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POVERTY POINT REGIONAL ECONOMIC DEVELOPMENT CORPORATION
FINANCIAL STATEMENTS DECEMBER 31, 2012
POVERTY POINT REGIONAL ECONOMIC DEVELOPMENT CORPORATION
DECEMBER 31, 2012
C O N T E N T S
Page
INDEPENDENT ACCOUNTANTS' REPORT 1
FINANCIAL STATEMENTS
Statement of Financial Position 2
Statement of Activities 3
Statement of Cash Flows 4
NOTES TO THE FINANCIAL STATEMENTS 5-10
SUPPLEMENTARY INFORMATION
Schedule I - Schedule of Findings and Response 11-12
Cochran, Clark & Robinson ACCcponjfcnofCefttfledPLtolcAccoirilcrils •X6 AJa Street • P.O, Box 533 - Ra/vie. Lxxjfciana 71269
Susan C Cochrcn, CPA A C Clofk III, CPA Rene6 Robhson, CPA
[3181 728-'1655 [318) 728-5670
Fax (318) 728-6618 ccr@ccrcpa,net
INDEPENDENT ACCOUNTANTS'COMPILATION REPORT
To Che Board of Directors of Poverty Point Regional Economic Development Corporation 809 Julia Street; Suite A Rayville, LA 7i::69
We have compiled the accompanying statement of financial position of Poverty Point Regional Economic Development Corporation (a nonprofit corporation) as of December 31, 2012, and the related statement of activities and the cash flows for the year then ended. He have not audited or reviewed the accompanying financial statements and, accordingly do not express an opinion or provide any assurance about whether the financial statements are in accordance with accounting principles generally accepted in the United States of America.
Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America and for designing, implementing and maintaining internal control relevant to the preparation and rair presentation of the financial statements.
Our responsibility is to conduct the compilation in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. The objective of a compilation is to assist the owners in presenting financial information in the form of financial statements without undertaking to obtain or provide any assurance that there are no material modifications th=3t should be made to the financial statements.
The supplementary information contained in Schedule I is presented for purposes of additional analysis and is not a required pare of the basic financial statements. The supplementary information has been compiled from information that is the representation of management. We have not audited or reviewed the supplementary information and, accordingly, do not express an opinion or provide any assurance on such supplementary information.
Cochran, Clark & Robinson
/^^cLu^ tlca.iJ<, S^i^y^-
Rayville, LA June 26, 2013
Page 2
POVERTY POINT REGIONAL ECONOMIC DEVELOPMENT CORPORATION STATEMENT OF FINANCIAL POSITION
DECEMBER 31, 2012
ASSETS
CURRENT ASSETS Cash in Bank 2,626
TOTAL CURRENT ASSETS 2,626
PROPERTY, PLANT AND EQUIPMENT Land 25,946 Equipment 3,313 Accumulated Depreciation (2, 700)
NET PROPERTY, PLANT AND EQUIPMENT 26,559
TOTAL ASSETS 29,185
LIABILITIES AND NET ASSETS
NET ASSETS Unrestricted Net Assets 3,239 Permanently Restricted Net Assets 25, 946
TOTAL NET ASSETS 29,185
TOTAL LIABILITIES AND NET ASSETS 29,185
See Independent Accountants' Compilation Report. The accompanying notes are an integral part of these financial statements.
POVERTY POINT REGIONAL ECONOMIC DEVELOPMENT CORPORATION STATEMENT OF ACTIVITIES
FOR THE YEAR ENDING DECEMBER 31, 2012
Page 3
REVENUE, GAINS AND OTHER SUPPORT
State Revenue Interest Income Net Assets Released from
Restriction TOTAL REVENUE, GAINS AND OTHER SUPPORT
TEMPORARILY PERMANENTLY UNRESTRICTED RESTRICTED RESTRICTED
17,179
17,180
TOTAL
17,179
(17,179)
0
0
0
17,179
1
0
17,180
EXPENSES PROGRAM SERVICES Contractors Depreciation Insurance Legal and Professional
TOTAL PROGRAM SERVICES
SUPPORTING SERVICES Dues Salaries and Taxes
TOTAL SUPPORTING SERVICES
TOTAL EXPENSES
CHANGE IN NET ASSETS
TRANSFERS OUT
NET ASSETS BEGINNING OF YEAR
NET ASSETS END OF YEAR
630
80 4,695 17,354 22,759
101
254 355
23,114
(5,934)
0
9,173
3,239
0
0
0
0
0
0
0
25,
25,
0
0
0
0
0
946
946
630
80 4,695 17,354
22,759
101
254
355
23,114
(5,934)
0
35,119
29,185
See Independent Accountants' Compilation Report. The accompanying notes are an integral part of these financial statements.
POVERTY POINT REGIONAL ECONOMIC DEVELOPMENT CORPORATION STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 2012
Page 4
RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Change in Net Assets
Adjustments to Reconcile Net Assets to Net Cash Provided by Operating Activities:
Depreciation
Changes in Assets and Liabilities: Increase (Decrease) in Accounts Payable Increase (Decrease) in Payroll Taxes Payable
Total Adjustments NET CASH USED BY OPERATING ACTIVITIES
80
(97,550) (611)
(5,934)
(98,081) (104,015)
Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
(104,015)
106,641
2,626
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash Payments for Interest C
Cash Payments for Taxes C
See Independent Accountants' Compilation Report. The accompanying notes are an integral part of these financial statements.
Page 5
POVERTY POINT REGIONAL ECONOMIC DEVELOPMENT CORPORATION NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2012
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Corporation's Activities. Poverty Point Regional Economic Development Corporation (the corporation and PPREDC) was incorporated on March 25, 2002, for the purpose of providing and encouraging economic development in East Carroll, Madison, Richland, and West Carroll Parishes, in the State of Louisiana.
The corporation, which is designated as a non-profit economic development corporation, was created under the authority of Louisiana Revised Statute 33:9021. This statute authorizes the creation and organization of non-profit economic development corporations, when approved by the governing authority of a local governmental subdivision. Poverty Point Reservoir District (PPRD) authorized the formation of Poverty Point Regional Economic Development Corporation. Once created, the Corporation is independent of the governmental subdivision that authorized its formation.
Poverty Point Regional Economic Development's goal is to alleviate the conditions of economic distress present in the above-mentioned parishes by providing jobs and economic stimulus. The Corporation's plan of action is to act as a catalyst for the construction and development of recreational and related service businesses and facilities, in order to encourage and promote economic development. The initial development project, which was transferred to the State of Louisiana Office of Culture, Recreation, & Tourism (CRT) through the Poverty Point Reservoir District in December 2010, (See Note 11), consisted of a golf course and related facilities, including a clubhouse, restaurant, and maintenance building. The projects shall be for public access and will encourage other private economic development.
In 2011, PPREDC completed a Stay and Play Project adjacent to the golf course. Funding for this project was provided by the State of Louisiana through a cooperative endeavor agreement with the Louisiana Department of Transportation and Development (DOTD). The DOTD administers funds appropriated by the Louisiana legislature for capital outlay projects. The Project was transferred to the State of Louisiana, Office of Culture, Recreation and Tourism in 2011.
Basis of Accounting. The financial statements have been prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America, applicable for not-for-profit organizations. The statements reflect all significant receivables, payables, and other liabilities.
State Capital Outlay Revenue is considered to be earned to the extent that the liability for the expenditure has been incurred. The expenses are recognized when incurred for the capital outlay project.
See Independent Accountants' Compilation Report.
Page 6
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Contributions are recorded as revenue upon receipt of cash, property, or unconditional pledges. Contributions are considered available for unrestricted use unless specifically restricted by the donor.
Restricted Resources. All funds received from the State of Louisiana are restricted for use in achieving the corporation's stated purpose of improving economic development in the specified area.
Cash. Cash consists of cash in banlc, and certificates of deposits with maturity dates of less than three months.
Accounts Receivable. Accounts Receivable are reimbursements from the DOTD for pre-approved costs incurred in the project. Because receivables are not recorded until approved, there is no allowance for doubtful accounts.
Property, Plant and Equipment. Land costs are presented at cost or approximate value on the date of the donation, including legal, professional, and recording costs allocated to property acquisitions. The golf course, infrastructure, buildings, and improvements are stated at cost less accumulated depreciation.
Furniture and equipment are carried at cost or if donated, at the approximate fair marlcet value at the time of donation. The threshold amount for capitalization is $100 for furniture or equipment.
Depreciation is calculated using the straight-line method with estimated useful lives ranging from five to ten years.
Revenue. The Corporation receives substantially all of its support from the DOTD. State contract support is recognized to the extent of approved reimbursable expenses.
Organizational Costs and Trademark. Amortization of organizational costs and trademark is recorded using the straight-line method over a sixty-month period.
Income Taxes. The Corporation is exempt from federal income taxes under section 501(c) (3) of the Internal Revenue Code and did not conduct any unrelated business activities. Therefore, there is no provision for federal income taxes in the accompanying financial statements.
The Corporation is required to file and does file tax returns with the Internal Revenue Service (IRS) and other taxing authorities. Generally, the IRS can examine returns for up to three years after they are filed. The federal income tax returns of the Corporation for 2009, 2010, and 2011, are subject to examination by the IRS.
See Independent Accountants' Compilation Report.
Page 7
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
Planned Maintenance. Planned maintenance costs are recognized using the direct expense method and will be expensed as incurred.
NOTE 2 - CASH
The Corporation maintains a general fund and special projects fund checking accounts at BancorpSouth. On December 31, 2012, all funds were insured by the FDIC.
NOTE 3 - PROPERTY, PLANT & EQUIPMENT
The book value of property, plant, and equipment at December 31, 2012, is as follows:
CLASS Land Office Equipment
TOTALS
ESTIMATED LIFE
5-10 yrs.
COST 25,946 3,313 29,259
ACCUMULATED DEPRECIATION
2,700 2.,7_00
BOOK VALUE 25,946
613 26,.559
Depreciation expense for the year ended December 31, 2012, calculated using the straight-line method is $80.
During 2011, the Stay and Play project was completed. The completed components of the project were capitalized based on generally accepted accounting principles. The Stay and Play project and various capitalized assets were purchased with DOTD funds and are classified as permanently restricted assets. There was no depreciation associated with the Stay and Play, since the project was completed and shortly thereafter, transferred to the CRT and placed in service.
On June 22, 2011, the Corporation transferred to the CRT, through cooperative endeavor agreement, all of its rights, title, and interest in "and to the immovable property attached to, 3.77 3 acres where the Stay and Play Project was constructed (See Note 11).
See Independent Accountants' Compilation Report.
Page 8
NOTE 4 - AMORTIZABLE ASSETS
Trademark costs of $10,355 were amortized over a sixty-month period using the straight-line method. The current year amortization expense was $0. At year-end, the Corporation's intangible assets were fully amortized and not reflected on the statement of financial position.
NOTE 5 - INCOME TAXES
The Corporation has received tax-exempt status from the Internal Revenue Service under Section 501(c)(3) of the Internal Revenue Code. Because their application and approval occurred within 27 months of the date of the corporation's organization, their tax-exempt status is retroactive to the date of organization.
NOTE 6 - NET ASSETS
Funds transferred from the Poverty Point Reservoir District as grant funds in 2002 for initial operating capital, are unrestricted. Any residual assets from this funding source are classified as "Unrestricted Net Assets".
All State Revenue received by the Corporation is restricted by DOTD for use in the development, design, and construction of recreational improvements in the designated economically depressed area. Based on the specified intent expressed in the Cooperative Endeavor Agreement between the Corporation and DOTD, any residual assets funded by DOTD are classified es "Permanently Restricted Net Assets".
Contributions of property for the golf course are classified as "Permanently Restricted Net Assets". The property would revert to the donee if the property ceases to be used for its stated purpose. Property contributions were donated to the golf course. At year-end, all property with the exception of 26.42 acres has been transferred to the CRT.
NOTE 7 - MEMBERSHIP IN THE CORPORATION
The corporation is organized on a non-stock basis. Membership in the corporation is represented by membership certificates pursuant to the terms of L.S.A.-R.S. 12:210. The members must be adult persons residing in Richland, Madison, West Carroll, or East Carroll Parishes, Louisiana. At present, the corporation has four members.
NOTE 8 - BOARD OF DIRECTORS' COMPENSATION
As per the Articles of Incorporation dated March 25, 2002, Article XI "The Board of Directors shall receive no compensation". In 2012, the members of the Board of Directors did not receive any compensation.
See Independent Accountants' Compilation Report,
Page 9
NOTE 9 - COMPENSATED ABSENCES
The Corporation does not accrue for compensated absences. Management believes the amount is immaterial to the financial statements.
NOTE 10 - CONCENTRATIONS
The State of Louisiana Department of Transportation and Development provides support through appropriated capital outlay funds. The availability of these funds is subject to approval by acts of state legislation.
Financial instruments that potentially subject the corporation to concentrations of credit risk consist principally of cash investments in banks at times in excess of the FDIC insured $250,000 limit (See Note 2).
Management believes that the Corporation is not exposed to any significant credit risk related to cash or to accounts receivable under the State Capital Outlay appropriation.
NOTE 11 - COOPERATIVE ENDEAVOR AGREEMENT
On May 16, 2007, the State of Louisiana Department of Culture, Recreation, and Tourism (CRT) and the Department of Transportation and Development together with the Louisiana Division of Administration entered into a Cooperative Endeavor Agreement with Poverty Point Reservoir District (PPRD) and Poverty Point Regional Economic Development Corporation (PPREDC) to transfer upon completion the Black Bear Golf Course including all real property and improvements owned by PPREDC, and some additional real estate owned by PPRD.
The first amendment to the Cooperative Endeavor Agreement was signed November 17, 2010, and amended the agreement to transfer the Stay and Play lodge upon completion, including all real property and improvements associated with the lodge.
In 2010, the Corporation transferred the Black Bear Golf Course including all real property and improvements to PPRD, excluding 30.19 acres, which was held for future development. Concurrently, the PPRD transferred the property to the CRT.
On June 22, 2011, the Corporation transferred the Stay and Play Project on completion to the PPRD, along with 3.773 acres (See Note 3). Concurrently, the PPRD transferred the property to the CRT.
NOTE 12 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Because of the short maturity of cash and cash equivalents, intergovernmental payable, and payroll taxes payable their carrying amounts approximates fair value.
See Independent Accountants' Compilation Report,
Page 10
NOTE 13 - CONTRACTS
The corporation entered into no contracts during 2012.
NOTE 14 - SUBSEQUENT EVENTS
Management has evaluated subsequent events through June 26, 2013, the date the financial statements were available to be issued. No events, other than those described in these notes, have occurred that require disclosure or adjustments.
See Independent Accountants' Compilation Report,
Page 11
POVERTY POINT REGIONAL ECONOMIC DEVELOPMENT CORPORATION RAYVILLE, LOUISIANA
Schedule I Schedule of Findings and Responses
For the Year Ending December 31, 2012
Prior Year Findings Page 1 of 2
Finding Related to the Financial Statement Audit Report in Accordance with Generally Accepted Governmental Auditing Standards (GAGAS):
Finding 11-1 - Oversight over Cost Reimbursements:
Condition/Cause: A cost reimbursement request was submitted in accordance with the amendment to the Cooperative Endeavor Agreement with the CRT. The invoices had previously been submitted to the DOTD and paid earlier in the year. The total reimbursement from the CRT was $97,550.
Criteria:
Effect:
Cost reimbursement controls should be in place to insure submission of reimbursement requests with a single agency.
There has been no expenditure of the excess funds, therefore cash in the special projects fund is over stated.
Recommendation: PPREDC should reimburse the funds that were requested with an explanation that payment had been received under terms with the other agency.
In addition, management should review reimbursements of cost on a regular basis.
Management's Response: Management plans to reimburse the funds in a timely
manner. Management stated that they contacted the Louisiana Legislative Auditor to set up a meeting with the DOTD and CRT, to determine which agency should be reimbursed.
Follow-Up: In 2012, Management reimbursed $97,550 to DOTD as approved by the Office of the Legislative Auditor, DOTD, and CRT.
(Continued)
See Independent Accountants' Compilation Report.
Page 12
POVERTY POINT REGIONAL ECONOMIC DEVELOPMENT CORPOEy TION RAYVILLE, LOUISIANA
Schedule I Schedule of Findings and Responses
For the Year Ending December 31, 2012
Page 2 of 2
(Continued)
Finding 11-2 - Board Member Oversight:
Condition/Cause: During the past year, the Board of Directors have not conducted formal meetings and recorded minutes.
Criteria:
Effect:
Recommendation:
Management's Response:
Follow-Up:
The articles of incorporation call for a minimum annual meeting.
The Board has not documented decisions made during the year.
Decisions and oversight of the board should be documented in a timely manner, even if a formal meeting has not been called. The board should conduct an annual meeting.
Management will hold annual meeting and document all major decisions.
In 2012, Management has conducted formal meetings and documented its decisions in recorded minutes.
See Independent Accountants' Compilation Report.
