Marksville, Louisiana Financial Report Year Ended December ...app1.lla.state.la.us/PublicReports.nsf/A571E7EF05C... · AVOYELLES WATER COMMISSION Marksville, Louisiana Financial Report

AVOYELLES WATER COMMISSION Marksville, Louisiana

Financial Report

Year Ended December 31,2012

TABLE OF CONTENTS

Page

INDEPENDENT AUDITORS' REPORT 1 -2

BASIC FINANCIAL STATEMENTS

Proprietary Fund Type - Enterprise Fund Statement of net position 4 Statement of revenues, expenses, and changes in net position 5 Statement of cash flows 6-7

Notes to basic fmancial statements 8-16

OTHER INFORMATION

Schedule of Board Members 18

Schedule of Insurance in Force 19 Utility Rate Schedule 20 Accounts Receivable Aging 21

INTERNAL CONTROL, COMPLIANCE, AND OTHER MATTERS

Report on intemal control over fmancial reporting and on compliance and other matters based on an audit of fmancial statements performed in accordance with Government A uditing Standards 23 -24

Summary schedule of current and prior year audit fmdings and corrective action plan 25-26

C. Burton Kolder. CPA* Russel l F. Champagne, CPA* Victor R. Slaven, CPA* Gerald A. Thibodeaux, Jr.. CPA* Robert S. Carter, CPA* Arthur R. Mixon, CPA* Penny Angel le Scruggins, CPA Christine C. Doucet. CPA

KOLDER, CHAMPAGNE, SLAVEN & COMPANY, CERTIFIED PUBUC ACCOUNTANTS

LLC

OFFICES

Wanda F. Arcement, CPA, CVA Al len J. LaBry, CPA Albert R. Leger, CPA,PFS.CSA* H/larshall W. Guidry. CPA

Stephen R Moore, Jr.. CPA.PFS.CFP®.ChFC* James R. Roy. CPA Robert J . Metz. CPA Alan M. Taylor. CPA Kelly M. Doucet. CPA Cheryl L Bartley. C P A Mandy B. Self. CPA Paul L. Delcambre, Jr.. CPA Kristin B. Dauzat, CPA Matthew E. Margagl io. CPA Jane R. Hebert. CPA Bryan K Joubert , CPA Stephen J. Anderson. CPA W . Jeffrey Lowry, CPA

Retired: Conrad 0 . Chapman. CPA* 2006 Tynes E. Mixon. Jr.. CPA 2011 P. Troy Coun/i l le, CPA* 2013

INDEPENDENT AUDITORS' REPORT

183 South Beadle Rd . Lafayette, LA 70508 Phone (337) 2 3 2 ^ 1 4 1 Fax (337) 232-8660

113 East Br idge St. Breaux Br idge, LA 70517 Phone (337) 332-4020 Fax (337) 332-2867

1234 David Dr. Ste 203 Morgan City, LA 70380 Phone (985) 384-2020 Fax (985) 384-3020

408 Wes t Cot ton Street Vi l le Platte, LA 70586 Phone (337) 363-2792 Fax (337) 363-3049

332 W e s t Sixth Avenue Ober i in . LA 70655 Phone (337) 639-4737 Fax (337) 6 3 9 ^ 5 6 8

450 East Main Street New Iberia. LA 70560

Phone (337) 367-9204 Fax (337) 367-9208

200 South Main Street Abbevi l le. U 70510

Phone (337) 893-7944 Fax (337) 893-7946

1013 Main Street Franklin. LA 70538

Phone (337) 828-0272 Fax (337) 828-0290

133 East Wadd i lSL Mari<sville LA 71351

Phone (318) 253-9252 Fax (318) 253-8681

1428 Metro Drive Alexandria. LA 71301

Phone (318) 442-4421 Fax (318) 442-9833

W E B SITE W W W . K C S R C P A S . C O M

* A Professional Accounfing Corporation

Board of Commissioners Avoyelles Water Commission Marksville, Louisiana

Report on the Financial Statements

We have audited the accompanying financial statements of the business-type activities of the Avoyelles Water Commission (hereinafter, the "Commission"), as of and for the year ended December 31, 2012, and the related notes to the financial statements, which collectively comprise the Commission's basic financial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fi-aud or error. In making those risk assessments, the auditor considers intemal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

Member of: AMERICAN INSTITUTE OF CERTiF iED PUBLIC A C C O U N T A N T S

Member of: SOCIETY OF LOUISIANA

CERTIFIED PUBLIC ACCOUNTANTS

http://WWW.KCSRCPAS.COM

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

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Commission, as of December 31,2012, and the changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information

Management has omitted the management's discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic fmancial statements, is required by the Govemmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Commission's basic financial statements. The accompanying information listed as "Other Information" in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards

As described in Note 11 to the financial statements, the Commission adopted the provision of GASB Statement No. 63, Financial Reporting ofDeferred Outflows of Resources, Deferred Inflows of Resources, andNet Position, in 2012.

In accordance with Government Auditing Standards, we have also issued a report dated June 15,2013, on our consideration of the Commission's intemal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of intemal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the intemal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Commission's intemal control over financial reporting and compliance.

Kolder, Champagne, Slaven & Company, LLC Certified Public Accountants

Marksville, Louisiana June 15, 2013

BASIC FINANCIAL STATEMENTS


Statement ofNet Position December 31, 2012

ASSETS Current assets:

Cash and cash equivalents Accounts receivable Prepaid expenses

Total current assets Restricted assets:

Cash and cash equivalents Prepaid land lease

Total restricted assets

Capital assets, net Bond issue costs, net

Total assets

Deferred outflows of resources

LIABILITIES Current liabilities, payable from current assets:

Accounts payable Accrued liabilities

Total current liabilities, payable from current assets Current liabilities, payable from restricte(j assets:

Current maturities of long term debt Accrued interest payable

Total current liabilities, payable from restricted assets Total current liabilities

Noncurrent liabilities: Note payable

Total liabilities

Deferred inflows of resources

Net investment in capital assets Restricted net position Unrestricted net position

Total net position

NET POSITION

$ 1,408,035

88,585

7,743

1,504,363

377,778

27,879

405,657

10,188,285 53,845

12,152,150

23,177 1,075

24,252

199,421 24,042

223,463

247.715

11,271,613

11,519,328

(1,083,328) 182,194

1,533,956 $ 632,822

The accompanying notes are an integral part of this statement.

4


Statement of Revenues, Expenses and Changes in Net Position Year Ended December 31,2012

OPERATING REVENUES Water sales and fees 1,174,138

OPERATING EXPENSES Accounting fees Fuel and oil Contracting services Depreciation Insurance Repairs and maintenance Salaries Payroll taxes Rent and Utilities Supplies Lease Expense Other

Total operating expenses

3,200 1,523 3,375

465,979 16,291 19,535 29,062

1,992 95,495 35,017

303 8,173

679,945

Operating income 494,193

NON-OPERATING REVENUES (EXPENSES) Interest income Interest expense

Total non-operating revenues (expenses)

5,516

(491,530)

(486,014)

Change in net position

Net position, beginning

8,179

624,643

Net position, ending $ 632,822



Statement of Cash Flows Year Ended December 31, 2012

Cash flows from operating activities: Receipts from customers 1,180,805 Payments for goods and services (175,961) Payments to employees (31,187)

Net cash provided by operating activities 973,657

Cash flows from capital and related financing activities:

Purchases and constmction of capital assets (98,181) Interest and fiscal charges paid on long-term debt (491,930)

Principal paid on long-term debt (191,162)

Net cash used by capital and related financing activities (781,273)

Cash flows from investing activities Proceeds from sale of investments 400,000 Interest received 5,516

Net cash provided by investing activities 405,516

Net increase in cash and cash equivalents 597,900

Cash and cash equivalents, beginning of period 1,187,913

Cash and cash equivalents, end of period $ 1,785,813

(continued)


Statement of Cash Flows (continued) Year Ended December 31, 2012

Reconciliation of operating income to net cash provided by operating activities: Operating income $ 494,193 Adjustment to reconcile operating income/(loss) to

net cash provided by operating activities -Amortization of land lease 303 Amortization of bonds issue costs 1,683 Depreciation 465,979 Changes in assets and liabilities:

Decrease in accounts receivable 6,667 Decrease in prepaid expenses 2,831 Increase in accounts payables 2,134 Decrease in accmed liabilities (133)

Net cash provided by operating activities $ 973,657


7


Notes to Basic Financial Statements

(1) Summarv of Significant Accounting Policies

The accompanying financial statements of the Avoyelles Water Commission have been prepared in conformity with accounting principles generally accepted in the United States (GAAP) as applied to govemmental units. GAAP includes all relevant Govemmental Accounting Standards Board (GASB) pronouncements. The accounting and reporting framework and the more significant accounting policies are discussed in subsequent subsections of this note.

The following is a summary of certain significant accounting policies:

A. Financial Reporting Entitv

The Avoyelles Water Commission (the "Commission") was created under the provisions of Louisiana Revised Statutes 33:3811 for the purpose of providing potable drinking water to three municipalities. The Commission was created by an intergovemmental agreement formed between the Village of Moreauville, Avoyelles Ward Three Waterworks District and the City of Marksville. The Conunission is govemed by a board of directors composed of three members. Each member is appointed by each of the following three municipalities: the Village of Moreauville, the Avoyelles Ward Three Waterworks District and the City of Marksville. Each board of commissioner serves until he is replaced by the municipality that he or she represents. The commission began operations in January 2007.

B. Basis of Presentation

The accompanying basic financial statements of the Commission have been prepared in accordance with accounting principles generally accepted in the United States of America as applied to govemmental entities and a govemmental entity provides certain disclosures required by the Govemmental Accounting Standards Board.

The accounts of the Commission are organized and operated on the basis of a fund. A fund is an independent fiscal and accounting entity with a separate set of self-balancing accounts. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The proprietary fund is maintained consistent with legal and managerial requirements.

The Commission maintains only one fiind and it is described below

Proprietary Fund -

Enterprise Fund



The Enterprise fund is used to account for operations (a) that are financed and operated in a manner similar to private business enterprises- where the intent of the goveming 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 the goveming 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.

C. Measurement Focus/Basis of Accounting

Measurement focus is a term used to describe "which" transactions are recorded within the various financial statements. Basis of accounting refers to "when" transactions are recorded regardless of the measurement focus applied.

Measurement Focus

The enterprise fund utilizes an "economic resources" measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net position (or cost recovery), financial position, and cash flows. All assets and liabilities (whether current or noncurrent) associated with their activities are reported. Proprietary fund equity is classified as net position.

Basis of Accounting

The proprietary fund statements are presented using the accrual basis of accounting. Under the accmal basis of accounting, revenues are recognized when eamed and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets and liabilities resulting from exchange and exchange-like transactions are recognized in accordance with the requirements of GASB Statement No. 33 "Accounting and Financial Reporting for Nonexchange Transactions".

D. Assets. Deferred Outflows. Liabilities. Deferred Inflows and Equitv

Cash and cash equivalents

Cash and cash equivalents include all demand accounts, savings accounts, and certificates of deposits. For the purpose of the cash flows, "cash and cash equivalents" include all demand and savings accounts, certificates of deposit or short-term investments with an original maturity of three months or less when purchased.

Receivables

Receivables consist of all revenues earned at year-end and not yet received. Unbilled utility service receivables resulting from utility services rendered between the date of meter reading and billing and the end of the month, are recorded at year-end.



Prepaid Items

Payments made to vendors for services that will benefit periods beyond the current reporting period are recorded as prepaid items.

Restricted Assets

Certain proceeds of enterprise fund bonds, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net position because their use is limited by applicable bond covenants.

Capital Assets

Capital assets, which include property, plant, and equipment, are reported at historical cost or estimated cost if historical is not available. Donated assets are recorded as capital assets at their estimated fair market value at the date of donation. The Commission maintains a threshold level of $1,000 for capitalizing assets.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constmcted. Interest incurred during the constmction phase of capital assets is included as part of the capitalized value of the assets constructed. Total interest expense incurred by the Commission during the year was $491,530, none of which was capitalized.

As of December 31,2012, $761,437 of interest charges were capitalized during construction.

Depreciation of all exhaustible capital assets is recorded as an expense in the statement of revenues, expenses and changes in net position, with accumulated depreciation reflected on the statement of net position. Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation. The range of estimated usefiil lives by type of asset is as follows:

Utility system and improvements 30-40 years Fumiture, fixtures and equipment 7-10 years

Compensated Absences

The Commission has no set policy for accumulated vacation, sick pay or other benefits. The Commission currently employs three part-time individuals who do not accumulate any vacation or sick leave, therefore, at December 31,2012, no liability exists for compensated absences.

10



Long-term Debt

All long-term debt to be repaid from business-type resources is reported as liabilities in the financial statements. The long-term debt consists primarily of bonds payable.

Bond Issue Costs

Bond issue costs are deferred and amortized over the terms of the bond to which they apply. Amortization is provided using the straight-line method since it does not differ materially from the interest method.

Deferred Outflows of Resources and Deferred Inflows of Resources

In some instances, the GASB requires a govemment to delay recognition of decreases in net position as expenditures until a future period. In other instances, govemments are required to delay recognition of increases in net position as revenues until a future period. In these circumstances, deferred outflows of resources and deferred inflows of resources result from the delayed recognition of expenditures or revenues, respectively.

Equity Classifications

Net position represents the difference between assets and deferred outflows of resources, less liabilities and deferred inflows of resources. The Commission reports three categories of net position, as follows:

a. Net investment in capital assets - Consists of net capital assets reduced by the outstanding balances of any related debt obligations and deferred inflows of resources attributable to the acquisition, construction or improvement of those assets and increase by balances of deferred outflows of resources to those assets.

b. Restricted net position - Net position is considered restricted if their use is constrained to a particular purpose. Restrictions are imposed by extemal organizations such as federal or state laws or buyers of the Commission's bonds. Restricted net position is reduced by liabilities and deferred inflows of resources related to the restricted assets. Constraints may be placed on the use, either by (I) extemal groups, such as creditors, grantors, contributors, or laws or regulations of other govemments; or (2) law through constitutional provisions or enabling legislation.

c. Unrestricted net position - Consists of all other net position that does not meet the definition of the above two components and is available for general use by the Commission.

11



When both restricted and unrestricted resources are available for use, the Commission's policy is to use restricted resources first, then unrestricted resources as needed.

E. Revenues and Expenses

Operating Revenues and Expenses

Operating revenues and expenses for proprietary funds are those that result from providing services and producing and delivering goods and/or services. It also includes all revenue and expenses not related to capital and related financing, noncapital financing, or investing activities.

Expenses

Expenses are classified by function for business-type activities and are further classified as operating and nonoperating.

F. Use of Estimates

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

(2) Cash and cash equivalents

Under state law, the Commission may deposit fiinds within a fiscal agent bank organized under the laws of the State of Louisiana, the laws of any other state in the Union, or the laws of the United States. The Commission may invest in certificates and time deposits of state banks organized under Louisiana law and national banks having principal offices in Louisiana. At December 31, 2012, the Commission had cash and cash equivalents (book balances) totaling $1,785,813.

Cash $ 1,408,035 Interest bearing deposits 377,778

Total $ 1,785,813

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 of securities owned by the fiscal agent bank. The market value of the pledged securities plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent bank. These securities are held in the name of the pledging fiscal agent bank in a holding or custodial bank that is mutually acceptable to both parties. Deposit balances (bank balances) at December 31, 2012, are as follows:

12



Bank Balance $ 1,825,200

At December 31, 2012, the deposits are secured as follows:

Federal deposit insurance $ 500,000 Pledged securities 1,325,200

Total $ 1,825,200

Custodial credit risk for deposits is the risk that in the event of the failure of a depository financial institution, the Commission's deposits may not be covered or the Commission will not be able to recover collateral securities that are in the possession of an outside party. The Commission does not have a policy to monitor or attempt to reduce exposure to custodial credit risk, however, at December 31, 2012, the Commission's total bank balances were fiiUy insured and collateralized with securities held in the name of the Commission by the pledging institution's agent, the deposits are, therefore, not exposed to custodial credit risk.

(3) Accounts Receivables

Receivables at December 31,2012 in the amount of $88,585 were for charges for services. The entire amount is deemed collectible.

(4) Restricted Assets

Restricted assets at December 31, 2012 consisted of the following:

Total Cash and cash equivalents

Reserve Fund $ 188,889 Depreciation and Contingency Fund 188,889

Total cash and cash equivalents 377,778

Prepaid land lease 27,879

Total restricted assets $ 405,657

(5) Capital Assets

Capital asset activity for the year ended December 31, 2012 was as follows:

13



Capital assets not being depreciated:

Land

Constmction in progress

Right of ways

Capital assets being depreciated:

Vehicles

Buildings

Equipment

Distribution system

Total capital assets

Less accumulated depreciation

Vehicles

Equipment

Distribution system

Total accumulated depreciation

Capital assets, net

Balance

01/01/12

$ 10,000

49,009

165,132

4,925

-

308,406

12,176,839

12,714,311

4,679

157,900

1,995,649

2,158,228

S 10,556,083

Additions Dele

$ - $

68,155

-

4,980

11,174

13,872

98,181

246

59,736

405,997

465,979

$ (367,798) $

Balance

tions 12/31/12

$ 10,000

117,164

165,132

4,925

4,980

319,580

12,190,711

12,812,492

4,925

217,636

2,401,646

2,624,207

$ 10,188,285

Depreciation expense was charged to business-type activities in the amount of $465,979.

(6) Changes in Long-Term Debt

The following is a summary of debt transactions of the Commission for the year ended December 31,2012:

Due Within

1/1/2012 Additions Payments 12/31/2012 One Year

USDA note payable $ 6,542,902 $ - $ (93,049) $ 6,449,853 $ 97,069

USDA note payable 5,119,294 - (98,113) 5,021,181 102.352

Total long-term debt $ 11,662,196 $ $ (191,162) $ 11,471,034 $ 199,421

Long-term debt at December 31, 2012 are comprised of the following issues:

14



$6,916,000 USDA note dated June 20, 2007, bearing interest at 4.250% per annum. Final maturity date, December 13,2044. $ 6,449,853

$5,876,000 USDA note dated June 20, 2007, bearing interest at 4.250% per annum. Final maturity date, June 20,2044. 5,021,181

Total 11,471,034

The annual requirements to amortize all debt at December 31, 2012 is as follows:

(7)

Year ending December 31,

2013 2014 2015 2016 2017

2018-2022 2023-2027 2028-2032 2033-2037 2038-2042 2043-2044

Totals

$

—

L

Flow of Funds: Restrictions of Use-

Principal

199,421 208,064 217,084 226,496 236,312

1,344,349 1,662,021 2,054,760 2,540,303 2,090,329

691,895

11,471,034

- Water Revenues

Interest

$ 483,665 475,022 466,005 456,596 446,780

2,071,115 1,753,443 1,360,704

475,161 341,450

30,390

$ 8,360,331

Total

$ 683,086 683,086 683,089 683,092 683,092

3,415,464 3,415,464 3,415,464 3,015,464 2,431,779

722,285

$ 19,831,365

The revenues derived from water sales are partially pledged to retire the USDA notes dated June 20,2007. The resolution of the USDA notes requires the establishment and maintenance of the following bank accounts:

Reserve Fund Depreciation and Contingency Fund

Each month an amount equal to $2,847 must be deposited into the Reserve Fund until $683,093 has been accumulated in the Reserve Fund. Also, each month a sum of $2,847 per month must be deposited into the Depreciation and Contingency Fund until $683,093 has been accumulated in the Reserve Fund.

15



(8) Litigation

At December 31,2012, the Commission was not involved in any lawsuits claiming damages that would not be adequately covered by liability insurance.

(9) Risk Management

The Commission is exposed to risks of loss in the areas of damage to and destmction of assets, injuries to employees and natural disasters. These risks of loss are covered by participation in a public entity risk pool that operates as a common insurance program and by acquiring commercial insurance coverage. There have been no significant reductions in the insurance during the year.

(10) Compensation of Board Members

Board members were not compensated during the year ended December 31, 2012.

(11) New Accounting Pronouncements

During the fiscal year ended December 31,2012, the Commission adopted GASB 63, Financial Reporting ofDeferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, which provides guidance for reporting deferred outflows of resources, deferred inflows of resources, and net position in a statement of financial position and related disclosures. The statement of net assets is renamed the statement of net position and includes the following elements: assets, deferred outflows of resources, liabilities, deferred inflows of resources, and net position, as applicable.

In April 2012, the Govemmental Accounting Standards Board (GASB) issued Statement No. 65, Items Previously Reported as Assets and Liabilities. The statement clarifies the appropriate reporting of deferred outflows of resources or deferred inflows of resources to ensure consistency in financial reporting. The provisions of GASB Nos. 65 must be implemented by the Commission for the year ending December 31, 2013. The effect of implementation on the Commission's financial statements has not yet been determined.

(12) Subsequent Events

The Commission has evaluated subsequent events through June 15, 2013, the date which the financial statements were available to be issued.

16


Schedule of Board Members (Unaudited)

December 31, 2012

Commissioners Term Expiration

Penn Lemoine P. O. Box 373 Moreauville, LA 71355 318-305-1977

No term expiration Appointed by Village of Moreauville

John Lemoine 906 Tunica Drive East Marksville, LA 71351 318-253-7253

No term expiration Appointed by City of Marksville

Joan Decuir 1181 Cocoville Road Mansura, LA 71350 318-964-2356

No term expiration Appointed by Avoyelles Ward Three Waterworks District

18

Description of Covemge

Workmen's Compensation

General Liability

Commercial Property

Auto Insurance

Bond Insurance

Crime Insurance

Inland Marine

Excess Liability


Schedule of Insurance in Force (Unaudited)

December 31,2012

Coverage Amount Insurance Company As^t Covered

Employees $100,000 Each Employee LWCC

N/A $300,0000 Special Risk Insurance Co.

Property $713,863 Special Risk Insurance Co.

Vehicles $ 1,000,000 Special Risk Insurance Co.

Employees $3,000,000 Special Risk Insurance Co.

Property $100,000 Special Risk Insurance Co.

Equipment $72,500 Special Risk Insurance Co.

Property $1,000,000 Special Risk Insurance Co.

Policy Number

125097-A

PF60509S902

PF605098902

PF605098902

PF605098902

PF605098902

FF605098902

GPPAXS305038201

Expiration Date

6/18/2013

6/14/2013

6/14/2013

6/14/2013

6/14/2013

6/14/2013

6/14/2013

6/14/2013

19


Utility Rate Schedule (Unaudited)

December 31, 2012

Records maintained by the Commission indicated that the utility rates are as follows:

Description Rate per Gallon Flat Rate Minimum Charge

Water rates $2.85 per thousand gallons - N/A

20


Accounts Receivable Aging (Unaudited)

December 31, 2012

Records maintained by the Commission indicated accounts receivable aging as follows:

Current $ 88,585 30 to 60 days 61 to 90 days

Over 90 days -

Total $ 88,585

21

INTERNAL CONTROL, COMPLIANCE, AND OTHER MATTERS

22

C. Burton Kolder. CPA* Russell F. Champagne. CPA* Victor R. S laven. CPA* Gerald A. Thibodeaux. Jr.. CPA* Roljert S. Carter. CPA* Arthur R. Mixon. CPA* Penny Angel le Scruggins. CPA Christine C. Doucet. CPA

KOLDER, CHAMPAGNE, SLAVEN & COMPANY, LLC CERTIFIED PUBLIC ACCOUNTANTS

OFFICES

Wanda F. Arcement, CPA.CVA

A l l e n J . LaBry. CPA Albert R. Leger. CPA,PFS.CSA* Marshall W . Guidry, CPA

Stephen R Moore. Jr., CPA .PFS .CFP ' .ChFC* James R. Roy. CPA

Robert J. Metz. CPA Alan M. Taylor. CPA Kelly M. Doucet. CPA Cheryl L Bartley. CPA Mandy B. SelT. CPA Paul L. Delcambre, Jr., CPA Kristin B. Dauzat, CPA Matthew E. Margagl io, CPA

Jane R. Hebert, CPA Bryan K. Joubert, CPA Stephen J . Anderson, CPA W. Jeffrey Lowry, CPA

Retired: Conrad 0 . Chapman. CPA* 2006 Tynes E. Mixon. Jr., CPA 2011 P. Troy Courvi l le, CPA* 2013

183 South Beadle Rd. Lafayette, LA 70508 Phone (337) 232-4141 Fax (337) 232-8660

113 East Bridge S t Breaux Bridge, LA 70517 Phone (337) 332-4020 Fax (337) 332-2867

1234 David Dr. Ste 2 0 3 Morgan City, LA 70380 Phone (985) 384-2020 Fax (985) 384-3020

408 Wes t Cotton Street Vi l le Platte, LA 70586 Phone (337) 363-2792 Fax (337) 363-3049

332 Wes t Sixth Avenue Ober i in, LA 70655 Phone (337) 639-4737 Fax (337) 639 -4568

4 5 0 East Main Street New Iberia, LA 70560

Phone (337) 367-9204 Fax (337) 367-9208

2 0 0 South Main Street Abbevi l le, LA 70510

Phone (337) 893-7944 Fax (337) 893-7946

1013 Main Street Frankl in. LA 70538

Phone (337) 828-0272 Fax (337) 828-0290

1 3 3 E a s t W a d d i l S t Marksvi l le LA 71351

Phone (318) 253-9252 Fax (318) 253-8681

1428 Metro Drive Alexandria. LA 71301

Phone (318) 442-4421 Fax (318) 442-9833

W E B SITE W W W . K C S R C P A S . C O M

* A Professional Accounting Corporatfon

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Board of Commissioners Avoyelles Water Commission Marksville, Louisiana

We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contamed in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the business-type activities of the Avoyelles Water Commission (hereinafter, the "Conwnission"), as of and for the year ended December 31, 2012, and the related notes to the financial statements, which collectively comprise the Avoyelles Water Commission's basic fmancial statements and have issued our report thereon dated June 15, 2013.

Intemal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Commission's intemal control over financial reporting to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the fmancial statements, but not for the purpose of expressing an opinion on the effectiveness of the Commission's intemal control. Accordingly, we do not express an opinion on the effectiveness of the Commission's intemal control.

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

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

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described in the summary schedule of current and prior year audit findings as item 12-l(IC) and 12-2(IC) to be material weaknesses.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Commission's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that were required to be reported under Government Auditing Standards.

Avovelles Water Commission's Response to Findings

The Commission's response to the findings identified in our audit are described in the accompanying summary schedule of current and prior year audit findings. The Commission's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on them.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of intemal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's intemal control or compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's intemal control and compliance. Accordingly, this communication is not suitable for any other purpose. However, under Louisiana Revised Statute 24:513, this report is distributed by the Legislative Auditor as a public document.

Kolder, Champagne, Slaven & Company, LLC Certified Public Accountants

Marksville, Louisiana June 15, 2013

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Fiscal Year Finding

Reference Initially Number Occurred


Summaiy Schedule of Current and Prior Year Audit Findings and Coneclive Action Plan

For the Year Ended December 31,2012

Description of Finding

CURRENT YEAR (12/31/12) Compliance N/A N/A There are no compliance findings.

Correclive Action Taken

Name of Contact Person

Aniicipated Date of

Completion

Intemal Control

12-1 (IC) Unknown Inadequate segregation of duties exist with office manager Due to M»nomic conditions if would not t^ cost Mr. Penn preparing the bills, mailing the bills, collecting monies, effective to hire needed personnel to properly segregate Lemoine, making deposits, posting transactions to the general ledger the accounting functions, therefore there is no action President and reconciling the bank accounts. required.

N/A

12-2 (IC) 12/31/2012 The Commission dews not have a staff f^rson who has the qualifications and training lo apply generally accepted accounting principles (GAAP) in recording the entity's financial statements, including the related notes.

The Commision has evaluated the cost vs. benefit of ^tablishing intemal controls over the preparation of financial statements in accordance with GAAP, and determined that it is in the best interests of the govemment to outsource this task to its independent auditors, and lo carefiilly review the draft financial statements and notes prior to approving them and accepting responsibility for their contents and presentation.

Mr. Penn Lemoine, President

N/A

25


Summary Schedule of Current and Prior Year Audit Findings and Corr^rtive Action Plan

For the Year Ended December 31,2012

Ref^ence Number

Fiscal Year Finding initially

Occurred

PRIOR YEAR(12/31/II) Compliance N/A N/A

Intewial CnnlFol

Description of Finding Corrective Action Taken

Name of Contact Person

Anticipated Date of

Completion

There are no compliant findings.

IC-l-I I Unknown Inadequate segregation of duties exist with office manager preparing the bills, mailing the bills, collecting monies, making dqwsits, posting transactions to the general ledger and reconciling the bank accounts.

Due to economic conditions it would not be cost effective to hire needed personnel to pmperly segregate the a^xounting fiinctions, therefore there is no action required.

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Documents

Marksville, Louisiana Financial Report Year Ended December ...app1.lla.state.la.us/PublicReports.nsf/A571E7EF05C... · AVOYELLES WATER COMMISSION Marksville, Louisiana Financial Report