o:n '0- 'V

THE COORDINATING AND DEVELOPMENT CORPORATIONSTATEMENT OF FINANCIAL POSITION

STATEMENTS OF ACTIVITIES, FUNCTIONAL EXPENSES,AND CASH FLOWS

JUNE 30, 2005

Under provisions of state law, this report K a publicdocument. 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 Pate /~* &

INDEX

i "

iPage

Independent Auditor's Report _ 2

Statement of Financial Position - June 30, 2005 3

Statement of Activities for the Year Ended June 30, 2005 4

Statement of Functional Expenses - Program Servicesfor the Year Ended June 30, 2005 5

Statement of Cash Flows for the Year Ended June 30, 2005 6

Notes to Financial Statements 7-18

Combined Balance Sheet - June 30, 2005 19

Combined Statement of Revenues, Expenditures, and OtherSources/Uses for the Year Ended June 30, 2005 20

Combined Statement of Cash Plows for theYear Ended June 30, 2005 21

Schedule of Federal Awards for the Year Ended June 30, 2005 22

Notes to the Schedule of Expenditures of Federal Awardsfor the Year Ended June 30, 2005 23

Schedule of Findings and Questioned Costfor the Year Ended June 30, 2005 . 24

Management's Corrective Action Planfor the Year Ended June 30, 2005 25

Report on Compliance and on internal Control OverFinancial Reporting Based on an Audit of FinancialStatements Performed in Accordance with GovernmentAuditing Standards 26

Report on Compliance with Requirements Applicable to EachMajor Program and Internal control Over Compliancein Accordance with OMB Circular A-133 27-28

HEARDMCELROY& VESTAL

LLPCERTIFIED PUBLIC ACCOUNTANTS

333 TEXAS STREET

15TH FLOOR

SHREVEPORT, LA 71101

318429-1525318 429-2070 FAX

POST OFFICE Box 1607

SHREVEPORT, LA

71165-1607

PARTNERSJ. PETER GAFFNEY, CPA, APCSPENCER BERNARD, JR., CPAH.Q. GAHAGAN, JR., CPA, APCGERALD W. HEDGCOCK, JR., CPA, APCTIM B. NIELSEN, CPA, APCJOHN W. DEAN, CPA, APCMARK D. ELDREDGE, CPAROBERT L. DEAN, CPASTEPHEN W. CRAIG, CPA

ROY E. PRCSTWOOD, CPAA. D. JOHNSON, JR., CPARON W. STEWART, CPA, APC

OF COUNSELGILBERT R. SHANLEY, JR., CPAC. CODY WHITE, JR., CPA, APCWILLIAM L. HIGHTOWER, CPA

December 20, 2005

Board of DirectorsThe Coordinating and Development Corporation (CDC)Shreveport, Louisiana

Independent Auditor's Report

We have audited the accompanying statement of financial position of the Coordinating and DevelopmentCorporation (CDC) as of June 30,2005, and the related statement of activities and functional expenses, cashflows, and changes in assets and liabilities of the agency fund for the year then ended. These financialstatements are the responsibility of the Board's management. Our responsibility is to express an opinion onthese financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and Government Auditing Standards issued by the Comptroller General of the United States. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financialposition of the Coordinating and Development Corporation (CDC) as of June 30,2005, and the results of itsoperations and cash flows for the year then ended, in conformity with accounting principles generallyaccepted in the United States of America.

Our audit was made for the purpose of forming an opinion on the financial statements of Coordinating andDevelopment Corporation (CDC) taken as a whole. The supplementary financial information is presentedfor purposes of additional analysis and is not a required part of the basic financial statements. Theaccompanying schedule of expenditures of federal awards is presented for purposes of additional analysisas required by OMB Circular A-133, Audits of States, Local Governments and Nonprofit Organizations, andis also not a required part of the basic financial statements. Such information has been subjected to theauditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairlypresented in all material respects in relation to the basic financial statements taken as a whole.

In accordance with Government Auditing Standards, we have also issued a report dated December 20,2005on our consideration of the Coordinating and Development Corporation (CDC)'s internal control overfinancial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts andgrants. That report is an integral part of an audit performed in accordance with Government AuditingStandards and should |)e read in conjunction with this report in considering the results of our audit.

HS/IVA PROFESSIONAL SERVICES FIRM

SHREVEPORT • BOSSIER CITY hmv@hmvcpa.com E-MAIL

THE COORDINATING AND DEVELOPMENT CORPORATIONSTATEMENT OP FINANCIAL POSITION

JUNJS' 30, 2005

AssetsCurrent

Cash & Cash EquivalentsAccounts ReceivableNotes Receivable

(Current Portion)Other Current Assets

Total Current Assets

Other AssetsInvestments - Vacation EscrowCertificates of DepositNotes Receivable (Net of Current

Portion & Allowance forUncollectibles of $7,418)

Total Other Assets

Equipment (Net of AccumulatedDepreciation of $31,707}

Total Assets

Liabilities & Net AssetsCurrentAccounts PayableCash DeficitDue to Louisiana Department

of LaborOther PayablesDue to AIDCNotes Payable - Current Portion

Total Current Liabilities

Long Term LiabilitiesNotes Payable (Net of

Current Portion)Vacation Fund Payable

Total Long Term Liabilities

Total Liabilities

Net Assets (Deficit)

Total Liabilities & Net Assets

$ 1,020,780729,418

13,3602,928

1,766,486

0348,437

41,038

389,475

275,7783,847

115,49519,851119,28770.075

604.333

751,233916,150

1.667.383

2.271,716

See Notes to Financial Statements

THE COORDINATING AND DEVELOPMENT CORPORATIONSTATEMENT OF ACTIVITIES

FOR THE YEAR £NDED JUNE 30, 2005

Unrestricted

RevenuesStepWorkforce DevelopmentMarketing & Economic DevelopmentEconomic DevelopmentDues & OtherTDInterest IncomeCommunity Development

Total Revenues

Unallocated Payments fromAffiliated Organizations

Total Revenues and UnallocatedPayments from AffiliatedOrganizations

Program ServicesWorkforce Development/Step

Total Program Services

Supporting ServicesInterest ExpenseManagement & General

Total Supporting Services

Unallocated Payments toAffiliated Organization

Total Expenditures £ Unallocated PaymentsTo Affiliated Organizations

Decrease in Net Assets

Net Assets (Deficit) at Beginning of Year

Net Assets (Deficit) at End of Year

$ 163,7665,704,879

8,25062,765

283,59319,03630,818

122,364

6,395,471

273.575

6,669,046

5,420,266

5,420,266

7, 6871,137,500

1,145,187

127,416

6,692,869

23,823)

91,932)

See Notes to Financial Statements-4-

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THE COORDINATING AND DEVELOPMENT CORPORATIONSTATEMENT'OF CASH FLOWS

FOR THE YEAR ENDED JUNE 30, 2005

Cash Flows From Operating Activities

(Decrease) Increase in Net Assets $( 23,823)

Adjustments To Reconcile Change In Net AssetsTo Net Cash (Used) Operating ActivitiesBad Debt Recovery ( 30,251)Decrease in Cash Deficit ( 1,842}Increase in Accounts Receivable ( 373,097}Decrease in Accounts Payable { 9,430)Increase in Due to AIDC 119,287Increase in Other Current Assets • ( 129)Increase in Other Payables 19,851

Net Cash (Used) By Operating Activities ( 299,434)

Cash Flows From Investing ActivitiesCertificates of Deposit . 58,520Repaid Notes Receivable 252,094Decrease in Vacation Fund Escrow 668,544Increase in Vacation Fund Payable . 81,337

Net Cash (Used) By Investing Activities 1,060,495

Cash Flows From Financing ActivitiesLoans 40,000Loans Repaid ( 21,875}

Net Cash (Used) By Financing Activities 18 .125

(Decrease) in Cash & Cash Equivalents 779,186

Beginning Cash & Cash Equivalents 241,594

Ending Cash & Cash Equivalents 5 1,020,780

Note: No income taxes were paid for the year.Interest of $8,553 was paid during the year and none was capitalized,

See Notes to Financial Statements-6-

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS

JUNE 30, 2005

NOTE A - ACCOUNTING POLICIES

1. The accompanying financial statements have been prepared on the accrual basis,whereby all revenues are recognized when susceptible to accrual andexpenditures are recorded when the related fund liability is incurred. TheCoordinating and Development Corporation (CDC) uses funds to report on itsfinancial position and the results of operations. Fund accounting is designedto demonstrate legal compliance and to aid financial management by segregatingtransactions related to certain grants/programs/divisions. A fund is aseparate accounting entity with a self-balancing set of accounts. Governmentalfunds are used to account for all of CDC's activities, and divisions are usedto provide for segregation of programs within CDC.

2. The Coordinating and Development Corporation (CDC) is a_ private, not-for-profit, IRS Section 501 (c) (4) Corporation. The Corporation operates primarilyin the ten parishes of Northwest Louisiana. It is governed by an elected Boardof Directors and provides business, industrial and economic development to boththe private sectors and area governments.

3 . Depre c i at ion - Depreciation is provided on the straight line method over theuseful life of the office equipment, Equipment is recorded at cost, andincludes all items with cost exceeding $500 and a useful life greater than oneyear.

4. Cash & jgash Equivalents - The Company considers all highly liquid debtinstruments with a maturity of three months or less to be cash equivalents.

5. Divisions - The following divisions, reported as funds, are maintained:

1. Division of Economic Development2. Division of Workforce Development3. Division of Project Review4. Division of Natural Resources5. Division of Local Funds6. Division of Community Development7. Division of 8%8. Division of IRP9. Division of TD10. Division of Marketing & Economic Development11. Division of Culture, Recreation & Tourism12. Division of Step

The reporting of all divisions in one report is in compliance with OMB CircularA-133 .

6. Transfers In/Transfers_0ut - Transfers in/out represents funding from/to theDivision of Local Funds.

7. Budgets - Budgets are not required for all divisions.

-7-

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS

JUNE 30, 2005

NOTE A - ACCOUNTING POLICIES (continued)

8. Investments - Investments are presented in the financial statements at fairmarket value.

9. Temporarily .'.Restricted Assets - As discussed in Note C, the Company has apolicy that reimburses employees for unused vacation time, which is reflectedas a restricted asset. These restrictions will expire when the vacation timeis used or the individuals retire.

10. Capitalized Interest - The Company did not capitalize interest in year endedJune 30,2005.

11. Adverti s i ng - The Company expenses non-direct response advertising as incurred.

12. Impairment - The carrying value of property, equipment and intangibles isevaluated periodically in relation to the operating performance and futureundiscounted cash flows of the underlying businesses. Adjustments are made ifthe sum of expected future cash flows is less than book value. For the yearpresented, no adjustment was necessary.

13. Collateral - On all loans through the Division of IRP, the Company requiresadequate collateral and secures a mortgage which is usually real estate,

14 . Allowance for Doubtful Accounts - The Company evaluates its losses annually onthe IRP Division and records this as an allowance. Bad debts are written offdirectly as they are identified, and a minimum allowance of 6% of the net loanbalance is reserved.

Interest income is recorded as earned. The Board will write off notes/accountsreceivable at such time as. all efforts have been exhausted to recover theasset. Loans are considered past due when payments are 30 days in arrears.

NOTE B - ACCOUNTS RECEIVABLE

Accounts receivable for the year ended 6/30/05 are as follows:

6/30/05Receivable Division Amount

Ark-La-Tex Investment &Development Corporation $200,000La. Dept of Labor Step 7,257La. Dept. of Labor 'Workforce Development 476,701Var. Municipalities Community Development 42,976Colson Tri District (TD) 2,484

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS

JUNE 30, 2005

NOTE C - VACATION ESCROW

During the year ended 6/30/90, the Company began accruing the funding for itsvacation fund, which allows personnel who leave or retire the ability to sellback their unused vacation time.

During the current year, additional time earned and raises resulted in thefollowing adjustments to the account:

PYE 6/30/05

Funded

Unfunded

$ 916,150

0

The vacation fund is unfunded at year end and is reflected as a liability tothe local fund.

NOTE D - INVESTMENTS

The following funds are held in the IRP Division:

Cost

Money Market Fund held at Hibernia Bank

Liberty (Mutual) Fund for US GovernmentSecurities Class C Fund

$665,702

11,142

MarketValue@ 6/30/05

$ 665,702

11,142

Total , $676,844 $ 676,844

These funds serve as collateral on the $520,000 note described in Note T.

NOTE E - RELATED PARTIES/AFFILIATES

The CDC operated several divisions and is affiliated with three activenonprofit entities and two for-profit entity as follows:

Affiliates

(A) Tri District Development Corporation (TD) - A revolving loan program ofwhich CDC membership constitutes 1/3 control. This entity's year end is9/30. During the year ended 6/30/05, the Corporation received $19,036 inrevenues from Tri District.

-9-

THE COORDINATING .AND DEVELOPMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS

JUNE 30, 2005

NOTE E - RELATED PARTIES/AFFILIATES (continued)

(B) Ark-La_-Tex Investment &_Development Corporation (AIDC) - This Company isresponsible for funding 503/504 loans. This entity1s year end is 9/30.CDC is reimbursed by AIDC for its employee's time. During the year ended6/30/05, the Company paid AIDC rent on its office buildings and equipmentin Shreveport, Louisiana and Natchitoch.es, Louisiana on a 30 day leasetotaling $184,761. AIDC contributed $273,575 to CDC in 6/30/05. At6/30/05, the Company owes AIDC $119,287 and is owed $200,000 in noninterest bearing advances.

(C) Ark-La-Tex Regional Export & Technology Center, Inc. (ARETC) - Anonprofit entity responsible for implementing/developing import/exporteconomical advances in the ten parish area. During the year ended6/30/05, CDC paid the Company $127,416.

(D) Red River Valley Bidco Inc. (RRVB) - A for-profit entity owned by AIDCformed to encourage the formation of business and industrial developmentcorporations.

{E} N.W.E.D. Inc. - A for-profit entity.

Divisions

(A) Division of Economic Development - Funded by the federal government andCDC, whose purpose is to aid in economic growth in the surrounding tenparish area. This program requires a matching commitment of 75/25. Forthe year ended 6/30/05, CDC had contributed $102,736 of Local Divisionfunds. During the current year, the Division received the followingrevenues:

Various $ 12,765Federal Funds 50,000

(E) Division of Community Development - Funded by contracts with entities toprovide administrative services for entities receiving Louisiana CommunityDevelopment Block Grant (LCDBG) funds. In prior years, the Division wascalled "Division of Planning & Programming11. During the current year, theDivision received $62,382 of Local Funds.

(C) Division of Natural Resources - Funded by the Louisiana Association ofPlanning & Development Districts and CDC. There was no activity duringthe current year.

(D) Division of Project Review - Its purpose is to review federal grants.There was no activity during the current year.

-10-

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS

JUNE 30, 2005

NOTE E - RELATED PARTIES/AFFILIATES (continued)

(E) Divisionof__Culture, Recreation & Tourism - Funded in prior years topromote tourism to Northwest Louisiana. There was no activity during thecurrent year.

{F) Division of Local Funds - Any activity not included in the above. For theyear ended 6/30/05, it contributed $228,745 and received $0 from otherdivisions. As of year end, it is owed $47,302 by other divisions and owes$86,055 to other funds.

{G) Division of 8% - This program is administered by CDC and subcontracted tothe Louisiana Department of Education. Its purpose is to provideclassroom training to economically disadvantaged youths in remedialskills.

(H) Division of _Marketing & Economic Development - This program is a jointagreement between the Parish of Caddo and CDC for the promotion of CaddoParish, LA. During the year, the Division received $52,274 from LocalFunds.

(I) Division of IRP - A relending program administered by CDC as furtherdescribed in Note P.

(J) Division of_ TD - This program represents funds received inmanaging/administer ing Tri District Development Corporation, a relatedentity whose purpose is administration of revolving loan fund. TheDivision received funding of $11,353 from Local Funds.

(K) Division of Step - Job Readiness (JR) activities provide participants anopportunity to engage in activities that are beneficial to their movetoward self-sufficiency and their family's well being. The Step processis to prepare the client to find a job as quickly as the participantsworkplace literacy level, job skills and experience allow and or assistparticipants in the area of job retention and income growth.

NOTE F - OPERATING LEASES

The Company leases facilities & equipment owned by Ark-La-Tex Investment &Development Corporation and is currently leasing under a 30 day leaseagreement. Facilities are located in Caddo, Desoto, Bossier, Webster andNatchitoches Parish @ $17,813/month.

NOTE G - RETIREMENT PLAN - DEFINED CONTRIBUTION

The Company contributed $168,464 during the year ended 6/30/05, and allemployees with greater than six months employment with the Company areeligible. The Company contributed 15% of the employees' gross pay.

-11-

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS

JUNE 30, 2005

NOTE H - INDIRECT COSTS

The Company allocated indirect costs as follows:

Amount For Allocation6/30/05 Formula

Rent $ 213,756 Direct Labor/RevenueAll Other Administrative

Expenses (Less than $50,000) Direct Labor/Revenue

NOTE I - WIA

CDC acts as a recipient/subrecipient of WIA funds from the State of Louisiana,Department of Regulatory Services (Labor).. All revenues represent reimbursedcost under the terms of the various contracts with the State.

1. WIA-AdultThe purpose of this portion of WIA is to establish programs to prepareunskilled adults for entry into the labor force and to afford job trainingto those economically disadvantaged individuals who are in need of suchtraining to obtain productive employment.

WIA-YouthPrograms under this part are conducted only during the summer months.Individuals eligible under this part must be economically disadvantagedand between the ages of fifteen and twenty-one.

WIA-Dislocated WorkerThis program allows for dislocated workers to be trained. This programallows the placement of dislocated workers while allowing the employers totrain them.

2 . Training - ClassroomThis is used to record costs of tuition, books, and tools, if necessary,for program participants.

3. Training - Limited Work ExperienceThis is used to record the expenditures associated with the part of theprogram that is limited to high school seniors that are allowed to workfifteen hours per week, not to exceed a total of two hundred and fiftyhours.

4 . Training - OJTThis is used to record expenditures associated with on the job training.When an individual meets the requirements to enter this program, WIA willreimburse the individual's employer for one half of the participant'ssalary for a period not to exceed six months.

-12-

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS

JITNE 30, 2005

NOTE I - WIA (continued)

5 . E. 5 . ..ContractThese are contracts with the Office of Employment Security whereby theOffice of Regulatory Services screens prospective program participants foreligibility for the WIA/OJT program and solicits and develops on the jobtraining contracts with employers.

6. Support ServiceCost of supportive services which are necessary to enable an individualeligible for training under WIA, but who cannot afford to pay for suchservices, to participate in a training program funded under WIA.

7 . Part icijp_ant__SupportAccounts for payments made to participants in the WIA programs.

8. AdministrativeAdministrative coats are limited to ten/thirty percent of the totalcontract, depending on the program.

9. HistoryThe WIA Division is administered by The Coordinating and DevelopmentCorporation (CDC) which is a corporation exempt from income tax underInternal Revenue Code Section 501 (c) (4) . The Coordinating and DevelopmentCorporation (CDC), originally organized and chartered in 1954, is a not-for-profit, private corporation whose service area includes the tenparishes and • ninety-two municipalities of Northwest Louisiana. CDCprovides a wide range of services to its membership through its sixoperating Divisions: Economic Development, Workforce Development,Community Development, IRP, TD, Marketing & Economic Development andLocal.

The Coordinating and Development Corporation (CDC) also providesspecialized services to its membership through assisting the followingcorporations: Ark-La-Tex Investment & Development Corporation, Mid-Continent Capital Corporation, Tri District Development Corporation, RiverCities High Technology Group, Inc., Industrial Trust Corporation,Louisiana Foreign Sales Corporation, Ark-La-Tex Regional Export andTechnology Center, Inc., and the Red River Valley BIDCO, Inc. Servicesinclude: business investment and finance, employment and training, publicworks and infrastructure, economic development, international businessdevelopment, planning and management, energy conservation/naturalresources and aesthetics development.

-13-

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS

JUNE 30, 2005

NOTE I - WIA (continued)

10. BudgetsBudgets are adopted on a basis consistent with, generally acceptedaccounting principles. All appropriations lapse at year end,

11. EquipmentEquipment purchased by the Labor funds remains the property of the grantorand is not capitalized. Total cost of equipment owned by Labor currentlybeing used by CDC is:

Workforce Development

NOTE J - UNRESTRICTED ASSETS

All funds are unrestricted for use within the funds. In prior years, thevacation fund was restricted; however, management has determined this to beunrestricted.

NOTE K - EQUIPMENT

During the year ended 6/30/05, the following occurred:

6/30/04 6/30/05Life Method Balance Additions Balance

Furniture & Equip. 5-7yrs. S/L $31,707 $ 0 $31,707Accumulated Depr. 31.707 0 31,707

Net

All repairs during the year were expensed.

-14-

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS

JUNE 30, 2005

NOTE L - CASH & CERTIFICATES OF DEPOSIT

Cash & Certificates of Deposit consist of the following:

Pivision

Certificates of Deposit

Checking Accounts

From Note D

Certificates of Deposit

Cash & Cash Equivalents

BankingInstitution

RegionsAmSouthCoushattaChase

Bank One

JP Morgan Trust

Amount @June 30, 2005

Total

$

$

102,99,

5,140,

348,

67,

676,

276,

348,

1, 020,

1,369,

388506813

730

437

628

844

308

437

780

217

The monies at each banking institution are insured for $100,000. The moniesat each brokerage institution are insured for $500,000. The uninsuredamount @ 6/30/05 is $431,076.

NOTE M - LOCAL FUND REVENUES

Revenues for the year consisted of:

OtherDues

NOTE N - ESTIMATES

3,114280,479

283,593

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, actual results could differ from those estimates.

-15-

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS

JUNE 30, 2005

NOTE O - FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair value of financial instruments approximates the carrying (book)value because of the short maturity of these assets.

NOTE P - OPERATIONS/CREDIT RISK

The Company is dependent upon the continuance of the government grantfunding to support the economic development in the ten parish area. Theloans are subject to risk of collection; however, the management believesthe collateral is adequate.

NOTE Q - IRP LOANS

The Company has entered into a relending program with the United StatesDepartment of Agriculture (USDA) through the Rural Development Program. Theprogram allows for a total lending program of $890,762 @ - 1% interest,principal due over a 27 year amortization beginning after the program'sthird year. The monies are advanced/loaned by USDA upon loan approval toqualified businesses. As of 6/30/05, the following has transpired:

(Notes Payable)Loans FromUSDA

Amortization6/06 $ 30,0756/07 30,4706/08 30,9006/09 &Thereafter 689, 863

S 781,308

The Company has made a total of nine loans @ 6/30/05. The Company hascharged 6-9.5% interest on debt and loans are normally for 10 year terms.

Notes Receivable $ 61,815Current Portion { 8,749)Allowance _J 7.418)

S 45,648

The reserve is estimated to be 12% of the unpaid balance.

Accrued interest @ 6/30/05 is $3,976.

During the year, the Company borrowed $40,000 from JP Morgan Chase securedby a Certificate of Deposit at the same bank, with interest at prime plus1%.

-16-

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO FItJKNCIAL STATEMENTS

JUNE 30, 2005

NOTE Q - IRP LOANS (continued)

Date ofLoan

October, 2001July , 1999January, 2000November, 1998January, 1999November, 1998October, 1999October, 1999July, 2000

InterestRate

896999787

.0

.5

.0

.5

.5

.5

.5

.5

.5

10

10

109

157

10

1012

Term

yearsyearsyearsyearsyearsyearsyearsyearsyears

Lendee

Rockin RoosterH . FanningHendrix Mfg.KJH InvestmentsKa j ohn Inv .Lites BrothersPlantation silkRivertown Dev.Rolling Knolls

OriginalLoan

$ 100,52,

222,135,150,50,

81,100,120,

000

000

000

000000

725000

000

000

Balance© 6/30/05

$ 00

0

0

0

3,0130

58,8010

Plantation Silk was written off in the prior year as being uncollectible.

Due 6/066/076/086/096/10

$ 13,36012,22713,30914,4858,433

$ 61,814

All loans are current at June 30, 2005.

NOTE R - BOARD OF DIRECTORS

All services are on a voluntary basis. The board members were onlyreimbursed travel expenditures.

NOTE S - RISK MANAGEMENT

The Company is exposed to various risk of loss and insured against theselosses through comprehensive commercial insurance. Claims resulting fromthese losses have historically not exceeded insurance coverage.

NOTE T - CONTINGENCIES

The Company is a participant/guarantor to a construction contract in BossierCity as of the year end. The project is owned by AIDC and costs areprojected to range between $1,500,000 and $2,000,000.

-17-

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO FINANCIAL STATEMENTS

JUNE 30, 2005

NOTE U - NOTES PAYABLE HIBERNIA ^

On December 23, 2003, The Coordinating and Development Corporation receiveda letter of credit of $2,150,000, maturity date January 1, 2015 fromHibernia Bank, which is secured by certain pieces of real estate owned byAIDC and the following Certificates of Deposit held under the name of TheCoordinating and Development Corporation.

Hibernia CD, dated 3/15/04, maturitydate 3/15/06, interest rate 2.87%

This CD was asigned to AIDC.

This letter of credit is collateral for bonds borrowed by The Coordinatingand Development Corporation from the Louisiana Local GovernmentEnvironmental Facilities & Community Development Authority Rev Bonds for thesame amount ($906,667) payable at floating interest rate, which at 6/05 was5.266%.

The Coordinating and Development Corporation has assigned all of this toAIDC in that the purpose of the loan is to develop buildings in NorthwestLouisiana and the repayment of this debt is to come from rentals.

An additional loan from Hibernia to The Coordinating and DevelopmentCorporation of $520,000, with varying interest rates (at 6/30/05, it was6.75%) secured by funds held by The Coordinating and Development Corporationhas also been assigned to AIDC.

This debt is reflected as being owed by AIDC as per the agreement betweenthe two entities.

During the year, the entity received the following states/city funds whichwere transferred to AIDC.

State of LouisianaFacility Planning

Bossier CityViking Drive 10/04 $444,239 4/05 $ 70,074

3/05 130,920 5/05 60,841

NOTE V - PAYABLE

The Company owes the Department of Labor $115,495.

-18-

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Cw

THE COORDINATING AND DEVELOPMENT CORPORATION

SCHEDULE G*F FEDERAL AWARDS

FOR THE YEAR ENDED JUNE 30, 2005

Federal Grantor

Hpnmaior ProgramsUS Department of Commerce

Economic Development Adro

Total

Federal CFDA #

11.30011.300

Major ProgramsWorkforce Investment Act/Dept of LaborAdult

Total

Dislocated Worker

Total

Youth

Total

State Incentive

15%

W!A Total

Step

Total

FY03PY03FY04PY04FY05PY05

FY03PY03FY04PY04FY05PY05

PY03PY04PY05

17.25817.25S17.25817.25817.25817.258

17.26017.26017.26017.26017.26017.260

17.25917.25917.259

GrantTerm

1/1/05-12/31/051/1/04-12/31/04

7/1/04-6/30/057/1/04-6/30/057/1/04-6/30/057/1/04-6/30/057/1/04-6/30/057/1/04-6/30/05

7/1/04-6/30/057/1/04-6/30/057/1/04-6/30/057/1/04-6/30/057/1/04-6/30/057/1/04-6/30/05

7/1/04-6/30/057/1/04-6/30/057/1/04-6/30/05

7/1/04-6/30/05

ProgramAmount

$ 50,00050.000

100,000

314,3810

1,095,952273,460

1,038,097225.812

2.947.702

1,665,4300

909,327364,644936,476352.729

4,228.606

1,502,0761,414,0151,168.3114,084,402

66.317

34,000

11.361.027

182.367

$11.643.594

Revenues ForYear Ended.June 30. 2005

050.00050.000

214,0640

852,892273,460

1,038,09794.176

2.472.689

550,5390

270,01084,289901,331

01.806.169

01,276,412

49.2921.325.704

66.317

34.000

5.704.879

163.766

ExpendituresFor

Year EndedJune 30. 2005

050.00050.000

214,0640

852,892273,460

1,038,09794.176

2.472,689

550,5390

270,01084,289

901,3310

1.806.169

1,276,41249,292

1.325.704

66.317

34.OOP

5.704.879

163.766

5,918,645 $_ 5,918.645,

See Notes to Financial Statements-22-

THE COORDINATING AND DEVELOPMENT CORPORATIONNOTES TO THE SCHEDULE OF^EXPENDITURES OP FEDERAL AWARDS

FOR THE YEAR ENDED JUNE 30, 2005i

1. Basis of Presentation

The accompanying schedule of expenditures of Federal awards includes the Federal grantactivity of The Coordinating and Development Corporation and is presented on theaccrual basis of accounting, which is the same basis of accounting used for thepresentation of the general purpose financial statements. The information in thisschedule is presented in accordance with the requirements of OMB Circular A-133, Auditsof States, Local Governments, and Nonprofit Organizations.

The Coordinating and Development Corporation did pass through Federal awards tosubrecipients during the fiscal year, however no one recipient received $300,000 nordid CDC expend any Federal awards in the form of noncash assistance.

-23-

THE COORDINATING AND,. DEVELOPMENT CORPORATION< SCHEDULE OF FINDINGS AND QUESTIONED COST, FOR THE YEAR ENDED JUNE 30, 2005

We were engaged to audit the financial statements of The Coordinating andDevelopment Corporation (CDC) as of and for-the year ended June 30, 2005 andhave issued our report thereon dated December 20, 2005, We conducted ouraudit in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits containedin Government Auditing Standards, issued by the Comptroller General of theUnited States. Our report expresses an unqualified opinion on the financialstatements for the year ended June 30, 2005.

Section I -_Summarv of Auditor,'s Results.:

a. The report on internal control and compliance material to the financialstatements reported the following items:

- Internal Control - There were no reportable conditions

- Compliance - No noncompliance that is material to the financialstatements

b. Federal Awards:

- Workforce Investment - Grants awarded totaling $11,361,027

- Step - Grants awarded totaling $182,367

- Economic Development - Grants awarded totaling $100,000

c. Identification of Major Programs:

- WIA - Total revenues received during this year were $5,704,879

Section II - Findings Relating to the Financial Statements.Which are Requiredto be__Reported .._in Accordance with _GeneraIly_Accepted Governmental AuditingStandards:

- None

Section III - Findings and Questioned Costs for Federal Awards _Whi.ch_ShallInclude Audit F_indin_gs as Defined by OMB Circular A-133:

- None

See Accountant's Report and Notes-24-

THE COORDINATING AND.DEVELOPMENT CORPORATIONMANAGEMENT'S CORRECTIVE ACTION PLANFOR THE YEAR ENDED JUNE 30, 2005

SECTIQN IINTERNAL CONTROL AND COMPLIANCE MATERIAL TO THE FINANCIAL STATEMENTS

No findings were reported in theschedule of findings and questionedcost.

Response - N/A

SECTION IIINTERNAL CONTROL AND COMPLIANCE MATERIAL TO FEDERAL AWARDS

No findings were reported in theschedule of findings and questionedcost.

Response - N/A

SECTION IIIMANAGEMENT LETTER

No findings were reported in theschedule of findings and questionedcost.

Response - N/A

See Accountant's Report and Notes-2.5-

HEARDMCELROY<& VESTAL

LLPCERTIFIED PUBLIC ACCOUNTANTS

333 TEXAS-STREET

15TH FLOOR

SHREVEPORT, LA 71101

318 429-1525318 429-2070 FAXPOST OFFICE Box 1607SHREVEPORT, LA

71165-1607

PARTNERSJ. PETER GAFFNEY, CPA, APCSPENCER BERNARD, JR., CPAH.Q. GAHAGAN, JR. , CPA, APCGERALD W. HEDGCOCK, JR., CPA, APCTIM B. NIELSEN, CPA, APCJOHN W. DEAN, CPA, APCMARK D. ELDREDGE, CPAROBERT L. DEAN, CPA

W. CRAIG, CPA

ROY E. PRESTWOGD, CPAA. D. JOHNSON, JR., CPARON W. STEWART, CPA, APC

OF COUNSELGILBERT R. SHANLEY, JR., CPAC. CODY WHITE, JR., CPA, APCWILLIAM L. HIGHTOWER, CPA

December 20,2005

Board of DirectorsThe Coordinating and Development Corporation (CDC)Shreveport, Louisiana

Report on Compliance and on Internal Control Over Financial ReportingBased on an Audit of Financial Statements Performed in

Accordance with Government Auditing Standards

We have audited the financial statements of the Coordinating and Development Corporation (CDC) as of andfor the year ended June 30, 2005, and have issued our report thereon dated December 20, 2005. Weconducted our audit in accordance with auditing standards generally accepted in the United States of Americaand the standards applicable to financial audits contained in Government Auditing Standards, issued by theComptroller General of the United States.

Internal Control Over Financial ReportingIn planning and performing out audit, we considered the Coordinating and Development Corporation (CDC)'sinternal control over financial reporting in order to determine our auditing procedures for the purpose ofexpressing our opinion on the financial statements and not to provide an opinion on the internal control overfinancial reporting. Our consideration of the internal control over financial reporting would not necessarilydisclose all matters in the internal control that might be material weaknesses. A material weakness is areportable condition in which the design or operation of one or more of the internal control components doesnot reduce to a relatively low level the risk that misstatements caused by error or fraud in amounts that wouldbe material in relation to the financial statements being audited may occur and not be detected within a timelyperiod by employees in the normal course of performing their assigned functions. We noted no mattersinvolving the internal control over financial reporting and its operation that we consider to be materialweaknesses.

Compliance and Other MattersAs part of obtaining reasonable assurance about whether the financial statements of the Coordinating andDevelopment Corporation (CDC) are free of material misstatement, we performed tests of its compliancewith certain provisions of laws, regulations, contracts and grant agreements, noncompliance with whichcould have 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 our audit and, accordingly,we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or othermatters that are required to be reported under Government Auditing Standards.

This report is intended for the information and use of the board of directors, management, federal awardingagencies, and others within the organization, and is not intended to be and should not be used by anyoneother than these specified parties. However, this report is a matter of public record and its distribution is notlimited.

A PROFESSIONAL SERVICES FIRMSHREVEPOST * BOSSIER CITY

WEST MONROEhmv@hmvcpa.com E-MAILwww.hmvcpa.com WEB ADDRESS

HEARDMCELROY<& VESTAL

LLPCSHTIFIED PUBLIC ACCOUNTANTS

333 TEXAS-STREET

15TH FLOOR

SHREVEPQRT, LA 71101

318 429-1525318 429-2070 FAXPOST OFFICE Box 1607

SHHEVEPORT, LA

71165-1607

PARTNERSJ. PETER GAFFNEY, CPA, APCSPENCER BERNARD, JR., CPAH.Q. GAHAGAN, JR., CPA, APCGERALD W. HEDGCOCK, JR., CPA, APCTIM B. NIELSEN, CPA, APCJOHN W. DEAN, CPA, APCMARK D, ELDREDGE, CPAROBERT L. DEAN, CPASTEPHEN W. CRAIG, CPA

ROY E. PRESTWOOD, CP\A. D. JOHNSON, JR., CPARON W. STEWART, CPA, APC

OF COUNSELGILBERT R. SHANIEY, JR. , CPAC. CODY WHITE, JR., CPA, APCWILLIAM L. HIGHTOWER, CPA

December 20,2005

Board of DirectorsThe Coordinating and Development Corporation (CDC)Shreveport, Louisiana

Report on Compliance with Requirements Applicable to EachMajor Program and Internal Control Over Compliance in

Accordance with OMB Circular A-133

ComplianceWe have audited the compliance of the Coordinating and Development Corporation (CDC) with the typesof compliance requirements described in the U. S. Office of Management arid Budget (OMB) Circular A-133Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30,2005. The Coordinating and Development Corporation (CDC)'s major federal programs are identified in thesummary of auditor's results section of the accompanying schedule of findings and questioned costs.Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its majorfederal programs is the responsibility of the Coordinating and Development Corporation (CDC)'smanagement. Our responsibility is to express an opinion on the Coordinating and Development Corporation(CDC)'s compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in theUnited States of America; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits ofStates, Local Governments, and Non-Profit Organizations . Those standards and OMB Circular A-133require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance withthe types of compliance requirements referred to above that could have a direct and material effect on a majorfederal program occurred. An audit includes examining, on a test basis, evidence about the Coordinating andDevelopment Corporation (CDC)'s compliance with those requirements and performing such otherprocedures as we considered necessary in the circumstances. We believe that our audit provides a reasonablebasis for our opinion. Our audit does not provide a legal determination on the Coordinating andDevelopment Corporation (CDC)'s compliance with those requirements.

In our opinion, the Coordinating and Development Corporation (CDC) complied, in all material respects,with the requirements referred to above that are applicable to each of its major federal programs for the yearended June 30, 2005.

A PROFESSIONAL SERVICES FIRMSHREVEPORT • BOSSIER CITY

WEST MONROEhmv@hmvcpa.com E-MAILwww.hmvcpa.com WEB ADDRESS

Internal Control Over ComplianceThe management of the Coordinating and Development Corporation (CDC) is responsible for establishingand maintaining effective internal control over compliance with requirements of laws, regulations, contractsand grants applicable to federal programs. In planning and performing our audit, we considered theCoordinating and Development Corporation (CDC)'s internal control over compliance with requirements thatcould have a direct and material effect on a major federal program in order to determine our auditingprocedures for the purpose of expressing our opinion on compliance and to test and report on internal controlover compliance- in accordance with OMB Circular A-133.

Our consideration of the internal control over compliance would not necessarily disclose all matters in theinternal control that might be material weaknesses. A material weakness is a condition in which the designor operation of one or more of the internal control components does not reduce to a relatively low level therisk that noncompliance with applicable requirements of laws, regulations, contracts and grants that wouldbe material in relation to a major federal program being audited may occur and not be detected within atimely period by employees in the normal course of performing their assigned functions. We noted nomatters involving the internal control over compliance and its operation that we consider to be materialweaknesses.

This report is intended solely for the information and use of the board of directors, management, federalawarding agencies and pass-through entities, and others within the organization and is not intended to be andshould not be used by anyone other than these specified parties.

J