VILLAGE OF GRAYSONGrayson, Louisiana
Report On AuditOf
Basic Financial StatementsFor The Year EndedDecember 315 2005
Release Date_Jll̂ Z_^L4
Jimmie Self, CPAA Professional Accounting Corporation
2908 Cameron Street, Suite CMonroe, Louisiana 71201
Phone 318/323-4656 • FAX 318/388-0724
VILLAGE OF GRAYSONGrayson, Louisiana
Report On AuditOf
Basic Financial StatementsFor The Year EndedDecember 31,2005
Jimmie Self, CPAA Professional Accounting Corporation
2908 Cameron Street, Suite CMonroe, Louisiana 71201
Phone 318/323-4656 • FAX 318/388-0724
VILLAGE OF GRAYSONGrayson, Louisiana
Table of ContentsAs of and for the Year Ended December 31,2005
Exhibit Page
Independent Auditor's Report 1 -2
Required Supplementary Information (Part 1)
Management Discussion and Analysis 4-10
Basic Financial StatementsGovernment-Wide Statements:
Statement of Net Assets A 12
Statement of Activities B 13
Fund Financial StatementsGovernmental Funds:
Balance Sheet - Governmental Funds C 15
Reconciliation of the Balance Sheet to theStatement of Net Assets - GovernmentalFund C-l 16
Statement of Revenues, Expenditures, andChanges in Fund Balances - GovernmentalFunds D 17
Reconciliation of the Statement of RevenuesExpenditures, and Changes in Fund Balances ofGovernmental Funds to the Statement of Activities D-l 18
Proprietary Funds:
Statement of Net Assets - Proprietary Funds E 19
Statement of Revenues, Expenses, andChanges in Fund Net Assets - ProprietaryFunds F 20
Statement of Cash Flows - Proprietary Funds G 21
VILLAGE OF GRAYSONGrayson, Louisiana
Table of ContentsAs of and for the Year Ended December 31, 2005
Notes to Financial Statements Schedule Page
Notes 23-37
Required Supplementary Information (Part IDStatement of Revenues, Expenditures, andChanges in Fund Balances Governmental FundsBudget (GAAP Basis) to Actual 1 39
Other Supplemental Information
Schedule of Compensation Paid Elected Officials 41
Report on Compliance and on Internal ControlOver Financial Reporting Based on an Audit ofFinancial Statements Performed in Accordance withGovernment Auditing Standards 42 - 43
Schedule of Findings and Questioned Costs andPrior Year Findings and Questioned Costs 44
Management's Corrective Action Plan 45
Jimmie Self, CPAA Professional Accounting Corporation
2908 Cameron Street, Suite CMonroe, Louisiana 71201
Phone 318-323-4656 Fax 318-388-0724
Independent Auditor's Report
To the Honorable Mayor andThe City CouncilVillage of GraysonGrayson, Louisiana
I have audited the accompanying financial statements of the governmental activities andthe business-type activities, as of and for the year ended December 31,2005 whichcollectively comprise the Village's basic financial statements as listed in the table ofcontents. These financial statements are the responsibility of Village of Grayson,Louisiana's management. My responsibility is to express opinions on these financialstatements based on my audit.
I conducted my audit in accordance with auditing standards generally accepted in theUnited States of America. Those standards require that I plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. I believe that my audit provides areasonable basis for my opinions.
In my opinion, the financial statements referred to above present fairly, in all materialrespects, the respective financial position of the governmental activities, the business-type activities, and each major fund of the Village of Grayson, as of December 31,2005,and the respective changes in financial position and cash flows, where applicable, thereoffor the year then ended in conformity with accounting principles generally accepted inthe United States of America.
The Management Discussion and Analysis and the schedules presented therewith are nota parts of the basic financial statements, but are supplementary information required bythe GASB. I have applied certain limited procedures, which consisted principally ofinquiries of management regarding the methods of measurement and presentation of thesupplementary information. However, I did not audit any of the supplementaryinformation and express no opinion on it.
In accordance with Government Auditing Standards, I have also issued my report datedJune 30,2006, on my consideration of the Village of Grayson's internal control overfinancial reporting and my tests of its compliance with certain provisions of laws,
GRAYOSIndAudRep
regulations, contracts, and grants. That report is an integral part of an audit performed inaccordance with Governmental Auditing Standards and should be read in conjunctionwith this report in considering the results of my audit.
Jimmie Self, CPAMonroe, LouisianaJune 30, 2006
GRAYOSIndAudRep
Required Supplementary Information(Parti)
Management Discussion and Analysis
VILLAGE OF GRAYSONGRAYSON, LOUSIANA
Management Discussion and AnalysisDecember 31,2005
As management of the Village of Grayson, Louisiana (the "Village"), we offer readers ofthe Village's financial statements this narrative overview and analysis of the financialactivities for the fiscal year ended December 31, 2005. The Management Discussion andAnalysis ("MD&A") is designed to provide an objective and easy to read analysis of theVillage's financial activities based on currently known facts, decisions, and conditions. Itis intended to provide readers with a broad overview of Village finances. It is alsointended to provide readers with an analysis of short-term and long-term activities of theVillage based on information presented in the financial report and fiscal policies thathave been adopted. Specifically, this section is designed to assist the reader in focusingon significant financial issues, provide an overview of the financial activity, identifychanges in the Village's financial position (its ability to address the next and subsequentyear challenges), identify any material deviations from the financial plan (the approvedbudget), and identify fund issues or concerns.
As with other sections of the financial report, the information contained within theMD&A should be considered only a part of the greater whole. The readers of thisstatement should take time to read and evaluate all sections of this report, including thefootnotes (Notes to the Financial Statements) and the other Required SupplementaryInformation (Financial Schedules and reports) that is provided in addition to thisManagement Discussion and Analysis.
Overview of Financial Statements
This discussion and analysis is intended to serve as an introduction to the Village'sfinancial statements. The basic financial statements consist of the following components:
1. Government-Wide Financial Statements2. Fund Financial Statements3. Notes to the Financial Statements4. Other Supplementary Information, which is in addition to the basic financial
statements themselves.
1. Government-Wide Financial Statements
Government-Wide Financial Statements are designed by GASB Statement No. 34 tochange the way in which government financial statements are presented. It now providesreaders for the first time a concise "entity-wide" Statement of Net Assets and Statementof Activities, seeking to give the user of the financial statements a broad overview of theVillage's financial position and results of operations in a manner similar to a private-sector business.
A. The Statement of Net Assets presents information on all the Village's assets andliabilities using the accrual basis of accounting, which is similar to the accounting usedby most private-sector companies. The difference between the assets and liabilities isreported as net assets. Over time, increases or decreases in net assets may serve as a
GRAY05MD&A
VILLAGE OF GRAYSONGRAYSON, LOUSIANA
Management Discussion and AnalysisDecember 31,2005
useful indicator of whether the financial position of the Village is improving orweakening.
B. The Statement of Activities presents information showing how government's netassets changed during the most recent fiscal year. All changes in net assets are reportedas soon as the underlying event giving rise to the change occurs, regardless of the timingof related cash flows. Thus, revenues and expenses are reported in this statement forsome items that will only result in cash flow in future fiscal periods (e.g., uncollectedtaxes).
The government-wide financial statements further assist the reader in their evaluation bydistinguishing functions of the Village into:
A. Governmental activities that are principally supported by taxes andintergovernmental revenues, and
B. Business-type activities that are intended to recover all or a significant portion oftheir costs through user fees and charges.
Government-Wide Financial Analysis
As noted earlier, net assets may serve over time as a useful indicator of a government'sfinancial position. The Village's assets exceeded its liabilities at the close of the previousfiscal year ended December 31, 2004 by $1,659,465. Of that total amount, $54,847 wereunrestricted net assets. The net assets were comprised of $471,031 from GovernmentalActivities and $1,188,433 from Business-Type Activities.
During the present year ended December 31,2005, the Village's assets exceeded itsliabilities by $1,928,797. Of that total amount, $110,834 are unrestricted net assets. Thenet assets are comprised of $559,130 from Governmental Activities and $1,369,667 fromBusiness-Type Activities.
By far, the largest portion of the Village's net assets (90 percent) reflects its investment incapital assets (e.g., land, buildings, machinery & equipment, vehicles, etc.), less anyrelated debt used to acquire those assets that is still outstanding. The Village uses thesecapital assets to provide services to citizens; consequently, these assets are not availablefor future spending. Although the Village's investment in its capital assets is reported netof related debt, it should be noted that the resources needed to repay this debt must beprovided from other sources, since capital assets themselves cannot be used to liquidatethese liabilities.
An additional portion of the Village's net assets (4 percent) represents resources that aresubject to external restrictions on how they may be used. The remaining balance (6percent) in unrestricted assets may be used to meet the government's ongoingobligations to citizens and creditors.
GRAY05MD&A
VILLAGE OF GRAYSONGRAYSON, LOUSIANA
Management Discussion and AnalysisDecember 31,2005
At the end of the current fiscal year, the Village is able to report positive balances in bothcategories of net assets, both for the government as a whole, as well as for its separategovernmental and business-type activities.
Governmental Activities
The Governmental Activities of the city include General Government, Public Safety,Public Works, Community Development, and Miscellaneous Programs. Sales taxes,property taxes, as well as licenses, permits, and fines fund most of these governmentalactivities.
Here we show the Village's expenditures related to those functions typically associatedwith governments. In the chart below, General government includes the followingdepartments: Legislative (Town Council), Executive, Financial, Building, and otherGeneral Administration. Public Safety encompasses the police and fire protectiondepartments. Public Works is made up of Water, Sewerage, and street departments.
Governmental Activities Expenditures 2004 2005
General GovernmentPublic SafetyPublic WorksPaid on Long-Term Debt
Total Governmental Activities
$72,217563
16,55615,204
681
1615
73,78556982100
$104,540 100 $75,175
98010100
100
General revenues are those available for the city to use to pay for the governmentalactivities as described above.
General Revenues 2004 2005
Property TaxesContributionsOccupational LicensesFranchise FeesFinesMiscellaneousFire Assessment
$6,2471,627
24,7898,8566,0804,81823,069
82331286
31
8,8381,799
23,1649,4873,834430
25,538
122
311351
34
GRAY05MD&A
VILLAGE OF GRAYSONGRAYSON, LOUSIANA
Management Discussion and AnalysisDecember 31,2005
Interest Income - - 2,054
Total General Revenues $75,486 100 $75,143 100
For the year ended December 31, 2004, Occupational licenses were the largest revenuesource for the Village comprising 31 % of total governmental revenue. Fireassessments revenues in the amount of $23,069 are the second largest revenue source forthe Village comprising 31% of the total governmental revenue. Property taxes for theyear were in the amount of $6,247. The total revenue from fines was in the amount of$6,080.
For the year ended December 31,2005, Fire Assessments were the largest revenue sourcefor the Village comprising 34 % of total governmental revenue. Occupational licensesare the second largest revenue source for the Village comprising 31% of the totalgovernmental revenue. Property taxes for the year were in the amount of $8,838. Thetotal revenue from fines was in the amount of $3,834.
Business-Type Activities
The Business-Type Activities of the Village are those fees to customers that help coverall or most of the cost of the services it provides. The Village water and sewerdepartments are reported here.
Business Type Activities - Water and Sewer2004 2005
Revenues Expenses Revenues Expenses
$175,668 $206,995 $178,586 $198,149
2. Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resourcesthat have been segregated for specific activities or objectives. The Village, like any otherstate or local governments, uses fund accounting to ensure and demonstrate compliancewith finance-related legal requirements. All of the funds of the Village can be dividedinto two categories: governmental funds and proprietary funds.
A. Governmental funds are used to account for most of the Village's basic services asreported as governmental activities in the government-wide financial statements.However, unlike the government-wide financial statements, governmental fund financial
GRAY05MD&A
VILLAGE OF GRAYSONGRAYSON, LOUSIANA
Management Discussion and AnalysisDecember 31,2005
statements focus on how money flows into and out of those funds and the balances left atyear-end that are available for spending. Those funds are reported using modified accrualaccounting that measures cash and all other financial assets that can readily be convertedto cash. The governmental fund statements provide a detailed short-term view of theVillage's general governmental operations and basic services it provides. Governmentalfund information helps you determine whether there are more or fewer financialresources that can be spent in the near future to finance the Village's programs.
Because the focus of governmental funds is narrower than that of the government-widefinancial statements, it is useful to compare the information presented for governmentfunds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-termimpact of the government's near-term financing decisions. Both the governmental fundBalance Sheet and the governmental fund Statement of Revenues, Expenditures, andChanges in Fund Balances provide a reconciliation to facilitate this comparison betweengovernmental funds and governmental activities. These reconciliations are located onpages 16 and 18.
The Village maintains two individual governmental funds. Information is presentedseparately in the governmental fund Balance Sheet and in the governmental fundStatement of Revenues, Expenditures, and Changes in Fund Balances for the GeneralFund. The basic governmental fund financial statements can be found on pages 15 and17 of this report
Financial Analysis of Government Funds
At the close of the previous fiscal year ended December 31,2004, the Village'sgovernmental funds reported combined ending fund balances of $27,022. There were noreserved fund balances.
At the close of the current fiscal year ended December 31, 2005, the Village'sgovernmental funds reported combined fund balances of $106,541. There weree noreserved fund balances.
CHANGES IN FUNDBALANCES
Fund Balance Date General and Fire Fund Water and Sewer Fund
December 31,2004 $ 89,573 $ 1,188,433
December 31,2005 $ 106,541 $ 1,369,667
GRAY05MD&A
VILLAGE OF GRAYSONGRAYSON, LOUSIANA
Management Discussion and AnalysisDecember 31,2005
B. Proprietary Funds - Enterprise funds are used to report the same functions presentedas business-type activities in the government-wide financial statements. The Village usesenterprise funds to account for its Water and Sewer Department. Proprietary fundsprovide the same type of information as the government-wide financial statements, onlyin more detail. The proprietary fund financial statements provide separate informationfor the Water and Sewer Department. The basic proprietary fund financial statements canbe found on pages "Basic Financial Statements" section of this report.
3. Notes to the Financial Statements
The Notes to the Financial Statements provide additional information that is essential fora full understanding of the data provided in the government-wide and financialstatements. The notes to the financial statements can be found immediately following thesection entitled "Basic Financial Statements."
4. Other Supplementary Information
In addition to the basic financial statements and accompanying notes, this report alsopresents certain required supplementary information. Required supplementaryinformation can be found beginning with a section entitled "Required SupplementaryInformation - Part I."
A. Budgetary Comparison Schedule - The Village adopts an annual appropriated budgetfor its general fund. A budgetary comparison schedule (Schedule 1 in the RequiredSupplementary Information Part II section) has been provided for these funds todemonstrate compliance with the adopted budget and state laws.
B. Analysis of Significant Budget Variances in the General Fund.
Budget Variances - General Fund 2004 2005
Revenues $(545) unfavorable $(6,147) unfavorable
Expenditures $5470 favorable $12,744 favorable
5. Combining Statements for the non-major Governmental Funds - N/A
6. Other Supplementary Schedules are included in this report.
Capital Assets and Debt Administration
1. Capital AssetsThe Village's investment in capital assets, net of accumulated depreciation, as ofDecember 31, 2004 in its governmental activities is $359,178 and in business-type
GRAY05MD&A 9
VILLAGE OF GRAYSONGRAYSON, LOUSIANA
Management Discussion and AnalysisDecember 31,2005
activities is $1,466,082 which totals $1,825,260 for the Village. For the current yearended December 31,2005, the Village's investment in capital assets, net of accumulateddepreciation, in its governmental activities is 452,589 and in business-type activities is$71,649,403 which totals $2,101,992 for the Village. The investment in governmentalactivities assets includes land, buildings and systems, machinery and equipment, parksand landscaping. The investment in assets for business-type activities includes the waterand sewer system and treatment plants. Additions to governmental activities assetswithin the year in the amount of $116, 536 included a new fire station remodeling andrepairs to town hall. Additions to business-type activities assets (water and sewer system)in the amount of $256,601 include a new pavilion, repairs to a water well and relocationof utilities.
2. Long-Term DebtAt the end of the previous fiscal year ended December 31, 2004, the Village had arevenue bond indebtedness of $365,158. At the end of the current fiscal year endedDecember 31, 2005, the Village had a revenue bond indebtedness of $356,808. Thisindebtedness was undertaken by the Village as Sewer Revenue Bonds in August of 1991and is scheduled to be paid in full in the year of 2029.
This financial report is designed to provide a general overview of the Village's financesfor all those with an interest in the government's finances. Questions concerning any ofthe information provided in this report or requests for additional financial informationshould be addressed to Ellen Scribner, Town Clerk, Village of Grayson, P. O. Box 8,Grayson, LA 71378.
GRAY05MD&A 10
Basic Financial Statements
VILLAGE OF GRAYSON, LOUISIANA
STATEMENT OF NET ASSETS
December 31,2005
GOVERNMENTAL BUSINESS-TYPE
ACTIVITIES ACTIVITIES
EXHIBIT A
TOTAL
(MEMORANDUMONLY)
Assets:Cash and Cash Equivalents
Investments
Receivables, Net
Restricted CashCapital Assets, Net (See NOTE ITotal Assets:
I.A.4.)
$
$
73,874 $41,3861,155
-452,589569,004 $
38,728-
19,55780,371
1,649,4041,788,060
$ 112,60241,38620,71280,371
2,101,993$ 2,357,064
Liabilities:Accounts and Other PayablesPayable from Restricted Assets:
Customer DepositsAccrued Liabilities
Current portion of long-term obligationsNon-Current Portion of long-term obligations
Total Liabilities:
Net Assets:Invested in Capital Assets, Net of Related Cost
RestrictedUnrestricted
Total Net AssetsTotal Liabilities and Net Assets
9,874 $ 10,963 $ 20,837
$
$
----
9,874 $
452,589
-
106,541559,130569,004 $
35,055
7,594
7,974356,807
418,393 $
1,285,00380,371
4,2931,369,6671,788,060 $
35,055
7,5947,974
356,807428,267
1,737,59280,371
110,8341,928,7972,357,064
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS REPORT
GRAYOSStmtNetAssets 12
VILLAGE OF GRAYSON, LOUISIANAStatement of ActivitiesFor the Year ended June 30, 2005
EXHIBIT B
Functions/Programs
Program Revenues TotalOperating Capital
Expenses Charges for Grants and Grants and Governmental Business-type Net ExpensesServices Contributions Contributions Activities Activities /Revenue
Primary GovernmentGovernmental ActivitiesGeneral GovernmentPublic SafetyPublic WorksTotal GovernmentalActivities
$ (117,818) $(105,003)
(821)
$ (223,642) 3
. 25,967 $
: 25,967 $
- $ 94,256 5
- $ 94,256 3
i 2,405 $(105,003)
(821)
1 (103,419) $
- $
- $
2,405(105,003)
(821)
(103,419)
Business Type ActivitiesWaterSewer
Total Business TypeActivities
Total Primary Government
$ (139,636)(58,513)
$ (198.149)
$ (421,791)
$ 132,35446,232
$ 178,586 $
$ 204,553 $
245,874 $ - $
- $ 245,874 $ - $
- $ 340,130 $ (103,419) $
238,592 $ 238,592(12,281) (12,281)
226,311 $ 226,311
226,311 $ 122,892
General RevenuesTaxes:Property TaxesFranchise Fees/Licenses
Investment IncomeGain on Sale of Fixed AssetsFranchise feeFinesTransfersRelocation RefundsOther Misc ellaneous IncomeInterest ExpenseFrom EscrowContributions
Total General Revenues
Change in Net AssetsNet Assets, Beginning
Net Assets, Ending
$ 8,838 $23,1642,054
-9,4873,834
17,000----
1,79966,176
(37,243)596,373
- $--
810--
(17,000)(13,291)
2,788(18,473)
89-
(45,077)
181,2341,188,433
8,83823,1642,054
8109,4873,834
-(13,291)
2,788(18,473)
89
1,79921,099
143,9911,784,806
$ 559.130 $ 1.369.667 $ 1.928.797
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS REPORT
GRAYOSStmtActi vities
Fund Financial Statements
VILLAGE OF GRAYSON, LOUISIANABALANCE SHEET
Governmental Funds
December 31,2005
EXHIBIT C
Total Governmental
Funds
Assets:
CashInvestmentsReceivables-(net, where applicable, of
allowance for doubtful accounts)Total Assets:
Liabilities and Fund Balance
Liabilities:Accounts and Other Payables
Total Liabilities
Fund Balances:Unreserved-undesignated (deficit)
Total Equity & Other CreditsTOTAL LIABILITY, EQUITY AND OTHER CREDITS
General Fire (MemorandumFund Fund Only)
$ 1,073 $ 72,801 $41,386
1,155
$ 2,228 $ 114,187 $
73,874
41,386
1,155116,415
$
$
4,8334,833
(2,605)(2,605)2,228
$ 5,041 $5,041
109,146109,146
$ 114,187 $
9,8749,874
106,541106,541116,415
Note: Amounts reported for governmental activities inthe statement of net assets (Exh A) are different because:
Capital assets used in governmental activities are notfinancial resources and therefore are not reported _in the funds. 452,589
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS REPORT
GRAYOSBalShtGovFnds 15
VILLAGE OF GRAYSON, LOUISIANA EXHIBIT C-1Reconciliation of the Balance Sheet
to the Statement of Net AssetsGovernmental Funds
For the Year ended December 31, 2005
Fund Balances - Total Governmental Funds $ 106,541
Amounts reported for governmental activities in the statement ofnet assets are different because:
Capital assets, net of accumulated depreciation of $452,589 are 452,589not financial resources, therefore are not reported in thegovernmental funds.
Net Assets of Governmental Activities $ 559.130
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS REPORT
GRAY05ReconBalShtToStmtNetAsstGovFnds 16
VILLAGE OF GRAYSON, LOUISIANAStatement of Revenues, Expenditures,
and Changes in Fund BalancesGovernmental Funds
For the Year ended December 31, 2005
EXHIBIT D
TotalGovernmental
Revenues:Property TaxesOccupational LicensesContributionsFire AssessmentFranchise FeeFinesInterest IncomeMiscellaneousTotal Revenues
Expenditures:General GovernmentPublic SafetyPublic WorksInterestTotal Expenditures
Excess (Deficiency) ofRevenues over expenditures
Other Financing Sources/UsesTransfers InTotal - Other Financing Sources
Excess (Deficiency) of RevenuesOver Expenditures
Fund Balance - Beginning of YearFund Balance - End of Year
GeneralFund
$ 8,838 $23,164
9,4873,834
43045,752
61,055
;61,055
(15,303)
17,00017,000
1,697
(4,302)$ (2,605) $
FireFund
1,79925,538
--
2,054
29,391
12,731569821
14,120
15,271
-
15,271
93,875109,146
Funds(Memorandum only)
$ 8,83823,164
1,79925,538
9,4873,8342,054
43075,143
73,785569821
75,175
(32)
17,00017,000
16,968
89,573$ 106,541
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS REPORT
G RAYOSStmtRevExpChng Fnd BalGovFnds 17
VILLAGE OF GRAYSON. LOUISIANA EXHIBIT D-1Reconciliation of the Statement of Revenues,
Expenditures, and Changes in Fund Balances ofGovernmental Funds to the Statement of Activities
For the Year ended December 31, 2005
Net Change in Fund Balances - Total Governmental Funds $ 16,971
Amounts reported for governmental activities in the statement of activitiesare different because:
Governmental funds report capital outlays as expenditures. However,in the statement of activities, the cost of those assets is allocated overtheir estimated useful lives as depreciation expense, This is the amountby which capital outlays exceeded depreciation in the current period.
CAPITAL GRANTS $ 94,256CAPITAL OUTLAY (116,536)DEPRECIATION (31,932)
$ (54.212) (54,213)
Change in Net Assets of Governmental Activitie; $ (37,242)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT
GRAYOSReconStmtRevExpChngFndBalGovFndsToStmtActiv 18
VILLAGE OF GRAYSON, LOUISIANASTATEMENT OF FUND NET ASSETSPROPRIETARY FUNDSJune 30, 2005
EXHIBIT E
ASSETSCurrent Assets:
Cash and Cash EquivalentsAccounts Reveivable, NetTotal Current Assets
Non-Current Assets:Restricted Assets: Cash and Cash Equivalents
Capital Assets:Land, Buildings, and EquipmentAccumulated DepreciationTotal Capital AssetsTotal Assets
LIABILITIESCurrent Liabilities
Accounts PayableCustomer DepositsAccrued Bond InterestBonds Payable, current
Total Current Liabilities
Non-Current LiabilitiesBonds Payable
Total Long-Term LiabilitiesTotal Liabilities
Net AssetsInvested in Capital Assets, Net of Related DebtRestricted
Total Net Assets
Total Liabilities and Net Assets
Business-Type ActivitiesEnterprise Funds
$
$
$
WaterFund
17,299 $15,74733,046
17,196
813,819(210,095)603,724653,966 $
8,285 $35,055
43,340
-43,340
603,7236,903
610,626
SewerFund
21,4293,810
25,239
63,175
1,689,918(644,238)
1,045,6801,134,094
2,678
7,5947,974
18,246
356,807356,807375,053
681,28077,761
759,041
Totals
$ 38,72819,55758,285
80,371
2,503,737(854,333)
1,649,404$ 1,788,060
$ 10,96335,0557,5947,974
61,586
356,807356,807418,393
1,285,00384,664
1,369,667
$ 653,966 $ 1,134,094 $ 1,788,060
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS REPORT
GRAY05StmtFundNetAsstsPropFnds 19
VILLAGE OF GRAYSON, LOUISIANASTATEMENT OF REVENUES, EXPENSES, AN!CHANGES IN FUND NET ASSETSPROPRIETARY FUNDSFOR THE YEAR ENDED DECEMBER 31,200:
OPERATING REVENUESCharges for ServicesInterest IncomeMiscellaneous Income
Total Operating Revenues
OPERATING EXPENSESSalaries ExpenseAuto ExpenseClericalRepairCrossroads - Water DeoartmentInsuranceTractor ExpenseOffice ExoensePostage ExpenseRetirement ExpensePayroll TaxesTelephone ExpenseUtilitiesMiscellaneousMaterials & SuppliesDepreciationOxidation PondOxidation Pond Materials and Supplies
Total Operating Expenses
OPERATING INCOME (LOSS):
NON-OPERATING REVENUES (EXPENSES:Income from Sale of Fixed AssetsTransfers to General FundIncome from Deposit CollectionsRelocation Funds
Total Non-operating Revenues and ExpensesIncome (Loss) Before Contributions
Grant Income for Capital AssetsEscrow AccountInterest Expense
Total Non-operating Revenues (Expenses)
Changes in Net Assets
TOTAL NET ASSETS BEGINNINGTOTAL NET ASSETS ENDNG
EXHIBIT I
WaterFund
$ 124,774 $383
7,197132,354
51,0146,072752335
6.7696,434647
5.1621,0064,167
-2,12014,0506,476
1634,617
-
-139,636
SewerFund
44,346139
1,74746,232
480--
241.
6,258-
1.762-
5437
-4,499
94538,663884
4,69058,513
Total(MEMORANDUM
ONLY)
$ 169,120522
8,944178,586
51,4946,072752576
6.76912,692647
6.9241,0064,221
372,12018,5496,476961
73,280884
4,690198,149
(7,282)
810(17,000)2,788
(13,291)
-(26,693)(33,975)
245,87489
245,963
211,988
398,638$ 610,626 $
(12,281)
---
(18,473)(18,473)(30,754)
--
-
(30,754)
789,795759,041
(19,563)
810(17,000)2,788
(13,291)(18,473)(45,166)(64,729)
245,87489
245,963
181,234
1,188,433$ 1,369,667
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS STATEMENT.
GRAYOSStmtRevExpChngFndNctAsstsPF 20
VILLAGE OF GRAYSON, LOUISIANAStatement of Cash FlowsProprietary Funds
For the Year Ended December 31, 2005
EXHIBIT G
Business-Type ActivitiesEnterprise Funds
Cash Flows from Operating Activities:Receipts from CustomersPayments to SuppliersPayments to EmployeesInterest IncomeMiscellaneous IncomeNet Cash Provided by Operating Activities
Cash Flows from non-capital financing activities:Cash Flows from Financing Activities:Transfers to Other Funds/AcctsIncome from Deposit CollectionsRelocation Reimbursements
Net Cash Provided (used) by Non-Capital Activities
Cash Flows from capital and related financing activities:Gain from sale of Fixed AssetsAcquisition and Construction of Capital AssetsPrincipal Paid on Revenue BondsInterest Paid on BondsCapital Grants Received
Net Cash Provided (used) by Capital and Related Financing Activities:Net Increase (Decrease) in Cash and Cash EquivalentsCash and Cash Equivalents at January 1, 2005 - Beginning of YearCash and Cash Equivalents at December 31, 2005 - End of Year
Reconciliation of Operating Income (Loss) to Net CashProvided (Used) by Operating Activities:
Operating Income (Loss)Adjustments to Reconcile Operating Income(Loss) toNet Cash Provided by Operating Activities:DepreciationIncrease (Decrease) in Accounts ReceivableIncrease (Decrease in Accounts PayableMiscellaneous
Net Cash Provided by Operating operations
Water Fund
$ 124,374(54,004)(51,014)
3837,46427,203
(17,000)2,824
(13,291)(27,467)
810(254,763)
--
245,874(8,076)(8,313)25,625
$ (8,079)
Sewer Fund
$ 44,400(19,337)
(480)139
1,74726,469
(3,519)--
(3,519)
(1,838)(7,974)(18,473)
-(28,285)(5,335)26,380
$ 21,045
Total
$ 168,774(73,341)(51,494)
5229,21153,672
(20,519)2,824
(13,291)(30,986)
810(256,601)(7,974)(18,473)245,874(36,361)(13,648)52,005
$ 12,966
(7,282) $ (12,281) $ (19,563)
34,617400
(532)
38,663(54)33
108
73,280346
(499)108
27.203 $ 26,469 $ 53.672
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS REPORT
GRAYOSStmtCshFlowsPropFnds 21
Notes to Financial Statements
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
INTRODUCTION
The Village of Grayson, Grayson, La., was incorporated under the provision of the Lawrason Act (LouisianaRevised Statutes [LSA - R.S. 33.321 - 463] and operates under a Mayor-Board of Aldermen/Women formconsisting of 4 compensated members of government. It provides the following services to its residents:public safety (police); highways and streets; gas, water, sewer, and sanitation facilities through the utilityfund; culture/recreation; and general administrative services.
NOTE I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of the municipality conform to generally accepted accounting principlesas applicable to governments. Such accounting and reporting procedures also conform to the requirements ofLouisiana Revised Statutes 24:517 and to the industry audit guide, Audits of State and Local GovernmentalUnits.
LA. BASIS OF PRESENTATION
The accompanying financial statements of the Village of Grayson, Grayson, La., have been prepared inconformity with generally accepted accounting principles (GAAP) as applied to governmental units. TheGovernmental Accounting Standards Board (GASB) is the accepted standard setting body for establishinggovernmental accounting and financial reporting principles.
I.B. REPORTING ENTITY
As the municipal governing authority, for reporting purposes, the Village of Grayson, Louisiana is considereda separate financial reporting entity. The financial reporting entity consists of (a) the primary government,(municipality), (b) organizations for which the primary government is financially accountable, and (c) otherorganizations for which nature and significance of their relationship with the primary government are such thatexclusion would cause the reporting entity's financial statements to be misleading or incomplete.
Governmental Accounting Standards Board (GASB) Statement No. 14 established criteria for determiningwhich component units should be considered part of the Village of Grayson, Louisiana for the financialreporting purposes. The basic criterion for including a potential component unit within the reporting entity isfinancial accountability. The GASB has set forth criteria to be considered in determining financialaccountability. This criteria includes:
1. Appointing a voting majority of an organization's governing body, and
A. The ability of the municipality to impose its will on that organization and /or
B. The potential for the organization to provide specific financial benefits to or impose specificfinancial burdens on the municipality.
2. Organizations for which the municipality does not appoint a voting majority but are fiscallydependent on the municipality.
3. Organizations for which the reporting entity financial statements would be misleading if data ofthe organization is not included because of the nature or significance of the relationship.
GRAY05Notes 23
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
No component units are included in this report, since there are none. All portions of the Village's financialactivities which might be otherwise considered as component units are managed as a portion of the centralizedgovernmental and proprietary activities and are included in this report.
LC. GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS
I.C.I. Government-wide Financial Statements
The government-wide financial statements include the Statement of Net Assets and the Statement ofActivities. These statements report financial information for the Village as a whole excluding fiduciaryactivities such as employee pension plans. The primary government is presented separately within thefinancial statements with the focus on the primary government. Individual funds are not displayed but thestatements distinguish governmental activities, generally supported by taxes and Village general revenues,from business-type activities, generally financed in whole or in part with fees charged to external customers.The Statement of Activities reports the expenses of a given function offset by program revenues directlyconnected with the functional program. A function is an assembly of similar activities and may includeportions of a fund or summarize more than one fund to capture the expenses and program revenues associatedwith a distinct functional activity. Program revenues include: (1) charges for services which report fees, finesand forfeitures, and other charges to users of the Village's services; (2) operating grants and contributionswhich finance annual operating activities including restricted investment income; and (3) capital grants andcontributions which fund the acquisition, construction, or rehabilitation of capital assets and include fees todevelopers. These revenues are subject to externally imposed restrictions to these program uses. Taxes andother revenue sources not properly included with program revenues are reported as general revenues.
I.C.2. Fund Financial Statements
The Village of Grayson uses funds to report on its financial position and the results of its operations. Fundaccounting is designed to demonstrate legal compliance and to aid financial management by segregatingtransactions relating to certain government functions or activities.
A fund is a separate accounting entity with a self-balancing set of accounts.
Funds of the Village of Grayson are classified into two categories, governmental and proprietary. Eachcategory, in turn, is divided into separate fund types. The fund classifications and a description of eachexisting fund type follow:
Fund financial statements are provided for governmental, proprietary, and fiduciary funds. Major individualgovernmental and enterprise funds are reported in separate columns with composite columns for non-majorfunds.
I.D. MEASUREMENT FOCUS, BASIS OF ACCOUNTING, AND FINANCIAL STATEMENTPRESENTATION
I.D.I MEASUREMENT FOCUS/ BASIS OF ACCOUNTING
GRAYOSNotes 24
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
Measurement focus is a term used to describe "which" transactions are recorded within the various financialstatements. Basis of accounting refers to "when" transactions are recorded regardless of the measurementfocus applied.
Measurement Focus
On the Government-wide Statement of Net Assets and the Statement of Activities, both governmental andBusiness-like activities are presented using the economic resources measurement focus as defined in item b.below.
In the fond financial statements, the "current financial resources" measurement focus or the "economicresources" is used as appropriate.
a. The governmental fund utilizes a "current financial resources" measurement focus. Only currentfinancial assets and liabilities are generally included on the balance sheet. The operating statementpresents sources and uses of available spendable financial resources during a given period. Thisfund uses fund balance as its measure of available spendable financial resources at the end of theperiod.
b. The government-wide financial statement utilizes an "economic resources" measurement focus.The accounting objectives of this measurement focus are the determination of operating income,changes in net assets (or cost of recovery) and financial positioa All assets and liabilities (whethercurrent or non-current) associated with its activities are reported. Government-wide fund equity isclassified as net assets.
I.D.2. Financial Statements
The financial statements of the Village are prepared in accordance with generally accepted accountingprinciples (GAAP). The Village's reporting entity applies all relevant Governmental Accounting StandardsBoard (GASB) pronouncements and applicable Financial Accounting Standards Board (FASB)pronouncements and Accounting Principles Board (APB) opinions issued on or before November 30,1989,unless they conflict with GASB pronouncements. The Village's reporting entity does not apply FASBpronouncements or APB opinions issued after November 30, 1989.
The government-wide statements report using the economic resources measurement focus and the accrualbasis of accounting generally include the reclassification or elimination of internal activity (between or withinfunds). However, internal eliminations do not include utility services provided to Village's departments.Reimbursements are reported as reductions to expenses. Proprietary and fiduciary fund statements alsoreport using this same focus and basis of accounting although internal activity is not eliminated in thesestatements. Revenues are recorded when earned and expenses are recorded when a liability is incurred,regardless of the timing of related cash flows. Property tax revenues are recognized in the year for which theyare levied while grants are recognized when grantor eligibility requirements are met.
Governmental fund financial statements reports use the current financial resources measurement focus and themodified accrual basis of accounting. Revenues are recognized when they are both measurable and available.Available means collectible within the current period or soon enough thereafter to pay current liabilities.The Village considers revenues to be available if they are collected within 60 days of the end of the fiscal
GRAYOSNotes 25
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
year. Expenditures are recorded when the related fund liability is incurred, except for general obligation bondprincipal and interest which are reported as expenditures in the year due.
Pension trust funds recognize employer and participant contributions in the period in which contributions aredue and the Village has made a formal commitment to provide the contributions. Retirement benefits andrefunds are recognized when due and payable in accordance with the terms of the plan.
Major revenue sources susceptible to accrual include sales and use taxes, property taxes, franchise taxes(fees), intergovernmental revenues, and investment income. In general, other revenues are recognized whencash is received.
Operating income reported in proprietary fund financial statements includes revenues and expenses related tothe primary, continuing operations of the fund. Principal operating revenues for proprietary funds are chargesto customers for sales or services. Principal operating expenses are the costs of providing goods or servicesand include administrative expenses and depreciation of capital assets. Other revenues and expenses areclassified as non-operating in the financial statements.
When both restricted and unrestricted resources are available for use, it is the Village's policy to userestricted resources first, then unrestricted resources as needed.
I.D.3. Total Columns on Combined Statements
Total columns on the combined statements are captioned Memorandum Only to indicate that they arepresented only to facilitate financial analysis. Data in these columns do not present financial position, resultof operations, or changes in financial position in conformity with generally accepted accounting principles.Neither is such data comparable to a consolidation. Inter-fund eliminations have not been made in theaggregation of this data.
I.E. MAJOR FUNDS
I.E.I. Governmental Funds
The Village reports the following major governmental funds:
General Fund - reports as the primary fund of the Village. This fund is used to account for all financialresources not reported in other funds.
Fire Fund - accounts for operating activities of the fire department
I.E.2. Proprietary Fund
The Village reports the following enterprise funds:
Water Fund - accounts for the operating activities of the Village's water utilities services. This is amajor fund.
Sewerage Fund - accounts for the operating activities of the Village's sewer utility services. This is amajor fund.
GRAYOSNotes 26
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
I.F. ASSETS, LIABILITIES, AND NET ASSETS OR EQUITY
I.F.I. Cash and Investments
The Village maintains and controls cash and investments, some of which are restricted. Legal restrictions andthe Village's policies governing deposits and investments are discussed in Notes in. A.I.
The Village's reporting entity considers highly liquid investments (included restricted assets) with an originalmaturity of three months or less when purchased to be cash equivalents.
Investments are reported at fair value that is determined using selected bases. Short-term investments arereported at cost that approximates fair value. Securities traded on a national or international exchange arevalued at the last reported sales price at current exchange rates. Managed funds related to the retirementsystems not listed on an established market are reported at estimated fair value as determined by therespective fund managers based on quoted sales prices of the underlying securities. Cash deposits arereported at carrying amount that reasonably estimates fair value.
I.F.2. Capital Assets
Capital Outlays are recorded as expenditures of the General Special Revenue and Capital Projects Funds andas assets in the government-wide financial statements to the extent the Village's capitalization threshold ismet. In accordance with GASB Statement No. 34, infrastructure has not been capitalized due to an existingexception for Phase-Three local governments with annual revenues of less than $10 millioa Neither isdepreciation of infrastructure fixed assets required for a Phase-Three Government entity.
Depreciation is recorded on general fixed assets on a government-wide basis. Capital outlays for ProprietaryFunds are recorded as fixed assets and depreciated over their estimated useful lives on a straight-line basisand government-wide basis. All fixed assets are valued at their estimated fair market value on the datedonated. The following table shows the projected useful lives of certain items utilized by the water andsewer utilities. These estimates demonstrate the period of time over which the item is depreciated.
PROJECTED USEFUL LIVESWater Utility Projected Useful Life
Wells 20 yearsStorage tanks 40 years
Purification plant 33 yearsLines and meters 40 years
Sewerage Utility Projected Useful LifePump stations 40 yearsLines 40 yearsAutos and trucks 5 yearsOther equipment 10 years
Maintenance, repairs, and minor equipment are charged to operations when incurred. Expenditures thatmaterially change capacities or extend useful lives are capitalized. Upon sale or retirement of land, buildings,
GRAYOSNotes 27
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
and equipment, the cost and related accumulated depreciation, if applicable, are eliminated from therespective accounts and any resulting gain or loss is included in the results of operations.
I.F.3. OBLIGATIONS- Long-Term
In the government-wide financial statements, long-term debt is reported as liabilities in the applicablegovernmental activities statement of net assets.
In the fund financial statements, governmental fund types recognize debt issued reported as other financingsources. Repayment of the principal and interest is shown as an expenditure.
I.F.4. Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in theUnited States of America, require management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenue, expenditures, and expenses during the reporting period.Actual results may differ from those estimates.
I.F.5. EQUITY CLASSIFICATIONS
In the government-wide statements, equity is classified as net assets and displayed in three components:
a. Invested in capital assets, net of related debt, consists of capital assets including restricted capitalassets, net of accumulated depreciation and reduced by the outstanding balance of any bonds,mortgages, notes, or other borrowings that are attributable to the acquisition, construction orimprovement of those assets.
b. Restricted net assets consist of net assets with constraints placed on their use either by (1) externalgroups such as creditors, grantors, contributors, or laws or regulations of governments:; or (2) lawthrough constitutional provision or enabling legislation.
c. Unrestricted net assets consist if all other net assets that do not meet the definition of "restricted"or "invested in capital assets, net of related debt."
I.G. REVENUES, EXPENDITURES, AND EXPENSES
I.G.I Proprietary Funds
Operating revenues and expenses for proprietary funds are those that result from providing services andproducing and delivering goods and/or services. It also includes all revenue and expenses not related tocapital and related non-capital financing or investing activities
I.G.2. Ad Valorem Taxes
GRAYOSNotes 28
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied by the Village inSeptember or October and are actually billed on October 1, and are mailed to the taxpayers in November.Billed taxes become delinquent on January 1 of the following year. Revenues from ad valorem taxes arebudgeted and the year billed. The revenue derived from this tax is not dedicated to any specific purpose
The Village bills and collects its own property taxes using the assessed value determined by the tax assessorof Franklin Parish. Property tax revenues are recognized when they become available. Available includesthose property tax receivables elected to be collected within sixty days after year-end. Delinquent taxes areconsidered fully collectible and therefore an allowance for uncollectible taxes is provided..
I.G.3. Expenditures/Expenses
In the government-wide financial statements, expenses are classified by function for both governmental andbusiness-type activities.
In the fund financial statements, expenditures are classified as follows:
Governmental Funds - By CharacterProprietary Funds - By Operating and Non-operating
In the fund financial statements, governmental funds report expenditures of financial resources. Proprietaryfunds report expenses relating to use of economic resources.
I.G.4. Compensated Absences
Village employees are entitled to ten days of compensated absences. However, compensated absences donot vest or accumulate and are recorded as expenditures when they are paid.
NOTE II. BUDGETARY INFORMATION
II.A. BUDGET POLICY AND PRACTICE
The Village Clerk submits an annual budget to the Village council in accordance with applicable statutes andpolicies. The budget is presented to the Council for review, and public hearings are held to address prioritiesand the allocation of resources. In December, the Village Council adopts the annual fiscal year budgets forVillage operating funds. Once approved, the Village Council may amend the legally adopted budget whenunexpected modifications are required in estimated revenues and appropriations.
II.B. BASIS OF BUDGETING
The Village of Grayson (Mayor and Council) uses the following budget practices:
(1) Prior to December 31 of each year, the town Clerk submits to the Mayor and Council Members aproposed operating budget for the fiscal year commencing the following January 1. The operatingbudget includes proposed expenditures and the means of financing them for the upcoming year. Thebudget is submitted in summary form. In addition, more detailed line item budgets are included foradministrative control. The level of control for the detailed budgets is at the departmenthead/function level.
GRAYOSNotes 29
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
(2) Public hearings are conducted to obtain taxpayer comment.
(3) During the month of January the budget is legally enacted through passage of an ordinance.
(4) Formal budgetary integration is employed as a management control device during the year forthe General Fund.
(5) Budgets for the General Fund, are adopted on the GAAP basis.
(6) Appropriations lapse at the end of each fiscal year.
(7) The Mayor and Council Members authorize supplemental appropriations during the year.Supplemental appropriations were made during the fiscal year.
II.C. INTERFUND TRANSACTIONS
Legally authorized transfers are treated as interfund transfers and are included in the results of operations ofboth governmental and proprietary funds.
INTERFUND TRANSFERS Transfers In Transfers Out
General Fund $ 17,000 $Water Fund 17.000Totals $ 17,000 $ 17,000
II.D. ENCUMBRANCE ACCOUNTING
Encumbrance accounting is not utilized by the Village.
NOTE III. DETAILED NOTES ON FUNDS
III.A. ASSETS
III.A.1. Cash and Cash Equivalents
Cash includes amounts in demand deposits, interest-bearing demand deposits, and money market accounts.Cash equivalents include amounts in time deposits and those investments with original maturities of 90 daysor less. Under state law, the Village of Grayson may deposit funds in demand deposits, interest-bearingdemand deposits, money market accounts, or time deposits with state banks organized under Louisiana lawand national banks having their principal offices in Louisiana.
At December 31,2005, the Village had cash totaling $234,359 as follows:
General Fund Enterprise Fund TotalDemand Deposits - Book Balances 73,874 38,728 $ 112,602
GRAY05Notes 30
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
Restricted Cash and Investments 41,386 80,371 121,757Total 115,260 119,099 $ 234,359
Under state law, the Village of Grayson may invest in United States bonds, treasury notes, or certificates.These are classified as investments if their original maturities exceed 90 days. However, if the originalmaturities are 90 days or less, they are classified as cash equivalents. Investments are stated at cost. Cashand investments are secured as follows:
Citizen's Bank Homeland BankBank Balances $ 178,656 $ 55,155Federal Deposit Insurance (100,000) (100,000)Pledged Securities (Market Value) 74,431 (92,520)Under-collateralized (This has been corrected) (4,225)Collateral Sufficient $ 44,845
The Village's bank accounts are now sufficiently collateralized.
Even though the pledged securities are considered uncollateralized (Category 3) under the provisions ofGASB Statement 3, Louisiana Revised Statute 39:1229 imposes a statutory requirement on the custodial bankto advertise and sell the pledged securities within 10 days of being notified that the fiscal agent bank hasfailed to pay deposited funds upon demand..
III.A.2. Receivables
The receivables of $20,712 at December 31,2005 are as follows:
General Fund $ 1,155Enterprise Fund 19,557TOTAL RECEIVABLES $ 20,712
No allowance for doubtful accounts has been established.
III.A.3. Restricted Assets
Certain proprietary fund assets are restricted for construction funded through long-term debt. Net assetsrestricted for debt service include the excess of assets over certain liabilities restricted for the debt service onrevenue bonds. Restricted assets are also reported in various funds for case deposited in bank accountslegally restricted for specified uses such as the payment of debt service and fiscal fees on long-term debt ormortgage loans, and certificates of deposit (CD) issued in the Village or trust name and deposited with theVillage Treasurer in lieu of project retainages. Proceeds of restricted CD's on deposit with the VillageTreasurer are payable as liabilities payable from restricted assets. When both restricted and unrestrictedresources are available for use, it is the Village's policy to use restricted resources first, the unrestrictedresources as needed.
III.A.4. Capital Assets
GRAYOSNotes 31
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
Capital outlays are recorded as expenditures of the General Special Revenue and Capital Projects Funds andas assets in the government-wide financial statements to the extent the village's capitalization threshold ismet. In accordance with GASB Statement No. 34, infrastructure has not been capitalized due to an existingexception for local governments with annual revenues of less than $10 million.
Depreciation is recorded on general fixed assets on a government-wide basis. Capital outlays for ProprietaryFunds are recorded as fixed assets and depreciated over their estimated useful lives on a straight-line basisand government-wide basis. All fixed assets are valued at historical or estimated historical cost if actual costwas not available. Donated fixed assets are valued at their estimated fair market value on the date donated.
Maintenance, repairs, and minor equipment are charged to operations when incurred. Expenditures thatmaterially change capacities or extend useful lives are capitalized. Upon sale or retirement of land, buildings,and equipment, the cost and related accumulated depreciation, if applicable, are eliminated from therespective accounts and any resulting gain or loss is included in the results of operations.The following is a summary of the changes in capital assets for the fiscal year ended June 30,2005.
(THIS PORTION OF THIS PAGE IS INTENTIONALLY LEFT BLANK)
GRAYOSNotes 32
VILLAGE OF GRAYSONGrays on, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
Capital Assets and depreciation activity as of and for the year ended December 31, 2005 for the Village of
Grayson are as follows:
CAPITAL ASSETS
GOVERNMENTAL ACTIVITIES
Capital Assets
Land
Buildings
Furniture/Fixtures
Total Capital Assets
Less - Accumulated Depreciation
BuildingsFurniture/Fixtures
Total Accumulated Depreciation
Capital Assets, Net
CAPITAL ASSETS
BUSINESS-TYPE ACTIVITIES (PROPRIETARY FUND) WATER SYSTEM AND SEWER SYSTEM
Buildings and Equipment
Water System
Sewer System
TOTAL
Less - Accumulated Depreciation
Water System
Sewer System
Total Accumulated Depreciation
Capital Assets, Net
Balance
12/31/04
3,600
397.712
97,342
498.654
97,79534,874
130,669
Additions Deletions
105,806
10,730
116.536
13,513
18,419
31,932
Balance
12/.31/05
3,600
503,518
615.190
109,308
53,293
162,601
367,985 148,468 452,589=^^^^^^
587,694
1,688,088
2,275,775
204,117
605,575
809,692
254,763
1,838
256,601
34,616
38.663
73,279
(28,639)
(28,639)
(28,639)
(28,639)
813,818
1,689,918
2,503,736
210,095
644.238854,333
1,466,083 183,322 1,649,403
TOTAL CAPITAL ASSETS, NET
Governmental Capital Assets, Net 452,589
Business-Type Capital Assets, Net 1.649.403
TOTAL (Exhibit A) 2,101.992
III.B. DEBT
III.B. Changes in Long-Term DebtThe following is a summary of the Village's long-term debt at December 31,2005, composed of thefollowing;
GRAYOSNotes 33
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31,2005
2004 Paid 2005212,700 Sewer Revenue bond (Bond R-l) dated August 4,
1989; due in annual installments of $12,500; dueAugust 4, 1991-2029; Interest at 5% 176,111 3,767 172,344
237,500 Sewer Revenue Bond (Bond R-2) dated August 4,1989; due in annual installments of $13,958; dueAugust 4, 1991-2029; Interest at 5% 196,644 4,206 192,438
372,755 364,782Less Current Portion: 7,597 7,974
TOTAL LONG-TERM DEBT 365,158 356,808
The annual requirements to amortize all long-term debt outstanding beginning December 31,1995, are asfollows:
Year
20062007200820092010
2011-2029
RevenueBonds
26,45826,45826,45826,45826,458
502,709
Under the terms of the bond indenture on outstanding sewer revenue bonds, dated August 4,1989, all incomeand revenues (hereinafter referred to as income) of every nature, earned or derived from operations of thesewer system are pledged and dedicated to the retirements of said bonds, and are to be set aside in thefollowing funds:
a. Each month there will be set aside into a fund called the "Sinking Fund" an amount constituting 1/12of the next maturing installment of principal and interest on the outstanding bonds. Such transfersshall be fully sufficient to assure prompt payment of principle and interest installments as theybecome due, and may be used only for such payments.
The following is a schedule of deposits that should be made to the sinking fund:
PERIOD MONTHLY INSTALLMENTS08/20/04 THROUGH 07/20/05 2204.86
b. There shall be set aside in a Reserve Fund an amount equal to 5% of the principle and interestpayments required during the month until there shall have been accumulated in the reserve account anamount equal to $38,202.
The following is a schedule of payments that should be made to the Reserve Fund:GRAYOSNotes 34
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
PERIOD MONTHLY DEPOSITS08/20/04 through 07/20/05 $ 176.23 per month must be
deposited into the fond until$42,294 has beenaccumulated.
c. Monthly deposits of $112 should also be made for the period of August 20, 1990 through July 20,2029 to the Contingency Fund.
III.B.2 Short-Term Debt
Short-term liabilities are paid as they accrue and become payable. They are paid on a monthly basis asapproved by the mayor and council for payment.
NOTE IV. OTHER
IV.A. PROPERTY TAX REVENUES
The year ended December 31,2005. Taxes of 5.49 mills were levied on property with assessed valuationstotaling $1,213,893 and were deducted as follows:
General corporate purposes 5.49 mills
IV.B. RESTRICTIONS ON USE OF UTILITIES REVENUES
Funds provided by utilities revenue is to be used in the following manner before they are available for otherlawful purposes:
1. Operating expense of utility system.2. Revenue bond service funds.3. Revenue bonds reserve funds.4. Revenue bond depreciation and contingencies fund.
IV.C. PENSION PLAN
Substantially all employees of the Village of Grayson, are members of the following statewide retirementsystems: Municipal Employees Retirement System of Louisiana, Municipal Police Employees RetirementSystem of Louisiana, or Firefighters' Retirement System of Louisiana. These systems are cost-sharing,multiple-employer defined benefit pension plans administered by separate boards of trustees. Pertinentinformation relative to each plan follows:
A. Municipal Employees Retirement System of Louisiana
Plan Description. The system is composed of two distinct plans, Plan A and Plan B, with separateassets and benefit provisions. All employees of the municipality are members of Plan A. Some
GRAYOSNotes 35
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31,2005
employees of the municipality are members of Plan A and Plan B. All permanent employees workingat least 35 hours per week who are not covered by another pension plan and are paid wholly or inpart from municipal funds and all elected municipal officials are eligible to participate 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 30 years of creditable service are entitled to a retirement benefit, payablemonthly for life, equal to 3 percent of their final-average salary. Furthermore, employees with atleast 10 years of creditable service, but less than 30 years, may take early retirement benefitscommencing at or after age 60, with the basic benefit reduced 3 percent for each year retirementprecedes age 62, unless he has at least 30 years of creditable service. In any case, monthlyretirement benefits paid under Plan B cannot exceed 100 percent of final-average salary.] Final-average salary is the employee's average salary over the 36 consecutive or joined months thatproduce the highest average. Employees who terminate with at least the amount of creditable servicestated above, and do not withdraw their employee contributions, may retire at the ages specifiedabove and receive the benefit accrued to their date of termination. The System also provides deathand disability benefits. Benefits are established or amended by state statute.
The system issues an annual publicly available financial report that includes financial statements andrequired supplementary information for the System. That report may be obtained by writing to theMunicipal Employees Retirement System of Louisiana, 7937 Office Park Boulevard, Baton Rouge,
Louisiana 70809, or by calling (225) 925-4810.
Funding Policy. [Under Plan B, members are required by state statue to contribute 5.0 percent oftheir annual covered salary and the Village of Grayson is required to contribute at an actuariallydetermined rate. The current rate is 3.75 percent of annual covered payroll.] Contributions to theSystem also include one-fourth of one percent (except Orleans and East Baton Rouge parishes)of thetaxes shown to be collectible by the tax rolls of each parish. These tax dollars are divided betweenPlan A and Plan B based proportionately on the salaries of the active members of each plan. Thecontribution requirements of plan members and the Village of Grayson are established and may beamended by state statute. As provide by Louisiana Revised Statue 11:103, the employercontributions are determined by actuarial valuation and are subject to change each year based on theresults of the valuation for the prior fiscal year. [Village of Grayson contributions to the Systemunder Plan Bfor the years ending December 31, 2005, 2004, and 2003, were $4167, $ 5,741, and$4,755, respectively, equal to the required contributions of each year.] Employer rate wasincreased in 3rd Quarter 03.
IV.D. ACCOUNTS, SALARIES, AND OTHER PAYABLES
Accounts, salaries, and other payables of $49,117 are as follows:
PAYABLESAccounts Payable - General Fund 9,874Accounts Payable - Enterprise Fund 10,963Customer Deposits 35,055
TOTAL $ 55,892
GRAY05Notes 36
VILLAGE OF GRAYSONGrayson, Louisiana
NOTES TO THE BASIC FINANCIAL STATEMENTSAs of and for the Year Ended December 31, 2005
IV.E. INTER-FUND TRANSACTIONS
During the course of normal operations, the Village has numerous transactions between funds includingexpenditures and transfers of resources primarily to provide services. The governmental funds financialstatements generally reflect such transactions as transfers.
IV.F. CONTINGENCY
IV.F.a. According to the attorney acting on behalf of the Village, there were no pending litigations or claimsas of December 31,2005. There have been no subsequent legal actions to date.
IV.F.b. The Village received funds from federal and state governmental agencies in the form of grants, whichis subject to audit by the federal or state government. The ultimate determination of amounts received underthese programs is generally based upon allowable costs reported to and audited by the government. Untilsuch audits have been completed and final settlements reached, there exists a contingency to refund anyamount received in excess of allowable costs. Management is of the opinion that no material liability willresult from such audits.
IV.G. SUBSEQUENT EVENTS
There were no subsequent events noted which would affect the financial statement.
IV.H. POST-RETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS
The Village of Grayson has no retired employees as of December 31, 2005.
IV.I. SEGMENT INFORMATION
The Village has issued revenue bonds to support a variety of public services. The fund financial statementsreport major funds with revenue supported debt for the water and sewer funds. Services provided by thesefunds are described in NOTE I.E.2. and also included in the basic financial statements.
IV.J. LEASE
The Village of Grayson (Grayson Police Department) leases equipment from Applied Concepts, Inc. (DBAStalker Radar and Video), one (1) Stalker Deal SLSDSL2KA. This lease requires a monthly payment of$54.03 for 36 months.
GRAYOSNotes 37
Required Supplementary Information(Part II)
VILLAGE OF GRAYSON, LOUISIANAStatement of Revenues, Expenditures,
and Changes In Fund BalancesGovernmental FundsBudget (GAAP Basts) and Actual
For the Year ended December 31, 2005
Schedule 1
Revenues:Property TaxesOccupational Licenses
Fire AssessmentFranchise FeeFinesMiscellaneousInterest IncomePolice Jury 2% taxContributions
Total Revenues
Expenditures:General GovernmentPublic SafetyPublic WorksTotal Expenditures
Excess {Deficiency) ofRevenues over expenditures
Other Financing Sources/Uses:Transfers in
Total Other Financing Sources/UsesExcess (Deficiency) ofRevenues Over Expenditures
Fund Balance Beginning of Year-Originally stated
Fund Balance-End of Year
GENERAL FUND
OriginalBudget
FinalBudget
Variance withFinal BudgetFavorable
Actual (Unfavorable)
6,86224,789
8,8576.0802,645
$ 6,900 $ 8,838 $24,000 23.164
12.0006,0003,000
9.4873.834
430
1,938(836)
(2,513)(2,166)(2,570)
49.233
66,520
66,520
51,900
73,799
73,799
45.753 $
61,055
61,055
(6,147)
12,744
12,744
(17,287)
-
(21,899)
-
(15,302)
17,00017.000
6,597
17,00017,000
(17,287)
17,287$ - $
(21,899)
4,30226,201 $
1.698
(4.302)(2,604) $
23,597
23.597
FIRE FUNDVariance withFinal Budget
Original Final FavorableBudget Budget Actual (Unfavorable)
23,069 24,000 25,538 1,538
3.728---
2,0002,2001,800
50
-2,054
-1,799
(2,000)(146)
1.8001,849
26,797 30,050 29,391 $ (659)
24,7834.239778
35.5241,900800
12,731569820
22.7931,331(20)
29,800 38.224 14,120 24.104
(3,003) (8,174) 15,271 (23.445)
4,571
6.058
(8.174)
93.875
15,271
93.875
(23,445)
$ 85,701 $ 109.146 S (23,445)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THIS REPORT
GRAYOSStmtRevExpChngFndBatGovFndsBudgAct 39
Other Supplemental Information
VILLAGE OF GRAYSONSchedule of Compensation Paid to the Mayor and Councilmen/Women
For the Year Ended December 31, 2005
BUDDY NUGENT, MAYOR $2564.00P.O. Box 252Grayson, La. 71435318-649-5361Salary - $ 221.17 per mo.
CHRISTY BAILEY, COUNCILWOMAN $1339.20P.O. Box 681Grayson, La. 71435318-649-2152Salary-$ 111.60 per mo.
JEANIE MCCOY, COUNCILWOMAN $1339.207710 Hwy. 165Columbia, La. 71418318-649-5948Salary - $ 111.60 per mo.
RAYMOND CRUSE, COUNCILMAN $1339.20P.O. Box 309Grayson, La. 71435318-649-7117Salary-$ 111.60 per mo.
Total $6581.60
GRAYOSBoardMentComp 41
Jimmie Self, CPAA Professional Accounting Corporation
2908 Cameron St, Suite CMonroe, LA 71201
Phone (318)-323-4656 • Fax (318)388-0724
REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIALREPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS
PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To The Honorable MayorAnd the Board of CommissionersVillage of Grayson, Louisiana
I have audited the financial statements of the governmental activities, the business-typeactivities, and each major fund, of the Village of Grayson, Louisiana as of and for theyear ended December 31,2005, which collectively comprise the Village of Grayson,Louisiana's basic financial statements and have issued my report thereon dated June 30,2006. I have conducted my audit in accordance with auditing standards generallyaccepted in the United States of America and the standards applicable to the financialaudits contained in Government Auditing Standards issued by the Comptroller General ofthe United States.
Compliance
As part of obtaining reasonable assurance about whether Town of Grayson, Louisiana'sfinancial statements are free of material misstatement, I performed tests of its compliancewith certain provisions of laws, regulations, contracts, and grants, noncompliance withwhich could have a direct and material effect on the determination of financial statementamounts. However, providing an opinion on compliance with those provisions was notan objective of my audit, and accordingly, I do not express such an opinion. The resultsof my tests disclosed no instances of noncompliance that are required to be reportedunder Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing my audit, I considered Town of Grayson, Louisiana's internalcontrol over financial reporting in order to determine my auditing procedures for thepurpose of expressing my opinions on the financial statements and not to provideassurance on the internal control over financial reporting. My consideration of theinternal control over financial reporting would not necessarily disclose all matters in theinternal control over financial reporting that might be material weaknesses. A materialweakness is a condition in which the design or operation of one or more of the internal
GRAYOSComplianceGAS 42
control components does not reduce to a relatively low level the risk that misstatementsin amounts that would be material in relation to the financial statements being auditedmay occur and not be detected within a timely period by employees in the normal courseof performing their assigned functions. I noted no matters involving the internal controlover financial reporting and its operation that I considered to be material weaknesses.
This report is intended solely for the information and use of the management, LouisianaLegislative Auditor, and federal awarding agencies and pass-through entities and is notintended to be and should not be used by anyone other than these specified parties.Under Louisiana Revised Statute 24:513, this report is distributed by the LegislativeAuditor as a public document.
Jimmie Self, CPAMonroe, LouisianaJune 30,2006
GRAY05ComplianceGAS 43
VILLAGE OF GRAYSONSchedule of Findings and Questioned Costs
For the Year Ended December 31. 2005
Finding:
2005-1 Condition - Under state law, all funds on deposit must be secured byfederal deposit insurance or the pledge of securities owned by the fiscal agent bank. AtDecember 30, 2005, the village did not have all their bank balances secured by pledgedsecurities.
Recommendation - The Village of Grayson should establish procedures to ensurethe bank provides the required pledged securities.
Schedule of Prior Year Findings and Questioned CostsFor the Year Ended December 31, 2004
There were no prior year findings.
GOODOSFirelingj 44
VILLAGE OF GRAYSONP. O. Box 8
Grayson, LA 71435
June 30,2005
Jimmie Self, CPA, APAC2908 Cameron StreetMonroe, LA 71201
RE: Management's Corrective Action PlanFYE December 31,2005
The Village of Grayson's response to the Schedule of Findings and Questioned Costs forthe year ended December 31,2005:
Response Finding 2005-1 - The Village of Grayson has contacted its fiscal agentbank concerning the lack of an adequate pledge of securities to cover all ofthe bank balances of the Village. The fiscal agent bank has pledged thenecessary additional securities and has provided the Village withappropriate documentation.
Recommendation - In order to ensure that the fiscal agent bank providesthe required pledge security, a review of the securities will be added to themid-year checklist on June 30 and the end of the calendar year closingactivities checklist providing for twice-yearly confirmation. In addition,our fiscal agent bank is providing an over-pledge of securities to providecoverage for unexpected increases in collection.
Sincerely yours,
Susan RobinsonVillage Clerk
GRAYOSMngmtCorrActPlan