Town of Merryville - Louisianaapp1.lla.la.gov/PublicReports.nsf/F95E8916EFB00BA...Public works...

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lOWN OF MERRYVTLLE, LOUISIANA

\ N N I ; A L FINANCIAL S'fATEMENTS WITH AUDrrOR\S REPORT

JUNE 30, 2011

•Jnder provisions cf state law, this report is a public (jocuTient Acopy ofthe report has been submitted to the ent!r>' and otner appropnate public officials. The report is available for public inspection at the Baton Rouge office ofthe Legislative Auditor and. where appropnate, at the office ofthe pahsh clerk of court.

Release Date ' " t u U l ZU lZ

Tabic ofC'ontcnts

INDEPENDENT AUDITOR'S REPOR'f

BASIC FINANCIAL STATEMENTS: Statement of Net Assets Statement of Activities Balance Shed Governmental l-'unds Reconciliation ofthe Govemmental Funds Balance Sheet

to Statement of Net Assets Statement of Revenues, E.xpenditures and Changes

in Fund Balances - Governmental Funds Reconciliation ofthe Statement of Revenues

Expenditures and Changes in Fund Balance of Governmental Funds to the Statemeni of Activities

Statenieni of Net Assets - Proprietary Fund Statement of Ficvcnues, Expenses and Changes

in Net Assets - Proj^rietary Fund

Statement of Cash flows - Proprietary Fund

Notes lo the Financial Statements

Required Supplemental Inibrmation General Fund Statement of Revenues. Expenditures

and Changes in Fund Balances -• Budget and Actual Special Revenue Fund — Sales Tax Fund - Statement of

Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 2 29

Other Supplemental In formation Schedule of Per Diem Paid to Board Members 3 31

Other Reports Schedule ofi'rior Year Audit Findings 4 33 Schedule of'CuiTcnt Year .Audit Findings iind

Management's Response ."i 34-35

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of 1-inaneial Statements Performed in Accordance With (jovcrnmcnt .'Inditing Standard.^ - 36-37

Statement

-

A B C

D

E

F G

11

I

-

Schedule

1

Page(s)

1-2

4 s 6

7

8

9 10

11

12-13

14-25

Pagc(s}

27-28

John A. Windham, CPA A Professional Corporation

1620 North Pine Street John A. Windham, CPA DeRidder, LA 70634 Tel: (337) 462-3211 Fax:(337)462-0640

INDEPENDENT AUDITOR'S REPORT

The Honorable Larry CaiToll, Mayor and .Members of [he Board of Aldermen

Town of .VIerrvville, Louisiana

1 was engaged lo audit the accompanying Hnaneial statements ofthe govemmental activities, the business-tv^pe activities and each major fund ofthe Town of Merryvilte, Louisiana, as of and for the year ended June 30, 2011, which collectively comprise the Town's basic financial statements as listed in the table of contents. These financial statements are the responsibility ofthe Town of .Vlcrryvillc. Louisiana's management. My responsibility would have been to express opinions on these financial statements based on the audit 1 would have conducted.

The Town of Merryville, Louisiana had two separate administrations during the year under audit and a third administration subsequent to the year end June 30. 2011 and prior to the audit report release date. Inuring the.se administrations numerous allegations and accusations of wrong doing have arisen. Also, the Loiusiana Coniplianee Questionnaire was not adopted by the Board until the December 2011 meeting. The questionnaire had been debated by the Board in previous and special meetings as to whether it was answered correctly. Due to the uncertainties of compliance with laws and regulations etTecting the Hnaneial statements, and the uncertainties from the allegations and accusations that have been made, 1 am unable to express and I do not express an opinion on the financial statements referred to in the first paragraph.

In accordance with Government Auditing Standnrds, I have also issued my report dated October 1S, 201 1 on my consideration ofthe Town of .Vlcrryvillc, Louisiana's intemal control over financial repotting and my tests of its compliance with certain provisions of laws, regulations, contracts and grant agieemcnts and other matters. 'I he purpose of that report is lo dcseritx' the scope of my testing of intemal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance wilh Government Auditing Standards and should have been considered in assessing the results ofthe audit that I would have conducted.

Accounting principles generally accepted in the United States of America require that the budgetary comparison information on pages 27 through 29 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial .statements, is required by the Governmental Accounting Standards fJoard, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or histoncal context. I have applied certain limited procedures to the required supplcmcnlary information in accordance with auditing standards generally accepted in the United States of .America, which consisted of inquiries of management about the methods of preparing the information and comparing the infomiation for consistency with management's responses lo my inquiries, the basic financial statements, and other knowledge I obtained. 1 do not express an opinion or provide any assurance on the information because the limited procedures do not provide me with sufficient evidence to e.\p("css an opinion or provide any assurance.

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'I he llonorable Lariy (Carroll, Mayor and Mcml)cis ofthe Board of Aldermen

The Town of MciTvville, Louisiana, has not presented management's discussion and analysis that accounting principles generally accepted in the United States of America has determined is necessary to supplement, although not required to be part of, the basic financial statements.

We were engaged for the purpose of forming opinions on the financial statements that collectively comprise the 'fown of Merryville. Louisiana's financial statements as a whole. The schedule of per diem paid lo board members is presented for puiposes of additional analysis and is not a required part ofthe financial statements. Because ofthe significance ofthe matter described above, it is inappropriate to and I do not express an opinion on the supplementary infomiation referred to above.

• . /^^^Xo^ cpfi

DeRidder, Louisiana October 18.2011

^^^^^^HVAXCIAI -STAT

To\\n <if .Vlcrrv\illc, Louisiana Statement A

ASSETS

Statement oi' Net Assets .Iunc30, 2011

Governmental

Activities

Primary Go\ernment

Business-type Activilies Total

Cash and cash equivalents Receivables:

Ad valorem Sales taxes Franchise taxes Occupational licenses Accounts Intergovernmental:

.Mcohol taxes State mowing contract Federal grant

Due from utility fund Prepaid insurance Restricted cash and cash equivalents Capital assets not being depreciated Capital assets being depreciated, net

Total assets

LIABILIflES Accounts payable Payroll taxes payable Due to general fund .Accrued interest payable Customer deposits

46.421

S-037 2S,644

S.4S5 5.S23

114,786

17.40S

161,207

8.037 28,644

S,4S5 5,823

17.40S

s

$

4SS 3,170 2,150 1,470

11,169 81.937

2,600 315,173 615.567

24,707

3.338 ---

S

S

--------

132.194 S

14,699 S 1.430 1,470 9.516 17.241

488 3,170 2,150 1,470 11,169

81,937

2,600

315.173 747,761

39,406 4.768 I.47U 9.516 17.241

Noncurrent liabilities: Due within one year Due in more than one year

Total liabilities

NH I" ASSFTS Invested in capital asset, net of related debt Restricted for:

Revenue bond retiremenl Sales tax dedications

Unrestricted fotal net a.s.sets

Total liabilities and net assets

s

s

S

s

--

28,045

317,773

.

1 14.498 155.251 587,522

6I5,.567

S

S

s

s

23,000 191,375 258,731

2.467,573

68,126 -

131.523 2,667,222

2.925,953

S

S

S

S

23,000 191,375

286,776

2.785,346

68,126 114,498 286,774

3.254,744

3,54L.520

The accompanying notes ate an integral part of this statement.

Town oIMciTvvillc, Louisiasia Statciiiciii B

Si;itt;iiieiit of Aciivities For the Year Ended June 30. 2011

Program Revenue;

Program .Aciivities Govemmcnial aciivilii-vi:

Gc[icriil j:overnineni and administration

Public sal'i-'iy Public works

Total jzovcmmenlal aciiviii'j.s

Business-type activities. Water and .iewer

Total noveinnient

l:.\penscs

Fees, Fme.s iind Operating Grant Charges tor and

Services Contributions

Net (E.xpeiises) Revenues and Changes in Net .As.=;eis

Capital Grants Governmental Business-type and Coniributions Activities Activities Total

s

s

1X4.663 183.267

20-1.642

.S72.572

S

S

295.4.S2

31.750

.127.202

373.7tl4 192.443

946,276 S 519.645 S

5.S75

5.S75

(jcneral revenues: Ta.xes:

Ad valorem Sale.s Alcohol Fninchi.se G a mini);

Occupational licenses and permits Investment earnings Gain on sale uf assets Rentals .Miscellaneous 'transfers

fotal general revenues and transfers C'hange in net assei.s

Net assets at beyinnitii! of year Net assets at end of vear

34,'>75

(IS4.663) S

118,060

(137.917)

.U.975 (204.;i20) S

433.709

S (1S4.663) 11S.060

(137,917)

252.44S

5.S75 $ 468,684 S (204,520) % 2.52,448 S

(2(14.520)

25:,44S

47.928

s

23.740

290,600 2,657

42.533 2.418

57,098

-SX2

4.464

3.353

(79.3 11) 348,494 143,974

443.548 587.522 S

--

486

79,311 71,71,7

332.245 2,334.977 2,667,222 S

23.740

2')0,660 2,657

42,533 2.418

57,098 486 882

4.464

3,353

428,291 476.219

2.778.525 3,254,744

•fhe aceompanyiny notes are an integral part ofthe siateinem. 5

Town of Merrvvillc. Lou Statemeni C

Balance Sheet Governmental Eunds

June 30.2011

ASSETS


Ad valorem taxes Sales taxes Eranchise taxes Occupational licenses

Intergovernmental: Alcohol taxes State mowing contract Federal grant

Due from utility fund r*tcpaid insurance Restricted cash and cash equivalents

Total assets

S

s

General

146,421

8,037 -

8,485 -

488 3,170 2,150 1,470

11,169 -

181,390

Sp

Sa

S

s

Major Fund L'cial Revenue

l-'und

Ies Tax Fund

_

-28.644

-5.823

-----

81,937 116,404

Go^

S

S

'fotal /crnmcntal Funds

146,421

8,037 28,644

8,485 5,823

488 3.170 2.150 1,470

11,169 81.937

297,794

LIABILITIES AND FUND BALANCES

Liabilities: Accounts payable Payroll taxes payable

Total liabilities

S 22,801 3,338

S 26,139

1.906

1,906

24,707 3,338

28.045

Fund Balances: Nonspendable

Not in spendable form Restricted Unassigned

'Total fund balances

Total liabilities and fund balances

s

s

s

11,169

144,082 155,251

181,390

114.498

114.498

116,404

s

s

s

11,169 114,498 144,082 269,749

297,794

'The accompanying notes are an integral part of this statement. 6

' fown of .Vlcrryville, Louisiana Statement D

Reconciliation ofthe Governmental Funds Balance Sheet

to Statement of Net Assets

.lune 30. 2011

Total fund balance - total governmental funds S 269,749

Amoimts reported for governmental activities in the statement of net assets are different because:

Capital a.ssets used in governmental activities are not

financial resources and therefore are not reported in

the governmental funds balance sheets. 317,773

Net assets of governmental activities S 587,522

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

7

Town of Merryville, Louisiana Statement E

Statement of Revenues. Expenditures and Changes in Fund Balances Governmental Funds

For the Year Ended June 30. 2011

Major Fund

Revenues Taxes:

Ad valorem Sales Alcohol Franchise Gaming

Charges for services Intergovernmental:

Federal grants State grants

Occupational lieen.scs and permits Fines and forfeitures Rentals Other revenues

Total revenues

Expenditures General government Public safety Public works Capital outlay

Total expenditures

General Fund

S 23,740 -

2,657

42,533

2,418

31,750

5.875

34.975

24.690

295.452

4,464

3,354

S 471.908

S 168,882

164.673

201,562

45.129

S 580,246

Speei al Revenue

Fund

Sales Tax Fund

$

S

S

s

290.660 ----

_ -

32,408 ---

323.068

6,103 ---

6,103

G(

S

S

S

s

Total

Dvernmental

Funds

23,740

290,660 2.657

42,533

2,418

31,750

5,875

34,975

57,098

295,452

4,464

3.354

794,976

174.985

164,673

201-562

45,129

586,349

Excess (deficiency) of revenues over expenditures (108,338) S 316,965

Other tlnancing sources (uses) Transfer in Transfer out

Gain on sale of assets

Total other financing sources (uses)

Net change in fund balance

Fund balances at lieginning of year

Fund balances at end of year

S

S

S

S

16S,32y

-882

169,211

60,873

94.378

155,251

208,627

S - S 168,329 (247,641) (247,641)

882 S (247,641) S (78,430)

S 69,324 S 130.197

45,174 139.552

114,498 S 269,749

The accompanying notes are an integral part of this statement.

'Town of Merryville, Louisiana Statement F

Reconciliation ofthe Statement of Revenues, Expenditures

and Changes in Fund Balance of Governmental Funds to the

Statement of Activities

For the Year Ended June 30, 201 1

Net change in fund balances - total governmental funds S 130,197

Amounts reported for governmental activities in the

statement of activities arc different because:

Governmental funds report capital outlays as expenditures. However,

in the government-wide statement of activities and changes in

net assets, the cost of those assets is allocated over their estimated

useful lives as depreciation expense. This is the amount ofcapital

assets recorded in the current period. 45,129

Depreciation expense on capital assets is reported in the government-

wide statement of activities and changes in net assets, but they

do not require the use of current financial resources. Therefore,

depreciation expense is not reported as an expenditure in governmental ftinds. (31,352)

Change in net assets of governmental activities S 143,974


9

fown of Merrvvillc. Louisiana Statement G

Statement of Net Assets Proprietary Fund

June 30, 201 I

Assets Current Assets


Accounts Prepaid insurance

Total current assets Noncurrent Assets

Restricted cash and cash equivalents Capital assets nol being depreciated Capital assets being depreciated, net

Total noncurrent assets

Toiiil assct<i

Liabilities Current Liabilities

Accounts payable Customer deposits Payroll taxes payable Due to general fund

Total current liabilities .

Liabilities payable from restricted assets Accrued interest payable Current portion of revenue bonds payable

Total liabilities payable from restricled assets

Noncurrent L^iabilities Revenue bonds payable

Total liabilities

Net Assets Invested in capital assets, net of related debt Restricted for:

Revenue bond retiremenl Unrestricted

Total net assets

Total liabilities and net assets

Business-type Activities -

Enterprise Fund Water and

Sewer

114.786

s

s

s

s

17,408 11,169

143.363

100,642

37,666 2.644,282 2,782.590

2,925,953

S

s

S

s

14,699 17.241 1,430 1,470

34,840

9,516

23,000

32,516

191,375

255,731

2,467,573

s

5

68,126

131,523

2,667,222

2.925,953

The accompanying notes are an integral part of this statemeni. 10

Town of Merryville, Louisiana Statement II

Statetiient of Revenues, Expenses and Changes in Net Assets

Proprietary Fund

For the Year Ended June 30. 201 1

Business - type

Activities -

Enterprise Eund

Operating revenues Charges for services

Operating expenses

Personal services

Supplies

Contractual services

Depreciation

Total operating expenses

Income (loss) from operations

Nonoperating revenues (expenses)

Investment income

Interest expense

'foial nonoperating revenues (expenses)

Income (loss) before contributions

and transfers

Transfers in

Capital contributions

Change in net assets

Net assets at beginning of year

Net assets at end of year

S

s

s

s

S

S

s

s

s

S

Water and

Sewer

192,443

85,076

34,136

105.508

138,140

362.860

(170,417)

486

(10,844)

(10,358)

(180,775)

79.311

433.709

332,245

2,334,977

2,667.222


I I

fown of .Merryville, Louisiana Statement I

Statement of Cash Flows Proprietary Fund

For the Year Ended June 30. 201 1


Enterprise Fund

Cash flows from operating aciivities: Cash received from customers Cash payments to suppliers

for goods and services Cash payments to employees for services

Net cash used by operating activities

Cash flows from noncapital financing activities: Transfers from other funds Payments from other funds

Net cash provided by noncapital tlnancinti activities

Water and Sewer

192,203

s

S

S

(136,760) (85,725) (30.282)

79,3 11 6.318

85,629

Cash flows from capital and related financing activities: Acquisition and construction ofcapital assets Interest paid on bonds Retirement of bonds Capital contributions received

Net cash used by capital and related financing aciivities

S (685,092) (11,819) (22,000) 512,775

S (206,136)

Cash flow from investing activities: Interest on cash and investments

Net increase (decrease) in cash and cash investments

Cash and Cash investments, July I Cash and Cash investments, June 30

486

S (150,303) 365,731

215.428 (Continued)


Town of Mcrrvville, Louisiana Statement I

Statement of Cash Flows Proprietary Fund

For the Year Ended June 30, 201 I

Reconciliation of (loss) from operations to net cash used by operating activities:


Enterprise Funds

Water and Sewer

Loss from operations (170,417)

Adjustments to reconcile income (loss) from operations to net cash used by operating activities:

Depreciation 138,140

Change in assets and liabilities: Increase in accounts receivable Decrease in payroll taxes payable Increase in accounts payable Increase in customer deposits payable increase in prepaid insurance

(958) (649)

10,795 718

(7,911)

Net cash used by operating aciivities (30.282)

(Concluded)

The accompanying notes arc an integral patt of this statement. 13

NO'TES TO FINANCIAL STATEMENT

14

Town of MeiTyvillc, Louisiana

Notes to the Financial Stateinents As of and for the Year Ended June 30, 201 1

INTROOUCIION

The Town of Merryville was incorporated under the provisions of ihc Lawrason Act. The Town operates under a Mayor-Board of .'\Idermen form of govemment.

The accounting and reporting policies ofthe Town of MeiTyville confoim to generally accepted accounting principles as applicable to governments. Such accounting and reporting procedures also conform to the requirements of Louisiana Revised Statutes 24:517 and to the guides set forth in the Louisiana Municipal .Audit and Accountinu Guide, and to the industry audit guide, Au<Iiis of State and Local Governmental Units.

'The Town maintains various funds that provide services and benefits to its citizens including repairs and maintenance of approximately 15 miles of roads and streets, and water, sewer, and garbage collection services to approximately 600 residents.

The Town is located within Beaufcgard Parish in the southwestern part ofthe Slate of Louisiana and is comprised of approximately 1.200 residents. The governing board is composed of five elected aldermen that are compensated for regular and special board meetings. There are approximately six employees who maintain the water and sewer systems and handle the clerical work for the Town. The police department consists of an elected chief of police and approximately four patrolmen.

GASB Statement No. 14. The Reporting Entity, established critena for determining the governmental reporting entity and component units that should be included within the reporting entity. Under provisions of this Statemeni, the municipality is considered a primary government, since it is a special purpose govemment that has a separately elected governing body, is legally separate, and is fiscally independent of other state or local governments. As used in G.ASB Statement No. 14, fiscally independent means that the municipality may, without the approval or consent of another governmental entity, determine or modify its own budget, levy its own taxes or set rates or charges, and issue bonded debt.

1. SUMMARY OF SIGMFICAM ACCOUNTING POLICIES

.A. Covcrnnicnt-Widc and Fund Financial Statements

The govemmenl-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all the nonfiduciary activities ofthe primary govemment. For the most part, the effect of interfund activity has been removed from these staicments. Governmental activities, which normally are supported by taxes and intergovemmental revenues, arc reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of a given function or segments are offset by prograin revenues. Direct expenses are those that arc clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that arc restricted to meeting the operational or capital requirements of a particular function or seginent. 'faxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for govemmental funds and proprietary funds. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the funds financial statements.

B. .Measurement Focus„ Ba.sis of Accounting;, and Financial Statement Presentation

'The government-wide financial statements arc reported using the economic resources measurement focus and the accrual basis of accounting, as is the proprietary fund financial statements. Revenues arc recorded when earned and expenses are recorded when a liability is incurred, regardless ofthe titning of related cash fiows. Property taxes are recognized as revenues m the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

15

'Town of .Merryville. Louisiana

Notes to the Financial Stalemcnts (Continued)

Governmental fiind financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues arc recognized as soon as they are both measurable and available. Revenues are considered to be available when they arc collectible within the current period or soon enough thereafter to pay liabilities of ihe cunent period. For this purpose, the govemment considers revenues to be available if they are collected within 60 days ofthe end ofthe current fiscal period. Expenditures generally arc recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Property taxes, franchise taxes, licenses, and interest associated with the cunent fiscal period are all considered lo be susceptible to accrual and so have been recognized as revenues ofthe cuirent fiscal period. All other revenue items are considered to be measurable and available only when cash is received by the government.

The municipality reports the following major governmental funds:

'The General Fund is the municipality's primary operating fund. It accounts for all financial resources of the general government, except for those in another fund.

The Special Revenue Fund accounts for and reports the proceeds of specific revenue sources, in the town's case, sales taxes, that are restricted, or committed to expenditures for specific purposes other than debt service or capital projects.

'The municipality reports the following major proprietary fund:

The Proprietary Fund accounts for operations (a) where the intent ofthe governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges, or (b) where ihc governing body has decided that periodic determination of revenues eamed, expenses incurred, and/or net income is appropriate for capital maintenance, public policy, management control, accountability, or other purposes.

Private-sector standards of accounting and financial teporling issued prior to December 1, 1989, generally arc followed in both the govemment-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance ofthe Govenimenial Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to this same limitation. The govemment has elected not to follow subsequent private-sector guidance.

As a general rule the effect of interfund activity has been eliminated from the govemment-wide financial statements. Exceptions to this general rule are paymcnts-in-Iicu of taxes and other charges between the governments' enterprise operations. Elimination ofthese charges would distort the direct costs and program revenues repoilcd for the various functions concerned.

>\mounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions. Internally dedicated resources arc reported as general revenues rather than as program revenues. Likewise, general revenues include all ta.xcs.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses geneially result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. Charges for services of providing water and sewer services to residents comprise the operating revenue ofthe Town's enterprise fund. Operating e,\penses for the enterprise fund includes the cost of sales and services, administrative expense, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When both restricted and unrestricted resources arc available for use, it is the municipality's policy to use restricted resources first, then unrestricted resources as they arc needed.

'fhe municipality has not established a policy for use of its unrestricted fund balance, therefore it considers coitimitted fund balances to be used first, then assigned fund balances to be used nc.Kt and finally the unassigned fund balance will be used.

fown of Merryville, Louisiana


C. Deposits and Investments

The municipality's cash and cash equivalents ate considered to be cash on hand, demand deposits, and short-tenn investments with original maturities of three months or less from the date of acquisition. State law and the municipality's investment policy allow the municipality to invest in collateralized certificates of deposits, government backed securities, commercial paper, the .stale sponsored investment pool, and mutual funds consi.sting solely of govemment backed securities.

D. Receivables and Payables

Activity between funds ihat are representative of lending/boiTOwing arrangements outstanding at the end ofthe fiscal year arc refened to as either "due to/from other funds" (i.e., the cunent portion of interfund loans) or "advances to/from other fund.s" (i.e., the non-current portion of interfund loans). All other outstanding balances between funds arc'reportcd as "due to/from other funds." Any residual balances outstanding between the governmental aciivities and business-type aciivities arc reported in the govemmeni-wide financial statements as "intemal balances."

Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable govemmental funds to indicate that they arc not available for appropriation and are not expendable available financial resources.

The Town levies taxes on real and business personal property located within the boundaries ofthe 'Town. Property taxes are levied by the Town on property values assessed by the Beauregard Parish Tax .Assessor and approved by the Slate of Louisiana 'Tax Commission.

The Beauregard Parish SherilT and Ex-Officio 'Tax Collector bills and collects property taxes for the Town. Collections arc remitted to the Town monthly. The "Town recognizes property tax revenues when levied.

Property Tax Calendar

Assessment date January 1. 2010 Levy date June 30, 2010 Tax bills mailed October 15, 2010 Total taxes are due December 31. 2010 Penalties & interest due January 31, 201 I Lien date January 31, 201 1 Tax sale May 15.2011

For the year ended June 30, 201 I, ta.xcs of S.34 mills were levied on properly with an assessed valuation totaling S 1,900,539, and were dedicated as follows:

Authorized Levied Expiration Miliage Millatie Date

Taxes due for: Renewed General corporate tax 8.34 8.34 Annually

All trade and property tax receivables are shown net of an allowance for uncollectibles. Property taxes are collected and remitted by the local sheriff, if taxes are not paid, a sheriffs sale is held and the property is sold to satisfy the ta.xes due on that property. Due to this, the majority, if not all property taxes are collected; therctbre no allowance account for luicollcctibles has been established. Water and sewer charges have customer deposits that have been collccled in advance therefore the majority of all water and sewer billing is collected or taken out ofthe customer's dcpo.sil, any allowance account would be immaterial, therefore one has not been established.

17

Town of Merryville, Louisiana

Notes to the Financial Statements (C-ontinued)

The following arc the principal taxpayers and related property tax revenue for the municipality:

% of'Total Ad Valorem "Tax Assessed Assessed Revenue for

'Taxpayer 'Type of Business Valuation Valuation Municipality Central Louisiana Electric, Co. Utility $ 129,220 6.80% S 1.078

iS'fl/i'.V y'c/.YL'.V

'The Town of Merryville receives a three-percent sales tax, which is dedicated to the maintenance ofthe sewer system (1%), repair and mainlcnance of streets and roadways (1%), and the collection and disposal of solid waste (i'^'i.)-

K. Prepaid Items

Certain payments lo vendors reflect cost applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

F. Restricted Assets

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

Bond rcseiAc fund - The Utility Revenue Bonds dated .Augu.st 10, 1978 require that a reserve fund be established. Money in the.se accounts is used to pay the maturing principal and interest on the bonds.

Depreciation and contingency fund - The Utility Revenue Bonds dated August 10. 1978 require that a depreciation and contingency fund be established. Money in this account is used for extensions, additions, improvements and replacements necessary to properly operate the system.

C. Capital .Assets

Capital as.scts, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), arc reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Caf)ital assets are capitalized at histoncal cost or estimated cost if hi.storical cost IS not available. Donated assets arc recorded as capital assets at their estimated fair market value at the date of donation. The municipality maintains a threshold level of S5,000 or more fbr capitalizing capital assets.

According to GASB 34 the Town of Merryville was not required to retroactively report infrastructure assets in its financial statements, therefore, fhc.sc assets have nor been reported in the financial .statements.

The costs of nonnal maintenance and repairs that do not add to the value ofthe asset or materially extend assets lives are not capitalized.

Major outlays for capital assets and improvcinents are capitalized as projects arc constructed. Interest incurred during the construction pha.se ofcapital assets of business-type activilies is included as part ofthe capitalized \'alue ofthe assets constructed. The total interest expense included during the cuircnt fiscal year was SIO,844. No interest was included as part ofthe cost ofcapital assets under construction in construction projects.

.All capital assets, other ihan land, are depreciated using the straight-lnic method over the following useful lives:

Description Estimated l.ivcs Roads, bndges, and infrastructure 40-50 years Land improvements 40-50 years Buildings and building improvements 40-50 years Fumiture and fixtures 5-15 years V'ehicies 5-10 years Equipment 3-15 years

IS

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http://pha.se


Notes to the Financial Statements (Continued)

II. Compensated .Absences

The municipality has the Ibilowing policy relating to vacation and sick leave:

Each fulilimc and pari tiitic pennanent niunici})a! employee shall cam annual vacation and sick leave as follows:

Vacation • Five (5) days wilh pay afler one (I) year employment. • Ten (10) days with pay after two (2) years employment.

Vacation days cannot be carried over from year to year.

'The least amount of vacation taken at one lime is one half (1/2) day.

'The board may, in its discretion, pay as rcrniinal pay all accumulated unused annual leave lime up to a maximum often (10) days of such annual leave upon the retirement or resignation of an employee. An employee dismissed for cause shall not be paid for any accumulated annual leave.

Employees required to work on an observed holiday shall receive compen.satory time off Holidays observed by the municipality shall not be counted as vacation leave.

Leave from work with pay may be charged as sick leave if the absence is due to sickness, bodily injury, quarantine, required physical or denial examinations, or treatment, exposure to a contagious disca.sc when continued work might jeopardize the health of others, illness in the immediate family ofthe employee which requires the care of the employee. .All such absences, except those resulting from inteinperance or immorality, shall be charged against the sick leave credit ofthe employee. Immediate family as used here shall consist ofthe husband or wife, as the ca.sc may be the father or mother, or children ofthe employee whether half or full blood.

Each employee shall cam two and one half {2 V'l) days after six (6) months of employment and two and one half (2 '/!:) days will be earned every six months thereafter with a maximum of Cwe (5) days per year being earned.

'The least amount of time taken fbr sick leave is one half (1. 2) day.

Sick leave may not be accurnulated for an indefinite period, and there is no maximum amount of sick leave, which may be accumulated.

'fhe supervising board or official shall determine when a certificate from a doctor is required to substantiate the necessity of sick leave, provided that sick leave claimed for diree days or less .shall not require such certificate. T^cpartmcni heads and.-br the board are responsible for the application of this provision so that there will be no abuse of sick leave privileges.

'There will be no pay for uiuused sick leave upon resignation or retirement of an employee

Sick leave may be used as maternity leave.

I. Long-Term Obligations

In the govcmmcnt-wide financial statements, and the proprietary funds types in the fund financial statcmcnis, long-term debt and other long-temi obligations are reported as liabilities in the applicable govemmental activities, busincs.s-typc activities, or proprietary fund type statement of net assets. Bond premiums and discounts, as well as issuance costs, arc deferred and amortized over the life ofthe bonds using the effective interest method. Bonds payable arc reported net ofthe applicable bond premium or di.scount. Bond issuance costs are reported as deferred charoes and amorti/:ed over the term ofthe related debt.

Town of VIerrvville, Louisiana


In the fund financial .statements, governmcntai fund types recognize bond premiums and discounts, as well as bond issuance costs, during the curreni period. 'The face amount ofthe debl issued is reported as other financing sources. Premiums received on debt issuances arc reported as other financing sources while discounts on debt issuances arc reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

J. Fund Equity

In the fund financial statetnents, governmental funds report reservations of fund balance for amounts that are not available fbr appropriation or are legally restricted Liy outside parties for use for a specific purpose. Designations o^ fund balance represent tentative management plans that are subject to change.

K. Extraordinary and Special Items

F^xlraordinary items are transactions or events that are both unusual in nature and infrequent in occurrence Special items arc transactions or events within the control ofthe municipality, which arc either unusual in nature or infrequent in occurrence

L. Estimates

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

M. Nonspendable Fiiiid Balance

The nonspendable fund balance classification includes amounts that cannot be spent tiecause they are cither (a) not in spendable form or (b) legally or contractually required to be maintained intact. The "not in spendable fortii" criterion includes items ihat are not expected to be converted to cash, for example, inventories and prepaid amounts, .^s for the 'Town of .Vlcrryvillc the nonspendable fund balance consist of prepaid amounts of insurance premiums.

STFAVARDSIIIP. COMPLIANCE AND ACCOUM ABILIi V

iUJDGETINFORMATION The municipality uses the following budget pracliccs:

1. The Town Clerk and .Vlayor prepare a proposed budget and submit it to the Board of Aldermen no later than fifteen days prior to the beginning of each fiscal year.

2. A summary ofthe proposed budget is published and the public notified that the propo.sed budget is available fbr public inspection. At the .same lime, a public hearing is called.

3. A public hearing is held on the proposed budget at least ten days after the publication ofthe call for the hearing.

4. After the holding of the public hearing and completion of all action necessary to finalize and implement the budget, the budget is adopted through passage of an ordinance prior to the commencement ofthe fiscal year for which the budget is being adopted.

5. Budgetary amcndinents involving the transfer of funds from one department, program or function to another or involving increases in expenditures resulting frotn revenues exceeding amounts eslimaied require the approval ofthe Board of .Aldermen. These amended amounts are shown in the financial .statements.

6. .All budgetary appropriations lapse at the end of each fiscal vear.

Town of .Merryville. Louisiana


7. The budgets for the General Fund and Special Revenue Fund are adopted on a basis consistent with generally accepted accounting principles {G.A AP). Budgeted amounts or as originally adopted, or as amended from time to time by the Board of .Aldermen.

EXCESS OE EXi'ENOnVRES OVER APFROERIA TIONS 'Ihc following individual funds had actual expenditures over budgeted appropriations for the year ended June 30, 2011.

Original Unfavorable

Fund Bud act Final Budget Actual Variance

Sales Tax Fund S 263.000 S 250,000 S 253,744 S 3,744

General Fund 379.722 568,422 580.246 11,824

CASH AND CASH LQUIVALENTS

At June 30, 2011, the municipality has cash and cash equivalents (book balances) totaling 5443,786 as follows:

Demand deposits S 237.340

Petty cash 200 Monev market investment accounts 206.246

Total S 443,786

fhcsc deposits arc stated at cost, which approximates market, ijndcr state law, these deposits (or the resulting bank balances) must be secured L')y federal deposit insurance or the pledge of securities owned by the fiscal agent bank. 'The market value ofthe pledged .securities plus the federal deposit insurance must at all limes equal the amount on deposit with the fiscal agent. These securities are held in the naine ofthe pledging fiscal agent bank in a holding or custodial bank that is mutually acceptable to both parties.

At June 30, 2011, the municipality has S46L116 in deposits (collected bank balances). These deposits are secured from risk by S449,183 of federal deposit insurance and $1 1,933 of pledged securities held by the custodial bank in the name ofthe fiscal agent bank (G.ASB Category 3).

Even though the pledged securities are considered uncollateralized (Category 3) under the provisions of G.ASB Statement 3, R.S. 39:1229 imposes a statutory requirement on the custodial bank to advertise and sell the pledged securities within 10 days of being notified by the municipality that the fi.scal agent has failed to pay deposited funds upon demand.

RECEIVABLES

'Ihc receivables ofS74,205 at June 30, 201 I, arc as follows:

('lass of receivable 'Taxes:

Ad valorem Sales and use Franchise Occupational licenses

Intergovernmental Accounts

Total

General Fund

S

S

8,037 -

8.485 -

5.808 -

22,330

Spec

S

S

ial Revenue Fund

-28.644

-5.823

--

34.467

Proprietary I'und

s ----

17,408 S 17.408

S

s

Total

8,037 28,644

8,485 5,823 5,808

17,408 74,205

21

5.

'Town of Merryville, Louisiana


CAPITAL ASSETS

Capital asscis and depreciation activity as of and for the year ended June 30, 2011, for the primary govemment is as follows:

Beginning Balance Increases Decreases

Ending Balance

Governmental activities: Capital assets, not being depreciated

Land

Capital assets being depreciated Buildings Vehicles Improvements other than buildings Machinery and equipment

Total capital assets being depreciated

Less accumulated depreciation for: Buildings Vehicles Improvements other than buildings Equipment

Total accumulated depreciation

Total capital a.ssets being depreciated, net

Business-type activities: Capital assets, not being depreciated

Land Construction in progress

Total capital assets being depreciated Capital assets not being depreciated

Buildings Improvements other than buildings Machinery and equipment Vehicles

Total capital assets being depreciated

Less accumulated depreciation for: Buildings Improvements other than buildings Machinery and equipment Vehicles

Total accumulated depreciation

'Total business-type assets being depreciated, net

.600 ,600

163,091 99,647

269,535 200,008 732.281

77,569 62,513

135,599 155,204 430,885

S 301,396

Beginning Balance

S 37,666 321,356 359.022

18,328 4,733,540

211.229 17.907

4.981.004

776 2.839,356

95,608 17,907

2.953,647

S 2.027.357

34.975 10,154 45.129

4,615 11,955 7,069 7.713

31.352

S 13,777

Increases

S 433.709 433,709

-

459 113.391 24,290

138.140

S (138,140)

S

S

_S_

-

-

-

-

Decreases

-

-

-

-

-

-

_

l(i3,091 99,647

304,510 210,162 777,410

82,184 74.468

142.668 162.917 462,237

S 315,173

Ending Balance

S 37,6)66 755,065 792.731

18.328 4,733,540

211,229 17,907

4.981,004

1.235 2,952.747

119,898 17.907

3.09 L7S7

S L8S9,217

9?

'fown of Merryville. Louisiana


Depreciation expense of 531,352 for the year ended June 30, 2011, was charged to the following governmcntai functions:

Public works S 3,080 Public safety 18,594 General administration 9,678

Total S 31,352

6. CONSTRUCTION COMMITMENTS

'The municipality has active construction projects as of June 30, 2011. The fown of Merryville has a wastewater improvement project in progress that will upgrade and add to the current wastewater system. At year end the commitments wilh contractors are as follows:

Remaining Pfoiect Spent to Date Commitment

Wastewater Improvement Project S 755,065 S 244.935

7. INTtRIUNI) RECEIVABLES, P.VVABLES, AND TRANSFERS

The Town of .MeiTyville has a three-percent sales tax that is collected and deposited into a special revenue sales tax fund. The money is then transferred out ofthe sales lax fiind and split between the general fund and proprietary fund according to the percentage found in the sales lax resolution, 'fhcsc transfers are completed on a monthly basis and are routine transfers for the town.

Special revenue

General fund

Proprietary fund

Total

General fund

Proprietary fund

Total

fund

1

S

s

S

s

Vansfer in

168.329

79,311

247,640

Due To

1,470

1.470

Transfer out

S 247.640

S 247,640

Due From

S 1.470

S 1.470

8. ACCOUN IS AND OTIIER PAYABLES

'The payables of 544,174 at June 30, 2011, arc as follows:

/ithholdings xcounts Total

General Fund

5 3.338

22,801 S 26,139

Special

Revenue

Fund

S 1,906

S 1,906

Proprietary

Fund

5 1,430

14.699

5 16.129

5

5

Total

4,768

39,406 44.174

23

'fown of .Vlcrryvillc, Louisiana


LONG-TERM OBLIGAI IONS

'The following is a summary ofthe long-lenn obligation transactions for the year ended June 30, 2011

Bonded Dclit Long-lenn obligations at beginning of year Additions Deductions Long-term obligations at end of year

S 236,375

(22,000) 5 214.375

'The following is a summary of the current (due in one year or less) and the long-term (due in more than one year) portions of long-term obligations as of June 30, 2011:

Current portion Long-term portion

'Total

Bonded Debt S 23.000

I9L375 S 214,375

.All municipal bonds outstanding al June 30, 201 I, for 5214,375, are revenue bonds with maturities from 2011 to 20IS and the interest rate at 5%. Bond principal and interest payable in the next fiscal year are 523.000 and 510,719, respectively, 'fhe individual issues arc as follows:

Original Bond Issue

Utilities Revenue Refunding Bonds Series 1978 S 550,000

Year Ending June 30, 2012 2013 2014 2015 2016

2017-2019 'Total

Final Interest Rate Payment

5%

S

S

Due

8/10/2018

Principal Payments

23,000 24.000 25,000 26,000 27,000 89,375

214,375

5

5

Interest to .Maturitv

5 50,703

Interest Payments

10,719 9,569 8,369 7,119 5,819 9,108

50.703

Principal Outstanding

S 214,375

Total 5 33,719

33.569 33,369 33,119 32,819 98,483

5 265,078

Funding Source

Water revenues

In accordance with R.S. 39:562, the municipality is legally restricted from incurring long-term bonded debt in excess of 35% ofthe assessed value of taxable property. At June 30, 2011, the statutory limit is 5665,189 and outstanding bonded debt totals 5214.375.

24


Notes to the Financial Statements (Concluded)

10. RESTRICTED RETAINED EARNINGS/FUND BALANCES

'The Proprietary Fund - The Utility Fund had restricted net assets available as follows:

Restricted assets: Reserve and conlingeney accounts _5 100,642

Less: Liabilities payable from restricted assets:

Customers deposits 5 Current portion of bond Accrued interest on bond

'fotal

Restricted net assets

The Special Revenue Fund - The Sales Tax Fund had rcslrictcd fund l^alances available as follows:

Restricted a.ssets: Sales tax cash account 5 81.937 Sales taxes receivable 28,644 Occupational licenses receivable 5,823

'Total 5 116,404

5

5

23,000 9.516

32,516

68,126

Less: Liabilities payable from restricted assets:

Accounts payable _S 1.906

Restricted fund balance S 1 14,498

Z-i

REQUIRED SUPPLEMCN'TAL INFORMATION

Town orMcrrvvillc, Louisiana .Schodutc I

General I'und

St.iiumcnl of Revenues, Expendiuircs and Changes in 1-und rtaianccs

Uudgcl and Actual

I"or the Year Ended June 30. 2011

Budiiet to GAAP

Revenues

Ta-xes.

Ad valorem

Alcohol

'I'obacco

Franchise fees

Gaming

Charge.'; for-iorvicei;

Inicrijovcnimcnlal:

Federal grams

Slate grants

l-oca! grants

C)ccu[iaiional licctiser; and purmits

Fines and forfcittires

Rentals

Other revenue

Total revenues

[Judi-'Cied Anmuni

Oriii inal

S 25,000

2.500

1.706

40.000

2.000

21.440

5.000

12.000

500

25

SO.OOO

3.125

1,100

S 1"4..V)6

\-

S

s

s

inal

30.000

2.500

1.706 34.000

2,000

24.440

35.0(tO

500

24,000

2'.»0,000

4,000

I.IOO

44tJ.246

.•\ctual Amount

lUiduelarv Hasis

S

S

23,740

2,657

42.533

2.41S

31.750

5,S75

34,<J75

-24,6^0

2^^5.452

4.464

3.354

471.90S

differences

over (under)

S (6,260)

157

(1,706)

S.533

418

7.310

5.S75

(25)

(500)

690

5,452

464

2.254

S 22.662

Acttwl Amount

GAAP Basis

S 23.740

2,6. ^7

-42.533

2.4 IS

31.750

5.S75

34.975

-24,6'JO

295.452

4,464

3.3-M

% 471,90s

Fxpenditures

General government

andadmini.straiinn

Public saiety

l*ubtic works

Capital oiiilav

'I'oial e.xpenditures

l:.\cess fdeficiencv) o f revenues

over e.\penditures

S

s

^

165.328

111.144

103,150 100

379.722

(K'i5,326)

S

S

s

175,044

162.244

196.034

35,100

5{.S,422

(110. ]?(,)

S

s

%

16S.8S2

164,673

201,562

45.129

5R0.246

(IOS,33Sl

S

s

s

6.162

(2,429)

{5.52S)

(10.029)

(11,824)

10.838

S

s

%

I6S.SS2

164.673

201.562

45.12')

5S0.246

(108,335)

Town oCMerryvil lo. Louisiana Schedule

Cien'jral l-'und

Statement o f Revenues. R.\pendiiures and Changes in Fund Balances

Budget and .Attual

Foi the Year landed June 30, 2011

Other fin.incing ,^c.nlrtes:

Transfer in

Gain on sale o f assets

total other financing sources


Fund balances at beginning o f vear

I'und balances at end o f year

5

S

.S

S

iJudiiete

Orii:inal

191.000

191.000

5.674

92.002

')7.676

d Amounts

1-

S

%

^

%

tnal

170.000

170.000

^0.824

y4.3"'8

145,202

Act

Bud

S

s

s

s

tial Amount

uetarv Basis

168.329

SS2

169,211

—

60,873

94.378

155.251

Budge'

d i l l

over

S

s

s

s

1 to GAAP

erenccs

(under)

(1.671)

882

(789)

10,049

10.049

/

S

_s

s

s

(Continued)

lettial Amount

GAAP Basis

168,329

882

169.211

60.873

94.378

155.251

(Concluded)

'I'own of .Mcrrvville. l.ouisian:i Schedule 2

Special Revenue Fund

Sales Ta.\ Fund Statement of Revenues. E.\penditures and Changes in Fund Balances

Buiiget and .Actual

For the \'ear Ended June 30. 2011

Revenues Ta.xes:

Sales Occupalional licenses and permits

Total revenues

Expenditures Ciencral government

and administration

l-;xcess (deficiency) of revenues over expenditures

Other llnancing sources (uses): Transfers out


Fund balances at beginning of year

l-'und balances at end of vear

Budyeted .Amounts Oriiiinal

Budget to GAAP .Actual Amount dilfcrences Actual Amount

Final Budgetary Basis over (under) G.A.M' Basis

$ 223,220 S 290.000 .S 290,660 S

40.201 30.000 32.408

5.000 S 5.000 S

258.421 S 315.000 % 316,965 S

48,420 S .5.174 .•> 114,4')8 S

660 S 290.660

2.408 32.408

263,421 S 320.001) S 323.068 S 3,06S S 323.068

6.103 % (1.103) S 6,103

l.')65 S 316,965

S (258.000) S (245.000) S (247.641) S (2.641) S (247.641)

S 421 S 70.000 .S 09.324 S (676) S 69.324

47,99'> 45,174 45.174 - 45.174

(67f.) S 1I4.4*J8

OTHER SUPPLEMENTAL INFORMATION

30

Town of Merryville, Louisiana Schedule 3

Schedule of Per Dicm Paid to Board Members Year Ended June 30. 201 I

L oard Members

Elton Havens

Teresa TIavens

Beaver Knighton

Sarah Whitehead

Tami I.ongoria

Brenda Jeans

5

5

'fotal Paid

1.250

650

L250

1,250

1,250

600

6,250

31

OTHER REPORTS

32

Town of Merryville, Louisiana Schedule 4

Schedule of Prior Year Audit Findings YearEnded June 30, 2011

Findinus- Financial Statement Audit

'fhcrc were no prior year audit findings as of June 30. 2010.

33

'Town of Merryville, Louisiana

Schedule of Current Year Audit Findings and Management's Response Year Ended June 30, 2011

Schedule 5

Findings - Financial Statement .Audit

Audit Finding No. 2011-1

Sale of .scrap iron not deposited to public funds account.

Condition:

Criteria:

Cause of Condition;

Effect of Condition;

Recommendation;

The town sold scrap iron for cash. The cash was kept on hand and not tlepositcd to a public funds account. 'The cash was used to pay for employee's nicals.

The Louisiana Constitution prohibits the use of public funds for private purposes. Also generally accepted accounting principles relating to intemal controls arc deficient when cash is not timely deposited to the fown's bank account.

The mayor and town clerk did not reali/.e that this violated the Louisiana Constitution for use of public funds, or that it created a significant deficiency in intemal control.

The Louisiana Constitution for the use of public funds has been violated along with other state .statutes. A significant deficiency in interna! controls over public funds e.\ist.

I reeomniend that all public funds from whatever source be deposited into the public funds checking account and these funds only be used for public purposes.

34

Schedu l e 5

T D W N O F MERRYVILLE MERRYVILLE, LOUISIANA 7 0 6 9 3

December 22.2011

Mr. Oaryl G. Purpera, CPA, Ci"E LouisiLina Legislative Auditor P.O. Box 94397 Baton Rouge, 1 .a 70804-9397

Dear Mr. Eurpcrn.

We recently tlni.shcd our i nniiiil audit and one finding was noted.

.Vvidit finding No.. 2011-1

The Town of Mcro'ville collccled scrape iron that was placed by the side ot the road by residents to be picked up. The Town of Merryville sold ihe scrape iron Tor eayh. The money was placed in a baij and was used lo pay for employee meals during the lioliday.s. Aller ihe money was ." pcnt, tlie reeeipicd were then dispo.sed of.

Oi;r response to ;hc Imding is .slated below:

We did not realize ihat we etjuid not iLse the money collected from the scrape iron for employee meals. In ihe future all money collected from ihe sell of .scrape iron will be deposited into ihe (ieneral Fund account for public purposes and all receipts from the .sale of iron will be kept on file.

I, the Mayor of Merryville. have been made aware ol'siliiaiion and will monitor the sell of scrape iron more closely to make sure ihal this does not happen again.

Sincerely yours

Earry Carroll, Mayor Town of Merry vilie

35

John A. Windham, CPA A Professional Corporation

1620 North Pine Street John A. Windham, CPA DeKidder, LA 70634 Tel: (337) 462-3211 Fax: (337) 462-0640

REPORT ON IN'TERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STA'TEMENTS PERFORMED IN ACCORDANCE WITII GOVERNMENT AUDITING STANDARDS

The Honorable Lairy Carroll, Mayor and the .Members ofthe Board of Aldermen

Town of Mcnyvillc, Louisiana

I was engaged to audit the financial staicments ofthe govemmental activities, the business-type activities and each major fund ofthe "Town of Merryville, Louisiana, as of and for the year ended June 30, 2011, which collectively comprise the Town of Merryville. Louisiana's basic financial statements and have issued my repon thereon dated October IS, 2011,1 would have conducted my audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller Geneial of the United States.

Internal Control Over Financial Reporting

In planning and performing my audit that I would have conducted, I considered the 'Town of Merryville, Louisiana's intemal contiol over financial reporting as a basis for designing my procedures for the puiposc of expressing my opinions on the Iinancial statements, but not for the puipose of expressing an opinion on the effectiveness ofthe Town of Merryville, Louisiana's internal control over financial reporting. Accordingly, I do nol express an opinion on the effectiveness ofthe Town of MeiTyville, Louisiana's intemal control over financial reporting.

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

My consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or materia! weaknesses. I did not identify any deficiencies in mtcmal control over financial reporting that we consider to be material weaknesses, as defined above. However, I identified certain deficiencies in intemal control over financial reporting, described in the accompanying schedule of current year audit findings and management's response that 1 consider to be significant deficiencies in intemal control over financial reporting. Audit Finding No- 2011 -1. A significant deficiency is a deficiency, or a combination of deficiencies, in intemal control that is less severe than a material weakness, yet important enough to merit ancntion by those charged with governance.

36

f

The Honorable Larry Carroll, Mayor Town of Merryville, Louisiana Page 2

Compliance and Other Malters

As part of obtaining reasonable assurance about whether the 'Town of MeiTyville, Louisiana's financial staicments are free of material misstatement, 1 performed tests of its compliance with cenain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with tho.sc provisions was not an objective ofthe audit I would have conducted and, accordingly, I do not express such an opinion. The results of my lesls di.scloscd an instance of noncompliance or other matters that is required to be reported under Governmeni Auditing Standard and which is described in the accompanying schedule of cuircnt year audit findings and management's response as Audit Finding No. 2011-1.

'Town of MeiTyville, Louisiana's response lo the finding identified is described in the accompanying schedule of current year audit findings and management's response. 1 did not audit the Town of MeiTyville. Louisiana's respon.se and, accordingly, I express no opinion on it.

'fhis report is intended solely for the information and use of management, others within the organization, the Board of Aldermen, and the Louisiana Legislative Auditor and is not intended lo be and should not be u.sed by anyone other than these specified parties, although under Louisiana Revised Statute 24:513, this report is distributed by the Louisiana Legislative Auditor as a public document.

M/ - IdM^, cpfi DeRidder. Louisiana October IS, 2011

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