

(129,892)

(175,965)

167,528

22,165

13,728

30,719

370,830

401,549

(Continued)


21


PROPRIETARY FUNDStatement of Cash Flows


Statement I

RECONCILIATION OF OPERATING INCOME TO NETPROVIDED BY OPERATION ACTIVITIES

Operating income (loss)

Adjustments

Depreciation

Net changes in assets and liabilities:

Accounts receivable

Tenants' security deposits

Accounts payable

Accrued salaries and withholdings

Net cash provided by (used for) operating activities


SewerUserFund

UtilityFund

TotalEnterprise

Funds

(24,135) $

54,851

35,051 $

54,552

10,916

109,403

(427)

0

(3,452)

544

27,381

5,464

4,695

1,706

(5,146)

96,322

5,037

4,695

(1,746)

(4,602)

123,703

(Concluded)


NOTES TO THE FINANCIAL STATEMENTS

TOWN OF HAYNESVILLE, LOUISIANAHaynesville, Louisiana

Notes to the Financial StatementsAs of and for the Year Ended June 30, 2007

INTRODUCTION

The Town of Haynesville, Haynesville, Louisiana (Town), was incorporated August 14, 1901, underthe provisions of the Lawrason Act. The Town operates under the Mayor-Board of Aldermen formof government.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. BASIS OF PRESENTATION

The accompanying financial statements of the Town have been prepared in conformity with U.S.generally accepted accounting principles (GAAP) as applied to governmental units. TheGovernmental Accounting Standards Board (GASB) is the accepted standard setting body forestablishing governmental accounting and financial reporting principles.

B. REPORTING ENTITY

GASB Statement No. 14, The Reporting Entity, established criteria for determining thegovernmental reporting entity and component units that should be included within the reportingentity. Under provisions of this Statement, the Town is considere d a primary government, since itis a special purpose government that has a separately elected governing body, is legallyseparate, and is fiscally independent of other state or local governments. As used in GASBStatement No. 14, fiscally independent means that the Town may, without the approval orconsent of another governmental entity, determine or modify its own budget, levy its own taxes orset rates or charges, and issue bonded debt.

GASB Codification Section 2100 establishes criteria for determining which, if any, componentunits should be considered part of the Housing Authority for financial reporting purposes. Thebasic criterion for including a potential component unit within the reporting entity is financialaccountability, which includes:

1. Appointing a voting majority of an organization's governing body, and:a. The ability of the government to impose its will on that organization and/orb. The potential for the organization to provide specific financial benefits to orimpose specific financial burdens on the government.

2. Organizations for which the government does not appoint a voting majority but arefiscally dependent on the government.

3. Organizations for which the reporting entity financial statements would be misleading ifdata of the organization is not included because of the nature or significance of therelationship.

Based on the above criteria, Fire Protection District No. 3 and Recreation District - Wards 2 & 3are considered component units of the Town and are reported in the Town's financial statementsas blended entities.

23



C. FUNDS

The Town uses funds to maintain its financial records during the year. Fund accounting isdesigned to demonstrate legal compliance and to aid management by segregating transactionsrelated to certain Town functions and activities. A fund is defined as a separate fiscal andaccounting entity with a self-balancing set of accounts. Funds of the Town are classified into twocategories: governmental and proprietary, as follows:

Governmental Funds

Governmental funds account for most of the Town's general activiti es. These funds focus on thesources, uses, and balances of current financial resources. Expendable assets are assigned tothe various governmental funds according to the purposes for which they may be used. Currentliabilities are assigned to the fund from which they will be paid. The difference between agovernmental fund's assets and liabilities is reported as fund balance. In general, fund balancerepresents the accumulated expendable resources which may be used to finance future periodprograms or operations of the Town. The following are the Town's primary governmental funds:

General Fund - The primary operating fund of the Town, it accounts for all financialresources, except those required to be accounted for in other funds. The General Fundis available for any purpose provided it is expended or transferred in accordance withstate and federal laws and according to Town policy.

Major Special Revenue Funds - Account for the proceeds of specific revenue sourcesthat are legally restricted to expenditures for specified purposes, or designated by theTown to be accounted for separately.

Capital Projects Fund -The Capital Projects Fund accounts for all financial resources usedfor the acquisition or construction of major capital facilities other than those financed byProprietary Funds.

Proprietary Funds

The Enterprise Funds are used to account for operations (a) that are financed and operated in amanner similar to private business enterprises where the costs (expenses including depreciation)of providing goods or services to the general public on a continuing basis are financed through usercharges: or (b) where the governing body has decided that periodic determination of revenuesearned, expenses incurred, and/or net income is appropriate for capital maintenance, public policy,management control, accountability, or other purpose.

D. MEASUREMENT FOCUS/BASIS OF ACCOUNTING

Government-Wide Financial Statements (GWFS)

The Statement of Net Assets (Statement A) and the Statement of Activities (Statement B) displayinformation about the reporting government as a whole. These statements include all thefinancial activities of the Town.

The GWFS were prepared using the economic resources measurement focus and the accrual

24

TOWN OF HAYNESV1LLE, LOUISIANAHaynesville, Louisiana


basis of accounting. Revenues, expenses, gains, losses, assets and liabilities resulting fromexchange or exchange-like transactions are recognized when the exchange occurs (regardless ofwhen cash is received or disbursed). Revenues, expenses, gains, losses, assets and liabilitiesresulting from nonexchange transactions are recognized in accordance with the requirements ofGASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions.

Program Revenues - Program revenues included in the Statement of Activities (Statement B)derive directly from parties outside the Town's taxpayers or citizenry, as a whole; programrevenues reduce the cost of the function to be financed from the Town's general revenues.

Direct Expenses - The Town reports all direct expenses by function in the Statement of Activities(Statement B). Direct expenses are those that are clearly identifiable with a function.Depreciation expense, which can be specifically identified by function, is included in the directexpenses of each function.

Fund Financial Statements (FFS)

Governmental funds are accounted for using a current financial resources measurement focus.With this measurement focus, only current assets and current liabilities are generally included onthe balance sheet. The statement of revenues, expenditures, and changes in fund balancesreports on the sources (i.e., revenues and other financing sources) and uses (i.e., expendituresand other financing uses) of current financial resources. This approach differs from the mannerin which the governmental activities of the government-wide financial statements are prepared.Governmental fund financial statements therefore include a reconci liation with brief explanationsto better identify the relationship between the government-wide statements and the statements forgovernmental funds.

Fund financial statements report detailed information about the Town. The focus of governmentalfund financial statements is on major funds rather than reporting funds by type. Each major fundis presented in a separate column. As of and for the year ended June 30, 2007 the general fund,sales tax fund, fire protection district, and the recreation district are considered to be major fundsand are reported in the Balance Sheet (Statement C) and in the Statement of Revenues,Expenditures, and Changes in Fund Balances (Statement E). The capital projects fund is theonly other (nonmajor) governmental fund of the Town.

All proprietary funds are accounted for on a flow of economic resources measurement focus.With this measurement focus, all assets and liabilities associated with the operation of these fundsare included on the balance sheet. Fund equity (net total assets) is segregated into contributedcapital and retained earnings components. Proprietary fund-type operating statements present in-creases (revenues) and decreases (expenses) in net total assets.

Governmental funds use the modified accrual basis of accounting. Under the modified accrualbasis of accounting, revenues are recognized when susceptible to accrual (i.e., when theybecome both measurable and available). Measurable means the amount of the transaction canbe determined and available means collectible within the current period or soon enough thereafterto pay liabilities of the current period. The Town considers all revenues available if they arecollected within 60 days after the fiscal year end. Expenditures are recorded when the relatedfund liability is incurred, except for interest and principal payments on general long-term debtwhich is recognized when due, and certain compensated absences and claims and judgmentswhich are recognized when the obligations are expected to be liquidated with expendable

25



expendable available financial resources. The governmental funds use the following practices inrecording revenues and expenditures:

Revenues

Those revenues susceptible to accrual are property taxes, franchise taxes, and charges forservices. Fines, permit and license revenues are not susceptible to accrual because generallythey are not measurable until received in cash.

The accrual basis of accounting is utilized by the proprietary fund type. Under this method,revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.

Interest earnings are recorded when the investments have matured and the interest is available.

Expenditures

Salaries are recorded as expenditures when earned by employees.

Purchases of various operating supplies, etc. are recorded as expenditures when the related fundliability is incurred.

Compensated absences are recognized as expenditures when leave is actually taken or whenemployees, or their heirs, are paid for accrued leave upon retirem ent or death.

Principal and interest on long-term debt are recognized when due.

Other Financing Sources (Uses)

Transfers between funds that are not expected to be repaid, sales of fixed assets, and long-termdebt proceeds and payments, are accounted for as other financing sources (uses). These otherfinancing sources (uses) are recognized at the time the underlying events occur.

E. BUDGETS

The Mayor prepares a proposed budget and submits it to the Board of Aldermen no later than fifteendays prior to the beginning of each fiscal year. A summary of the proposed budget is publishedand the public notified that the proposed budget is available for public inspection. At the same time,a public hearing is called. A public hearing is held on the proposed budget at least ten days afterpublication of the call for the hearing. After the holding of the public hearing and completion of allaction necessary to finalize and implement the budget, the budget is adopted through passage ofan ordinance prior to the commencement of the fiscal year for which the budget is being adopted.The budget ordinance is structured such that revenues are budgeted by source and appropriationsare budgeted by department and by principal object of expenditure. The Board of Aldermen mayrevise or amend the budget at its discretion during legally convened sessions. Management mayamend the budget only below the department level. The Town utilizes formal budgetaryintegration as a management control device for all funds.

F. CASH AND CASH EQUIVALENTS

Cash includes amounts in demand deposits, interest-bearing demand deposits, and time

26



deposits. Cash equivalents include amounts in time deposits and those investments with originalmaturities of 90 days or less. Under state law, the Town may deposit funds in demand deposits,interest-bearing demand deposits, or time deposits with state banks organized under Louisianalaw or any other state of the United States, or under the laws of the United States.

G. INVESTMENTS

Investments are limited by R.S. 33:2955 and the Town's investment policy. If the originalmaturities of investments exceed 90 days, they are classified as investments; however, if theoriginal maturities are 90 days or less, they are classified as cash equivalents.

H. INTERFUND RECEIVABLES/PAYABLES

During the course of operations, numerous transactions occur between individual funds for goodsprovided or services rendered. These receivables and payables are short term in nature and areclassified as interfund receivables or interfund payables on the Balance Sheet (Statement C).

I. INVENTORIES

Inventories of supplies in the Proprietary Fund are not material and are charged to operations aspurchased.

J. CAPITAL ASSETS

Capital assets are capitalized at historical cost or estimated cost if historical cost is not available.Donated assets are recorded as capital assets at their estimated fair market value at the date ofdonation. The Town maintains a threshold level of $1,000 or more for capitalizing capital assets.

Capital assets are recorded in the GWFS, but are not reported in the FFS. Since surplus assetsare sold for an immaterial amount when declared as no longer needed for their intendedpurposes by the Town, no salvage value is taken into consideration for depreciation purposes. Allcapital assets, other than land, are depreciated using the straight-line method over the followinguseful lives: ^

| Estimated Lives |Utility Fund

Water Utility:Water works 40 yearsWater meters 40 yearsComputer 4 - 5 yearsOther equipment 4-10 yearsWater tank rework 15 years

Sewerage and Sanitation:Lines, pump stations 40 yearsAutos and trucks 4 - b yearsOther equipment 4-10 yearsLandfill 20 years

Sewer User FundSewerage disposal plant bO yearshquipment tio yearsWarehouse 4 - 5 yearsLift pump rework 10 years

27



K. ACCOUNTS PAYABLE

Of the $124,919 total accounts, salaries and other payables reported on the balance sheet,$11,503 represents amounts payable to employees for salaries payable. The balance of$113,416 is due vendors for various operating services and materials and to taxing authorities forpayroll tax withholdings.

L. COMPENSATED ABSENCES

Compensated absences computed by the Town is as follows:

Vacation is limited to five days after one continuous year of service, ten days after two continuousyears of service and thereafter. Vacation days must be used in the calendar year of entitlement.Unused days at December 31 of each year do not accrue.

Sick leave is limited to thirty days at full pay and thirty days at half-pay. Days must be used withinthe calendar year and do not accrue.

The cost of leave privileges, computed in accordance with the GASB Codification Section C60, isrecognized as a current-year expenditure in the governmental funds when leave is actually takenor when employees or their heirs are paid for accrued leave upon retirement or death.

At June 30, 2007, employees of the Town have accumulated and vested $9,623 of employeeleave benefits, computed in accordance with GASB Codification Section C60. The entirecompensated absence liability is reported on the government-wide financial statements.

M. RESTRICTED NET ASSETS

For government-wide statement of net assets, net assets are reported as restricted whenconstraints placed on net asset use are either:

1. Externally imposed by creditors (such as debt covenants), grantors, contributors, or laws orregulations of other governments; or

2. Imposed by law through constitutional provisions or enabling legislation.

N, FUND EQUITY

In the fund financial statements, governmental funds report reservations of fund balance foramounts that are not available for appropriation or are legally restricted by outside parties for usefor a specific purpose. Designations of fund balance represent tentative management plans thatare subject to change.

O. INTERFUND TRANSACTIONS

Transactions that constitute reimbursements to a fund for expenditures initially made from it thatare properly applicable to another fund are recorded as expenditures in the reimbursing fund andas reductions of expenditures in the fund that is reimbursed. Nonrecurring or nonroutinepermanent transfers of equity are reported as residual equity transfers. All other interfund

28



transactions are reported as transfers.

P. ESTIMATES

The preparation of financial statements in conformity with accounting principles generallyaccepted in the United States of America require management to make estimates andassumptions that affect the reported amounts of assets and liabilities and disclosure of contingentassets and liabilities at the date of the financial statements and the reported amounts ofrevenues, expenditures, and expenses during the reporting period. Actual results could differfrom those estimates.

2. LEVIED TAXES

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

| Authorized milage | Levied Millage | Expiration Date ~[l-ire Protection TTTOO JT23 2009Recreation 5.50 5.00 201UStreet & Sewage 5.00 5.00 2011General Operation 9.82

3. SALES TAX

Proceeds from a one percent (1%) sales and use tax shall be dedicated and used for thepurposes of opening, constructing, paving, resurfacing, improving and/or maintaining streets,alleys, sidewalks and bridges, constructing, acquiring, extending, improving, renovating and/ormaintaining street light facilities, waterworks, sewers and sewerage disposal works, garbagecollection and waste disposal facilities, police department stations and equipment, public buildingsand/or fire department stations and equipment, including fire engines, public parks andrecreational facilities, airport facilities and purchasing and acquiring the necessary land,equipment and furnishings for the afore-said public works, buildings, improvements and facilities,title to which improvements shall be in the public, or for any one or more of said purposes, all asauthorized by Sub-Part I, Chapter 6, Title 33 of the Louisiana Revised Statutes of 1950 (R.S.33:2711 etseq.)

The Town is also authorized to levy and collect a tax of one percent (1%) for an unlimited periodupon the sale at retail, the use, and lease or rental, the consumption and storage for use orconsumption of tangible personal property and on sales of services in said Town, as defined inR.S. 47:301 to 47:317, inclusive, with the revenues derived from said sales and use tax to bedeposited in a special fund and dedicated and used for the purposes of industrial construction,inducement and/or procurement, opening, constructing, paving, resurfacing, improving and/ormaintaining streets, alleys, sidewalks and bridges, constructing, acquiring, ex-tending, improving,renovating and/or maintaining street lighting facilities, and waterworks.

4. CASH AND CASH EQUIVALENTS

At June 30, 2007, the Town had cash and cash equivalents (book balances) totaling $1,881,615of which $942,388 was in demand deposits, $159,289 in savings deposits, and $779,938 incertificates of deposits.

29



These deposits are stated at cost, which approximates market. Under state law, these deposits(or the resulting bank balances) must be secured by federal deposit insurance or the pledge ofsecurities owned by the fiscal agent bank. The market value of the pledged securities plus thefederal deposit insurance must at all times equal the amount on deposit with the fiscal agent.

At June 30, 2007, the Town had $1,891,610 in deposits (collected bank balances). These depositsare secured from risk by $200,000 federal deposit insurance, a $500,000 Federal Home LoanBank Letter of Credit and $1,749,391 of pledged securities held in a Federal Reserve pledgeaccount. The deposits collateralized by the Letter of Credit and the securities held in the FederalReserve pledge account are not exposed to custodial credit risk.

5. INVESTMENTS

Investments are categorized into these three categories of credit risk:

1. Insured or registered, or securities held by the Town or its agent in the Town's name2. Uninsured and unregistered, with securities held by the counter party's trust department

or agent in the Town's name3. Uninsured and unregistered, with securities held by the counter party, or by its trust

department or agent but not in the Town's name

At June 30, 2007, the Town's investment balances were as follows:

Type ofInvestment Category 1

Carrying Amount

Fair Value

AmortizedCost Cost

TotalCarryingAmount

Certificates of Deposit $ 519,095 $ 519,095 $ 519,095

6. RECEIVABLES

The receivables of $231,508 at June 30, 2007, are as follows:

Occupational licensesRoyalties, franchise, and other taxesSales taxesCustomerOther

FundGeneral Sales Tax Enterprise Total

$ 233 $ - $ - $ 23322,346 - - 22,346

39,576

4,665

39,576161,478 161,478

3,210 7,87527,244 $ 39,576 $ 1W,688 231,508

30


Notes to the Financial StatementsAs of and for the Year Ended June 30,2007

Beginning

Balance Additions Deletions

Ending

Balance

399,279 $

Function

Depreciation

Expense

General government

Public safety

Public works


Total

26,045

58,396

31,619

3,351

119,411

31

$ 399,279

7. CAPITAL ASSETS

A summary of changes in capital assets for the year ended June 30, 2007, is as follows:

A. Capital Assets - Governmental Funds

Capital assets not being depreciated:

Land

Constructions in progress

ToBl capital assets not being depreciated

Capital assets being depreciated:

Buildings and improvement

Equipment and furniture

Total capital assets being depreciated

Less accumuated depreciation for

Buildings and improvements

Equipment and (umrture

Total accumulated depreciation

Total capital assets being depreciated, net

Total capital assets, net

Functional Allocation of Depreciation Expense

399,279

1.379,172

1.101,802

2.480.974

(620,882)

(628,695)

(1,249.5771

1.231.397

S 1.630.676 J

.

49.507

49.507

(30,638)

(88.773)

(119.411)

(69.904) *

(69.904) $

399.279

1,379,172

1.151.309

2.530.481

(651,520)

(717.4681

(1.368.988)

1.161.493

- $ 1.560.772



B. Capital Assets - Proprietary Funds

Capital assete not being depreciated:

Land

Consfrucfions in progress

Total capital asseb not being depreciated

Beginning

Bilanct Additions Deletions

Ending

Balance

$ 25,500 I

25.500

25,500

25,500

Otwr Capital assets being depreciated:

Unity plant and distribution system

Machinery & equipment

Total otter capital asseb being depreciated

Less accumulated depreciation

Otwr capfel assets, net

Total caprtal assets, net

•Depreciation expense was charged b

(unctions as follows:

Business-type activities;

Sewer

Total Business-type activities depreciation

expense

$

4,831,896

421.289

5.253.185

(2,482.884)

2,770.301

2.795.801 $ '

44,953

44.953

(109,4031

(64.450)

(64.4501 $

4,831,896

466.242

5.298.138

(2,592.287)

2.705.851

- $ 2.731.351

2007

54,552

54,851

S 109.403

8. RETIREMENT SYSTEMS

A. MUNICIPAL EMPLOYEES' RETIREMENT SYSTEM OF LOUISIANA (SYSTEM)

Plan Description

The System is composed of two distinct plans, Plan A and Plan B, with separate assets andbenefit provisions. All employees of the municipality are members of Plan A. All permanentemployees working at least 35 hours per week who are not covered by another pension plan andare paid wholly or in part from municipal funds and ail elected municipal officials are eligible toparticipate in the System.

Under Plan A, employees who retire at or after age 60 with at least 10 years of creditable service, ator after age 55, with at least 25 years of creditable service, or at any age with at least 30 years of

32



creditable service are entitled to retirement benefit, payable monthly for life, equal to 3 percent oftheir final-average salary for each year of creditable service. Final-average salary is theemployee's average salary over the 36 consecutive or joined months that produce the highestaverage. Employees who terminate with at least the ages specified above and receive the benefitaccrued to their date of termination. The System also provides death and disability benefits.Benefits are established or amended by state statute.

The System issues an annual publicly available financial report that includes financial statementsand required supplementary information for the System. The report may be obtained by writing tothe Municipal Employees Retirement System of Louisiana, 7937 Office Park Boulevard, BatonRouge, Louisiana 70809, or by calling (225) 925-4810.

Funding Policy

Under Plan A, members are required by state statute to contribute 9.25% of their annual coveredsalary and the Town of Haynesville is required to contribute at an actuarially determined rate. Thecurrent rate is 16.25% of annual covered payroll. Contributions to the System also include one-fourth of 1% of the taxes shown to be collectible by the tax rolls of each parish. These tax dollarsare divided between Plan A and Plan B based proportionately on the salaries of the activemembers of each plan. The contribution requirements of plan members and the Town ofHaynesville are established and may be amended by state statute. As provided by LouisianaRevised Statute 11:103, the employer contributions are determined by actuarial valuation and aresubject to change each year. The Town of Haynesville contributions to the System under Plan Afor the years ending June 30, 2007, 2006, and 2005 were $43,842, $40,534, and $43,630,respectively, equal to the required contributions for each year.

B. MUNICIPAL POLICE EMPLOYEES1 RETIREMENT SYSTEM OF LOUISIANA

(SYSTEM) Plan Description

All full-time police department employees engaged in law enforcement are required to participatein the System. Employees who retire at or after age 50 with at least 20 years of creditable serviceor at or after age 55 with at least 12 years of creditable service are entitled to a retirement be-nefit, payable monthly for life, equal to 3 1/3% of their final-average salary for each year of cred-itable service. Final-average salary is the employee's average salary over the 36 consecutive orjoined months that produce the highest average. Employees who terminate with at least theamount of creditable service stated above, and do not withdraw their employee contributions,may retire at the ages specified above and receive the benefit accrued to their date of termination.The system also provides death and disability benefits. Benefits are establi shed or amended bystate statute.

The System issues an annual publicly available financial report that includes financial statementsand required supplementary information for the System. The report may be obtained by writing tothe Municipal Employees Retirement System of Louisiana, 8401 United Plaza Boulevard, BatonRouge, Louisiana 70809, or by calling (225)929-7411.

Funding Policy

Plan members are required by state statute to contribute 7.5% of their annual covered salary andthe Town of Haynesville is required to contribute at an actuarially determined rate. The current

33



rate is 15.5% of annual covered payroll. The contribution requirements of plan members and theTown of Haynesville are established and may be amended by state statute. As provided by LAR.S. 11:103, the employer contributions are determined by actuarial valuation and are subject tochange each year based on the results of the valuation for the prior fiscal year. The Town ofHaynesville's contributions to the System for the years ending June 30, 2007, 2006, and 2005,were $24,564, $19,938, and $19,973, respectively, equal to the required contributions for eachyear.

9. CAPITAL LEASE

The Town is leasing a meter reading system through Government Capital Corporation. The leaseterm is sixty months with an expiration date of April 1, 2008. Payments of $8,045 are due on amonthly basis. The lease has a purchase option that the Town expects to exercise at the end ofthe tease.

The water meter reading system is included in capital assets and is being depreciated over itsestimated useful economic life.

Future minimum lease payments and purchase option under the capital lease are:

Year AmountJune 30, 2008 $53,113

Total 53,113Less: Amount representing interest 1,160

Present value of minimum lease paymentsPurchase options 51,953

Less: Current portion 51,953

Long-term portion $

10. LONG-TERM OBLIGATIONS

Through its history, the Town has funded the liability for compensated absences due employeesupon retirement or death from the fund that incurred the liability for the salaries of thoseemployees. During 2003, the Town entered into a capital lease in order to obtain water metersand a reading system. The following is a summary of the long-term obligation transactions for theyear ended June 30, 2007;

34



Capital LeaseObligation

CompensatedAbsences Total

Balance at July 1, 2006 $ 134,097 $ 10,505 $ 144,602

AdditionsDeletions

Balance at July 1, 2007

The following is a summary of the current (due in one year or less) and the long-term (due inmore than one year) portions of long-term obligations as of June 30, 2007:

$(82,144)

51,953 $

9,623(10,505)

9,623 $

9,623(92,649)

61,576

LeaseObligation

CompensatedAbsences Total

Current portion

Long term portion

Total

51,953 $ - $ 51,953

9,623 9,623

51,953 $ 9,623 $ 61,576

11. LEASE INCOME

The Town leases a building to a regional retailer. The lease agreement specifies that the tenantpay the town $500 per month. On an annual basis the tenant pays the Town an amount equal to2% of its gross sales less the monthly rent paid during the year. This lease will end on January31, 2008.

12. RISK MANAGEMENT

The Town is exposed to various risk of loss related to torts, thefts of, damage to, and destructionof assets, errors and omissions, and injuries to employees. To handle such risk of loss, the Townmaintains commercial insurance policies covering automobile liability and uninsured motorist,surety bond coverage, flood insurance, and property insurance. In addition to the above policies,the Town maintains a general liability policy and an errors and omissions policy. No claims werepaid on any of the policies during the past three years, which exceeded the policies' coverageamount.

13. LITIGATION AND CLAIMS

At June 30, 2007, the Town was not involved in any lawsuits nor is aware of any outstanding claims,which are not covered by insurance.

35

REQUIRED SUPPLEMENTARY INFORMATION

PART II

Schedule A


GENERAL FUNDStatement of Revenues, Expenditures, and

Changes in Fund Balances - Budget and ActualFor the Year Ended June 30, 2007

ORIGINALBUDGET

FINALBUDGET

ACTUAL(BUDGETARY

BASIS)

VARIANCEWITH FINAL

BUDGETPositive

(Negative)

REVENUES

Taxes

Ad valorem

Franchise tax

Other taxes

Licenses and permits

Fines, forfeitures, and court costs

Intergovernmental

Interest earnings

Other

Total revenues

EXPENDITURES

CurrentGeneral government

Public safety

Public works

Capital outlay

Total expenditures

EXCESS (Deficiency) REVENUES

OVER EXPENDITURES

OTHER FINANCING SOURCES (Uses)

Operating transfers in

Operating transfers outTotal other financing sources(uses)

NET CHANGES IN FUND BALANCES

FUND BALANCES - JULY 1, 2006

FUND BALANCES - JUNE 30, 2007

$ 115,000 $

85,000

5,700

84,100

78,000

0

2,554

93,800

464,154

174,152

380,000

133,200

0

687,352

(223,198)

229,900

0

229,900

6,702

49,340

56,042

115,000 $

85,000

5,700

94,100

72,500

17,800

4,406

94,552

489,058

182,503

372,800

140,650

45,250

741,203

(252,145)

255,000

0

255,000

2,855

49,340

52,195 $

114,570 $

85,751

5,026

97,751

72,961

43,938

4,675

95,166

519,838 $

178,635

403,394

131,591

24,150

737,770 $

(217,932)

254,150

(22,000)

232,150

14,218

59,765

73,983 $

(430)

751

(674)

3,651

461

26,138

269

614

30,780

3,868

(30,594)

9,059

21,100

3,433

34,213

(850)

(22,000)

(22,850)

11,363

10,425

21,788


36

Schedule BTOWN OF HAYNESVILLE

Haynesville, Louisiana

SALES TAX FUNDStatement of Revenues, Expenditures, and


ORIGINALBUDGET

FINALBUDGET

ACTUAL(BUDGETARY

BASIS)

VARIANCEWITH FINAL

BUDGETPositive

(Negative)

REVENUES

Taxes

Sales taxes

Interest earnings

Total revenues

EXPENDITURES

Current

General government

Total expenditures

EXCESS (Deficiency) OF REVENUES

OVER EXPENDITURES


Operating transfers out

Total other financing sources(uses)



$ 470,000 $

2,600

472,600

212,350

212,350

260,250

(239,700)

(239,700)

20,550

281,387

$ 301,937 $

466,000 $

7,000

473,000

197,250

197,250

275,750

(269,800)

(269,800)

5,950

281,387

287,337 $

466,088 $

10,636 $

476,724

191,028

191,028

285,696

(270,950)

(270,950)

14,746

280,406

295,152 $

88

3,636

3,724

6,222

6,222

9,946

(1,150)

(1,150)

8,796

(981)

7,815


37

Schedule C


FIRE PROTECTION DISTRICT NO. 3 FUNDStatement of Revenues, Expenditures, and


REVENUES

Taxes

Ad valorem

Interest earnings

Other

Total revenues

EXPENDITURES

Public safety

Capitlal outlay

Total expenditures

EXCESS (Deficiency) REVENUES

OVER EXPENDITURES


Operating transfers in

Total other financing sources(uses)



ORIGINALBUDGET

$ 136,000

12,000

14,500

162,500

100,500

50,000

150,500

FINALBUDGET

$ 145,000

16,000

24,700

185,700

98,350

0

98,350

ACTUAL(BUDGETARY

BASIS)

$ 151,504

31,096

24,719

207,319

98,171

0

98,171

VARIANCEWITH FINAL

BUDGETPositive

(Negative)

$ 6,504

15,096

19

21,619

179

0

179

12,000 87,350 109,148 21,798

16,800

16,800

28,800

602,954

$ 631,754 $

16,800

16,800

104,150

602,954

707,104 $

16,800

16,800

125,948

602,543

728,491 $

0

0

21,798

(411)

21,387


38

Schedule DTOWN OF HAYNESVILLE

Haynesville, Louisiana

RECREATION DISTRICT WARDS 2 & 3Statement of Revenues, Expenditures, and


ORIGINALBUDGET

FINALBUDGET

ACTUAL(BUDGETARY

BASIS)

VARIANCEWITH FINAL

BUDGETPositive

(Negative)

REVENUES

Taxes

Ad valorem

Interest earnings

Charges for services

Other

Total revenues

EXPENDITURES

Current


Capitlat outlay

Total expenditures

EXCESS (Deficiency) OF REVENUES

OVER EXPENDITURES


TOTAL OTHER FINANCING SOURCES (Uses)



FUND BALANCES - JUNE 30, 2007

$ 130,000 $

5,500

1,600

0

137,100

106,500

20,000

126,500

10,600

0

0

10,600

138,000 $

9,000

2,200

0

149,200

101,500

29,000

130,500

18,700

0

0

18,700

143,981 $

9,268

2,591

700

156,540

103,714

25,357

129,071

27,469

0

0

27,469

5,981

268

391

700

7,340

(2,214)

3,643

1,429

8,769

0

0

8,769

162,597 162,597 162,582 (15)

$ 173,197 $ 181,297 $ 190,051 $ 8,754


39


Notes to the Schedule of Revenues, Expenditures andChanges in Fund Balance - Budget and Actual


NOTE 1 • BUDGETARY POLICIES

A proposed budget for the general fund and the special revenue funds of the Town of Haynesville isprepared on the modified accrual basis of accounting. The budget is legally adopted by the Town ofHaynesville and then amended during the year, as necessary. The budget is established and controlledat the object level of expenditures. Appropriations lapse at year-end and must be reappropriated for thefollowing year to be expended. The Town of Haynesville authorizes all amendments to the budget.Amendments were made to the original budget and all amendments are reflected in the accompanyingbudget comparison information.

Formal budgetary integration is employed as a management control device during the year.

40

Kenneth D. Folden & Co.Kenneth D. Folden. CPA Certified Public Accountants Ted W. Sanderlin. CPA

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

Certified Public Accountants (318) 259-7316 Certified Public Accountantsemail: kfoldenfq)foldencpa.com FAX (318) 259-7315 email: tsanderlinfqjfoldencpa.com

Independent Auditor's Report on Internal Control OverFinancial Reporting and on Compliance and

Other Matters Based on an Audit of Financial StatementsPerformed in Accordance With Government Auditing Standards

Town of HaynesvilleHaynesville, Louisiana

We have audited the financial statements of the governmental activities, the business-type activitiesand each major fund of the Town of Haynesville, as of and for the year ended June 30, 2007, whichcollectively comprise the Town of Haynesville's basic financial statements and have issued our reportthereon dated December 21, 2007. We conducted our audit in accordance with auditing standardsgenerally accepted in the United States of America and the standards applicable to financial auditscontained in Government Auditing Standards, issued by the Comptroller General of the UnitedStates.

Internal Control Over Financial Reporting

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

A control deficiency exists when the design or operation of a control does not allow management oremployees, in the normal course of performing their assigned functions, to prevent or detectmisstatements on a timely basis. A significant deficiency is a control deficiency, or combination ofcontrol deficiencies, that adversely affects the Town of Haynesville's ability to initiate, authorize,record, process, or report financial data reliably in accordance with generally accepted accountingprinciples such that there is more than a remote likelihood that a misstatement of the Town ofHaynesville's financial statements that is more than inconsequential will not be prevented or detectedby the Town of Haynesville's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that resultsin more than a remote likelihood that a material misstatement of the financial statements will not beprevented or detected by the Town of Haynesville's internal control.

Our consideration of internal control over financial reporting was for the limited purpose described inthe first paragraph of this section and would not necessarily identify all deficiencies in internal controlthat might be significant deficiencies or material weaknesses. We did not identify any deficiencies inthe internal control over financial reporting that we consider to be material weaknesses, as definedabove.

41

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Town of Haynesville's financialstatements are free of material misstatement, we performed tests of its compliance with certainprovisions of laws, regulations, contracts and grant agreements, noncomptiance with which couldhave 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 one instance ofnoncompliance or other matters that is required to be reported under Government AuditingStandards and which is described in the accompanying schedule of findings as item 2007-01.

Town of Haynesville's response to the finding identified in our audit is described in the accompanyingschedule of findings. We did not audit the Town of Haynesville's response and, accordingly, weexpress no opinion on it.

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

December 21, 2007Jonesboro, Louisiana

42

SUPPLEMENTAL INFORMATION

Schedule 1


Schedule of Findings and Questioned CostsFor the Year Ended June 30, 2007

A. SUMMARY OF AUDIT RESULTS

Financial Statements Audit

1. The auditor's report expresses an unqualified opinion on the basic financial statements ofthe Town of Haynesville.

2. No material weaknesses or reportable conditions relating to the audit of the basicfinancial statements are reported in the Independent Auditors' Report on Internal ControlOver Financial Reporting and on Compliance and Other Matters Based on an AuditPerformed in Accordance With Government Auditing Standards.

3. No instances of noncompliance or other matters material to the basic financialstatements of the Town of Haynesville were disclosed during the audit.

B. FINDINGS - FINANCIAL STATEMENTS AUDIT

2007-1 -Untimely Filing of Report

The Town of Haynesville did not have annual financial statements filed within six months ofthe close of the year as required by law.

Management Response

Practices have been put in place that will ensure future required filings will be submitted in atimely manner, and within the time frame required by state law.

43

Schedule 2


Schedule of Compensation Paid CouncilpersonsFor the Year Ended June 30, 2007

2007Alvin Kendrick $ 7,255Alvin Moss 1,200Roderick Hampton 4,429Herbert Taylor 1,000Joyce Major 6,862Rene Lincoln-Buggs 6,899Carla Smith 4.800

Total $ 32,445

44

Documents

KENNETH D. FOLDEN & CO.app1.lla.state.la.us/PublicReports.nsf/221961FC... · KENNETH D. FOLDEN & CO. CERTIFIED PUBLIC ACCOUNTANTS 302 EIGHTH STREET, JONESBORO, LA 71251 (318)259-7316