06DEC ii AMii; gc · 2021. 1. 8. · 06DEC ii AMii; gc VILLAGE OF SIMPSON ANNUAL FINANCIAL STATEMENTS WITH AUDITOR'S REPORT June 30, 2006 Underprovisions of state law, this report

06DEC ii AMi i ; gc

VILLAGE OF SIMPSON

ANNUAL FINANCIAL STATEMENTSWITH AUDITOR'S REPORT

June 30, 2006

Underprovisions of state law, this report is a publicdocument, A copy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available forpubfic inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.

p^r.Release Date

VILLAGE OF SIMPSONTABLE OF CONTENTS

Statement

INDEPENDENT AUDITOR'S REPORT — 1-2

Management's Discussion and Analysis 3-8

BASIC FINANCIAL STATEMENTS:

Statement of Net Assets A 9

Statement of Activities B 10

Balance Sheet - Governmental Fund C 11

Reconciliation of the Governmental Fund Balance SheetTo Statement of Net Assets C 12

Statement of Revenues, Expenditures and Changesin Fund Balances - Governmental Funds D 13

Reconciliation of the Statement of RevenuesExpenditures and Changes in Fund Balance ofGovernmental Funds to the Statement of Activities D 14

General Fund - Statement of Revenues, Expendituresand Changes in Fund Balances - Budget and Actual E 15-16

Statement of Net Assets - Proprietary Fund F 17

Statement of Revenues, Expenses, and Changesin Net Assets - Proprietary Fund G 18

Statement of Cash Flows - Proprietary Fund H 19-20

Notes to the Financial Statements 21-31

VILLAGE OF SIMPSONTABLE OF CONTENTS

Schedule Page(s)

Required Supplemental Information — 32

Schedule of Per Diem Paid to Board Members 1 33

Schedule of Prior Year Audit Findings 2 34

Schedule of Corrective Action PlanFor the Current Year Audit Findings 3 35

Report on Compliance and on Internal Control OverFinancial Reporting Based on an Audit of FinancialStatements Performed in Accordance withGovernmental Auditing Standards 4 36-37

ELLIOTT & ASSOCIATES, INC.A Professional Accounting Corporation

P. O. Box 1287Leesville, Louisiana 71496-1287

(337) 239-2535 W. Micheal Elliott, CPA(337)238-5135Fax 239-2295

INDEPENDENT AUDITOR'S REPORT

The Honorable Roger Bennett, Mayorand Members of the Board of AldermenVillage of Simpson:

I have audited the accompanying financial statements of the governmental activities, thebusiness-type activities and each major fund, of the Village of Simpson, Louisiana, as of and forthe year ended June 30, 2006, which collectively comprise the Village's basic financialstatements as listed in the table of contents. These financial statements are the responsibility ofthe Village of Simpson Louisiana's management. My responsibility is to express an opinion onthese financial statements based on my audit.

I conducted my audit in accordance with auditing standards generally accepted in the UnitedStates of America, and the standards applicable to financial audits contained in GovernmentalAuditing Standards, issued by the Comptroller General of the United States. Those standardsrequire that I plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation. I believe that my auditprovides a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects,the respective financial position of the governmental activities, the business - type activities, andeach major fund of the Village of Simpson, Louisiana, as of June 30, 2006, and the respectivechanges in financial position and cash flows, where applicable, thereof and the respectivebudgetary comparison for the general fund for the year then ended in conformity with accountingprinciples generally accepted in the United States of America.

The Honorable Donnis Brinkley, MayorVillage of Simpson, Louisianacontinued

In accordance with Government Auditing Standards, I have also issued my report datedNovember 4, 2006, on my consideration of the Village of Simpson, Louisiana's internal controlover financial reporting and y tests of its compliance with certain provisions of laws, regulations,contracts, and grants. That report is an integral part of an audit performed in accordance withGovernmental Auditing Standards and should be read in conjunction with this report inconsidering the results of my audit.

My audit was conducted for the purpose of forming an opinion on the financial statements thatcollectively comprise the Village of Simpson, Louisiana's basic financial statements. Theschedules of per diem paid to board members, prior year audit findings, and current year auditfindings are presented for purposes of additional analysis and are not a required part of the basicfinancial statements. The schedules of per diem paid to board members, prior year auditfindings, and current year audit findings have been subjected to the auditing procedures appliedin the audit of the basic financial statements and, in my opinion, is fairly stated in the all materialrespects in relation to the basic financial statements taken as a whole. The schedules of per diempaid to board members, prior year audit findings and current year audit findings have not beensubjected to the auditing procedures applied in the audit of the basic financial statements and,accordingly, I express no opinion on them.

This report is intended for the information and use of management and the Board ofCommissioners, state awarding agencies and the Louisiana Legislative Auditor's office of theState of Louisiana and is not intended to be and should not be used by anyone other than thesespecified parties. Under Louisiana Revised Statue 24:513, this report is distributed by theLegislative Auditor as a public document.

Leesville, LouisianaNovember 4, 2006

Village of SimpsonSimpson, Louisiana

MANAGEMENT'S DISCUSSION AND ANALYSIS

This section of Village's annual financial report presents our discussion and analysis of theVillage's 's financial performance during the fiscal year that ended on June 30, 2006. Pleaseread it in conjunction with the Village's financial statement, which follows this section.Comparative analysis will be provided in future years when prior year information is available.

FINANCIAL HIGHLIGHTS

* The Village's combined total net assets decreased by $1,560 or.003% over the course ofthis year's operations. Net assets of our governmental activities increased approximately$4,963 or 1% and net assets of our business type activities decreased $6,523 or 1.40% forthe year.

* During the year, the Village's expenses were $4,963 less than the $69,775 generated incharges for services , taxes and other revenues. In the Village's business-type activities,expenses were $6,523 more than the $97,767 generated in revenues.

* The general fund reported a June 30, 2006 ending balance of $54,890.

OVERVIEW OF THE FINANCIAL STATEMENTS

this annual report consists of three parts - managements' discussion and analysis (this section),the basic financial statements and required supplementary information. The basic financialstatements include two kinds of statements that present different views of the Village:

* The first two statements are government-wide financial statements that provide bothlong-term and short-term information about the Village's overall financial status.

* The remaining statements are fund financial statements that focus on individual parts ofthe Village's government, reporting the Village's operations in more detail than thegovernment-wide statements.

* The governmental fund statements tell how general government services, likepublic safety, were financed in the short term as well as what remains for futurespending.

* Proprietary fund statements offer short and long-term financial information aboutthe activities the government operated like businesses, such as water and sewersystem.

The financial statements also include notes that explain some of the information in the financialstatements and provide more detailed data. The statements are followed by a section of requiredsupplementary information that further explains and supports the information in the financialstatements. In addition to these required elements, we have included a section with combiningstatements that provide details about our nonmajor government funds, which are added togetherand presented in single columns in the basic financial statements

The remained of this overview section of the management's discussion and analysis explains thestructure of contents of each of the statements.



Government-wide Statements

The government-wide statements report information about the Village as a whole usingaccounting methods similar to those used by private-sector companies. The statement of netassets includes all of the government's assets and liabilities. All the current year's revenues andexpenses are accounted for in the statement of activities regardless of when cash is received orpaid.

The two government-wide statements report the Village's net assets and how they havechanges. Net assets - the difference between the Village's assets and liabilities - is one way tomeasure the Village's financial health, or position.

* Over time, increased or decreases in the Village's net assets are an indicator of whetherits financial health is improving or deteriorating, respectively.

* To assess the overall health of the Village you need to consider additional nonfmancialfactors such as changes in the Village's property tax base and the condition of theVillage's roads.

The government-wide financial statements of the Village are divided into two categories:

* Governmental activities - most of the Village's basic services are included here, such asthe police, streets and drainage, sanitation and general administration. Property, salestaxes, franchise fees and interest finance most of these activities.

* Business - type activities - The Village charges fees to customers to help it cover thecosts of certain services it provides. The Village's one utility systems is included here.

Fund Financial Statements

The fund financial statements provide more detailed information about the Village's mostsignificant funds - not the Village as a whole. Funds are accounting devices that the Villageuses to keep tract of specific sources of funding and spending for particular purposes.

Some funds are required by State law and by bond covenants.

The Village has two kinds of funds:

* Governmental funds - Most of the Village's basic services are included in governmentalfunds, which focus on (1) how cash and other financial assets that can readily beconverted to cash flow in and out and (2) the balances left at year-end that are availablefor spending. Consequently, the governmental funds statements provide a detailed short-term view that helps you determine whether there are more or fewer financial resourcesthat can be spent in the near future to finance the Village's programs.

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MANAGEMENTS DISCUSSION AND ANALYSIS

FINANCIAL ANALYSIS OF THE TOWN'S FUNDS

As the Village completed the year, its governmental funds reported a combined fund balance of$523,755 an decrease of.003%.

CAPITAL ASSETS

At the end of June 30, 2006, the Village had invested $391,308 in a broad range of capital assets,including police equipment,, vehicles and water, gas and sewer systems. (See Table A-3) Thisamount represents a net decrease (including additions and deductions) of approximately $4,341or 1.12 percent, over last year.

Table A-3Town's Capital Assets

Governmental Activities2006 2005

17,0007,8044,340

Land and improvements $Other EquipmentPolice equipmentOffice equipmentVehicles —Water and Sewer Facility and System —Less: Accumulated depreciation ( 10.322)Total $ 18,822

$

5,6714,340

Business Activities2006 2005

$

( 5.474)$ 4,537

6,4833,500

731,740(369.237)$372,486

6,4833,500

711,740(339.294)

$ 382,430



This year's major capital assets additions included:

* $ 2,133- Police equipment -General17,000 - Generator-Utility Fund

$19,133 Total Capital Outlay

ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES

The Village's major sources of revenues for the general fund are comprised from taxes, finesand occupational licenses by 41.47%,5.63%, and 17.76% respectively. The economy is notexpected to generate any significant growth. All expenditures are expected to be consistent withthe current years.

CONTACTING THE TOWN'S FINANCIAL MANAGEMENT

This financial report is designed to provide citizens, taxpayers, customers, investors and creditorswith a general overview of the town's finances and to demonstrate the town's accountability forthe money is receives. If you have questions about this report or need additional financialinformation, contact Mayor Roger Bennett, Simpson, LA 71474.

BASIC FINANCIAL STATEMENTS

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VILLAGE OF SIMPSON Statement C

Reconciliation of the Governmental Fund Balance SheetTo Statement of Net Assets

June 30, 2006

Total fund balance - total governmental funds $ 54,890

Amounts reported for governmental activities in thestatement of net assets are different because:

Capital assets used in governmental activities are notfinancial resources and therefore are not reportedin the governmental funds balance sheet. 18,822

Net assets of governmental activities

The accompanying notes are an integral part of this statement

12

VILLAGE OF SIMPSON Statement D

Statement of Revenues. Expenditures, and Changes in Fund BalancesGovernmental Fund

For the Year Ended June 30. 2006

General Fund

RevenuesTaxes:

Franchise $ 13,288Sales tax - Sheriff 9,000Sales tax - hotels 6,650

Intergovernmental:State grants 1,018

Occupational licenses and permits 12,392Investment income 99

Fines and forfeitures 3,932Insurance rebates 6,142Other revenues 15.254

Total revenues S 67.775

ExpendituresGeneral government 23,119Public Safety 17,310Capital Outlay 19.133

Total Expenditures $ 59.562Excess (deficiency) of revenues

over expenditures 8.213

Other financing sources (uses)Transfer in 2,000Transfer Out ( 5.250)

Total other financing sources (uses) ( 3,250)

Net change in net assets 4,963

Net Assets at beginning of year 49.927

Net Assets at end of year

13

VILLAGE OF SIMPSON Statement D

Reconciliation of the Statement of Revenues, Expendituresand Changes in Fund Balance of Governmental Funds to the

Statement of Activities

For the Year Ended June 30, 2006

Net Change in fund balances - total governmental funds $ 4,963

Amounts reported for governmental activities in thestatement of activities are different because:

Governmental funds report capital outlays as expenditures.However, in the government-wide statement of activitiesand changes in net assets, the cost of those assets is allocatedover their estimated useful lives as depreciation expense. Thisis the amount of capital assets recorded in the current period. 19,133

Depreciation expense on capital assets is reported in thegovernment-wide statement of activities and changes in netassets, but they do not require the use of current financialresources. Therefore, depreciation expense is not reported as anexpenditure in governmental funds. (4,848)

Change in net assets of governmental activities $ 19,248

The accompanying notes are an integral part of this statement

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Statement FVILLAGE OF SIMPSON

Statement of Net AssetsProprietary Fund

June 30, 2006Business - TypeActivities -

Enterprise FundWater

ASSETSCurrent Assets

Cash and cash investments $ 49,348Receivable:

Accounts 7.457Total current assets 56,805

Noncurrent AssetsRestricted cash and cash investments 25,658Capital assets, net 372.486

Total noncurrent assets 398.144Total assets S 454.949

LIABILITIESCurrent Liabilities

Accounts payable $ 1,808Payroll taxes payable 259Other accrued liabilities 1,939Due to other funds —

Total current liabilities $ 4.006Liabilities payable from restricted assets

Accrued interest payableCustomer deposits 900Revenue bonds payable —

Total liabilities payable from restricted assets $ 900Noncurrent Liabilities

Revenue bonds payable —Total Liabilities $ 4.906

NET ASSETSInvested in capital assets, net of related debt $ 372,486Unrestricted 77.557

Total net assets S 450.043

Total Liabilities and net assets $ 454.949

17

VILLAGE OF SIMPSON, LOUISIANA Statement GStatement of Revenues, Expenses and Changes in Net Assets

Proprietary FundFor the Year Ended June 30, 2006

Business - TypeActivities


Operating revenuesCharges for services $ 72,153Other fees 847Miscellaneous 390

Total Revenue S 73.390

Operating expensesPersonal services 35,940Grant expense 4,960Water treatment costs 901Professional fees 2,913Auto expense 1,132Supplies 1,601Utilities and telephone 7,114Dues 1,763

Repairs 8,840Insurance 4,946Miscellaneous 4,235Depreciation 29.944

Total operating expenses $ 104,289

Income (loss) from operations ( 30,899)

Nonoperating revenues (expenses)Investment income 427Hotel tax revenue 6,650Grant income 14.049

Total nonoperating revenues (expenses) $ 21.126

Income (loss) before contributionsand transfers ( 9.773)

Transfers Out ( 2,000)Transfers in 5.250

Net Transfers 3,250

Change in net assets (6,523)Net Assets at beginning of year 456,566Net Assets at end of year S 450,043

18

VILLAGE OF SIMPSON, LOUISIANAStatement of Cash Flows


Statement H



Cash flows from operating activities:Cash received from customersCash payments to suppliers

For goods and servicesCash payments to employees for services

Net cash provided by operating activities

Cash flows from noncapital financing activities:Transfers from other funds

Net cash provided by noncapitalfinancing activities

Cash flows from capital and relatedfinancing activities:Acquisition and construction of capital assetsGrant IncomeTax Revenued capital

Net cash (used) by capitaland related financing activities

Cash flow from investing activities:Interest on cash and investments

Net increase (decrease) in cashand cash investments

Cash and Cash investments, June 30, 2004Cash and Cash investments, June 30, 2006

$ 72,013

(37,842)(36.154)( 1.983)

3.250

3.250

20,00014,0496,650

699

427

2,393

72.61375,006

(Continued)

19

VILLAGE OF SIMPSON, LOUISIANAStatement of Cash Flows


Statement H

Reconciliation of (loss) from operationsto net cash provided by operating activities:

Income from operationsAdjustments to reconcile income (loss) from

operations to net cash provided byoperating activities:DepreciationChange in assets and liabilities:

Decrease in accounts receivableDecrease in other current liabilitiesIncrease in accounts payableIncrease in customer deposits

Net Cash provided by operating activities



$ (30,899)

29,944

( 1,377)( 86)

37560

$ ( 1.983)(Concluded)

20

VILLAGE OF SIMPSON, LOUISIANA

Note to the Financial StatementsAs of and for the Year Ended June 30, 2006

INTRODUCTION

The VILLAGE of Simpson was incorporated under the provisions of the Lawrason Act. TheVILLAGE operates under a Mayor-Board of Aldermen form of government.

The accounting and reporting policies of the VILLAGE of Simpson conform to generallyaccepted accounting principles as applicable to governments. Such accounting and reportingprocedures also conform to the requirements of Louisiana Revised Statues 24:517 and to theguides set forth in the Louisiana Municipal Audit and Accounting Guide, and to the industryaudit guide, Audits of State and Local Governmental Units.

The VILLAGE maintains various funds that provide services and benefits to its citizensincluding repairs and maintenance of approximately 15 miles of road and streets, and water,sewer, and garbage collection services to approximately 600 residents.

I. SUMMARY OF SIGNIFICANT ACCOUNT POLICIES

A. Government - Wide and Fund Financial Statements

The government-wide financial statements (i.e., the statement of net assets and thestatement of changes in net assets) report information on the primary government. Forthe most part, the effect of interfund activity has been removed from these statements.Governmental activities, which normally are supported by taxes and intergovernmentalrevenues, are reported separately from business-type activities, which rely to a significantextent on fees and charges for support.

The statement of activities demonstrates the degree to which the direct expenses of agiven function or segment are offset by program revenues. Direct expenses are those thatare clearly identifiable with a specific function or segment. Program revenues include I)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 andcontributions that are restricted to meeting the operational or capital requirements of aparticular function or segment. Taxes and other items not properly included amongprogram revenues are reported instead as general revenues.

21


Notes to the Financial Statements (Continued)

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

B. Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The government-wide financial statements are reported using the economic resourcesmeasurement focus and the accrual basis of accounting, as is the proprietary fundfinancial statements. Revenues are recorded when earned and expenses are recordedwhen a liability is incurred, regardless of the timing of related cash flows. Property taxesare recognized as revenues in the year for which they are levied. Grants and similar itemsare recognized as revenue as soon as all eligibility requirements imposed by the providerhave been met.

Governmental fund financial statements are reported using the current financial resourcesmeasurement focus and the modified accrual basis of accounting. Revenues arerecognized as soon as they are both measurable and available. Revenues are consideredto be available when they are collectible within the current period or soon enoughthereafter to pay liabilities of the current period. Expenditures generally are recordedwhen a liability is incurred, as under accrual accounting. However, debt serviceexpenditures, as well as expenditures related to compensated absences and claims andjudgements, are recorded only when payment is due.

Property taxes, franchise taxes, licenses and interest associated with the current fiscalperiod are all considered to be susceptible to accrual and so have been recognized asrevenues of the current fiscal period. All other revenue items are considered to bemeasurable 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 allfinancial resources of the general government, except those required to beaccounted for in another fund.

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The municipality reports the following major proprietary fund:

The Proprietary Fund accounts for operations (a) where the intent of the governingbody is that the costs (expenses, including depreciation) of providing goods orservices to the general public on a continuing basis be financed or recoveredprimarily through user charges, or (b) where the governing body has decided thatperiodic determination of revenues earned, expense incurred, and/or net income isappropriate for capital maintenance, public policy, management control,accountability, or other purposes.

Private-sector standards of accounting and financial reporting issued prior to December 1,1989, generally are followed in both the government - wide and proprietary fund financialstatements to the extent that those standards do no conflict with or contradict guidance ofthe Governmental Accounting Standards Board. Governments also have the option offollowing subsequent private-sector guidance for their business-type activities andenterprise funds, subject to this same limitation. The government has elected not tofollow subsequent private-sector guidance.

As a general rule the effect of interfund activity has been eliminated from thegovernment-wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the governments enterprise operations.Elimination of these charges would distort the direct costs and program revenues reportedfor the various functions concerned.

Amounts reported as program revenues include 1) charges to customers or applicants forgoods, services, or privileges provided, 2) operating grants and contributions, and 3)capital grants and contributions. Internally dedicated resources are reported as generalrevenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items.Operating revenues and expenses generally result from providing services and producingand delivering goods in connection with a proprietary funds's principal ongoingoperations. Charges for services of providing water and sewer services to residentscomprise the operating revenue of the VILLAGE 's enterprise fund. Operating expensesfor enterprise funds and internal service funds include the costs of sales and services,administrative expense, and depreciation on capital assets. All revenues and expenses arenot meeting this definition are reported as nonoperating revenues and expenses.

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

C. Deposits and Investments

The municipality's cash and cash equivalents are considered to be cash on hand, demanddeposits, and short-term investments with original maturities of three months or less fromthe date of acquisition. State law and the municipality's investment policy allow themunicipality to invest in collateralized certificated of deposits, government backedsecurities, commercial paper, the state sponsored investment pool, and mutual fundsconsisting solely of government backed securities.

D. Receivables and Payables

Activity between funds that are representative of lending/borrowing arrangementsoutstanding at the end of the fiscal year are referred to as either "due to/from other funds"(i.e., the current portion of interfund loans) or "advances to/from other funds" (i.e., thenon-current portion of interfund loans). All other outstanding balances between funds arereported as "due to/from other funds." Any residual balances outstanding between thegovernmental activities and business-type activities are reported in the government-widefinancial statements as "internal balances."

Advances between funds, as reported in the fund financial statements, are offset by a fundbalance reserve account in applicable governmental funds to indicated that they are notavailable for appropriation and are not expendable available financial resources.

All trade and property tax receivables are shown net of an allowance for uncollectible.Water and sewer charges have customer deposits that have been collected in advancetherefore the majority of all water and sewer billing is collected or taken out of thiscustomer's deposit, any allowance account would be immaterial, therefore one has notbeen established.

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E. Restricted Assets

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

Cash collected from utility fund customers as deposits against future utility bills areclassified as restricted assets and are held by the VILLAGE in a custodial cash accountentitled "Customer Deposits."

F. Capital Assets

Capital assets, which include property, plant, equipment, and infrastructure assets (e.g.,roads, bridges, sidewalks, and similar items) are reported in the applicable governmentalor business-type activities columns in the government-wide financial statements. Capitalassets are capitalized at historical cost or estimated cost if historical cost is not available.Donated assets are recorded as capital assets at their estimated fair market value at thedate of donation. The municipality maintains a threshold level of $ 1,000 or more forcapitalizing capital assets.

According to GASB 34 the VILLAGE of Simpson was not required to retroactivelyreport infrastructure assets in it's financial statements, therefore, these assets have notbeen reported in the financial statements.

The costs of normal maintenance and repairs that do not add to the value of the asset ormaterially extend assets lives are not capitalized.

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VILLAGE OF SIMPSON, LOUISIANANotes to the Financial Statements (Continued)

Major outlays for capital assets and improvements are capitalized as projects areconstructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. Thetotal interest expense included during the current fiscal year was zero. No interest wasincluded as part of the cost of capital assets under construction in connection projects.

All capital assets, other than land, are depreciated using the straight-line method over thefollowing useful lives:

Description Estimated LivesRoads, bridges, and infrastructures 40-50 yearsLand improvements 40-50 yearsBuildings and building improvements 40-50 yearsFurniture and fixtures 5-15 yearsVehicles 5-10 yearsEquipment 3-15 years

H. Compensated Absences

The VILLAGE requires all employees to take vacations currently. Therefore, anyaccumulated vacation pay would be less than a year's accrual. Additionally, sick leave isnot accumulated.

I. Long-Term Obligations

In the government-wide financial statements, and the proprietary funds types in the fundfinancial statements, long-term debt and other long-term obligations are reported asliabilities in the applicable governmental activities, business-type activities, or proprietaryfund type statement of net assets. Bond premiums and discounts, as well as issuancecosts, are deferred and amortized over the life of the bonds using the effective interestmethod. Bonds payable are reported net of the applicable bond premium or discount.Bond issuance costs are reported as deferred charges and amortized over the term of therelated debt.

In the fund financial statements, governmental fund types recognize bond premiums anddiscounts, as well as bond issuance costs, during the current period. The face amount ofthe debt issued is reported as other financing sources. Premiums received on debtissuances are reported as other financing uses. Issuance costs, whether or not withheldfrom the actual debt proceeds received, are reported as debt service expenditures.

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II. Fund Equity

In the fund financial statement, governmental funds report reservations of fund balancesfor amounts that are not available for appropriation or are legally restricted by outsideparties for use for a specific purpose. Designations of fund balances represent tentativemanagement plans that are subject to change.

J. Extraordinary and Special Items

Extraordinary items are transactions or events that are both unusual in nature andinfrequent in occurrence. Special items are transactions or event within the control of themunicipality, which are either unusual in nature or infrequent in occurrence.

K. Estimates

The preparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America require management to makeestimates and assumptions that affect that affect the reported amounts of assets andliabilities and disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues, expenditures, and expenses during thereporting period. Actual results could differ from those estimates.

2. STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

Budget Information The VILLAGE uses the following budget practices:

1. The VILLAGE Clerk and Mayor prepare a proposed budget and submitsame to the Board of Aldermen no later than fifteen days prior to thebeginning of each fiscal year.

2. A summary of the proposed budget is published and the public notifiedthat the proposed budget is available for public inspection. At the sametime, a public hearing is called.

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

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4. After the holding of the public hearing and completion of all actionnecessary to finalize an implement the budget, the budget is adoptedthrough passage of an ordinance prior to the commencement of the fiscalyear for which the budget is being adopted.

5. Budgetary amendments involving the transfer of funds from onedepartment, program or function to another or involving increases inexpenditures resulting from revenues exceeding amounts estimated requirethe approval of the Board of Aldermen. These amended amounts areshown in the financial statements.

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

7. The budgets for the General Fund and Special Revenue Fund are adoptedon a basis consistent with generally accepted accounting principles(GAAP). Budgeted amounts are as originally adopted, or as amendedfrom time to time by the Board of Aldermen.

3. CASH AND CASH EQUIVALENTS

At June 30, 2006, the VILLAGE has cash and cash equivalents (book balances) totaling$ 129,106 as follows:

Demand Deposits $ 83,004Money market investment accounts 46,102

Total $ 129,106

These deposits are stated at cost, which approximates market. Under state law, thesedeposits (or the resulting bank balances) must be secured by federal deposit insurance orthe pledge of securities owned by the fiscal agent bank. The market value of the pledgedsecurities plus the federal deposit insurance must at all times equal the amount on depositwith the fiscal agent. These securities are held in the name of the pledging fiscal agentbank in a holding or custodial bank that is mutually acceptable to both parties.

At June 30, 2006, the municipality has $ 131,701 in deposits (collected bank balances).These deposits are totally secured from risk by $131,701 of federal deposit insurance

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4. RECEIVABLES

The receivables of $ 9,824 at June 30, 2006, are as follows:

Class of receivableTaxes:

FranchiseAccounts

Total

5. INTERFUND RECEIVABLES/PAYABLES

There were no interfund receivables or interfund payables at June 30, 2006, for any of theVILLAGE 's Funds.

General Fund

$

$

2,367

2.367

ProprietaryFund

$ —7.457

$ 7,457

$

$

Total

2,3677.4579.824

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VILLAGE OF SIMPSON, LOUISIANANotes to the Financial Statements (Continued)

6. CAPITAL ASSETS

Capital assets and depreciation activity as of and for the year ended June 30, 2006, for theprimary government is as follows:

Beginning EndingBalance Increase Decrease Balance

Governmental Activities:Capital assets being depreciated

Other equipmentPolice equipmentOffice Equipment

Total capital assets being depreciated

Less accumulated depreciation for:VehiclesPolice equipmentOffice Equipment

Total accumulated depreciation

$ — $ 17,0005,671 2,133

4.340 —

$

$ 10.011 S 19.133 $_

(3,400)(1,134) ( 1,448)(4.340)(5,474) (4.848)

$ 17,0007,8044.340

$ 29.144

(3,400)(2,582)(4.340)(10.322)

Total capital assets being depreciated, net $ 4,537 S 14.285 $_

Business-type activities:Capital assets, not being depreciated

LandTotal capital assets, not be depreciated

Capital assets being depreciatedPlant and EquipmentWell and EquipmentLine extensionOffice EquipmentAutos and trucks

Total capital assets being depreciatedLess accumulated depreciation for:

All depreciable assetsTotal business-type assets being depreciated, net

BeginningBalance Increase Decrease

S 18.822

EndingBalance

$ — $

612,43191,0338,2766,4833.500

721.723

$ (339,294) $t$ 382.429 $

20,000 —— —— —— —

20.000 —

(29,943) $ —(29,943) $ —

612,431111,0338,2766,4833.500

741.723

$(369.237)$ 372.486

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Notes to the Financial Statement (Continued)

Depreciation expense of $34,791 for the year ended June 30, 2006 was charged to the followinggovernmental functions:

General administration $ 4,848Business-type activities 29.943

Total

7.

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REQUIRED SUPPLEMENTAL INFORMATION

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VILLAGE OF SIMPSON, LOUISIANASchedule 1

Schedule of Per Diem Paid to Board MembersYear Ended June 30, 2006

Board Member Total Paid

Donnis Brinkley, Mayor $ 1,200Roger Bennett, Alderman* 600W.D. Reeder, Alderman 600Donald Owens, Alderman 600

$ 3.000

* Became interim Mayor effective September 6,2006 due to Mayor Brinkley's resignation due tohealth factors.

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Schedule of Prior Year Audit FindingsYear Ended June 30, 2006

Findings- Financial Statement Audit

There were no prior year audit findings reported as of June 30, 2006.

34


Schedule of the Corrective Action PlanFor the Current Year Audit Findings

Year Ended June 30, 2006

Current Year Audit Findings

There were no current year Findings.

35

ELLIOTT & ASSOCIATES, INC.A Professional Accounting Corporation

P. O. Box 1287Leesville, Louisiana 71496-1287

(337) 239-2535 W. Micheal Elliott, CPA(337)238-5135Fax 239-2295

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIALREPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Honorable Roger Bennett, MayorAnd the Members of the Board of Aldermen

VILLAGE of Simpson, Louisiana

I have audited the financial statements of the governmental activities, the business-type activities,and each major fund of the VILLAGE of Simpson, Louisiana, as of and for the year ended June30, 2006 which collectively comprise the VILLAGE of Simpson, Louisiana's basic financialstatements and have issued my report thereon date November 4, 2006. I conducted my audit inaccordance with auditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in Government Auditing Standards, issued bythe Comptroller General of the United States.

Compliance

As part of obtaining reasonable assurance about whether the VILLAGE of Simpson, Louisiana'sfinancial statements are free of material misstatement, I performed tests of its compliance withcertain provisions of laws, regulations, contracts, and grants, noncompliance with which couldhave a direct and material effect on the determination of financial statement amounts. However,providing an opinion on compliance with those provisions was not an objective of my audit and,accordingly, I do not express such an opinion. The results of my tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.

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The Honorable Roger Bennett, MayorVILLAGE of Simpson, LouisianaPage 2

Internal Control Over Financial Reporting

In planning and performing my audit, I considered the VILLAGE of Simpson, Louisiana'sinternal control over financial reporting in order to determine my auditing procedures for thepurpose of expressing my opinion on the financial statements and not to provide assurance on theinternal control over financial reporting. My consideration of the internal control over financialreporting would not necessarily disclose all matters in the internal control over financialreporting that might be material weaknesses. A material weakness is a condition in which thedesign or operation of one or more of the internal control components does not reduce to arelatively low level the risk that misstatements in amounts that would be material in relation tothe financial statements being audited may occur and not be detected within a timely period byemployees in the normal course of performing their assigned functions. I noted no mattersinvolving the internal control over financial reporting and its operation that I consider to bematerial weaknesses.

This report is intended solely for the information and use of management, others within theorganization, the Board of Aldermen, and the Legislative Auditor and is not intended to be andshould not be used by anyone other than these specified parties, although under LouisianaRevised Statue 24:513, this report is distributed by the Legislative Auditor as a public document.

Leesville, LouisianaNovember 4, 2006

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Documents

06DEC ii AMii; gc · 2021. 1. 8. · 06DEC ii AMii; gc VILLAGE OF SIMPSON ANNUAL FINANCIAL STATEMENTS WITH AUDITOR'S REPORT June 30, 2006 Underprovisions of state law, this report