RECFivrn i.Fn. :i - app1.lla.state.la.usapp1.lla.state.la.us/PublicReports.nsf/095DA5AFF96DA10286256FC... · document Acopy of the report has been ... Morgan City, LA 70380 Phone

RECFivrni.Fn. IC:i.ATi

05 MAR 11|

TOWN OF MELVILLE, LOUISIANA

Financial Report

Year Ended September 30, 2004

Under provisions o' stats law, tuiF. repcr* ic ? "' 'blicdocument Acopy of the report has been submitted tothe ent'ty and other Appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.

Release Date

TABLE OF CONTENTS

Page

Independent Auditors' Report 1-2

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS (GWFS)Statement of net assets 5Statement of activities 6

FUND FINANCIAL STATEMENTS (FFS)Balance sheet - governmental funds 9Reconciliation of the governmental funds balance sheet

to the statement of net assets 10Statement of revenues, expenditures, and changes in fund balances-

governmental funds 11Reconciliation of the statement of revenues, expenditures, and

changes in fund balances of governmental fundsto the statement of activities 12

Comparative statement of net assets - proprietary fund 13Comparative statement of revenues, expenses, and changes in fund net

assets - proprietary fund 14Comparative statement of cash flows - proprietary fund 15-16

Notes to basic financial statements 17-35

REQUIRED SUPPLEMENTARY INFORMATIONBudgetary comparison schedules:

General Fund 371982 Sales Tax Special Revenue Fund 381989 Sales Tax Special Revenue Fund 39

OTHER SUPPLEMENTARY INFORMATION

OTHER FINANCIAL INFORMATION

General Fund:Budgetary comparison schedule - revenues 42Budgetary comparison schedule - expenditures 43-44

Debt Service Funds:General Obligation Bonds 8/14/91 Debt Service Fund:

Budgetary comparison schedule 45Sales Tax Bonds 8/14/91 Debt Service Fund:

Budgetary comparison schedule 46

TABLE OF CONTENTS

Page

Schedule of number of utility customers (unaudited) 47Schedule of insurance in force (unaudited) 48Comparative departmental analysis of revenues and expenses 49-50

COMPLIANCE AND INTERNAL CONTROL

Report on Compliance and on Internal Controlover Financial Reporting Based on an Audit ofFinancial Statements Performed in Accordancewith Government Auditing Standards 52-53

Summary schedule of current and prior year audit findingsand corrective action plan 54-56

KOLDER, CHAMPAGNE, SLAVEN & COMPANY, LLCCERTIFIED PUBLIC ACCOUNTANTS

C Burton Kolder, CPA'Russell F Champagne, CPA"Victor R. Slaven. CPA"Conrad 0. Chapman, CPA'P. Tray Courville, CPA'Gerald A. Thibodeaux, Jr. CPA*

Robert S. Carter, CPAAllen J. UBry, CPAHarry J. Clostio. CPAPenny Angella Scruggins, CPAChristine I Cousin, CPAMary T. Thibodeaux, CPAKelly M. Doucet, CPAKenneth J. Rachat, CPACheryl L. Bartley. CPA. CVA

A Professional Accounting Cotporatran

WEB SITE:WWW.KCSRCPAS.COM

MEMBER OF;

AMERICAN INSTITUTE OFCERTIFIED PUBLIC ACCOUNTANTS

SOCIETY OF LOUISIANACERTIFIED PUBLIC ACCOUNTANTS

INDEPENDENT AUDITORS' REPORT

The Honorable Willie C. Haynes, III, Mayorand Members of the Board of Aldermen

Town of Melville, Louisiana

We have audited the accompanying financial statements of the governmental activities, the business-type activities, and each major fund of the Town of Melville, Louisiana, as of and for the year endedSeptember 30, 2004, which collectively comprise the Town's basic financial statements as listed in the tableof contents. These financial statements are the responsibility of the Town of Melville, Louisiana'smanagement. Our responsibility is to express opinions on these basic financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government Auditing Standards.issued by the Comptroller General of the United States. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement.An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that our auditprovides a reasonable basis for our opinions.

In our opinion, the basic financial statements referred to above present fairly, in all material respects,the respective financial position of the governmental activities, the business-type activities, and each majorfund of the Town of Melville, Louisiana, as of September 30, 2004, and the respective changes in financialposition and cash flows, where applicable, thereof for the year then ended in conformity with accountingprinciples generally accepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued a report dated January 7,2005 on our consideration of the Town of Melville's internal control over financial reporting and on our testsof its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integralpart of an audit performed in accordance with Government Auditing Standards, and should be read inconjunction with this report in considering the results of our audit.

As described in Note 2 to the basic financial statements, the Town of Melville adopted the provisionsof Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - andManagement's Discussion and Analysis - for State and Local Governments. This results in a change in theformat and content of the financial statements.

183 South BeadleLafayette, LA 70508Phone (337) 232-4141Fan(337) 232-8660

113 East Bridge StreetBreaux Bridge, LA 70517Phone (337) 332-4020Fax (337) 332-2867

133 East WadditMarksville, LA 71351Phone(318) 253-9252Fax (318)253-8681

1234 David Drive, Suite 105Morgan City, LA 70380Phone (985) 3 84-2020Fax (985) 384-3020

408 W. Cotton StreetVille Platte. LA 70586Phone (337) 363-2792Fax (337) 363-3049

332 W, Sixth AvenueOberlin, LA 70655Phone (337) 639-4737Fax (337) 639-4568

200 South Main StreetAbbeville, LA 70510Phone (337) 893-7944Fax (337) 893-7946

The required supplementary information on pages 37 through 39 are not a required part of the basicfinancial statements but are supplementary information required by the Governmental Accounting StandardsBoard. We have applied certain limited procedures, which consisted principally of inquiries of managementregarding the methods of measurement and presentation of the supplementary information. However, we didnot audit the information and express no opinion on it.

The Town of Melville has not presented management's discussion and analysis that the GovernmentalAccounting Standards Board has determined is necessary to supplement, although not required to be a part of,the basic financial statements.

Our audit was conducted for the purpose of forming opinions on the financial statements thatcollectively comprise the Town of Melville's basic financial statements. The other supplementaryinformation on pages 40 - 56 is presented for purposes of additional analysis and is not a required part of thebasic financial statements. Such information, except for that portion marked "unaudited" on which weexpress no opinion, has been subjected to the auditing procedures applied in the audit of the basic financialstatements, and in our opinion, is fairly presented in all material respects in relation to the basic financialstatements taken on a whole.

The financial information for the preceding year, which is included for comparative purposes, wastaken from the financial report for that year in which we expressed an unqualified opinion on the generalpurpose financial statements of the Town of Melville, Louisiana.

Kolder, Champagne, Slaven & Company, LLCCertified Public Accountants

Lafayette, LouisianaJanuary 7, 2004

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDEFINANCIAL STATEMENTS (GWFS)


Statement of Net AssetsSeptember 3 0,2004

ASSETSCurrent assets:

Cash and interest-bearing depositsReceivables, netInternal balancesDue from other governmental units

Total current assets

Noncurrent assets:Restricted assets:

Cash and interest-bearing depositsCapital assets:

LandCapital assets, net

Total noncurrent assets

Total assets

LIABILITIESCurrent liabilities:

Accounts and other payablesCapital lease payableBonds payableAccrued interest

Total current liabilities

Noncurrent liabilities:Customers' depositsCapital lease payableBonds payable

Total noncurrent liabilities

Total liabilities

NET ASSETSInvested in capital assets, net of related debtRestricted for debt serviceUnrestricted

Total net assets

GovernmentalActivities

$ 76,8174,214

37,09419,055

137,180

92,159185,962

278,121

415,301

89,8038,372

39,91914,634

152,728

7,335189,968

197,303

350,031

32,52711,60221,141

$ 65,270

Business-TypeActivities

$64,300

(37,094)-

27,206

51,802

_

4,033,452

4,085,254

4,112,460

50,495-

56,00011,535

118,030

45,746-

813,156

858,902

976,932

3,158,817-

(23,289)

$3,135,528

51,802

92,1594,219,414

4,363,375

4,527,761

140,2988,372

95,91926,169

270,758

45,7467,335

1,003,124

1,056,205

1,326,963

3,191,34411,602(2,148)

$3,200,798

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

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FUND FINANCIAL STATEMENTS (FFS)

FUND DESCRIPTIONS

General Fund

To account for resources traditionally associated with governments which are not required to be accountedfor in another fund.

Special Revenue Funds

1982 Sales Tax Fund -To account for the receipt and use of proceeds of the Town's 1% sales and use tax. The tax is dedicated tothe purposes of providing fire protection to the Town; providing for the operation, maintenance andimprovements to the natural gas distribution system and water system of the Town; and paying generaloperating expenses for the Town.

1989 Sales Tax Fund -

To account for the receipt and use of proceeds of the Town's 1,2% sales and use tax. The tax is dedicatedand used for the purposes of constructing, improving and maintaining public streets and bridges within theTown and maintaining and operating sewers and sewerage disposal facilities of the Town.

Debt Service Funds

General Obligation Bonds 08/14/91 FundTo accumulate monies for payment of the 1991 $155,000 General Obligation Bonds. Debt service isfinanced by the levy of a specific ad valorem tax.

Sales Tax Bonds 08/14/91 FundTo accumulate monies for the payment of the 1991 $450,000 Sales Tax Bonds. Debt service is financedfrom the 1989 Sales Tax Fund revenues.

Enterprise Fund

Utility Fund -

To account for the provision of gas, water, and sewer services to residents of the Town. All activitiesnecessary to provide such services are accounted for in this fund, including, but not limited to,administration, operations, maintenance, financing and related debt service, and billing and collections.

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Reconciliation of the Governmental Funds Balance Sheetto the Statement of Net Assets

September 30, 2004

Total fund balances for governmental funds at September 30, 2004

Total net assets reported for governmental activities in the statement of netassets is different because:

Capital assets used in governmental activities are not financial resourcesand, therefore, are not reported in the funds. Those assets consist of:

LandBuildings and improvements, net of $301,230 accumulated depreciationInfrastructure, net of $9,766 accumulated depreciationEquipment, net of $120,259 accumulated depreciation

$ 47,377

$ 92,159139,31623,24323,403 278,121

Long-term liabilities at September 30, 2004:

Bonds payable

Capital lease payable

Accrued interest payable

Total net assets of governmental activities at September 30, 2004

(229,887)

(15,707)

(14,634) (260,228)

$ 65,270


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Reconciliation of the Statement of Revenues, Expenditures, andChanges in Fund Balances of Governmental Funds

to the Statement of ActivitiesFor the Year Ended September 30, 2004

Total net changes in fund balances at September 30,2004 perStatement of Revenues, Expenditures and Changes in Fund Balances $21,808

The change in net assets reported for governmental activities in thestatement of activities is different because:

Governmental funds report capital outlays as expenditures. However,in the statement of activities, the cost of those assets is allocated overtheir estimated useful lives and reported as depreciation expense.

Capital outlay which is considered expenditures on Statementof Revenues, Expenditures and Changes in Fund Balances $ 10,723

Depreciation expense for the year ended September 30, 2004 (25,778) (15,055)

Principal paid on long term debt considered as an expenditure on statement 47,968

Difference between interest on long-term debt on modified accrual basis

versus interest on long-term debt on accrual basis

Total changes in net assets at September 30, 2004 per Statement of Activities


12


Comparative Statement of Net AssetsProprietary Fund

September 30, 2004 and 2003

2004 2003ASSETS

Current assets:Receivables:

Accounts receivableOther receivableDue from other fundsDue from other governmental units

Total current assets

Noncurrent assets:Restricted assets -

CashInterest-bearing deposits, at cost

Capital assets:Construction in progressOther capital assets, net of accumulated depreciation

Total noncurrent assets

Total assets

LIABILITIES

Current liabilities:Cash overdraftAccounts payableContracts payableOther liabilitiesDue to other fundsPayable from restricted assets -Revenue bondsAccrued interestCustomers' deposits

Total current liabilities

Noncurrent liabilities:Revenue bonds payable

Total liabilities

NET ASSETS

Invested in capital assets, net of related debtUnrestricted

Total net assets


13

$ 54,4429,858--

64,300

$ 43,8129,3891,8104,500

59,511

1,13150,671

5,50944,709

27737,094

56,00011,53545,746

200,870

813,156

1,014,026

76481,917

4,033,4524,085,254

4,149,554

567,6133,620,4984,270,792

4,330,303

21,06649,0464,5005,161

54,667

53,00017,25840,785

245,483

895,0001,140,483

3,158,817 3,264,749(23,289) (74,929)

$3,135,528 $3,189,820


Comparative Statement of Revenues, Expenses, and Changes in Fund Net Assets -Proprietary Fund

For the Years Ended September 30,2004 and 2003

Totals2004 2003

Operating revenues:Charges for services -

Gas salesWater salesSewer salesDelinquent charges

Miscellaneous -Slemco franchiseOther

Total operating revenues

Operating expenses:Gas department expensesWater department expensesSewer department expensesGas department depreciationWater department depreciationSewer department depreciation

Total operating expenses

Operating income

Nonoperating revenues (expenses):Interest incomeInterest expense

Total nonoperating expenses

Income (loss) before contributions and transfers

Capital contributions

Transfers in (out):Transfers inTransfers out

Total transfers in (out)

Change in net assets

Net assets, beginning

Net assets, ending

$ 264,659127,544117,517

874

47,28018,825

576,699

165,12191,62676,84039,33848,78269,096

490,803

85,896

540(58,228)(57,688)

28,208

(82,500)

(82,500)

(54,292)

3,189,820

$3,135,528

$ 233,89287,07591,188

1,687

51,2871,726

466,855

198,75283,60442,84539,33832,15668,987

465,682

1,173

1,449(73,411)(71,962)

(70,789)

137,063

27,634(165,571)

(137,937)

(71,663)

3,261,483

$3,189,820


14


Comparative Statement of Cash Flows -Proprietary Fund

Years Ended September 30,2004 and 2003

2004 2003Cash flows from operating activities:

Receipts from customersPayments to suppliersPayments to employeesOther receipts

Net cash provided by operating activities

Cash flows from noncapital financing activities:Cash received from other fundsCash paid to other fundsTransfer from other fundsTransfer to other funds

Net cash used for noncapital financing activities

Cash flows from capital and related financing activities:Principal paid on revenue bondsInterest and paying agent fees paid on revenue bondsPurchase of property, plant and equipmentIncrease in customers' depositsProceeds from water grant

Net cash used for capital and related financing activities

Cash flows from investing activities:Interest received on interest-bearing deposits

Net decrease in cash and cash equivalents

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of period

$499,964(433,578)

74,74466,105

207,235

540

(30,879)

82,681

$415,772(453,417)

92,36753,013

107,735

1,810(17,573)

-(82,500)

(98,263)

42,667(1,810)27,634

(165,571)

(97,080)

(78,844)(63,951)

(2,557)4,961-

(51,000)(73,831)

(137,063)6,783

137,063

(140,391) (118,048)

1,449

(105,944)

188,625

$ 51,802 $ 82,681

(continued)

15


Comparative Statement of Cash Flows -Proprietary Fund (Continued)

Years Ended September 30,2004 and 2003

2004 2003

Reconciliation of operating income to net cash provided byoperating activities:

Operating income

Adjustments to reconcile operating increase to net cash provided byoperating activities:DepreciationChanges in current assets and liabilities:

(Increase) decrease in accounts receivableIncrease in other receivableDecrease in cash overdraftDecrease in accounts payableIncrease (decrease) in other accrued liabilities

Net cash provided by operating activities

Reconciliation of cash and cash equivalents per statement of cashflows to the balance sheet:

Cash and cash equivalents, beginning of period -Interest-bearing deposits - restricted

Cash and cash equivalents, end of period -Interest-bearing deposits - restricted

Net decrease

$ 85,896 $ 1,173

157,216 140,481

(10,630) 1,930(469) (132)

(15,557) (7,896)(4,337) (29,676)(4,884) 1,855

$ 207,235 $ 107,735

$ 82,681 $ 188,625

51,802 82,681

$ (30,879) $(105,944)


16


Notes to Basic Financial Statements

(1) Summary of Significant Accounting Policies

The accompanying financial statements of the Town of Melville (Town) have beenprepared in conformity with generally accepted accounting principles (GAAP) as applied togovernmental units. GAAP includes all relevant Governmental Accounting Standards Board (GASB)pronouncements. In the government-wide financial statements and the fund financial statements forthe proprietary funds, Financial Accounting Standards Board (FASB) pronouncements andAccounting Principles Board (APB) opinions on or before November 30, 1989, have been appliedunless those pronouncements conflict with or contradict GASB pronouncements, in which case,GASB prevails. The accounting and reporting framework and the more significant accountingpolicies are discussed in subsequent subsections of this note. For the fiscal year ended September 30,2004, the Town implemented the new financial reporting requirements of GASB Statement No. 34,Basic Financial Statements - and Management's Discussion and Analysis - for State and LocalGovernments. As a result, an entirely new financial presentation format has been implemented.

A Financial Reporting Entity

The Town of Melville was incorporated under the provisions of theLawrason Act. The Town operates under the Mayor-Board of Aldermen form ofgovernment.

This report includes all funds that are controlled by or dependent on theTown's executive and legislative branches (the Mayor and Board of Aldermen).Control by or dependence on the Town was determined on the basis of budgetadoption, taxing authority, authority to issue debt, election or appointment ofgoverning body, and other general oversight responsibility.

Based on the foregoing criteria, there are no component unit governmentalorganizations that are included as part of the Town.

B. Basis of Presentation

Government-Wide Financial Statements (GWFS)

The statement of net assets and statement of activities display informationabout the reporting government as a whole. They include all funds of the reportingentity. The statements distinguish between governmental and business-type activities.Governmental activities generally are financed through taxes, intergovernmentalrevenues, and other nonexchange revenues. Business-type activities are financed inwhole or in part by fees charged to external parties for goods or services.

17


Notes to Basic Financial Statements (Continued)

The statement of activities presents a comparison between direct expensesand program revenues for the business-type activities of the Town and for eachfunction of the Town's governmental activities. Direct expenses are those that arespecifically associated with a program or function and, therefore, are clearlyidentifiable to a particular function. Program revenues include (a) fees, fines, andcharges paid by the recipients of goods or services offered by the programs, and (b)grants and contributions that are restricted to meeting the operational or capitalrequirements of a particular program. Revenues that are not classified as programrevenues, including all taxes, are presented as general revenues.

Fund Financial Statements

The accounts of the Town are organized and operated on the basis of funds.A fund is an independent fiscal and accounting entity with a separate set of self-balancing accounts. Fund accounting segregates funds according to their intendedpurpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds ismaintained consistent with legal and managerial requirements.

The various funds of the Town are classified into two categories:governmental and proprietary. The emphasis on fund financial statements is on majorgovernmental and enterprise funds, each displayed in a separate column. A fund isconsidered major if it is the primary operating fund of the Town or meets thefollowing criteria:

a. Total assets, liabilities, revenues, or expenditures/expenses of thatindividual governmental or enterprise fund are at least 10 percent ofthe corresponding total for all funds of that category or type and

b. Total assets, liabilities, revenues, or expenditures/expenses of theindividual governmental or enterprise fund are at least 5 percent ofthe corresponding total for all governmental and enterprise fundscombined.

All funds of the Town are considered to be major funds and are describedbelow:

Governmental Funds -

General Fund

The General Fund is the general operating fund of the Town. It is used toaccount for all financial resources except those required to be accounted for inanother fund.

18



Special Revenue Funds

Special revenue funds are used for the proceeds of specific revenue sources(other than expendable trusts or major capital projects) that are legally restricted toexpenditures for specific purposes.

Debt Service Funds

Debt service funds are used to account for the accumulation of resources for,and the payment of, general long-term debt principal, interest, and related costs.

Proprietary Funds -

Enterprise Fund

Enterprise funds are used to account for operations (a) that are financed andoperated in a manner similar to private business enterprises - where the intent of thegoverning body is that the costs (expenses, including depreciation) of providinggoods or services 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, expenses incurred, and/or net income isappropriate for capital maintenance, public policy, management control,accountability, or other purposes.

C. Measurement Focus/Basis of Accounting

Measurement focus is a term used to describe "which" transactions arerecorded within the various financial statements. Basis of accounting refers to"when" transactions are recorded regardless of the measurement focus applied.

Measurement Focus

On the government-wide statement of net assets and the statement ofactivities, both governmental and business-type activities are presented using theeconomic resources measurement focus as defined in item b. below.

19



In the fund financial statements, the "current financial resources"measurement focus or the "economic resources" measurement focus is used asappropriate:

a. All governmental funds utilize a "current financial resources"measurement focus. Only current financial assets and liabilities aregenerally included on their balance sheets. Their operatingstatements present sources and uses of available spendable financialresources during a given period. These funds use fund balance astheir measure of available spendable financial resources at the end ofthe period.

b. The proprietary fund utilizes an "economic resources" measurementfocus. The accounting objectives of this measurement focus are thedetermination of operating income, changes in net assets (or costrecovery), financial position, and cash flows. All assets and liabilities(whether current or noncurrent) associated with their activities arereported. Proprietary fund equity is classified as net assets.

Basis of Accounting

In the government-wide statement of net assets and statement of activities,both governmental and business-type activities are presented using the accrual basisof accounting. Under the accrual basis of accounting, revenues are recognized whenearned and expenses are recorded when the liability is incurred or economic assetused. Revenues, expenses, gains, losses, assets, and liabilities resulting fromexchange and exchange-like transactions are recognized when the exchange takesplace. Revenues, expenses, gains, losses, assets, and liabilities resulting fromnonexchange transactions are recognized in accordance with the requirements ofGASB Statement No. 33 "Accounting and Financial Reporting for NonexchangeTransactions."

In the fund financial statements, governmental funds are presented on themodified accrual basis of accounting. Under this modified accrual basis ofaccounting, revenues are recognized when "measurable and available." Revenues areconsidered to be available when they are collectible within the current period or soonenough thereafter to pay liabilities of the current period. For this purpose, thegovernment considers revenues to be available if they are collected within 60 days ofthe end of the current fiscal period. Expenditures (including capital outlay) arerecorded when the related fund liability is incurred, except for general obligationbond principal and interest which are reported when due.

The proprietary fund utilizes the accrual basis of accounting. Under theaccrual basis of accounting, revenues are recognized when earned and expenses arerecorded when the liability is incurred or economic asset used.

20



D. Assets. Liabilities and Equity

Cash, and interest-bearing deposits

For purposes of the statement of net assets, cash and interest-bearing depositsinclude all demand accounts, savings accounts, and certificates of deposits of theTown. For the purpose of the proprietary fund statement of cash flows, "cash andcash equivalents" include all demand and savings accounts, and certificates ofdeposit with an original maturity of three months or less.

Interfund receivables and payables

During the course of operations, numerous transactions occur betweenindividual funds that may result in amounts owed between funds. Those related togoods and services type transactions are classified as "due to and from other funds."Short-term interfund loans are reported as "interfund receivables and payables."Long-term interfund loans (noncurrent portion) are reported as "advances from and toother funds." Interfund receivables and payables between funds within governmentalactivities are eliminated in the statement of net assets.

Receivables

In the government-wide statements, receivables consist of all revenuesearned at year-end and not yet received. Major receivable balances for thegovernmental activities include sales and use taxes, and franchise fees. Business-type activities report customer's utility service receivables as their major receivables.Uncollectible amounts due for customer's utility receivables are recognized as baddebts at the time information becomes available which would indicate theuncollectiblitiy of the particular receivable. Although the specific charge-off methodis not in conformity with generally accepted accounting principles (GAAP), noallowance for uncollectible receivables is recorded due to immateriality at September30, 2004. Unbilled utility service receivables resulting from utility services renderedbetween the date of meter reading and billing and the end of the month, are notrecorded due to immateriality at September 30,2004.

Capital Assets

Capital assets, which include property, plant, equipment, and infrastructureassets, are reported in the applicable governmental or business-type activitiescolumns in the government-wide or fund financial statements. Capital assets arecapitalized 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 atthe date of donation. The Town maintains a threshold level of $500 or more forcapitalizing capital assets.

21



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

Depreciation of all exhaustible capital assets is recorded as an allocatedexpense in the statement of activities, with accumulated depreciation reflected in thestatement of net assets. Depreciation is provided over the assets' estimated usefullives using the straight-line method of depreciation. The range of estimated usefullives by type of asset is as follows:

Buildings and improvements 40 yearsEquipment and vehicles 3-10 yearsUtility system and improvements 10-50 yearsInfrastructure 40 years

In the fund financial statements, capital assets used in governmental fundoperations are accounted for as capital outlay expenditures of the governmental fundupon acquisition. Capital assets used in proprietary fund operations are accounted forthe same as in the government-wide statements.

Restricted Assets

Restricted assets include cash and interest-bearing deposits of the proprietaryfund that are legally restricted as to their use. The restricted assets are related to therevenue bond accounts and utility meter deposits.

Long-term debt

The accounting treatment of long-term debt depends on whether the assetsare used in governmental fund operations or proprietary fund operations and whetherthey are reported in the government-wide or fund financial statements.

All long-term debt to be repaid from governmental and business-typeresources are reported as liabilities in the government-wide statements. The long-term debt consists primarily of revenue bonds payable and utility meter depositspayable.

Long-term debt for governmental funds is not reported as liabilities in thefund financial statements. The debt proceeds are reported as other financing sourcesand payment of principle and interest reported as expenditures. The accounting forproprietary fund long-term debt is the same in the fund financial statements as it is inthe government-wide statements.

22



Compensated Absences

Vacation and sick leave are recorded as expenditures of the period in whichpaid. Each full-time, permanent employee earns five days of sick leave per year upto a maximum of thirty days for major illness. Employees who resign or retire orwho are dismissed from employment shall not be paid for any accrued sick leave.Employees may not carry over or accumulate annual leave or sick leave from oneanniversary date to another. Any liability the town might have in this regard atSeptember 30, 2004 is considered immaterial; therefore, no liability has beenrecorded in the accounts.

Equity Classifications

In the government-wide statements, equity is classified as net assets anddisplayed in three components:

a. Invested in capital assets, net of related debt - Consists of capitalassets including restricted capital assets, net of accumulateddepreciation and reduced by the outstanding balances of any bonds,mortgages, notes, or other borrowings that are attributable to theacquisition, construction, or improvement of those assets.

b. Restricted net assets - Consists of net assets with constraints placedon the use either by (1) external groups such as creditors, grantors,contributors, or laws or regulations of other governments; or (2) lawthrough constitutional provisions or enabling legislation.

c. Unrestricted net assets - All other net assets that do not meet thedefinition of "restricted" or "invested in capital assets, net of relateddebt."

In the fund financial statements, governmental fund equity is classified asfund balance. Fund balance is further classified as reserved and unreserved, withunreserved further split between designated and undesignated. Proprietary fundequity is classified the same as in the government-wide statements.

E. Revenues. Expenditures, and Expenses

Operating Revenues and Expenses

Operating revenues and expenses for proprietary funds are those that resultfrom providing services and producing and delivering goods and/or services. It alsoincludes all revenue and expenses not related to capital and related financing,noncapital financing, or investing activities.

23



Expenditures/Expenses

In the government-wide financial statements, expenses are classified byfunction for both governmental and business-type activities.

In the fund financial statements, expenditures are classified as follows:

Governmental Funds - By CharacterProprietary Fund - By Operating and Nonoperating

In the fund financial statements, governmental funds report expenditures offinancial resources. Proprietary funds report expenses relating to use of economicresources.

Interfund Transfers

Permanent reallocations of resources between funds of the reporting entityare classified as interfund transfers. For the purposes of the statement of activities,all interfund transfers between individual governmental funds have been eliminated.

F. Revenue Restrictions

The Town has various restrictions placed over certain revenue sources fromstate or local requirements. The primary restricted revenue sources include:

Revenue Source Legal Restrictions of Use

Sales Tax See Note 10Water utility revenue Debt service and utility operations

The Town uses unrestricted resources only when restricted resources arefully depleted.

G. Budgets and Budgetary Accounting

The Town follows these procedures in establishing the budgetary datareflected in the financial statements:

1. The Town Clerk prepares a proposed operating budget for the fiscalyear and submits it to the Mayor and Board of Aldermen not later thanfifteen days prior to the beginning of each fiscal year.

24



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 afterpublication of the call for the hearing.

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

5. Budgetary amendments involving the transfers of funds from onedepartment, program or function to another or involving increases inexpenditures resulting from revenues exceeding amounts estimatedrequire the approval of the Board of Aldermen.

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

7. Budgets for all funds are adopted on a basis consistent with generallyaccepted accounting principles (GAAP). Budgeted amounts are asoriginally adopted or as finally amended by the Board of Aldermen.Such amendments were not material in relation to the originalappropriations.

H. Capitalization of Interest Expense

It is the policy of the Town of Melville to capitalize material amounts ofinterest resulting from borrowings in the course of the construction of fixed assets.No interest was capitalized for the year ended September 30,2004.

I. Use of Estimates

The preparation of financial statements in conformity with generallyaccepted accounting principles requires management to make estimates andassumptions that affect certain reported amounts and disclosures. Accordingly, actualresults could differ materially from those estimates.

25



(2) Change in Accounting Principle

For the year ended September 30, 2004, the Town has implemented GASB Statement No. 34,Basic Financial Statements - and Management's Discussion and Analysis - for State and LocalGovernments. GASB Statement No. 34 creates new basic financial statements for reporting on theTown's financial activities. The financial statements now include government-wide financialstatements prepared on the accrual basis of accounting, and fund financial statements which presentinformation for individual major funds rather than by fund type which has been the mode ofpresentation in previously issued financial statements.

The implementation of GASB Statement No. 34 caused the opening fund balance at June 30,2003 to be restated in terms of "net assets" as follows:

Total fund balances - Governmental Funds - at September 30,2003 $ 25,569

Add: Cost of capital assets at September 30, 2003 $ 698,653Less: Accumulated depreciation at September 30,2003 (405,477) 293,176

Less: Bonds payable at September 30,2003 (269,930)Capital lease payable at September 30, 2003 (23,631)Accrued interest payable at September 30, 2003 (14,510) (308,071)

Net assets at September 30,2003 $ 10,674

(3) Cash and Interest-Bearing Deposits

Under state law, the Town may deposit funds within a fiscal agent bank organized under thelaws of the State of Louisiana, the laws of any other state in the Union, or the laws of the UnitedStates. The Town may invest in certificates and time deposits of state banks organized underLouisiana law and national banks having principal offices in Louisiana. At September 30, 2004, theTown had cash and interest-bearing deposits (book balances) totaling $128,619, as follows:

Demand deposits $ 70,935Money market accounts 57,684

Total $128,619

26



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 or the pledgeof securities owned by the fiscal agent bank. The market value of the pledged securities plus thefederal deposit insurance must at all times equal the amount on deposit with the fiscal agent bank.These securities are held in the name of the pledging fiscal agent bank in a holding or custodial bankthat is mutually acceptable to both parties. Deposit balances (bank balances) at September 30, 2004are secured as follows:

Bank balances $170,378

Federal deposit insurance 170,378Pledged securities (Category 3) ~

Total federal insurance and pledgedsecurities $170,378

Pledged securities in Category 3 include uninsured or unregistered investments for which thesecurities are held by the broker or dealer, or by its trust department or agent, but not in the Town'sname. Even though the pledged securities are considered uncollateralized (Category 3), LouisianaRevised Statute 39:1229 imposes a statutory requirement on the custodial bank to advertise and sellthe pledged securities within 10 days of being notified by the Town that the fiscal agent has failed topay deposited funds upon demand.

(4) Ad Valorem Taxes

Ad valorem taxes attach as an enforceable lien on property as of January 1 of each year.Taxes are levied by the Town in September or October and are actually billed to taxpayers inDecember. Billed taxes become delinquent on January 1 of the following year. The Town bills andcollects its own property taxes using the assessed values determined by the Tax Assessor of St.Landry Parish. Property tax revenues are recognized when levied to the extent that they result incurrent receivables.

For the year ended September 30, 2004, taxes of 15.45 mills were levied on property withassessed valuations totaling $2,202,570 and were dedicated as follows:

General corporate purposes 7.52 millsDebt service 7.93 mills

Total taxes levied were $34,030. Uncollected ad valorem taxes at September 30, 2004amounted to $4,214.

27



(5) Due from Other Governmental Units

Amounts due from other governmental units at September 30, 2004 consisted of thefollowing:

Amount due from the State of Louisiana Office of Rural Development for policeprotection grant revenues earned for the fiscal year ending September 30,2004 $ 15,000

Amount due from the State of Louisiana for Racino gaming revenues earned duringthe months of August and September, 2004 4 055

$ 19,055

(6) Restricted Assets - Proprietary Fund Type

Restricted assets consisted of the following at September 30:

2004 2003

Gas bond and interest sinking fund $ 84 $ 103Sewer bond and interest sinking fund 1,047 661Gas bond reserve fund 403 36,655Sewer bond reserve fund 32 32Gas bond depreciation and contingency fund 4,481 4,436Sewer bond depreciation and contingency fund 9 9Customers' deposit 45,746 40,785

Totals $ 51,802 $ 82,681

28



(7) Capital Assets

Capital asset activity for the year ended September 30,2004 was as follows:

Governmental activities:Capital assets not being depreciated:

LandOther capital assets:

Buildings and improvementsInfrastructureEquipment and vehicles

Totals

Less accumulated depreciationBuildings and improvementsInfrastructureEquipment and vehicles

Total accumulated depreciation

Governmental activities,capital assets, net

Business-type activities:Gas distribution systemWater distribution systemSewer distribution system

Totals

Less accumulated depreciationGas distribution systemWater distribution systemSewer distribution system

Total accumulated depreciation

Business-type activities,capital assets, net

Balance10/01/03

$ 92,159

440,54633,009

132,939

698,653

285,7026,240

113,535

405,477

$ 293,176

$ 1,416,1921,607,9673,452,156

6,476,315

832,740395,526

1,059,938

2,288,204

Additions Deletions

$ - $ -

-

-10,723

10,723

15,5283,5266,724

25,778

$ (15,055) $ -

$ - $-

2,557

2,557

39,33848,78269,096

157,216

Balance09/30/04

$ 92,159

440,54633,009

143,662

709,376

301,2309,766

120,259

431,255

$ 278,121

$ 1,416,1921,607,9673,454,713

6,478,872

872,078444,308

1,129,034

2,445,420

$4,188,111 $(154,659) $ $ 4,033,452

29



Depreciation expense was charged to governmental activities as follows:

General governmentPoliceFireStreets

Total depreciation expense

Depreciation expense was charged to business-type activities as follows:

GasWaterSewer

Total depreciation expense

$ 16,6771,7646,1561,181

$ 25,778

$ 39,33848,78269,096

$157,216

(8) Changes in Long-Term Debt

The following is a summary of long-term debt transactions of the Town for the year endedSeptember 30,2004:

Long-term debt payable, October 1, 2003Long-term debt issuedLong-term debt retired

Long-term debt payable, September 30, 2004

GovernmentalActivities

GeneralObligation

Bonds

(40,043)

$ 229,887

CapitalLease

$269,930 $23,631

(7,924)

$ 15,707

Business-typeActivities

RevenueBonds

$948,000

(78,844)

$869,156

30



Long-term debt payable at September 30, 2004 is comprised of the following individualissues:

General obligation bonds:

$155,000 General Obligation Bonds, Series 1991, dated 8/14/91; due in annualinstallments of $13,378 through 2011; interest at 5.875 percent, payable from advalorem taxes. $ 70,333

$450,000 Sales Tax Bonds, Series 1991, dated 8/14/91; due in annual installments of$41,175 through 2009; interest at 5.875 percent, payable from sales tax revenues. 159 554

General obligation bonds payable $ 229,887

Capital lease:

$39,559 equipment lease dated August 3, 2001, due in monthy installments of $752,including interest at 5.50%, through July 3,2006, secured by General Fund revenues

Revenue bonds:

$592,000 Municipal Gas System bonds dated 12/20/82; due in annual installmentsof $35,000 - $40,000 through 12/20/07; interest at 5.0 percent. $ 124,860

$985,000 Municipal Sewer System bonds dated 7/25/83; due in annual installmentsof $19,000 - $65,000 through 7/25/23; interest at 5.0 percent and 7.12 percent. 744.296

Revenue bonds payable $ 869,156

31



The long-term debt is due as follows:

Year EndingSeptember 30,

20052006200720082009

2010-20142015-20192020-2023

Total

Governmental ActivitiesPrincipalpayments

$ 48,29149,59944,74847,37735,68519,894

Interestpayments

$ 15,28812,4749,8057,1764,3912,186

$ 245,594 $ 51,320

Business-typePrincipalpayments

$ 56,00060,00062,00040,86027,000

158,000224,000241,296

$869,156

ActivitiesInterest

payments

$ 52,60950,83347,57844,20140,604

176,503120,33042,076

$ 574,734

(9) Flow of Funds; Restrictions on Use - Utilities Revenues

Under the terms of the bond agreements on outstanding Municipal Gas System revenue bondsdated December 20, 1982, and outstanding Municipal Sewer System revenue bonds dated July 25,1983, all revenues derived from operation of the Utility System will be pledged and dedicated to theretirement of said bonds upon completion of the gas and sewer projects and are to be set aside into thefollowing funds:

On each bond issue, each month there will be set aside into a revenue bond and interestsinking fund account an amount consisting of 1/12 of the next installment of principal and interest onthe outstanding bonds. Such payments must be made on or before the 20th day of each month toassure the prompt payment of the principal and interest installments as they become due and may beused only for such payments.

Commencing with the first month in which the gas and sewer projects have been completed,5% of the amount to be paid into the sinking fund account each month must be deposited into areserve account until the gas reserve fund has a balance of $43,700 and the sewer reserve fund has abalance of $71,245.

Also, commencing with the first month in which the gas and sewer projects have beencompleted, $179 shall be deposited each month into a gas depreciation and contingency fund, and$284 shall be deposited each month into a sewer depreciation and contingency fund.

The Town of Melville did not comply with its bond agreements for the year ended September30, 2004. The Town did not make all its monthly transfers into the restricted accounts as required bythe bond indentures. Additionally, as required by the gas and sewer bond agreements with the UnitedStates Department of Agriculture, the Town did not collect revenues sufficient to provide funds foroperation and debt service requirements.

32



(10) Dedication of Proceeds and Flow of Funds - Sales and Use Taxes

A. Proceeds of a 1 percent sales and use tax originally approved by the voters of the Townon September 11, 1982, renewed on November 15, 2000 for ten years and levied bythe Town of Melville (2004 collections $48,545; 2003 collections $51,981) arededicated to the following purposes:

Providing fire protection to the Town; providing for the operation, maintenance andimprovement of the natural gas distribution system and water system of the Town; andpaying general operating expenses of the Town.

B. Proceeds of a 1.2 percent sales and use tax approved by voters of the Town onNovember 18, 1989 and levied by the Town of Melville for a period of twenty yearsfrom the date of the first levy of the tax (2004 collections $59,336; 2003 collections$63,532) are dedicated to the following purposes:

Constructing, improving, and maintaining public streets and bridges within the Townand maintaining and operating sewers and sewerage disposal facilities of the Town.

(11) Retirement Commitments

All employees of the Town of Melville participate in the Social Security system. The Townand its employees contribute a percentage of each employee's salary to the system (7.65 percentcontributed by the Town and 7.65 percent by the employee). The Town's contributions during theyears ended September 30, 2004, 2003 and 2002 amounted to $17,853, $16,940 and $18,194,respectively.

(12) Natural Gas Contract

Under a contract renewed annually, the Town of Melville purchases its natural gas fromLMGA. During the fiscal year ended September 30, 2004 the Town's natural gas purchasesamounted to $113,334.

(13) Risk Management

The Town is exposed to risks of loss in the areas of general and auto liability, propertyhazards and workers' compensation. All of these risks are handled by purchasing commercialinsurance coverage. There have been no significant reductions in the insurance coverage during theyear; however, the Town is delinquent in paying premiums on its coverages for the last two years.

33



(14) Segment Information - Enterprise Fund

The Town of Melville maintains three utility departments within its enterprise fund thatprovide gas, water, and sewer services. Segment information for the year ended September 30, 2004was as follows:

Operating revenues

Operating expenses:DepreciationOther


Operating income (loss)

GasDepartment

$295,532

39,338165,121

204,459

WaterDepartment

$147,718

48,78291,626

140,408

SewerDepartment

$133,449

69,09676,840

145,936

TotalEnterprise

Fund

$576,699

157,216333,587

490,803

$ 91,073 $ 7,310 $(12,487) $ 85,896

(15) Litigation and Claims

At September 30, 2004, the Town was involved in several lawsuits claiming damages. TheTown's legal counsel and elected officials are of the opinion that any unfavorable outcome will becovered by insurance.

(16) Compensation of Town Officials

A detail of compensation paid to the Mayor and Board of Aldermen for the year endedSeptember 30,2004 follows:

Willie C.HaynesIU

Aldermen:Chris BarkerRaymond FletcherTony ForetJames FontenotGeorge GuilloryEsther JohnsonDenise Oliney

$ 4,500

50650650

1,3001,2501,300

1,300

$ 11,000

34



(17) Interfund Transactions

A. Receivables and Payables

Interfund receivables and payables consisted of the following at September 30,2004:

Due to the General Fund from the Utility Fund representing short-term loans $ 3,145Due to the General Fund from the 1982 Sales Tax Fund for reimbursement forexpenditures paid 17 226

Due to the General Fund from the 1989 Sales Tax Fund for reimbursement forexpenditures paid 6,000Due to the 1982 Sales Tax Fund from the Utility Fund for reimbursement forexpenditures paid 21,143Due to the 1982 Sales Tax Fund from the 1991 Sales Tax Bonds Fund for reimbursementfor expenditures paid 10,650Due to the 1989 Sales Tax Fund from the 1982 Sales Tax Fund for reimbursement forexpenditures paid 26,169Due to the 1991 Sales Tax Bond Fund from the 1989 Sales Tax Fund for reimbursementfor expenditures paid 14,905Due to the 1991 Sales Tax Bond Fund from the Utility Fund for reimbursement forexpenditures paid 12,806

Total $112,044

B. Transfers

Transfers consisted of the following at September 30,2004:

Transfers In Transfers OutGovernmental Funds:

General Fund $ 87,500 $ -1982 Sales Tax Special Revenue Fund 5,0001989 Sales Tax Special Revenue Fund - 53,4791991 Sales Tax Bonds Fund 43,479

Proprietary Fund:Utility Fund - 82,500

Total $135,979 $ 135,979

Transfers are used to move revenues from the fund that statute or budget requires tocollect them to the fund that statute or budget requires to expend them.

35

REQUIREDSUPPLEMENTARY INFORMATION

36

TOWN OF MELVILLE, LOUISIANAGeneral Fund

Budgetary Comparison ScheduleFor the Year Ended September 30,2004

Budget

Revenues:TaxesLicenses and permitsIntergovernmentalFines and forfeitsMiscellaneous

Total revenues

Expenditures:Current -

General governmentPublic safety:

PoliceFire

Highways and streetsCulture and recreation

Capital outlayDebt service

Total expenditures

Deficiency of revenuesover expenditures

Other financing sources:Transfers from Utility FundTransfers from 1989 Sales Tax Fund

Total other financing sources

Net change in fund balance

Fund balance, beginning

Fund balance, ending

Original

$ 21,25033,00039,45110,50022,500

126,701

125,250

90,10012,00044,1503,9501,5009,056

286,006

(159,305)

159,500-

159,500

195

3,109

$ 3,304

Final

$ 18,82034,750112,38112,00035,200

213,151

112,370

89,61011,15056,5008,00016,9159,056

303,601

(90,450)

77,50010,000

87,500

(2,950)

3,109

$ 159

Actual

$ 19,01034,763

131,63311,53028,119

225,055

123,849

87,09512,15860,070

8,6647,6969,026

308,558

(83,503)

77,50010,000

87,500

3,997

3,109

$ 7,106

Variance -Final Budget

Favorable(Unfavorable)

19013

19,252(470)

(7,081)

11,904

(11,479)

2,515(1,008)(3,570)

(664)9,219

30

(4,957)

6,947

6,947

$ 6,947

37

TOWN OF MELVILLE, LOUISIANA1982 Sales Tax Special Revenue Fund

Budgetary Comparison ScheduleFor the Year Ended September 30, 2004

Revenues:Taxes - sales taxesIntergovernmental - fire insurance rebateMiscellaneous -

Other

Total revenues


General governmentPublic safety:

PoliceFire

Highways and streetsCulture and recreation

Capital outlay

Total expenditures

Excess (deficiency) of revenuesover expenditures

Other financing sources:Transfers from 1989 Sales Tax FundTransfers from Utility Fund

Total other financing sources




BudgetOriginal

$ 52,000 $-

5,765

57,765

8,220

52,32523,500

1,7001,000-

86,745

(28,980)

20,0009,000

29,000

20

977

Final

48,0006,166

2,758

56,924

480

55,200950

--

1,52558,155

(1,231)

5,000

5,000

3,769

977

Actual

$ 48,5456,166

2,75857,469

485

52,085---

3,027

55,597

1,872

5,0005,000

6,872

977



$ 545-

_

545

(5)

3,115950

--

(1,502)

2,558

3,103

--

3,103

-

$ 997 $ 4,746 $ 7,849 $ 3,103

38

TOWN OF MELVILLE, LOUISIANA1989 Sales Tax Special Revenue Fund

Budgetary Comparison ScheduleFor the Year Ended September 30, 2004

Revenues:Taxes - sales taxesMiscellaneous -

Interest

Total revenues


General government:Collection fees

Miscellaneous

Total expenditures

Excess of revenuesover expenditures

Other financing uses:Transfers to General FundTransfers to 1982 Sales Tax FundTransfers to 1982 Sales Tax Bond Fund

Total other financing uses




BudgetOriginal

$63,000

63,000

630

100

730

62,270

Final

$57,500

57,500

575100

675

56,825


FavorableActual (Unfavorable)

$59,336 $ 1,836

59,336 1,836

593 (18)

100

593 82

58,743 1,918

(10,000) (10,000)(20,000)(43,239) (43,479) (43,479)

(63,239) (53,479) (53,479)

(969) 3,346 5,264

922 922 922

1,918

$ (47) $ 4,268 $ 6,186 $ 1,918

39

OTHER SUPPLEMENTARY INFORMATION

40

OTHER FINANCIAL INFORMATION

41


Budgetary Comparison Schedule - RevenuesFor the Year Ended September 30,2004

Taxes:Ad valorem taxFranchise fees:

Cable TV

Total taxes

Licenses and permits:Occupational

Intergovernmental:State of Louisiana -

Beer taxesVideo pokerDOTD grantRural Development GrantRacino gaming

St. Landry Parish -Housing AuthoritySolid Waste Commission

Total intergovernmental

Fines and forfeits

Miscellaneous:Rent on buildingsCatfish festivalDonationsOther

Total miscellaneous

Total revenues

BudgetOriginal

21,250

33,000

10,500

17,000

5,500

22,500

Final Actual

$ 16,250 $ 14,820

5,000 4,000

18,820

34,750

$ 15,105

3,905

19,010

34,763

12,000

17,0009,0002,4006,800

35,200

11,530

15,8334,4202,4285,438

28,119

Variance withFinal Budget


$ 285

(95)190

13

2,2509,750

23,6512,700-

1,100-

39,451

1,8007,200

23,6511,000

17,000

2,40059,330

112,381

1,7786,982

23,65117,40421,002

1,48659,330

131,633

(22)(218)-

16,4044,002

(914)-

19,252

(470)

(U167)(4,580)

280,362)

(7,081)

$126,701 $213,151 $225,055 $ 11,904

42


Budgetary Comparison Schedule - ExpendituresFor the Year Ended September 30, 2004

General government:Salaries - mayor and aldermenOther salaries and wagesTravelPayroll taxesInsuranceDuesOffice expendituresProfessional feesUtilitiesTelephoneRepairs and maintenanceSuppliesCommunity activitiesMiscellaneousElection expenditures

Total general government

Public safety:Police department -

SalariesPayroll taxesInsuranceUtilitiesCoroner feesAuto expendituresMaintenance and suppliesMiscellaneousState fee on finesPrisoners' meals

Total police department

Fire department -Auto expendituresMaintenance and suppliesInsuranceMiscellaneous

Total fire departmentTotal public safety

Bud^Original

$10,50035,000

6003,7007,000

5002,500

31,0008,7005,0006,0005,5002,2003,0504,000

125,250

getFinal

$10,50033,5003,5004,600

10,000850

5,80018,000

7004,0004,0003,5009,0003,0201,400

112,370

Actual

$11,00032,2533,5422,298

20,1661,2545,879

18,6003,7875,0652,5883,6678,0004,3741,376

123,849



$ (500)1,247

(42)2,302

(10,166)(404)

(79)(600)

(3,087)(1,065)1,412(167)

1,000(1,354)

24

(11,479)

46,5004,40014,5001,000600

11,0008,9001,0001,0001,200

90,100

4,0007,000-1,000

12,000

102,100

50,0005,80016,0004,400100

8,0003,450260400

1,200

89,610

4,2001,5004,650800

11,150

100,760

50,0692,68415,7895,044100

5,3566,566304-1,183

87,095

4,1312,6174,615795

12,158

99,253

(69)3,116211(644)-2,644(3,116)

(44)40017

2,515

69(1,117)

355

(1,008)

1,507

(continued)

43


Budgetary Comparison Schedule - Expenditures (Continued)For the Year Ended September 30, 2004

Highways and streets:SalariesPayroll taxesInsuranceRepairs and maintenanceEquipment maintenanceUtilitiesTractor expendituresShell, asphalt, and dirtSolid waste expendituresAuto expendituresAnimal controlSuppliesTelephoneGrass cuttingMiscellaneous

Total highways and streets

Culture and recreation:SalariesPayroll taxesUtilitiesTelephoneInsuranceSuppliesRepairs and maintenanceMiscellaneous

Total culture and recreation

Capital outlay:Public safety -

Police:Equipment

Highways and streets -

EquipmentCulture and recreation -

Equipment

Total capital outlay

Debt service:

PrincipalInterest

Total debt service

Total expenditures

BudgetOriginal

S 10,000 $1,000

6505,000

22,0004,300--------

1,200

44,150

1,100100

1,000--500

1,000250

3,950

Final

10,5001,0007,3004,0004,0003,5001,200

40011,7005,000

5005,500

100600

1,200

56,500

-3,400

3002,000

5001,000

8008,000

Actual

$ 10,245382

7,8363,4225,3592,9411,193

31511,6287,154

6216,585

35848

1,506

60,070

-4,165

3381,853

1861,0801,042

8,664



$ 255618

(536)578

(1,359)559

78572

(2,154)(121)

(1,085)65

(248)(306)

(3,570)

-(765)(38)147314(80)

(242)(664)

1,500

1,500

9,056

9,056

11,415

5,500

16,915

7,9541,102

9,056

7,696

7,696

7,9241,102

9,026

3,719

5,500

9,219

30

30

$286,006 $303.601 $308,558 $ (4,957)

44

TOWN OF MELVILLE, LOUISIANAGeneral Obligation Bonds 08/14/91 Debt Service Fund


Revenues:Taxes - ad valoremMiscellaneous -

Interest

Total revenues

Expenditures:Debt service-

Principal retirement

Interest and fiscal charges

Total expenditures




BudgetOriginal

$15,000

110

15,110

Final Actual

$16,400 $16,700

100 8916,500 16,789



$ 300

(ID289

8,000

5,378

13,378

1,732

5,704

8,000

5,378

13,378

3,122

5,704

9,228

4,15013,378

3,411

5,704

(1,228)

1,228-

289

-

$ 7,436 $ 8,826 $ 9,115 $ 289

45

TOWN OF MELVILLE, LOUISIANASales Tax Bonds 08/14/91 Debt Service Fund


BudgetOriginal Final Actual



Expenditures:Debt service-

Principal retirementInterest and fiscal charges

Total expenditures

$26,00015,17541,175




$26,00015,175

41,175

$30,81510,40041,215

Other financing sources:Operating transfers from 1989 Sales Tax Fund 43,239 43,479 43,479

2,064 2,304 2,264

14,857 14,857 14,857

$16,921 $17,161 $17,121

$(4,815)4,775

(40)

(40)

$ (40)

46

TOWN OF MELVILLE, LOUISIANAEnterprise Fund

Utility Fund

Schedule of Number of Utility Customers(Unaudited)

September 30,2004 and 2003

Records maintained by the Town indicated the following number of customers were being served duringthe month of September 2004 and 2003:

Department 2004 2003

Gas (metered) 469 493Water 578 581Sewer 529 529

47


Schedule of Insurance in Force(Unaudited)

September 30, 2004

Description of Coverage

Workmen's Compensation -Employer's liability

Surety Bonds -TreasurerTown clerkAssistant clerkMayor

Fire, Extended Coverage, Blanket Policy:All Town buildings and contents

Comprehensive Liability and Collision:Fire trucks, police car, and utility vehicle

Commercial General Liability Policy

Public Officials Errors and Omissions

Law Enforcement Officers Liability Coverage

Coverage Amounts

$ 100,000

201,000201,000181,000181,000

1,171,500

350,000

500,000

100,000

100,000

48

TOWN OF MELVILLE, LOUISIANAEnterprise Fund

Utility Fund

Comparative Departmental Analysis of Revenues and ExpensesYears Ended September 30,2004 and 2003

Totals

Operating revenues:Charges for services -

CustomersOther charges

Miscellaneous -Slemco franchiseOther

Total operating revenues

Operating expenses:SalariesPayroll taxesNatural gas purchasesRepairs and maintenanceInsuranceOffice expenseSuppliesProfessional feesTelephoneUtilitiesDepreciationBad debtsAuto expenseMiscellaneous


Operating income (loss)

Nonoperating revenues (expenses):Interest incomeInterest expense

Total nonoperating expenses

Income (loss) before contributions and transfers

Capital contributions

Transfers in (out):Transfers inTransfers out

Total transfers out

Change in net assets

Retained earnings, beginning

Retained earnings, ending

2004

$ 509,720874

47,28018,825576,699

68,2916,453

113,33426,52854,1776,87517,06511,415

4721,022157,216

-846

7,534

490,803

85,896

540(58,228)

(57,688)

28,208

2003

$ 412,1551,687

51,2871,726

466,855

85,0967,271

123,5999,34118,1395,21914,1629,8235,65439,246140,4813,748227

3,676

465,682

1,173

1,449(73,411)

(71,962)

(70,789)

137,063

(82,500)(82,500)

(54,292)

3,189,820

$3,135,528

27,634(165,571)(137,937)

(71,663)

3,261,483

$3,189,820

49

Gas Water Sewer2004

$264,659454

28,3682,051

295,532

22,3332,151

113,334594

18,0591,8521,6532,821--

39,338-676

1,648

204,459

$ 91,073

2003

$233,892962

30,72294

265,670

42,6193,645

123,5994,3669,9022,4742,8392,886

8201,975

39,3382,240-

1,387

238,090

$ 27,580

2004

$127,544219

18,9121,043

147,718

22,6942,151-

10,00618,0593,736

11,8556,271

4711,75048,782

-85

4,972

140,408

$ 7,310

2003

$87,075354

20,5651,632

109,626

24,5232,093-

4,1887,0941,5698,3515,7724,834

21,90432,156

760227

2,289

115,760

$(6,134)

2004

$117,517201

_

15,731

133,449

23,2642,151-

15,92818,059

1,2873,5572,323-

9,27269,096

-85

914

145,936

$(12,487)

2003

$ 91,188371

_

-

91,559

17,9541,533-787

1,1431,1762,9721,165-

15,36768,987

748--

111,832

$ (20,273)

50

COMPLIANCE

AND

INTERNAL CONTROL

51


C. Burton Kolder, CPA'Russell F. Champagne, CPA' p Q BOX 82329Victor R. Slaven. CPA* , * ' ' , . . . , -rncnnConrad O-Chapman, CPA- Lafayette, LA 70598 WEBSITE:P. Troy Courville, CPA'. WWW.KCSRCPAS.COMGerald A Thibodeaux. Jr., CPA"

Phone (337) 232-4141Fax (337) 232-8660 MEMBER OR

Robert S. Carter, CPAAllan J. LaBry, CPA AMERICAN INSTITUTE OFHarry J. Clostio. CPA CERTIFIED PUBLIC ACCOUNTANTSPenny Angelle Scmggins, CPAChristine L Cousin, CPA SOCIETY OF LOUISIANAMary T. Thibodeaux, CPA CERTIFIED PUBLIC ACCOUNTANTSKelly M. Doucet, CPA

REPORT ON COMPLIANCE AND ON INTERNAL CONTROL. OVER FINANCIAL REPORTING BASED ON AN AUDIT OF

FINANCIAL STATEMENTS PERFORMED IN ACCORDANCEWITH GOVERNMENT AUDITING STANDARDS

The Honorable Willie C. Haynes, III, Mayorand members of the Board of Aldermen


We have audited the financial statements of the governmental activities, the business-type activities,and each major fund of the Town of Melville, Louisiana (the Town) as of and for the year ended September30, 2004, which collectively comprise the Town's basic financial statements, and have issued our reportthereon dated January 7, 2005. We conducted our audit in accordance with auditing standards generallyaccepted in the United States of America and the standards applicable to financial audits contained inGovernment Auditing Standards issued by the Comptroller General of the United States.

Compliance

As part of obtaining reasonable assurance about whether the Town's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws and regulations,contracts and grants, noncompliance with which could have a direct and material effect on the determinationof financial statement amounts. However, providing an opinion on compliance with those provisions was notan objective of our audit and, accordingly, we do not express such an opinion. The results of our testsdisclosed one instance of noncompliance that is required to be reported under Government AuditingStandards, which is described in the accompanying summary schedule of current and prior year audit findingsand corrective action plan at item 04-1(C).

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the Town's internal control over financialreporting in order to determine our auditing procedures for the purpose of expressing our opinion on thefinancial statements and not to provide assurance on the internal control over financial reporting. However,we noted a certain matter involving the internal control over financial reporting and its operation that weconsider to be a reportable condition. Reportable conditions involve matters coming to our attention relatingto significant deficiencies in the design or operation of the internal control over financial reporting that, in ourjudgment, could adversely affect the Town's ability to record, process, summarize and report financial dataconsistent with the assertions of management in the financial statements. This reportable condition isdescribed in the accompanying summary schedule of current and prior year audit findings and correctiveaction plan at item 04-2(IC).

183 South Beadle 1II East Bridge Street 133 East Waddi) 1234 David Drive. Suite 105 408 W. Cotton Street 332 W. Sixth Avenue 200 South Main SneetLafayette, LA 70508 Breaux Bndge, LA 70517 Maiksvillt. LA 71351 Morgan City, LA 70380 ViilePlatte. LA 70586 Oherlin, LA 70655 Abbeville, LA 70510Phone (317) 212-1141 Phone (337) 332-4020 Phone (31 S) 253-9252 Phone (985) 384-2020 Phone (337) 363-2792 Phone (137) 639-4737 Phone (337) 893-7944Fax (337) 232-8660 Fax (337) 332-2S67 Fax (31 S) 253-8681 Fax (985) 384-3020 Fax (337) 363-3049 Fix (337) 639-4568 Fax (337) 893-7946

52

A material weakness is a condition in which the design or operation of one or more of the internalcontrol components does not reduce to a relatively low level the risk that misstatements in amounts thatwould be material in relation to the financial statements being audited may occur and not be detected within atimely period by employees in the normal course of performing their assigned functions. Our considerationof the internal control over financial reporting would not necessarily disclose all matters in the internal controlthat might be reportable conditions and, accordingly, would not necessarily disclose all reportable conditionsthat are also considered to be material weaknesses. However, we believe the reportable condition describedin the accompanying schedule of current and prior year audit findings and corrective action plan at Item 04-2(IC) is a material weakness. We noted other matters involving the internal control over financial reportingthat we have reported to management of the Town of Melville in a separate letter dated January 7,2005.

This report is intended for the information of management. However, this report is a matter of publicrecord and its distribution is not limited.


Lafayette, LouisianaJanuary 7,2005

53

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C. Burton Kolder, CPA"Russell F. Champagne. CPA*Victor R. Slaven, CPA*Conrad 0. Chapman, CPA'P. Troy Courville. CPA'.Gerald A. Thibodeaux. Jr.. CPA*

Robert S- Carter, CPAAllen J. LaBry. CPAHarry J, Clostio, CPAPenny Angelle Scruggins. CPAChristine L. Cousin, CPAMary T. Thibodeaux, CPAKelly M. Doucet, CPAKenneth J. Rachal, CPACheryl L. Hartley, CPA. CVA

A Professional Accounting Corporation


P.O. Box 82329Lafayette, LA 70598

Phone (337) 232-4141Fax (337) 232-8660

WEB SITE:WWW-KCSRCPAS. COM

MEMBER OF:

AMERICAN INSTFTUTE OFCERTIFIED PUBLIC ACCOUNTANTS

SOCIETY OF LOUISIANACERTIFIED PUBLIC ACCOUNTANTS

MANAGEMENT LETTER

The Honorable Willie C. Haynes, III, Mayorand Members of the Board of Aldermen


We have completed our audit of the financial statements of the Town of Melville, Louisiana, as ofand for the year ended September 30, 2004. These suggestions for your information and considerationrelative to improving the internal controls and financial practices of the Town were also included in ourmanagement letter for the prior year, but are mentioned again for reemphasis:

1) Town officials should closely monitor expenditures/expenses in all areas in order to meetits current and long-term obligations.

2) Town officials should examine its accounts receivable software for utility billings.During the year ended September 30, 2004, numerous problems were encountered withthe software including loss of data. This led to difficulty in determining the actualamount of utility accounts receivable at September 30,2004.

3) In addition to the suggestions listed above, The Town of Melville should seekreimbursement from a local citizen for damages of $4,534 made to the Town's gassystem.

We would like to express our appreciation to you and your office staff for the courtesies andassistance rendered to us during the performance of our audit. Should you have any questions or needassistance in implementing our recommendations, please feel free to contact us.


Lafayette, LouisianaJanuary 7,2005

I 83 South BeadsLafayette. LA 70508Phone (337) 232-414]Fax (3 37) 23 2-3660

113 East Bridge StreetBreaux Bridge, LA 70517Phone(337)332-4020Fax (337) 332-2367

133 East WaddilMarksville.LA 71351Phone(318)253-9252Fax (318)253-8681

1234 David Drive, Suite 105Morgan City. LA 70380Phone (985) 384-2020Fax (985) 384-3020

408 W. Cotton StreetV.lle Plane. LA 70586Phone (337) 363-2792Fax (337) 363-3049

332 W. Sixth AvenueOberiin. LA 70655Phone (337) 63 9-4 737Fax (33 7} 639-4568

200 South Main StreetAbbeville, LA 70S10Phone (337)893-7944Fax (337) 893-7946

Documents

RECFivrn i.Fn. :i - app1.lla.state.la.usapp1.lla.state.la.us/PublicReports.nsf/095DA5AFF96DA10286256FC... · document Acopy of the report has been ... Morgan City, LA 70380 Phone