village of fenton internal audit

7/30/2019 Village of Fenton internal audit

1/48

^ ^ 5 7 ^

VILLAGE O F FEN TON, LOUISIANAANNUAL FINANCIAL REPORT AN D INDEPENDENTAUDITORS' REPORTS

YEAR ENDED JUNE 30, 2012

Under pi'ovisions of state law tiiis report is a puolicdocunienf Acopy of the report has been subniftted tothe entity and Oiher appropnate fxiblic officials Thereport is available for public inspection at the BatonRouge office of the Legisiative Auditor and whereappropnate, ai the office of the parish clerk of court

Release Date AP R 2 4 2013

G R A C S O N , C A S I D A Y & GUILLORV, L L PC E R T I F I E D P U B L I C A C C O U N T A N T S


2/48

CONTENTS PageMANAG EMENTS DISCUSSION AND ANALYSIS (UNAUDITED) 3-11INDEPENDENT AUDITOR S' REPORT 12BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTSStatement of net assets 15Statement of activities 16FUND FINANCIAL STATEMENTSBalance sheet-governmental funds 19Reconciliation of the balance sheet-Governmental Funds to the statementof net assets 20Statement of revenues, expenditures, and changes in fund balances-governmental funds 21Reconciliation ofth e statement of revenues, expenditures, and changes infund balances-governmental funds to the statement of activities 22Statement of net assets-propne tary fund 23Statement of revenues, expenses and changes in net assets - propnetary fund 24Statement of cash flows - propnetary fund 25NOTES TO BASIC FINANCIAL STATEMENTS 26-40

REQUIRED SUPPLEMENTAL INFORMATIONBudgetary companson schedule-general fund and special revenue fund 42-43

INDEPENDENT AUDITORS" REPORT ON INTERNAL CO NTROL OVERFINANCIAL REPORTING AND COMPLIANCE AND OTHER M ATTERSBASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED INACCORDANCE WITH GOVERNMENT AUDITING STANDARDS 44-45SCHEDULE OF FINDINGS AND RESPONSES 46-48

G R A C S O N , CASIDAV & G L I I LOin, L L PC E R T I F I E D P U B L I C A C C O U N T A N T S


3/48

VILLAGE OF FEN TON. LAManagement's D iscussion and Analysis

Within this section of the Village of F enton, LA's (Village) annual financial report, the Village'smanagement is pleased to provide this narrative discussion and analysis o fth e financial activities ofthe Village for the year ended June 30, 2012 The Village's financial performance is discussed andanalyzed within the context of the accompanying financial statements and disclosures following thissectionFINANCIAL HIGHLIGHTS

The Village's assets exceeded its liabilities by $1,995,884 (net assets) for the fiscal yearreported Total revenues of $859,355 exceeded total expenditures of $739,356, which resulted in acurrent year surplus of $119,999. compared to pnor year surplus of $228,892 Total net assets are compnsed of the following

(1) Capital assets, net of related debt, of $1,720,328 include property an d equipment, net ofaccumulated depreciation, and reduced for outstanding debt related to the purchase orconstruction of capital assets(2) Restncted for special revenue, capital outlay and debt sen/ice of $82,403(3) Unassigned/unrestncted net assets of $193,153 represent the portion available tomaintain the V illage's continuing obligations to citizens and creditors

The Village's govemmental funds reported total ending fund balance of $248,603 this yearThis compares to the pnor year ending fund balance of $207,138, reflecting an increase of$41,465 dunng the current year, compared to an increase of $100,118 in the pnor year At the end of the current fiscal year, unassigned fund balance for the General Fund was$166,200 Overall, the Village continues to struggle financially although an improvement has been madeover the pnor fiscal years The Village is continuing to work to improve on this financialposition

The above financial highlights are explained in more detail in the "financial analysis" section of thisdocumentOVERVIEW OF FINANCIAL STATEMENTSThis Management's Discussion and Analysis document introduces the Village's basic financialstatements The basic financial statements include (1) govemm ent-wide financial statements, (2) fundfinancial statements, and (3) notes to the basic financial statements The Village also includes in thisreport additional information to supplement the basic financial statements Comparative data ispresented when available

GUACSON, CASIOAN & Gi;iLLOR\, L L PC E R T I F IE D P U B L I C A C C O U N T A N T S


4/48


5/48

VILLAGE OF FENTON, LAManagement's Discussion and Analysis (Continued)

The basic govemmental fund financial statements are presented on pages 19 through 22 of this reportPropnetary funds are reported in the fund financial statements and generally report services for wh ichthe Village charges customers a fee The one Village propnetary fund is classified as an enterpnsefund This enterpnse fund essentially encompasses the same functions reported as business-typeactivities in the govemment-wide statements Sen/ices are provided to customers extemal to theVillage organization for water and sewer utilitiesThe basic enterpnse fund financial statements are presented on pages 23 through 25 of this reportNOTES TO THE BASIC FINANCIAL STATEMENTSThe accompanying notes to the financial statements provide information essential to a fullunderstanding of the govemment-wide and fund financial statements The notes to the financialstatements begin on page 26 of this reportOTHER INFORMATIONIn addition to the basic financial statements and accompanying notes, this report also presents certainrequired supplemental information conceming the Village's budget presentations Budgetarycompanson statements are included as "required supplemental information" for the general fund a ndthe special revenue fund These statements and schedules demonstrate compliance with the Village'sadopted and final revised budget Required supplemental information can be found on pages 42through 43 of this report

G R A C S O N , CASIOAY & Gun I OR ^, L L PC E R T I F IE D P U B L I C A C C O U N T A N T S


6/48


FINANCIAL ANALYSIS OF THE VILLAGE AS A WHOLEOver time, as year-to-year financial information is accumulated on a c onsistent basis, changes m netassets may be observed and used to discuss the changing financial position of the Village as a wh oleThe Village's net assets at fiscal year-end are $1,995,884 The following table provides a summary ofthe Village's net assets

AssetsCurrent assets andother assetsCapital assetsTotal assetsLiabilitiesCurrent liabilitiesLong-term liabilitiesTota l tiabitrtresNet assetsInvestment in capita)assets, net of debtRestnctedUnasstged/UnrestnctedTotal net assets

GovernmentalActivities2012

$ 300,043921,5981.221.641

78,26752.620130.887

842,15182,403166,2001,090,754

2011$ 241,645815.6581.057.303

63.55242.904106.456

590,618116,476(9,456)fi 6 97 638

Business-typeActivities2012

S 38,701899.433938.134

18.61314.39133.004

878,177-26.953 905.130

2011$ 35.924935.301

971.225

20,87921.80942.688

906.671-21.866fi 928,537

Total2012

$ 338.7441.821.0312.159.775

96.88067.011163.891

1,720.32882.403193.153S 1,995.864

2011$ 277,5691.750,959

2.028.528

67,01585.628152.643

1,646.881128,345100.659S 1.875.585

PercentageTotal2012 2011

16 % 14 %_84 _86J ^ % l f iQ%

59 % 44%41 56l i lQ% 1QQ%

86 % 88 %4 7_ iO _ _ 5iQQ% im %The Village ma intains a reasonable current ratio The current ratio compares cun-ent assets to currentliabilities and is an indication of the ability to pay cun'ent obligations The current ratio forgovemmental activities is 3 8 to 1 and 5 2 to 1 for 2012 and 2011, respectively, and for business typeactivities IS 2 1 to 1 and 1 7 to 1 for 2012 and 2011. respectively For the Village overall, the cur en tratio IS 3 5 to 1 and 2 5 to 1 for 2012 and 2011, respectivelyNote that approximately 77% (78% for 2011) of the governmental ac tivities' net assets are tied up incapital The Village uses these capital assets to provide services to its citizens However, wtthbusiness type activities, the Village has spent approximately 97% (98% for 2011) of its net assets oncapital Capital assets in the business-type activities also provide utility sen/ices, but they alsogenerate revenues for this fund Overall, 86% (88% for 2011) of the Village's total net assets areincluded in capital assets

GRACSON, CASIDAY & Gun i.oio, L L PC E R T I F I E D P U B L I C A C C O U N T A N T S


7/48


The following table provides a summary of the Village's changes in net assetsGovernmentalActivities

RevenuesProgramCharges for services/finesOperating grantsGeneralSales taxesOther taxesInterestOtherTotal Revenues

2012

$ 542.534135.97730,83945.9231116.520

771.804Program expensesGeneral govemment 390,038Public safetyPolice 197.572StreetsInterest 3.338Water and sewer -Total ExpensesExcess (deficiency)TransfersChange in netassetsBeginning net

590.948180.656137.4501

143,406

947.348

2011

$ 388,443195,04632,49749,435179.672

352.975

244,823151.176

3,928

399.927275,183(25.473)

249 710

697.638

Business-TypeActivities

2012 2011

$ 87.551 $ 96,626

87.551

1 492146.916

(60 857)37.450

(23.407)

928.537

98.826

145_.117148.408 145.117

(46 291)25.473

(20 818)

949_J55

TotalPercentage

Total2012 2011 2012

739.356119,999 228,892

Ending net assets S i.090 754 s 947 ^AA fi 905 ian fi ggflsa?

119,999 226.892

1 875.885 1.646.9931,9gfi,flB4 fi 1,675,685

2011

S 630,085 $ 487.269135 977 195 04630,63945,9231116.520

859.355 .

390.038197,672

4,630146.916

32.49749,435179.672773,936

244 823151,176

3,928145.117

73%16452

100%

53%271

_19

63%25471

100%

45%27127

545.044 1QQ% 1QQ%

G R A C S O N , CASIDAY & G L I I L O I O , LLPCERTIFIED PUBLIC A C C O U N T A N T S


8/48


GOVERNMENTAL REVENUESThe Village is heavily reliant on fines and grants to support governmental operations These provided86% (87% for 2011) of the Village's total revenues Also note that program revenues, excludinggrants, cover 70% (58% for 2011) of govemmental operating expenses This means that thegovernment's taxpayers and the Village's other general revenues fund 30 % (42% for 2011) of thegovemm ental activities As a result, the general economy and the local businesses have a majorimpact on the Village's revenue streamsGOVERNMENTAL FUNCTIONAL EXPENSESThis table presents the cost of each of the V illage's programs, including the net costs (i e , total costless revenues generated by the activities) The net costs illustrate the financial burden that was placedon the Village's taxpayers by each of these functions

Govemmental ActivitiesTotal Cost Net Costof Services of Services

2012 2011 2012 2011General govemment $390,038 $2 44 ,82 3 $ (254,061) $(4 9,7 77 )Public safetyPolice 197,572 151,176 344.926 237,267Streets . - . .Interest on long-term debt 3.338 3.928 (3.338) (3.928)Total $ 590.948 $ 399 927 $ 87.563 $ 183.562

BUSINESS-TYPE ACTIVITIESRevenues vs CostsThe operating revenues for the utility fund were 11 % less than 2011 and operating expenses 2% morethan 2011 Within the total business type activities o fth e Village, these activities reported a $60,857operating loss compared to an operating loss of $46,291 for the pnor year

G R A C S O N , C A S I U AY & G U H . L O I O , L L PC E R T I F I E D P U B L I C A C C O U N T A N T S


9/48

VILLAGE OF FENTO N, LAManagement's Discussion and Analysis (Continued)

FINANCIAL ANALYSIS OF THE VILLAGE'S FUNDSGovemmental FundsAs discussed, govemmental funds are reported in the fund statements with a short-term, inflow andoutflow of spendable resources focus This information is useful in assessing resources available atthe end of the year in companson with upcoming financing requirements Govemm ental fundsreported ending fund balances of $248,603 ($207,138 for 201 1), of which $82,403 is restncted forspecial revenue, capital outlay and debt service ($128,345 for 2011), and $166,200 is unassigned($78,793 for 2011) indicating availability for continuing Village service requirementsThe total ending fund balances of governmental funds show an increase of $41,465. compared to aincrease of $100.118 for the pnor yearMAJOR GOVERNMENTAL FUNDSThe G eneral Fund is the Village's pnmary operating fund and the largest source of day-to-day servicedelivery The General Fund's fund balance increased by $87,407 tn fiscal year 2011, the fundbalance increased by $88,249The revenues show an increase of $160,898 or 33% from the pnor year, mainly due to fines Theexpenditures side shows an increase of $156,146 or 40% over the pnor year, mainly due to generaland administrative expenses and capital outlayThe Sales Tax Fund continues to fund street repairs and capital outlay For the cuirent year sales taxrevenues decreased 5%THE PROPRIETARY FUNDThe propnetary fun d statements share the same focu s as the government-wide statements, reportingboth short-term infonnation about financial status Operating revenues decreased by $11,275 or 11 %and operating expenses increased by $1,799 or 1%BUDGETARY HIGHLIGHTSThe General Fund - the revenue and the expenditure side of the final budget for the G eneral Fundwere increased by $179,969 and $101,391 respectively this year from the pnor year's final budgetThe revenues were increased mainly for fines Expenditures were increased mainly for general andadministrative and public safety expendituresThe actual revenues were less than the final budget by $40,472, mainly due to fines, and the actualexpenditures exceeded the final budget by $60,067, m ainly due to general and adm inistrative andcapital outlayThe Sales Tax Fund - The actual sales taxes revenues were more than the final budget by $804

GRA CSO N, CASI OAY & GUILLOR 'V, L L PC E R T I F I E D P U B L I C A C C O U N T A N T S


10/48

VILLAGE OF FENTO N, LAManage ment 's D iscussion and Analys is (Cont inued)

CAPITAL ASSETS AND DEBT ADM INISTRATIONCapital assetsThe Vil lage's investment in capital assets, net of accumulated depreciation, for govemmental andbusiness-type activit ies as of June 30 , 201 2, wa s $921,598 and $899,433 respe ctively See Note Dfor addit ional information about changes in capital assets dunng the f iscal year and outstanding at theend of the year The fol lowing table provides a sum ma ry of capital asset activi ty

Non-depreciable assetLand $Construction in progress

Depreciable assetsBuildingsFumrture & equipmentTransportation equipment

Total depreciable assetsLess accumulated depreciation

GovemmentalActivities2 0 1 2

35,06537,900

803,270218,412211.061

1.232.743384.110

S

2 0 1 1

1,90079.016

530,114177,84591.762799.721247.115

Business-TypeActivities2 0 1 2

$ 14,790

1,399,55224 928.630

1.428,431543.788

2 0 1 1

$ 14,790

1.399.552249

1,399,801447.637

Total2 0 1 2

$ 49.85537.900

2,202,822216,661239.691

2.661.174918.898

$2 0 1 1

16,69018,456

1.919.701107.94681.381

2.109,028654.335

Book value-depreciable assets 848.633 552.606 S 884643 952,164 1 742,276 1.454 693Percentage depreaated 31 % 31 % 38% 32% 31 % 31 %Book value-all assets 921,598 633522 899433 966 954 1 821,031 1.489 839At June 30, 2012, the depreciable capital assets for governmental activi t ies were 3 1 % depreciated,compared to 31 % at June 30,2 011With the Vi l lage's business type activi t ies, 38% of the asset values were depreciated at June 30, 2012compared to 36% at June 30. 2011The major addit ions for the year were the purchase of 3 acres of land, a metal bui lding, a pol iceautomobile, and the LCDBG-Housing Accessibi l i ty ProjectLong-term debtAt the en d of the f iscal year, the Vi l lage h ad total debt outsta nding of $100,70 3 All of this am ount isbacked by the ful l faith and credit of the Vi l lage This includes lease obl igations payab le of $69,47 8 atthe end of the f iscal yearDunng the year, the Vi l lage issued $26,718 in debt and retired $30,093 of the outstanding debtbalance See Note C for addit ional information regarding long-term debt

G R A C S O N , C A S I D AY & G U I L L O I O , L L PC E R T I F I E D P U B L I C A C C O U N T A N T S10


11/48


ECONOMIC CONDITIONS AFFECTING THE VILLAGESince the pnmary revenue stream for the Village is utility charges and fines, the Village's utility chargesand fine revenues are subject to changes in the economyCONTACTING THE VILLAGE'S FINANCIAL MANAGEMENTThis financial report is designed to provide a general overview of the Village's finances, comply withfinance-related laws and regulations, and demonstrate the Village's com mitment to publicaccountability If you have any questions about this report or would like to request additionalinformation, contact the Village's Mayor, Eddie Alfred Jr P O Box 310, Fenton, LA 70640

GRACSON, CASIOAY & GUILLOK ^, LL PC E R T I F I E D P U B L I C A C C O U N T A N T S11


12/48

G R A G S O N , C A S I D A Y & G U I L L O R Y , L . L . P .C E R T I F I E D P U B L I C A C C O U N T A N T S

INDEPENDENT AUDITORS' REPORT

W G E O RG E G R A GS O N C P ARICHARD W CASrOAV C P ARAYMOND GUILLORY JR C P AGRAHAM A PORTUS E ACOY T V INCENT C P AM I C H EL L E L E E C P AB R A DL E Y J C A SI DA Y C P A C V AJ U U A W PO R T US C P AKAT HRYN BLESSINGTON C P AJ A C K LY N 8 R A N E F F C P A

November 20, 2012To the Honorable Eddie Alfred, Jr , Mayor and the Village C ouncilVillage of Fenton, LouisianaWe have audited the accompanying basic financial statements of the governmental activities, thebusiness type activities and each major fund of the Village of Fenton, Louisiana, as of and for theyear ended June 30 , 2012, as listed in the table of contents These basic financial statements arethe responsibility of the Village of Fenton, Louisiana's managem ent Our responsibility is to expressan opinion on these basic financial statements based on our audit Partial pnor year summanzedcomparative information has been denved from the Village's 2011 financial statements and, in ourreport dated December 12, 2011, we expressed unqualified opinions on the respective financialstatements of the governmental activities, the business-type activities, and each major fundWe conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of Amenca and the standards applicable to financial audits contained in GovemmentAuditing S tandard issued by the Comptroller General of the United States Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the basic financialstatements are free of matenal misstatement An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the basic financial statements An audit alsoincludes assessing the accounting pnnciples used and significant estimates made by management,as well as evaluating the overall basic financial statement presentation We believe that our auditprovides a reasonable basis for our opiniontn our opinion, the baste financial statements referred to above present fairly, in all matenalrespects, the respective financial position of the govemmental activities, the business type activitiesand each major fund of the Village of Fenton, Louisiana, as of June 30, 2012, and the respectivechanges in financial position and cash flows for the year then ended in conformity with accountingpnnciples generally accepted in the United States of AmencaIn accordance with Govemment Auditmg Standards, we have also issued our report datedNovember 20, 2012 on our consideration of the Village of Fenton, Louisiana's intemal control overfinancial reporting and our tests of its compliance wtth certain provisions of laws, regulations andcontracts and other matters The purpose of that report is to descnbe the scope of our testing ofinternal control over financial reporting and compliance and the results of that testing, and not toprovide an opinion on the internal control over financial reporting or on compliance That report isan integral part of an audit perfonmed in accordance with Government Auditing Standards andshould be considered in assessing the results of our auditAccounting pnnciples generally accepted in the United States of Amenca require that themanagement's discussion and analysis and budgetary companson information on pages 3 through 11and 40 through 41 be presented to supplement the basic financial statements Such infomiation,although not a part of the basic financial statements, is required by the Govemmental AccountingStandards Board, who considers it to be an essential part of financial reporting for placing the basicfinancial statements in an appropnate operational, economic, or histoncal context We have appliedcertain limited procedures to the required supplementary information in accordance with auditingstandards generally accepted in the United States of Amenca, which consisted of inquines ofmanagement about the methods of prepanng the infonnation and companng the information forconsistency with management's responses to our inquines, the basic financial statements, and otherknowledge we obtained dunng our audit of the basic financial statements We do not express anopinion or provide any assurance on the information because the limited procedures do not provideus with sufficient evidence to express an op inion or provide any assurance

145 EAST ST REET P O DRAWER 1847LAKE CHARLES LOUIS IANA 7O602 1847T E L (3 3 7 4 3 9 1 9 8 6 F AX 4 3 3 7 ) 4 3 9 1 3 6 012


13/48

BASIC FINANCIAL STATEMENTS

GR ACS ON, CASI OAY & Gun LOR"^ , L L PC E R T I F I E D P U B L I C A C C O U N T A N T S13


14/48

GOVERNMENT-WIDEFINANCIAL STATEMENTS

GRACSON, CASIDAY & GUILI.ORY, LL PC E R T I F I E D P U B L I C A C C O U N T A N T S14


15/48

VILLAGE OF FENT ON, LASTATEMENT OF NET ASSETS

June 30, 2012

ASSETSCashReceivablesPrepaidsCapital assetsLandCapital assets, netTotal assetsLIABILITIESAccounts and other accrued payablesCustomer depositsLong-temi liabilities

Due within one yearDue after one yearTotal liabilitiesNET ASSETSInvested in capital assets, net ofrelated debtRestnctedUnrestncted

Total net assets

Govemmenta lActivities$ 263,32333,5253.195

35.065886.5331.221,641

51.440-

26,82752,620130,887

842,15182.403166.200$ 1,090,754

Business-TypeActivities$ 26,12410.9881.589

14,790884,643938,134

7,8523,896

6,86514.39133,004

878,177-26,953

$ 905,130

Total$ 289.44744,513

4,78449,8551,771.176

2.159.775

59.2923,896

33,69267,011163.891

1,720,32882,403193.153$ 1.995.884

The accom panying notes are an integral part of the basic f inancial statements

G R A C S O N , CASIDAY & Guii.i. oio, L L PC E R T I F I E D P U B L I C A C C O U N T A N T S15


16/48

VILLAGE OF FENTON, LASTATEMENT OF ACTIVITIESYear Ended June 30, 2012

a in

>o ao => wZ ~

ActivitiesGovemm ental activitiesGeneral and administrativePoliceInterest on long-term debtTotal GovernmentalActivitiesBusiness-type activitiesWater and sewerInterest on long-term debtTotal primary government

Expenses$ 390,038

197,5723,338590,948146,9161.492$ 739,356

Program Revenues

Fees. Fines andCharaes for Services$

542,634

$

542,53487,551

630,085

OperatingGrants andContnbutions$ 135,977

135,977

$ 135.977

Net (Expense) Revenues andChanges in Net AssetsGovemmentalActivites

$ (254,061)344.962(3.338)

87,563

87.563

Primary GovernmentBusiness-TypeActivities$ - $

(59,365)(1.492)(60,857)

Total(254,061)344.962(3,338)

87,563(59,365)(1.492)26.706

General revenuesTaxes-Property taxes, levied for general purposesSales and use taxes, levied for general purposesFranchise taxesLicenses and pemriitsIntergovemmental - state revenue shanngInterestMiscellaneousTransfersTotal general revenuesChange in net assetsNet assets - BeginningNet assets - Ending

15,15530.83920.9329.8363.1531113.367(37,450)55,843143,406

947.348$ 1.090,754 $

-----.-37,45037.450(23.407)

928.537905,130 $

15,15530.83920.9329,8363,1531113.367-93,293119,999

1.875,8851,995,884

The accompanying notes are an integral part of the basic financial statements


17/48

FUND FINANCIAL STATEMENTS

G R A C S O N , C A S I D A Y & G U I L L O R Y , L L PC E R T I F I E D P U B L I C A C C O U N T A N T S17


18/48

MAJOR FUND DESCRIPTIONSGeneral Fund

The general fund is used to account for resources traditionally a ssociated with governmentswhich are not required to be accounted for in another fundSpecial Revenue Fund

The special revenue fund is used to account for specific revenues that are legally restrictedto expenditures for particular purposes The fund accounts for the receipt and use ofproceeds of the Village's 2 % sales and use taxCapital Protects Fund

The capital projects fund is used to account for financial resources to be used for theacquisition or constnjction of maior capital facilities (other than those financed by propnetaryfunds and trust funds)Debt Service Fund

To account for proceeds from debt sen/ice to pay on capital project debtPropnetary Fund

To account for the provision of water and sewerage services to residents of the Village Allactivities necessary to provide such services are accounted for in this fund, including, but notlimited to, ad ministration, operations, maintenance, financing and related debt service, andbilling and collection

G R A C S O N , C A S I DA Y & G U I LL O R Y , L L PC E R T I F IE D P U B L I C A C C O U N T A N T S18


19/48

VILLAGE OF FENTON. LABALANCE SHEET - GOVERNMENTAL FUNDSJune 30, 2012

ASSETSCashReceivables

AccountsIntergovemmental

Prepaid insuranceDue from other funds

TOTAL ASSETSLIABILITIESAccounts payableDue to other funds

TOTAL LIABILITIESFUND BALANCESAssignedUnassigned

TOTAL FUND BALANCESTOTAL LIABILITIES AND

FUND BALANCES

$

J=$

$

General213.437

3.195216.632

26,69723.73550.432

166,200166.200

216,632

S

Ts

_$_

SpecialRevenue

49.796

2,186

21,96873,950

1.0081,008

72,94272,942

73,950

$

$

J .

CapitalProjects

90

1,0081,098

-

1,0981,098

1,098

$

A$

J -

DebtService

8.3638,363

8,3638.363

8.363

$

s

$

2012Totals263,323

2.1863.195

31.339300.043

26,69724.74351,440

82,403166.200248.603

300.043

$

X$

2011Totals191.634

1.3829,9252,620

36.084241.645

5.01929.48834.507

128,34578.793207,138

241.645

The accompanying notes are an integral part ofthe basic financial statements

G R A C S O N , CASIDAY & G U I L L O R Y , LLPCERTIFIED PUBLIC A C C O U N T A N T S19


20/48

VILLAGE OF FENTON. LARECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDSTO THE STATEMENT OF NET ASSETSJune 30. 2012

Total fund balance for governmen tal fund at June 30, 2012 $ 248,603Total net assets reported for govem men tal activi ties in the statements ofnet assets is different because

Capital assets used in governme ntal activi ties are not f inancial resourcesand, therefore, are not reported in the funds Those assets consist ofLand $ 35,065Capital assets, net of $384,110 accumu lated depreciation 886,533 921.598

Long-temi liabilities at June 30, 2012Bonds payable (79.447)Total net assets of govem men tal activit ies at June 30. 2012 $ 1.090.754

The acco mpanying n otes are an integral part of the basic financial statem ents

G R A C S O N , C A S I DA Y & G U I L L O R V L L PC E R T I F IE D P U B L I C A C C O U N T A N T S20


21/48

VILLAGE OF FENTON, LASTATEMENT OF REVENUES. EXPENDITURES,AND CHANGES IN FUND BALANCES -GOVERNMENTAL FUNDSYear Ended June 30.2012

REVENUESTaxesLicenses and permitsIntergovernmentalFinesInterestMisoeltaneousTOTAL REVENUESEXPENDITURESCurrentGeneral and administrativePoliceCapital outlayDebt servicePnncipal

InterestTOTAL EXPENDITURES

General$ 36.0879.63640.124542 534-13.367641,948

236,283176.726114.74312,093

1,964543.809

SpeaalRevenueS 30.839-1.000-11-31,850

351-55,51610.626

1,37467.867

CapitalProiecls

$ -96.006--,98.006

--107.931--107.931

DebtService

$

------

2012Total$ 66.9269.B36139,130542.5341113.367771.804

238.634176,726278,19022,7193.338719.607

2011Total$ 69.32312.609198.139388 443176.579675.110

174,211133,332270,59211.7263.928593.789

EXCESS (DEFICIENCY) OFREVENUES OVER EXPENDITURESOTHER FINANCING SOURCES (USES)Proceeds from borrowingsOperating transfers inOperating transfers outTOTAL OTHER FINANCINGSOURCES (USES)NET CHANGES IN FUND BALANCESFUND BALANCES, BEGINNINGFUND BALANCES, ENDING

98139 (36.017) (9.925) 52 197 81.321

26.718(37.450)(10.732)87,40778,793

$ 166,200

-

(36.017)108.959

$ 72.942

-

(9.925)11,023

$ 1.098

-

-8.363

$ 8.363

26 718(37.450)(10,732), .41.465

207.138$ 248.603

44.27023.935(49.408)18.797

100,118107.020

$ 207.138

The accompanyinfl notes are an integral part of these financtal statements

G R A G S O \ , C A S ID A Y & Guii.i.OR , L LPCERTIFIED PUBLIC ACCOUNTANTS

21


22/48

VILLAGE OF FENTON. LARECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES ANDCHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIESYear Ended June 30, 2012

Total net changes in fund balances at June 30, 2012 perStatement of Revenues, Expenditures and Changes in Fund Balances $ 41,465The change in net assets reported for govemm ental activi t ies in thestatement of activities is different because

Governm ental funds report capital outlays as expenditures However,in the statement of activities, the cost of those assets is allocated overtheir estimated useful l ives and reported as depreciation expenseCapital outlay which is considered expenditures on the Statement ofRevenues, Expenditures and Changes in Fund Balances $ 180,936Depreciation expense for the penod ended June 30, 2012 (74,996) 105,940Govemmental funds reported bonded debt repayments as expendituresHowever, this expenditure does not appear in the Statem ent of Activi tiessince the payment is applied against the bond payable in the Statem entof Net Assets 22,719Govem men tal funds report debt proceeds as revenues Howeve r, thisrevenue does not appear in the statement o f activi t ies since the debtIS reported in the stateme nt of net assets (26,718 )

Total changes in net assets at June 30, 2012 per Statement of Activi t ies $ 143,406

The accomp anying notes are an integral part of the basic f inancial statements

G R A C S O N , C A S I D AY & Gull. l.ou^, L L PC E R T I F I E D P U B L I C A C C O U N T A N T S

22


23/48

VILLAGE OF FEN TON, LASTATEMENT OF NET ASSETS - PROPRIETARY FUNDJune 30, 2012

2012 2011ASSETSCurrent assetsCash and cash equivalentsReceivables, accounts, netPrepaid insuranceTotal current assetsFixed assets, net of accumu lated d epreciationTotal assets

LIABILITIESCurrent liabilitiesAccounts payableDue to other fundsCustomer depositsCurrent portion of long-term debtTotal current liabilities

Long-term debt, net of current portionNET ASSETSInvested in capital assets, net of related debtUnrestnctedTotal net assetsTOTAL LIABILITIES AND NET ASSETS

$

$

$

$ _

26,12410,9881.58938,701899,433938,134

1.2566.5963.8966,86518,613

14,391

878,17726,953905.130

938,134

$

$

$

$

20,55913,6181,74735,924935,301971,225

4,2256,5963,2376,82120,879

21,809

906,67121,866928,537

971,225

The accomp anying notes are an integral part of the basic financial statem ents

G R A C S O N , CASIDAY & GLn.i.om, L L PC E R T I F I E D P U B L I C A C C O U N T A N T S2 3


24/48

VILLAGE OF FENTON, LASTATEMENT OF REVENUES, EXPENSESAND CHANGES INNET ASSETS - PROPRIETARY FUNDYear Ended June 30, 2012

2012 2011OPERATING REVENUESWater salesSewer sen/ice cha rgesMiscellaneousTotal Operating RevenuesO P E R A T I N G E X P E N S E SInsuranceLicenses and feesMiscellaneousPersonal servicesPayroll taxesPostageProfessional feesRepairs and maintenanceSuppliesTelephoneTesting feesUtilitiesDepreciation

Total Operating ExpensesOPERATING INCOME (LOSS) (59,365) (46,291)NON-OPERATING REVENUES (EXPENSES)Interest expense ^ 1.492INCOME (LOSS) BEFORE OPERATING TRANSFER SOperating transfers in, netCHANGE IN NET ASSETSNETASSETS. BEGINNING

NETASSETS, ENDING

$ 51,99732,2173,337

87.551

10.1948295734.8202.6305984.35017.52717.7281,7262,85917,73035,868146,916

$ 60,11536.4632.248

98,826

6,9961,246

-32,0212,420420815

25.29128.2506161,500

15,40130,141145,117

$

(60,857)37.450(23,407)928.537905,130 $

(46,291)25,473(20,818)949,355928,537


G R A C S O N , CASIDAY & Gun I.OR>, L L PC E R T I F I E D P U B L I C A C C O U N T A N T S24


25/48

VILLAGE OF FENTON, LASTATEMENT OF CASH FLOWS -

PROPRIETARY FUNDYear Ended June 30. 2012

2012 2011CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customersPayments to suppliersPayments to employeesNet cash flows from operating activitiesCASH FLOWS FROM NON-CAPITAL FINANCINGACTIVITIESOperattng transfers in , netCASH FLOWS FROM CAPITAL AND RELATEDFINANCING ACTIVITIESPurchase of fixed assetsProceeds from capital leasesPnncipal paid ondebtInterest paid on debtNet cash flows from ca pital and relatedfinancing activitiesNET INCREASE (DECREASE) INCASHCASH - BEGINNINGCASH - ENDINGReconciliation ofoperating income (loss) tonet cash from o perating activitiesOperating income (loss)

Adjustment to reconcile operating income (loss) tonet cash provided (used) by operating activitiesDepreciation(Increase) decrease in receivables(Increase) d ecrease inprepaidsIncrease (decrease) inaccounts payable andaccrued expensesNet cash from operating activities

90,339(78,538)(34.820)(23.019)

37 450

(59.365)

(2.310)

91.676(82.561)(32.021)(22,906)

25.473

_$

(7.374)(1.492)(8,866)

5.56520.55926.124 $

(28,630)28,630

2.56717,99220,559

(46,291)

35,8682.630158

30.141(7,150)

-394

(23.019) (22,906)


G R A C S O N , C A S I D AY & Gbii I.ORV L L PC E R T I F IE D P U B L I C A C C O U N T A N T S25


26/48

VILLAGE OF FENTON, LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE A - SUMMARY OF SIGNIFICANT ACCO UNTING POLICIES

1 Reporting EntityAs the governing authonty of the V illage, for reporting purposes, the V illage of Fenton,Louisiana is the financ ial reporting entity The financial reporting entity consists of (a)the pnmary govemment (Village), (b) organizations for which the pnmary governmentIS financially accoun table, and (c) other organizations for which nature andsignificance of their relationship with the primary government are such that exclusionwould cause the reporting entity's financial statements to be misleading or incompleteGovemmental Accounting Standards Board Statement No 14 established cnteria fordetermining which component units should be considered part of the Village ofFenton. Louisiana for financial reporting purposes The basic cntenon for including apotential component unit within the reporting entity is financial accountability TheGASB has set forth cntena to be considered in determining financial accountabilityThis cntena includes1 Appointing a voting majority of an organization's governing body, anda The ability of the Village to impose its will on thatorganizationand/orb The potential for the organization to provide specificfinancial benefits to or impose specific financial burdens onthe Village2 Organizations for which the Village does not appoint a voting majontybut are fiscally dependent on the Village3 Organizations for which the reporting entity financial statements couldbe misleading if data of the organization is not included because ofthe nature or significance of the relationshipBased upon the application of these cntena, there are no component units included inthe Village's repo rting entity2 Basis of PresentationThe accompanying basic financial statements of the Village of Fenton, LA have beenprepared in conformity with governmental accounting pnnciples generally accepted inthe United States of Amenca The Governmental Accounting Standards Board(GASB) IS the accepted standard setting body for establishing gove rnmentalaccountmg and finana al reportmg pnnciples The accompanying basic financialstatements have been prepared in confonnity with GASB Statement 34, "BasicFinancial Statements and Management's Discussion and Analysis-for State and LocalGovernments", issued in June 1999

ContinuedG R A C S O N , C A S I D A Y & G L I I . I . O K > , L L PC E R T I F I E D P U B L I C A C C O U N T A N T S

26


27/48

VILLAGE OF FENTON, LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE A - SUMMARY OF SIGNIFICANT ACCOUN TING POLICIES - CONTINUED

Government-Wide Financial StatementsThe Statement of Net Assets and the Statement of Activities display informationabout the Village as a who le They include all funds of the reporting entity Thestatements distinguish between governmental and business-type activitiesGovernmental activities generally are financed through taxes, intergovemmentalrevenues, and other nonexchange revenues Business-type activities are finan ced inwhole or in part by fees charged to external parties for goods or servicesThe statement of activities presents a companson between direct expenses andprogram revenues for each of the functions of the Village's governmental activitiesand business-type activities Direct expenses are those that are specificallyassociated with a program or function and, therefore, are clearly identifiable to aparticular function Program revenues include (a) fees and charges paid by therecipients of sen/ices offered by the Village, and (b) grants and contnbutions that arerestncted to meeting the operational or capital requirement of a particular programRevenues that are not classified as program revenues, including all taxes, arepresented as general revenuesFund Financial StatementsThe Village uses funds to maintain its financial records dunng the year Fundaccounting is designed to demonstrate legal compliance and to aid management bysegregating transactions related to certain Village functions and activities A fund isdefined as a separate fiscal andaccounting entity with a self-balancing set of accounts The vanous funds of theVillage are classified into two categones govemmental and propnetary Theemphasis on fund financial statements is on major funds, each displayed on aseparate column A fund is considered major if it is the pnmary operating fund of theVillage or its total assets, liabilities, revenues, or expenditures of the individualgovemmental and e nterpnse fund is at least 10 percent of the corresponding total forall governmental and enterpnse funds of that category or type, and total assets,liabilities, revenues, or expenditures/expenses of the individual govemmental orenterpnse fund are at least 5 percent of the corresponding total for all governmentaland enterpnse funds combinedThe Village reports the following major fundsThe General Fund is the pnmary operating fund of the Village It accounts for allfinancial resources except those that are required to be accounted for in other fundsThe Special Revenue Fund is used to account for specific revenues that are legallyrestncted to expenditures for particular purposes This fund accounts for the receiptand use of proceeds of the V illage's 2% sales and use tax

ContinuedG R A C S O N , C A S I D AY & G U I I . L O R ' V , L L P

CERTIFIED PUBLIC ACCOUNTANTS

27


28/48

VILLAGE OF FENTON . LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

The Capital Projects Fund is used to account for the acquisition and construction ofmajor capital facilities other than these financed by the Enterpnse FundThe Debt Service Fund is used to account for debt proceeds utilized for capitalprojectsThe Enterprise Fund is used to account for operations (a) that are financed andoperated in a manner similar to pnvate business enterpnses-vt/here the mtent of thegoverning body is that the costs (expenses, including depreciation) of providinggoods or sen/ices to the general public on a continuing basis be financed orrecovered pnmanly through user charges, or (b) where the governing body hasdecided that penodic determination of revenues earned, expenses incurred, and/ornet income is appropnate for capital maintenance, public policy, managementcontrol, accoun tability, or other purposes The Village's enterpnse fund accounts forwater and sewer services3 Measurement Focus/Basis of AccountingMeasurement focus is a term used to descnbe '^A/hlch" transactions are recordedwithin the vanous financial statements Basis of accounting refers to "when"transactions are recorded regardless o fth e measurement focus appliedMeasurement FocusOn the government-wide statement of net assets and the statement of activities, bothgovernmental and business-type activities are presented using the economicresources measurement focus as defined in item b below In the fund financialstatements, the "current financial resources" measurement focus or the "economicresources" measurement focus is used as appropriate

a All governmental funds utilize a "current financial resources" measurementfocus Only current finan cial assets and liabilities are generally included ontheir balance sheets Their operating statements present sources and usesof available spendable financial resources dunng a given penod Thesefunds use fund balance as their measure of available spendable financialresources at the end of the penodb The propnetary fund utilizes an "economic resources" measurement focus

The accounting objectives of this measurement focus are the determinationof operating income, changes in net assets (or cost recovery), financialposition, and cash flows All assets and liabilities (whether current ornoncurrent) associated with their activities are reported Proprietary fundequity is classified as net assets

ContmuedG R A C S O N , C A S I D A Y & Gbiu.ORV L L P

CERTIFIED PUBLIC ACCOUNTANTS

28


29/48

VILLAGE OF FENTON, UKNOTES TO FINANCIAL STATEMENTSJune 30 , 2012NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

Basis of A ccountingIn the government-wide statement of net assets and statement of activities, bothgovernmental and business-type activities are presented using the accrual basis ofaccounting Under the accrual basis of accounting, revenues are recognized wheneamed and expenses are recorded when the liability ts Incurred or economic assetused Revenues, expenses, gams, losses, assets, and liabilities resulting fromexchange and exchange-like transactions are recognized when the exchange takesplaceGovernmental fund financial statements are reported using the current financialresources measurement focus and the modified accmal basis of accountingRevenues are recognized as soon as they are both measurable and availableRevenues are considered to be available when they are collectible within the currentpenod or soon enough thereafter to pay liabilities of the cun^ent penod For thispurpose, the government considers revenues to be available if they are collectedwithin 60 days of the end of the current fisca l penod Expenditures (including capitaloutlay) generally are recorded when a liability is incurred, as under accrualaccounting However, debt service expenditures are recorded only when payment isdueThe propnetary fund utilizes the accrual basis of accounting Under the accrual basisof accounting, revenues are recognized when eamed and expenses are recordedwhen the liability is incurred or econom ic asset used The Village applies allapplicable FASB pronouncements in accounting and reporting for its propnetary fund4 Budgets and Budgetary AccountingBudgets are adopted on a basis consistent with accounting pnnciples generallyaccepted in the United States of Amenca Annual appropnated budgets are adoptedfor all funds All annual appropnations lapse at fisca l year endPnor to the beginning of each fiscal year, the Mayor subm its a budget to the VillageAlderman The budget is prepared by fund, function and activity, and includesinfomiation on the past year, current year e stimates and requested appropnations forthe next fiscal yearThe Village Alderman holds public heanngs and may add to, subtract from or changeappropnations, but may not change the fonn of the budget Any changes in thebudget must be within the revenues and reserves estimated or the revenue estimatesmust be changed by an affirmative vote of a majonty of the government's councilExpenditures may not legally exceed budgeted appropnations at the activity levelThe budget was amended twice dunng 2012

Continued

G R A C S O N , C A S I D A Y & G u n i o i n , L L PC E R T I F IE D P U B L I C A C C O U N T A N T S29


30/48

VILLAGE OF FENTO N, LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

5 Cash and Cash EquivalentsCash includes amounts indemand deposits and time deposits with ongmal m atuntiesof 90 days or less Under state law, the Village may deposit funds in demanddeposits, interest-beanng demand deposits, money m arket accounts, or time depositswith state banks organized under Louisiana law and national banks having theirpnncipal offices inLouisianaThese deposits are stated at cost, which approximates market Under state law, thesedeposits (or the resulting bank balances) must be secured by federal depositinsurance or the pledge of secunties owned by the fiscal agent bank The marketvalue of the pledged secunties plus the federal deposit insurance must at all timesequal the amount ondeposit with the fiscal agent These secunties are held in thename of the pledging fiscal agent bank in a holding or custodial bank that is mutuallyacceptable to both parties At June 30, 2012, the Village has $313,864 indeposits(collected bank balances) These deposits are secured from nsk by federal depositinsurance6 Statement of Cash FlowsFor the purpose of the Statement of Cash Flows, for the enterpnse fund, the Villageconsiders all highly liquid investments with a matunty of three months or less whenpurchased tobe cash equivalents7 Interfund Receivables/PayabiesDunng the course of operations, numerous transactions occur between individualfunds for goods provided or services rendered These receivables and payables areclassified as due from other funds or due toother funds on the balance sheet8 Accoun ts ReceivableAccounts receivable include all amounts due from the customers o fth e Village's waterand sewer systems The Village provides an allowance for doubtful accounts, asneeded, for accounts deemed uncollectible This amount is $3,954 as of June 30,2012Uncollectible amounts due for ad valorem taxes and other receivables ofgovemmental funds are recognized as bad debts at the time infomiation becomesavailable which would indicate that the particular receivable isnot collectible

ContinuedG RA CS O N , CA S I D A Y & Gbii lOin, LLPC E R T I F I E D P U B L I C A C C O U N T A N T S

30


31/48

VILLAGE OF FENTON. LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

There appears to be concentration of credit nsk with regard to general accountsreceivable and more specifically accounts receivable for water and sewer user fees inthe Enterpnse Fund The Village's ability to collect the amounts due from the users ofthe Village water and sewer system and others (as reflected on the financialstatements) may be affected by significant economic fiuctuations, natural disaster orother calamity in this one concentrated geographic location9 Use of EstimatesThe preparation of the financial statements in confonnity with accounting pnnciplesgenerally accepted in the United States of Amenca requires management to makeestimates and assumptions that affect certain reported amounts and disclosuresAccordingly, actual results could differ from those estimates10 Capital AssetsCapital assets, which include property, plant and equipment are reported in theapplicable govemmental or business-type activities columns in the govemment-widefinan cial statements Capital assets are capitalized at histoncal cost or estimated costif histoncal is not available Donated assets are recorded as capital assets at theirestimated fair m arket value at the date of donationThe costs ofnonnal maintenance and repairs that do not add to the value oft he assetor matenally extend assets' lives are not capitalized Depreciation of all exhaustiblecapital assets is recorded as an allocated expense in the statement ofactivities, withaccumulated depreciation reflected in the statement of net assets Depreciation isprovided over the assets' estimated useful lives using the straight-line method ofdepreciation The range of estimated usefiji lives by type of asset is as follows

Buildings, plant and improvements 10-50 yearsEquipment 3-10 yearsTransportation and equipment 5 - 7 yearsIn the fund financial statements, capital assets used ingovernmental fund operationsare accounted for as capital outlay expenditures of the govemmental fund uponacquisition Capital assets used inpropnetary fund operations are accounted for thesame as in the government-wide statements

ContinuedG R A C S O N , C A S I D A Y & Guii.i.OR'v, LLP

CERTIFIED PUBLIC ACCOUNTANTS31


32/48

VILLAGE OF FENTON. LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

11 Compensated AbsencesVested or accumulated vacation leave that is expected to be liquidated withexpendable available financial resources is reported as an expenditure and a fundliability of the governmen tal fijnd that will pay it Amounts of vested o r accumulatedvacation leave that are not expected to be liquidated with expendable availablefinanaal resources are reported in the general long-term debt account group Noliability/expenditure is reported for these amounts Vested or accumulated vacationleave of propnetary funds is recorded as an expense and liability of those funds as thebenefits accrue to employees In accordance with the provisions of Statement ofFinancial Accounting Standards No 43, Accounting for Compensated Absences, noliability is recognized for that portion of accumulating sick leave benefits that it tsestimated will be taken as "terminal leave" pnor to retirement At June 30, 2012 theVillage's liability for compensated absences was $012 Lo ng -Te rm DebtThe accounting treatment of long-term debt depends on whether the assets are usedin govemmental fund operations or propnetary fund operations and whether they arereported in the government-wide or fund financial statementsAll long-term debt to be repaid from governmental and business-type resources arereported as liabilities in the govemm ent-wide statemen ts The long-term debt consistspnmanly of bondsLong-term debt for govemmental funds is not reported as liabilities in the fundfinancial statements The debt proceeds are reported as other financing sources andpayment of pnncipal and interest reported as expend itures The accounting forpropnetary fund long-term debt is the same in the fund statements as it is in thegovemment-wide statements13 Equity ClassificationIn the government-wide statements, equity is classified as net assets and displayed inthree componentsa invested in capital assets, net of related debt - Consists of capital assetsincluding restncted capital assets, net of accumulated depreciation and reducedby the outstanding balances of any bonds, mortgages, notes, or other borrowingsthat are attnbutable to the acquisition, construction, or improvement of thoseassetsb Restncted net assets - Consists of net assets with constraints placed on the useeither by (1) external groups such as creditors, grantors, contnbutors, or laws orregulations of other govemments, or (2) law through constitutional provisions orenabling legislation Continued

G R A C S O N , CA S I D A Y & G u n i.oio, L L PC E R T I F I E D P U B L I C A C C O U N T A N T S

32


33/48

VILLAGE OF FENTO N, LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

c Unrestncted net assets - All other net assets that do not meet the definition ofthe above mentioned categonesPropnetary fund equity is classified the same as in the govem ment-wide statementsIn the fund statements, governmental fund equity is classified as fund balance Fundbalance is further classified as assigned or unassigned

a Assigned fund balance - Includes fund balance amounts that are intended to beused for specific purposesb Unassigned fund balance - Includes positive fund balance within the general fundwhich has not been classified within the above mentioned categones

14 Sales TaxesProceeds of a 2 % sales and use tax levied by the Village of Fenton, LA arededicated for the maintenance and overlay of streets and capital outlay15 Re ven ue s, Expenditures, and E x p ensesProgram RevenuesProgram revenues included in the Statement of Activities are denved directly from theprogram itself or from parties outside the V illage's taxpaye rs or citizenry, as a wh ole,program revenues reduce the cost of the function to be financed from the Village'sgeneral revenuesRevenuesAd valorem taxes and the related state revenue shanng are recorded in the year taxesare due and payable Ad valorem taxes are assessed on a calendar year basis,become due on November 15 of each year, and become delinquent on December 31The taxes are generally collected in December, January and February of the fiscalyear Sales taxes are considered as "measurable" when in the hands of sales taxcollector and are recognized as revenue at that time Interest on interest-beanngdeposits IS recorded or accrued as revenues whe n earned Substantially all otherrevenues are recorded when receivedExpendituresThe Village pnmary expenditures include salanes and insurance, which are recordedwhen the liability is incurred Capital expenditures and purchases of vanous operatingsupplies are regarded as expenditures at the time purchased

Continued

G R A C S O N , C A S I D A Y & G U I I .L O R > , L L PC E R T I F IE D P U B L I C A C C O U N T A N T S33


34/48

VILLAGE OF FENTON. LANOTES TO FINANCIAL STATEMENTSJune 30. 2012NOTE A - SUM MARY OF SIGNIFICANT ACCOU NTING POLICIES - CONTINUED

Other Financing SourcesTransfers between funds that are not expected to be repaid are accounted for asother financing sources (uses) when the transfer is authonzed by the Village16 Subsequen t EventsManagement has evaluated subsequent events through November 20, 2012, the datethe financ ial statements we re available to be issued17 Comparative DataComparative totals for the pnor year have been presented in the accompanyingfinancial statements, although not on every statement, in order to provide anunderstanding of changes in the gove rnments finan cial position and operations

NOTE B - PROPERTY TAXESTaxes were levied on property as follows

Millaoe Assessed ValuationsGeneral corporate purposes 8 32 $ 991,583Property tax millage rates are adopted in July o fth e calendar year in which the taxesare levied and recorded All taxes are due and collectible when the assessment rollsare filed on or before November 15th of the current year, and become delinquent afterDecember 31st Property taxes not paid by February 28th are subject to property lien

NOTE C - LONG-TERM LIABILITIESThe following is a summary of changes in long-term liabilities of the Village of Fenton,LA

Governmental ActivitiesBonds payableOther LiabilitiesCapital Lease ObligationsGovernmental ActivitiesLong-Term LiabilitiesBusiness Type ActivitiesCapital Lease ObligationsTotal

Beginningof Year$ 41,851

33,59775.44828.630$104,078

Issued$

k

-26.71826,718

_26.718

Retired$ (10,626)

(12.093)(22,719)

(7.374)$ ^30.093)

Endof Year$ 31.225

48.22279.44721.256$ 100.703

Due W ithinOne Year$ 10.833

15.99426,8276.865S 33.692

Continued

G R A C S O N , C A S I D A Y & Guii.LOin, L L PCERTIFIED PUBLIC ACCOUNTANTS

34


35/48

VILLAGE OF FE NTON, LANOTES TO FINANCIAL STATEMENTSJune 30 , 2012NOTE C - LONG-TERM LIABILITIES - CONTINUED

The payments on the bonds payable are made by the Special Revenue Fund Thecapital lease obligations liability will be paid by the General Fund and EnterpnseFund General obligation bonds and capital lease obligations are compnsed of thefollowing individual issuesGeneral obligation bonds$47,500 2004 Public Revenue B onds due in monthlyinstallments of $238, including interest at 4 25% throughDecember 15. 2034, serviced by excess revenues of theVillage

The Village is required to maintain a resen/e and acontingency account as required by the USDA RuralDevelopment Loans However, the Village does notmaintain such resen/e accounts nor has any monetarydeposits been made to such accounts $ 31,225Capital lease obligations$22,135 capital lease dated July 2 , 2010, due in monthlyinstallments of $512 through June 2, 2014 , interest at 6 0% ,collateral of a 2010 Dodge Charger 11,514

$22,135 capital lease dated July 2, 2010, due in monthlyinstallments of $512 through June 2, 2014, interest at 6 0%,collateral of a 2010 Police Charger 11,513$28,630 capital lease dated June 30, 2011, due in m onthlyinstallments of $663 through June 1, 2015, interest at 6 0%,collateral of a 2011 Chevrolet Crew Cab 21,256$26,718 capital lease dated May 1, 2012, due in monthlyinstallments of $503 through Apnl 1, 2017. interest at 5 5% ,collateral of a 2012 Chevrolet Police Tahoe 25.195

$ 100.703

Continued

G R A C S O N , C A S I D AV & G U IL L O R Y , L L PC E R T I F I E D P U B L I C A C C O U N T A N T S35


36/48

VILLAGE OF FENTO N. LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE C - LONG-TERM LIABILITIES - CONTINUEDThe annual requirements to amortize all debt outstanding, including interest

Year endingJune 30.2013 $ 37,1552014 35,4322015 22,9442016 6,0392017 7.8892018-2022 14.2732023-2027 14,2732028-2032 14,2732033-2035 7.135

The Village leases vehicles under capital leases The economic substance of thelease is that the Village is financing the acquisition of the assets through the lease,and accordingly, it is recorded on the Village's assets and liabilitiesThe following is an analysis of the leased assets included in property and equipmentGovernmental ActivitiesTransportation equipment $ 70,988Less accumulated depreciation 18.599$ 52.389Business Type ActivitiesTransportation equipment $ 28,630Less accumulated depreciation 5.726$ 22.904

G R A C S O N , CASIDAY & GUII.LORV L L PC E R T I F I E D P U B L I C A C C O U N T A N T S36


37/48

VILLAGE OF FENTO N, LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE D - CAPITAL ASSETS

A summary of changes in capital assets for the year ended June 3 0, 2012 followsGovernm ental activitiesLand $Buildings and improvementsFumiture and equipmentTransportationEquipmentConstruction in progress _Totals at histoncal cost

6/30/20111,900773,290196,265

143,3929.9251,124,772Less accumulated depreaation forBuildings and improvem entsFumiture and Equipment

Transportation Equipment _140,91599.98168.218

Additions$ 33.16529.98022.147

67,669107.931260,892

32.18818.59724.211

Deletions$ --

-(79.956)(79.956)

-..

6/30/2012$ 35,065803,270218,412

211,06137.9001.305,708

173.103118,57892.429Total accumulateddepreciationGovemmental activitiescapital assets. Net

Business Type ActivitiesLandBuildings and plantTransportation equipmentFumiture and equipmentTotals at histoncal cost

309.114 74.996 815 658 $ 185.896$ 14,7901,399.55228,63024 9

384.110921.598

1,443,221

14,7901.399,55228.63024 91.443.221Less accumulated depreciation for

Buildings and plant 507,671Transportation equipmentFurniture and equipment 249Total accumulateddepreciation 507.920Business-type activitiescapital assets, net S 935,301

30.1425,726

35.868 35 86 8 %

Depreaation expense was charged to govemmental activities as followsGeneral and a dministrativePoliceTotalThe construction in progress consists of the following projects

Sewer system improvementsEmergency generatorsTotal

TotalBudgeted$ 108,209 (1)178.361 (2)s 2msmConstructionIn Progress$ 10,47427.426$ 37.900

537.8135,72624 9543.788

$

$S _

899.433

54.15020.84674.996

(1) $104,800 to be funded from grant funds(2) 100% to be funded from grant funds

G R A C S O N , CASIDAV & G U I L L O I O , L L PC E R T I F I E D P U B L I C A C C O U N T A N T S

37


38/48

VILLAGE OF FENTON , LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE E - RISK MANAGEMENT

The Village is exposed to vanous nsks of loss related to torts, theft of. damage to anddestruction of assets, errors and omissions, injunes to e mployees, and naturaldisasters The Village maintains commercial insurance coverage covenng each ofthose nsks of loss Managem ent believes such coverage is sufficient to preclude anysignificant uninsured losses to the Village Settled claims have not exceeded thiscommercial coverage in any o fth e past three fiscal yearsNOTE F - CONTINGENCIES

The Village participates in a number of federal and state grant programs that areeither partially or fully funded by grants received from other governmental units Suchgrants are subject to audit by the grantor agencies which could result in requests forreimbursement to the granting agency for expenditures that are disallowed under theterms of the grant Based on past expenence. the Village believes that any disallov^edcosts as a result of such audits w ill be imm atenal

NOTE G - PER DIEMEach council member receives monthly compensation The following is a list ofcouncil members and their compensation for the fiscal year ended June 3 0, 2012

E Alfred, Sr $ 3,600W Lemelle 3.600M Jones 3.600$ 1Q-8QQThe compensation paid to the Mayor for the year en ded June 30, 2012 is as follows

E Alfred. Jr $ 30.000NOTE H -A G IN G OF ACCOUNTS RECEIVABLE

Aging of Accounts Receivable - propnetary fund as of June 30, 2012 are as follows0-30Days$10,988

31-60Days$61-90Days$

over 90Days$ Total$ 10,988NOTE I - SUBSEQUENT EVENT

There is an ongoing investigation by the State of Louisiana Legislative Auditor that isnot complete as ofthe date ofthe audit report, November 20. 2012 and the effect onthe financ ial statements as of November 20. 2012 is not known

GR AC SO N, CASIDA Y & G un LOR>, L L E*C E R T I F I E D P U B L I C A C C O U N T A N T S38


39/48

VILLAGE OF FENTON, LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE J - SCHEDULE OF INSURANCE COVERAGE

The schedule of insurance cov erage as of June 30 , 2012 is as followsLimits

Automobile liability

Com mercial general liabilityPremises/Operations

Products/Completed operation

Medical payments

Fire legal liabilityCommercial property

Surety bondWorkers compensation

$500,000 bodily injury andphysical damage

$500,000 per occurrence-bodily injury and physicaldamage$500,000 in the aggregate-bodily injury and physicaldamage$1,000 per person$10,000 per accident$50,000 per occurrence$150,000 building$20,000 contents$10,000$100,000/$500.000/$100,000

Expiration Date

March 19, 2013

March 19, 2013

March 19,2013

March 19,2013March 19.2013

July 15, 2012May 19. 2013

September 24, 2012

G R A C S O N , C A S I D A > & G u n LOin, L L PCERTIFIED PUBLIC ACCOUNTANTS

39


40/48

VILLAGE OF FENTON, LANOTES TO FINANCIAL STATEMENTSJune 30, 2012NOTE K- SCHEDULE OF RATES AND NUMBER OF CUSTOM ERS

At June 30, 2012, the number of customers were as followsResidential - 165Comm ercial - 5

The schedule of rates for the proprietary fund is as followsS ew erResidential-In-town

Out-of-town

Commercial

$12 50, first 2,000 gallons2 00 per 1,000 gallons thereafter, up to 10,000gallons1 00 per 1,000 gallons afier 10,000 gallons$15 0 0. first 2,000 gallons2 00 per 1,000 gallons thereafter, up to 10,000gallons1 00 per 1,000 gallons after 10,000 gallons$15 00, first 2,000 gallons2 OOper 1,000 gallons thereafter, up to 10,000gallons1 00 per 1,000 gallons after 10,000 gallons

Water Residential-In-town-Out-of-town

$12 50 first 2,000 g allons1 00 per 1,000 gallons thereafter$15 00 first 2,000 g allons1 00 per 1,000 gallons thereafterCommercial-In-town

-Out-of-town

$18 00 first 2,000 gallons1 00 per 1,000 gallons thereafter$20 00 first 2.000 gallons1 00 per 1.000 gallons thereafter

G R A C S O N , CASII)A^ & G u n L O I O , L L PC E R T I F I E D P U B L I C A C C O U N T A N T S40


41/48

REQUIRED SUPPLEMENTAL INFORMATION

GRA CSO N, CASI DAY & Gun LORY, LL PC E R T I F I E D P U B L I C A C C O U N T A N T S

41


42/48

VILLAGE OF FENTON, LABUDGETARY COMPARISON SCHED ULE - GENERAL FUND

AND SPECIAL REVENUE FUNDYear Ended June 30, 2012

RevenuesTaxesLicenses and permitsIntergovemmentalFinesMiscellaneousInterestTotal revenuesExpendituresCurrentGenera l govemmentPublic safetyCapital outlayDebt service

PnncipalInterestTotal expendituresExcess (deficiency} of revenues overExpenditures

othe r f inanong sources (uses)Proceeds from borrowingopera t ing transfers mopera t ing transfers outTotal other finanang sources (uses)Excess (deficiency) of revenues and other

sources over expenditures and other usesFund balance at beginning of yearFund balance at end o f year

Ongmal$ 43.600

2,50063,600300,0005,600

415,300

192.175153.32561,500

407.000

Budget

$

General Fund

Final45.4752,42740.124590.6743.820

682,420

219,461183,02081,261

483.742

$Actual

36,0879.83640.124

542,53413.367

641,948

238,283176,726114,74312,0931,964543,809

VananceFavorable(Unfavorable)$ (9,388)

7,409(48,040)(3,820)13.367(40,472)

(18.822)6.294(33,482)

(12,093)(1.964)(60.067)

8.300 198,678 98,139

26,718(37,450)

$Si g

-8,300

78,79387.093 $

-198,678

78,793277,471 _$

(10,732)

87,40778,793

166,200

(100,539)

26.718(37.450)(10.732)

(111,271)

(111.271)

42


43/48

Speaal Revenue FundBudget

Original$ 35,000 $

--

35,000

32020,00012.00032,320

Final30,0351.000

;31,035

25454.77012,00067.024

Actual$ 30,839

1,000

1131,850

35155,51610,6261.374

67,867

VananceFavorable

(Unfavorable)$ 804

-1181 5

(97)(746)

1,374(1.374)

(843)

2,680 (35,989) (36.017) (26)

_ $ _

--

2,680108.959111,639 $ _

4,000(746)3,254

(32,735)108,959

76,224 $

--

(36.017)108,959

72.942 $

(4.000)(746)(4,746)

(4,774)

(4.774)

G R A C S O N , C A S I D A Y & GuiLLOin, LLPCERTIFIED PUBLIC ACCOU NTANTS43


44/48

G R A G S O N , C A S I D A Y & G U I L L O R Y , L.L .RC E R T I F I E D P U B L I C A C C O U N T A N T S

W GEORGE GRAGSON C P ARICHARD W C : A S I D A Y C P ARAVMOND GUILLORY JR C P AGRAHAM A PORTUS E ACOY T V rNCENT C P AM I CH E L LE L E E C P ABRADLEY J CIAS IDAY C P A C V AJ U U A W P OR T US C P AKAT HRYN BLESSINGT ON C P AJ A C KL Y N B R A N EF F C P A

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AN D OTHER MATTERSBASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMEDIN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDSNovember 20, 2012

The Village CouncilVillage of Fenton, LouisianaWe have audited the financial statements of the governmental activities, the business-type activities andeach major fund of the Village of Fenton, LA, as of and for the year ended June 30, 2012, whichcollectively compnse the Village of Fenton, LA's basic financial statements and have issued our reportthereon dated November 20, 2012 W e conducted our audit in accordance with auditing standardsgenerally accepted in the United States of America and the standards applicable to financial auditscontained in G overnment Auditing Standards, issued by the Comptroller General of the United StatesInternal Control Over Financial ReportingManagement of the Village is responsible for establishing and maintaining effective internal control overfinancial reporting In planning and performing our audit, we considered Village of Fenton, LA's internalcontrol over financial reporting as a basis for designing our auditing procedures for the purpose ofexpressing our opinions on the financial statemen ts, but not for the purpose of expressing an opinion on theeffectiveness of the Village of Fenton, LA's internal control over financia l reporting Accordingly, we do notexpress an opinion on the effectiveness of the Village of Fenton, LA's t nternal control over financialreportingA deficiency in intemal control exists when the design or operation of a control does not allow managementor employees, in the norm al course of performing their assigned functions, to prevent, or detect and correctmisstatements on a timely basis A mate nal weakness is a deficiency, or a combination of deficiencies, inintemal control such that there is a reasonable possibility that a matenal misstatement of the entity'sfinancial statements w ill not be prevented, or detected and corrected on a timely basisOur consideration of intema l control over financial reporting w as for the limited purpose descnbed in the firstparagraph of this section and was not designed to identify all deficiencies in internal control over financialreporting that m ight be deficiencies, significant deficiencies, or matenal weaknesses We did not identifyany deficiencies in internal control over financial reporting that we consider to be material weaknesses, asdefined above However, we identified certain deficiencies in internal control over financial reporting,descnbed in the accompanying schedule of findings and responses that we consider to be significantdeficiencies in internal control over financia l reporting as item 2012-1 A significant deficiency is adeficiency, or a combination of deficiencies, in intemal con trol that is less severe than a matenal weakness,yet important enough to merit attention by those charged w ith governance

145 EAST STREET P O DRAWER IB47LAKE CHARLES LOUIS IANA 706O2 184 7T E L ( 3 3 7 1 4 3 9 t 9 S 6 F A X ( 3 3 7 ) 4 3 9 1 3 6 644


45/48

Village of Fenton, LouisianaNovember 20 . 2012Page TwoCompliance And Other MattersAs part of obtaining reasonable assurance about whether the Village of Fenton, LA's financial statementsare free of matenal misstatement, we performed tests of its compliance with certain provisions of laws,regulations, contracts and grants, noncompliance with which could have a direct and material effect onthe determination of financial statement amounts However, providing an opinion on compliance withthose provisions was not an objective of our audit and, accordingly, we do not express such an opinionThe results of our tests disclosed instances of noncompliance or other matters that are required to bereported under Govemment Auditing Standards and which are described in the accompanying scheduleof findings and responses as items 2012-2, 2012-3 and 2012-4Village of Fenton, LA's response to the findings identified in our audit are descnbed in the ac comp anyingschedule of findings and responses W e did not audit Village of Fenton, LA's response and, accordingly,we express no opinion on itThis report is intended solely for the information and use of management and the Council and is notintended to be and should not be used by anyone other than these specified parties Under LouisianaRevised Statute 24 513, this report is distnbuted by the Legislative Auditor of th e State of Louisiana as apublic document j l , ^ ^ ^ C ^ t ^ : i < ^

GRA C; SO \ , CASI DAY & Gun LORY, L LPC E R T I F I E D P U B L I C A C C O U N T A N T S45


46/48

VILLAGE OF FENTON, LASCHEDULE OF FINDINGS AND RESPONSESYear Ended June 30, 2012Summary of Auditors' Results

Financial StatementsType of auditors' report issued unqualifiedIntemal control over financial reporting Matena l wea knesse s(es) identified'? yes X no Control deficiency(s) identified that arenot considered to be matenal weakness(es)'? X yes none reportedNoncompliance matenal to financialstatements noted'? yes X no

Findings Relatino To The Financial Statements Which Are Required To Be Reported InAccordance With Generally Accepted Governmental Auditing StandardsFind ing 2012-1;Inadequate Segregation of Duties

Condition Because of the small size of the Village's office staff, the oppo rtunityfor segregation of duties is limited Effective internal controlrequires adequate segregation of duties among entity personnelEffect Without proper segregation of duties, misstatements in amountsmay occur and not be detected within a timely penod by employeesin the normal course of performing their assigned functionsRecom mendation To the extent cost effective, duties should be segregated andmanagement should attempt to mitigate this weakness bysupervision and review proceduresCorrective Action Planned Mana gement has responde d that it does not believe that it iscost effective to employ adeq uate p ersonnel to achieve appropriatesegregation of duties Managem ent has implemented supervisionand review procedures such as review and approval of supportingdocumen ts related to expenditures, review listings of revenuereceived and review of bank reco nciliations on a m onthly basis

Finding 2012-2:Budgetary Authority and Control

Condition Inadequate budgeting procedures resulted in genera l fund revenuesbeing under budget by 5% or more and general governmentexpenditures being over budget by 5% or moreCriteria Inadequate budgeting procedures

ContinuedGRACSON, CASIDAY & G LU LO\


47/48

VILLAGE OF FENTON. LASCHEDULE OF FINDINGS AND RESPONSES - CONTINUEDYear Ended June 30, 2012Effect Violatio ns of Louisiana Revise d Statute 39 1310Cause Adm inistrative lack of oversight The budget was amende d twicedunng the year, however, a violation still occurredRecommendation The Village should review actual revenues and expenditures on anintenm basts and amend the budget if necessaryCorrective Action Planned The Village agrees with the finding and will implement therecommendationsFinding 2012-3:Prohibited TransactionCondition The Village entered into three transactions involving dirt work dun ngthe year totaling $6,779 with an immediate family mem ber, abrother of a councilmanCntena Per LRS 42 1113 A(1)(a) no member of a public servant'simmediate family shall enter into any contract that is under thejunsdiction of the agency of such public servantEffect Violations of Louisiana Revised Statute 42 1113CauseRecommendation

Administrative and management lack of oversightThe Village should terminate any contract with such family m emberAlso, Village should strengthen controls to detect and ens ure futurecompliance

Managem ent Respon se/Corrective Action Planned Managem ent agrees with findingControls have been improved to ensure fijture compliance with LRS42 1113 Effective January 1, 2013, the councilman will no longerbe on the Village CouncilFinding 2012-4:Bond Covenant V io la t ionCondition The Village is required to maintain a reserve and a contingencyaccount as required by the general obligation USDA RuralDevelopment Loan However, the Village does not maintain suchreserve accounts nor has any monetary deposits been made tosuch accountsEffect Violation of loan covenant

ContinuedGRACSON, CASIDAY & GUILLORY, LL PC E R T I F I E D P U B L I C A C C O U N T A N T S

47


48/48

VILLAGE OF FENTON, LASCHEDULE OF FINDINGS AND RESPONSES - CONTINUEDYear Ended June 30, 2012Cause Adm inistration and mana gem ent's determination of lack of sufficient

cash fiows and available fundsRecom mendation The Village should becom e compliant with loan covenant requiredreservesManagement Res ponse/Corrective Action Planned Managem ent agrees with findingThe Village w ill fund the required reserves as soon as excessunrestricted funds become available without putting the Village intoa financial bind

- Federal Award Findings and Questioned Costs-N/AIV - Prior Year Aud it Findings

Find ing 2011-1:Inadequate Segregation of DutiesCondition

Status

Because of the small size of the Village's office staff, the o pportunityfor segregation ofduties is limited Effective internal contro lrequires adequate segregation ofduties among entity personnelRepeat finding in2012

Finding 2011-02:Budgetarv Author i ty and Cont ro lCondition

StatusFinding 2011-03:Public Bid LawCondition

Inadequate budgeting procedures resulted tn General Fundrevenues being under budget by 5% or more and Special RevenueFund expenditures being over budget by 5% or moreRepeat finding in2012

The Village purchased three vehicles (an administrative vehicle, apolice vehicle and a public works vehicle) at vanous times dunngthe year and failed to comply with the public bid law (LSA-RS38 2211-2251) Each vehicle cost less than $30,000 but more than$10,000 and three quotes were not obtained pnor to purchase, asrequired

village of fenton internal audit

Documents