jefferson economic development commission [jedco]

J l ^ l ^

JEFFERSON PARISH ECONOMIG DEVELOPMENT COMMISSION JEFFERJSON PARISH. LOinSIANA

FINANCIAL STATEMENTS AND SCHEDULES

DECEMBER 31.2011

Under provisions of state law. this report is a public document. Acopy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, v^here appropriate, at the office of the parish clerk of court.

Release Date JUN 0 6 2012

i i *3 lA i Postlethwaite S S i K I & Netterville

A Professional Accounting Corporation

www.pncpa.com

http://www.pncpa.com

JEFFERSON PAJUSH ECONOMIC DEVELOPMENT COMMISSION JEFFERSON PARISH, LOUISIANA

FINANCIAL STATEMENTS AND SCHEDULES

DECEMBER 31,2011

TABLE OF CONTENTS

Page

Independent Auditors' Report 1

FINANCIAL SECTION

Required Supplementary Information - Part I: Management's Discussion and Analysis 3

Basic Financial Statements: Govenmient-wide Financial Statements:

Statement of Net Assets 12 Statement of Activities 13

Fund Financial Statements: Governmental Funds:

Balance Sheet 14 Reconciliation of tiie Governmental Fimds 15

Balance Sheet to the Statement of Net Assets. Statement of Revenues, Expenditures, and 16

Changes in Fund Balances Reconciliation of the Governmental Funds Statement 17

of Revenues, Expenditures, and Changes in Fimd Balances to the Statement of Activities

Fiduciaiy Funds: Fiduciary Funds Description 18 Fiduciaiy Funds - Statement of Fiduciaiy Net Assets 19

Notes to Basic Financial Statements 20

Required Supplementary InformatJoh - Part H Generi Fund and Major Fund Descriptions 38 Statement of Revenues, E5q)enditures, and Changes in Fund Balances - Budget and Actual:

General Fund 39 Jefferson Edge Fund 40 EDA Revolving Loan Fund 41 BRGL/LRCF Fund 42

SINGLE AUDIT SECTION

Lidependent.Auditors' Report on Literaal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 43

Independent Auditors' Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control Over Compliance in Accordance with OMB Circular A-133 and the Schedule of Exp^ditures of Federal Awards 45

Schedule of Expenditures of Federal Awards 47 Notes to ScheduIe;0f Expenditures of Federal Awards 48 Schedule of Findings and Questioned Costs 50

l j 9 f S I Postlethwaite M & a J & Netterville

A Probwiono! Accounting Corporotion Aisociotad OHices in Principol Ciliei of the Unil-id Stafss

www.pncpo.com

Independent Auditors' Report

The Board of Commissioners Jefferson Parish Economic Development Commission Metairie, Louisiana

We have audited the accompanying financial statements of the governmental activities, the aggregate discretely component unit, each major fund, and the e^gregate remaining fimd information of the Jefferson Parish Economic Development Commission ("JEDCO"), a component unit of Jefferson Parish, Louisiana, as of and for the year ended December 31, 2011, which collectively comprise JEDCO's basic financial statements as listed in the table of contents. These financial statements are the responsibility of JEDCO's management. Our responsibility is to express an opinion on these financial statements based on oiu: audit

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to fmancial audits contained in the Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are fi^e of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of JEDCO's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements referred to above present fably, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component unit, each major fimd, and the aggregate remaining fimd infonnation of JEDCO as of December 31,2011, and Ae respective changes in financial position and, where applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America.

In accordance wth Government Auditing Standards, we have also issued our report dated April 10,2012 on our consideration of JEDCO's internal control over fmancial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements. The purpose of that report is to describe the scope of our testing of internal control over fmancial reportmg and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed m accordance with Government Auditing Standards and should be read in conjunction with this report m considering the results of our audit.

1

30th Floor - Energy Centre • 1100 Poydras Street • New Orleans, LA 70163-3000 • Tel: 504.569.2978

One Gaileria Bivd, Suite 2100 • Metairie, LA 70001 • TeL 504.837.5990 • Fax: 504.834.3609

http://www.pncpo.com

Accounting principles generally accepted in the United States of America require that the management's discussion and analysis and budgetary comparison information on pages 3 through 11 and 39 through 42 be presented to supplement the basic financial statements. Such infonnation, although not a part of the basic fmancial statements, is required by the Govermnental Accounting Standards Board, who considers it to be an essential part of fmancial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because die limited procedures do riot provide us with sufficient eyidence to express an opinion or provide any assurancis.

Our audit was conducted for the purpose of forming an opinion on the financial statements that collectively comprise JEDCO's basic fmancial statements as a whole. The introductory section, combining and individual nonmajor fund.financial statements are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying schedule of e:q)enditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is ako not a required part of the fmancial statements. The combining and individual nonmajor fund financial statisments and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the fmancial statements. The infonnation has been subjected to the auditmg procedures applied in the audit of the financial statements and certain additional procedures, includmg comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in ail material respects in relation to the financial statements as a w^ole.

f: Metairie, Louisiana April 10, 2012

P&N

FINANCIAL SECTION

REQUIRED SUPPLEMENTARY INFORMATION

PARTI

MANAGEMENT'S DISCUSSION AND ANALYSIS

JGEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS

December 3L 2011

The Management's Discussion and Analysis (MD&A) of the Jefferson Parish Economic Development Commission's (JEDCO) financial performance provides an overall review and an objective, easily readable analysis of JEDCO's financial activities for the year ended December 31, 2011. The intent of MD&A is to review JEDCO's overall financial performance and to assist readers in assessing the financial position. Therefore, readers should read MD&A m conjunction with JEDCO's financial statements and the notes to the financial statements.

FINANCIAL mCHLIGHTS

• The assets of JEDCO exceeded its liabilities at the end of December 31. 2011 by $19,858,139 {net assets). Of this amount, $2,023,317 (unrestricted net assets) may be used to meet the government's ongoing obligations to citizens and creditors.

• JEDCO's total net assets decreased by $566,217. The decrease is primarily due to the decrease of $200,000 fix)m the Marketing Quality of Life during the year ended December 31, 2011 and a decrease in In Kind Donations of $108,150. Additionally, the JEDCO received State of Louisiana Tax Credits of $53,282 during the year ended December 31,2011 and $212,812 during the year ended December 31,2010.

• JEDCO's total assets decreased by $859,736 during the current year. Cash balances increased m the BRGL/LRCF Fund due to cash receipts received on outstanding notes receivable. The mcrease in cash balances were offset by a largei- decrease in note receivables and promises to give due to less loan activity within the LRCF program and less promises to give with the unstable economy. In addition, a decrease in infiastructure assets due to curroit year depreciation expense also contributed to the decrease.

• JEDCO's total habiUties decreased by $293,519 during the current year. The key factors in this decrease were a decrease in deferred revenue of $118,600 along with a decrease in amounts due to FORI of $197,125.

• During the year ended December 31, 2009, JEDCO obtained financing of $4 million through its component unit FORT to fimd construction of tiie Administration Building in the Churchill Technology and Business Park. During the year ended December 31, 2010, JEDCO received an additional $2 milUon in CDBG fimding fi^m Jefferson Parish to fimd the Incubator facility. At December 31, 2011 included in capital assets on FORI relating to the administrative building and Incubator facility is $5,793,484. The building was put in service m April 2011 and has a total cost of $5,908,869.

OVERVIEW OF TBE FINANCIAL STATEMENTS

This discussion and analysis are intended to serve as an introduction to JEDCO's basic financial statements. JEDCO's basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fimd financial statements, and 3) notes to the financial statements. This report also contains supplementary information in addition to the basic financial statements themselves.

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION MANAGEMENT'S DISCUSSION AND ANALYSIS

December 3L 2011

Government-wide financial statements. The government-wide financial statements are designed to provide readers with an overview of JEDCO's finances, in a manner similar to a private-sector entity.

The statement of net assets presents information on all of JEDCO's assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of JEDCO is improving or deteriorating.

The statement of activities presents infonnation showing how the government's net assets changed during the most recent year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and e^qienses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected revenues and compensated absences payable).

Both of the government-wide financial statements distinguish functions of JEDCO that are principally supported by intergovernmental revenues and charges for services. The govenunental activities of JEDCO include Financing the Future program. Economic Development program, Jefferson Edge program, BRGL/LRCF program, Patrick F. Taylor School Project, Technology Park, Business Innovation Center, and Marketing andAdministrative expenditures.

The government-wide financial statements can be found on pages 12 to 13 of this report and include the discretely presented comiporient unit FORI.

Fund financial statements. A fimd is a grouping of related accounts that is used to mamtaiii control over resources that have been segregated for specific activities or objectives. JEDCO, like other state and local governments, uses fimd accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of JEDCO can be divided into two categories: governmental funds and fiduciary funds.

Govemmeatai funds. Governmental fimds are used to account for essentially the same functions reported, as governmental activities in the govenunent-wide financial statements. However, unlike the government-wide financial statements, governmental fund fmancial statements focus on near-term inflows and outflows of spendable resoitrces, as well as on balances of spendable resources available at the end of the year. Such information may be useful in evaluating a government's near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental fimds with similar information presented for governmental activities in the government-wide fmancial statements. By doing so, readers may better understand the long-term impact of the government's near-term fmancing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation.to facilitate this comparison between governmental fimds and governmental activities.

JEDCO maintains five mdividual govenunental funds. Infonnation is presented separately in the governmental fimd balance sheet and in the govermnental fund statement of revenues, expenditures, and changes in fimd balances for the General fund, Jefferson Edge fund, EDA Revolving Loan fund, the


December 3L 2011

BRGL/LRCF fimd, the JEDCO Building fimd, all, of which are considered to be major fxinds. Data fix)m the otiaer two governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these nonmajor governmental fimds is provided in the form of combining statements elsewhere in this report

JEDCO adopts an annual appropriated budget for its general fimd, capital project fimds and all special revenues fimds with the exception of the EDA Revolvmg Loan fimd and the BRGL/LRCF fimd. A budget was not prepared for these funds and is explained in Note 3 on page 27. Budgetary comparison statements have been provided for all major fimds in the required supplementary infonnation and for nonmajor fimds in the other supplemental information section.

The basic governmental financial statements can be found on pages 14 and 16.

Fididciary Funds. Fiduciary fimds are used to account for resources held for the benefit of parties outside the government. Fiduciary fimds are no/ reflected in the govemment-v«de financial statements because the resources of those funds are not available to support JEDCO's own programs. The accounting used for fiduciary fimds is much like that used for proprietary fimds. The basic fiduciary fimd financial statements can be found on page 18 of this report.

Notes to the financial statements. The notes provide additional information that is essential to a fiill understanding of the data provided in the government-wide and fimd financial statements. The notes to the financial statements begin on page 20 of this report.

Other information. In addition to the basic financial statements and accompanying notes, this report also presents certsdn required st^plementary infonnation in the form of budgetary comparison statements for each major fiind. This information was discussed earlier in the governmental fimd section. The reqiured supplementary infonnation begins on page 38 of this report Tlie combining statements referred to earlier in connection with nonmajor governmental funds are presented immediately following the required supplementary infonnation.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earher, net assets may serve over time as a usefiil indicator of a government's financial position. In the case of JEDCO, assets exceeded liabilities by $19,858,139 at December 31,2011.


December 31.2011

Statements of Net Assets

2011 2010 Current and other assets Notes receivable Capital assets

Total assets

Other liabilities Long-term liabilities outstanding

Total liabilities

Net Assets: Invested in capital assets Restricted:

Economic Development Administration Jefferson Edge BRGL JEDCO building fimd

Unrestricted Total net assets

$ 5,385,870 7,326,557 7,826,016

20,538,443

514,735 115,569 680,304

7,826,016

1,191,856 606,310

7,759,437 451,203

2,023,317 $ 19,858,139

$ 4,675,940 8,603,228 7,631,897

20,911,065

745,708 228,115 973,823

7.631,897

1,318,072 355,616

8,001,692 894,662

1,735,303 $ 19,937,242

The amount "Invested in capital assets" represents JEDCO's net book value of its fixed assets. It is the accumulation of years of investments m fixed assets. These assets are not available for spending. The restricted portion of net assets represents resources tiiat are subject to external restrictions on how they may be used. The remaining balance of unrestricted net assets ($2,023,317) may be used to meet the government's ongoing obligations to citizens and creditors.

At the end of the current period, JEDCO is able to report positive balances in all three categories of net assets, both for the government as a whole, as well as for its separate governmental activities. The same situation held true for the prior year.

The government's net assets have decreased by $566,217 during the current year. The decrease is primarily due to the decrease of $200,000 fix)m the Marketing Quality of Life during the year ended December 31,2011 and a decrease in In Kind Donations of $ 108,150. Additionally, JEDCO received the State of Louisiana Tax Credit of $212,812 during the year ended December 31, 2010 and $53,282 during the year ended December 31, 2011.


December 31.2011

Governmental activities. Govenunental activities decreased JEDCO's net assets by $86,711. Key elements of this decrease are as summarized on the following page.

Charges for services increased by $12,798 in the current year primarily due to loan fees earned upon issuance of the loan or grant from the BRGL/LRCF program during the year ended December 31, 2011. During the year ended December 31, 2011, the number of new loans or grants issued decreased significantly as most of the grant funds were awarded during the year ended December 31,2009.

Operating grants and contributions decreased by $1,239,061 primarily due to an decrease in funding for the Jefferson Parish incubator of $755,988, the decrease of $200,000 fi-om the Marketing Quality of Life and the State of Louisiana Tax Credit of $212,812 that was received during the year ended December 31, 2010, but not during the year ended December 31,2011.

Capital grants and contributions decreased by $128,925 in the current year due to one-time fimding for the Patrick F. Taylor Science and Technology Academy and Conference Center. The funding for the Patrick F. Taylor Science and Technology Academy and Conference Center was conapleted during the year ended December 31,2010.

The largest single revenue source of the general fimd continues to be JEDCO's share of occupational licenses from Jefferson Parish. The occupational licenses have increased $16^535 fix)m the prior year due to the increase in the consumer price index.

Interest and investment earnings have increased $134,900 fi-om the prior year due to an increase of accmed interest from $71,251, to $184,905 on die note receivable at year ended December 31,2011.

In total, expenditures decreased by $282,357 from the prior year. The decrease is primarily due to a decrease in Incubator building expenses of $708,309, decrease in Economic Development e^qienses of $103,753, a decrease in Jefferson Edge expenses of $156,744 and a decrease of $106,439 in Patrick Taylor Expenses with tiie elimination of the program. The decrease is offset by an increase in administrative expenses of $936,720. The decrease in the Incubator building expenses is due to the pass through funding provided to FORJ for the iiicubator building. The increase m administrative expenses is primarily due to tiie $458,709 of uncollectible loans written off by EDA and BRGL/LRCF and tiie increase in the expenses related to the finniture and equipment expense for the new building.


December 31.2011

Statement of Activities

2011 2010 Revenues:

Program revenues: Charges for services Operating grants and contributions Capital grants and contributions

General revenues: Share of Jefferson Parish occupational hcenses Interest and investmeiit earnings Miscellaneous

Total revenues

E^enses: Administrative Economic Development Services Enterprise Center West Incubator Fuiancing the Future Jefferson Edge Marketing Technology Park Patrick F. Taylor Academy

Total expenses

Increase (Decrease) in netassets

Net assets - beginning

Net assets ~r ending

$ 183,703 1,223,307

27,514

1,599,731 285,763 36,948

3,356,966

2,082,486 506,769 54,413 511,213 206,599 105,045 245,071 211,587-

-

3,923,183

(566,217)

20,424,356

$ 19^858,139

$ 170,905 2,462,368 156,439

1,583,196 150,862 12,011

4,535,781

1,145,766 610,522 43,405

1,267,201 222,850 261,789 395,305 152,263 106,439

4,205,540

330,241

20,094,115

$ ,20,424,356

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION MANAGEMEIVT'S DISCUSSION AND ANALYSIS

December 31.2011

FINANCIAL ANALYSIS OF THGE GOVERNMENT'S FUNDS

As noted earlier, JEDCO uses fimd accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental funds. The focus of JEDCO's governmental funds is to provide information on near-term inflows, outflows, and balances oi spendable resources. Such information is usefiil m assessing JEDCO's fmancing requirements. In particular, unreserved fund balance may serve as a usefiil measure of a government's net resources available for spending at the end of the fiscal year.

As of the end of tiie current year, JEDCO's governmental funds reported combined fimd balances of $11,384,571, a decrease of $349,119 in comparison with the prior year. Of this balance, $1,324,498 is considered to be unassigned.

The general fimd is the chief operating fimd of JEDCO. At the end of the current year, the general fund has a total fimd balance of $1,375,765, of which $1,324,498 is unassigned. As a measure of the general fimd's liquidity, it may be usefiil to compare unassigned fiind balance to total fimd expenditures. Unassigned fimd baliance represents 50 percent of total general fund expenditures. The general fund's fimd balance increased by $212,117 during the current year.

The Jefferson Edge fimd has a total fimd balance of $606,3lO of which $605,860 is restricted for use based on the donors' intent. The net increase in the fimd balance during the current year was $250,694.

The EDA Revolvmg Loan fund has a total fimd balance of $1,191,856, of which $1,064,143 is nonspendable since it is not expected to be available untii the year ended December 31, 2013. The net decrease in the. fimd balance during the current year was $126,216, primarily related to administrative expenditures in excess of interest income.

The BRGL/LRCF Fund has a total fimd balance of $7,759,437, of which $6,701,347 is nonspendable for use since it is not expected to be available until the year ended December 31, 2013. The net decrease in fund balance during the current year was $242,255, primarily related to administrative expenses in excess of interest income. Also included in administrative expense is 5306,863 relating to the write-off of uncollectible receivables during the year ended December 31, 2011. The borrowers on the note receivable balances made payments of $716,011 on the notes receivable during 2011.

The JEDCO Building fimd has a total fimd balance of $451,203, all of which is committed. This fimd was previously called the JEDCO West Proceeds fimd, which was created in 2003 by a transfer fi-om general fund of sales proceeds fi-om a building sold in 2002. The fimd has been earmarked by its Board of Commissioners for fiimiture and equipment expenditures of JEDCO's administrative offices/technology incubator in the Churchill Technology and Business Park.


December 3L 2011

General Fund Budgetary Highlights

JEDCO's budget is prepared according to Louisiana law. During the course of the year, JEDCO revises its btidget to take into consideration significant changes in revenue or expenditures. Louisiana Revised Statue 39:1311 requires a budget amendment if either expected revenues is less or anticipated expenditures are in excess of budgetary goals by ^ve percent (5%) or more. A statement showing JEDCO's original and final budget compared with actual operating results is provided in this annual report. The General Fund's actual revenues were more than projected revenues by $107,223 and expenditures were less than final projections by $68,932.

A comparison of actual results as of December 31, 2011 and the final budget for the General Fund are as follows:

Total Revenues total Expenditures

Total Net Change

Final Budget

$ 2.613,419 2,739,157

$ (125,738)

Actual, Budgetary

Basis $ 2.720.642

2,670,225

$ 50,417

Difference $ 107,223

68.932

$ 176,155

The difference between the final budget and the actual results is primarily due to funding fix)m Jefferson Parish that was received, but not included in the budgeted amounts.

CAPITAL ASSETS, DEPRECIATION AND DEBT ADMINISTRATION

Capital Assets

At December 31, 2011, JEDCO had approximately $7,826,016 invested m capital assets. This amount is net of accumulated depreciation to date. The net book value of capital assets at December 31, 2011 is as follows:

Land $ 2,141,697 Infrastructure 5,447,055 Office fimuture 23 7,264

Total $ 7,826,016

Depreciation for tiie year ended December 31, 2011 was $301,706. Additional mformation on JEDCO's capital assets can be found in Note 6 on page 28.

10


December 3L 2011

CAPITAL ASSETS, DEPRECIATION AND DEBT ADMINISTRATION (CONTINUED)

Longrterm Obligations

JEDCO's Ibhgrterm obligati'ons at December 31,2011 are comprised of:

Compensated absences payable $ 60,919 Escrow deposits 6,750 Deferred revenue 47,900 Total $ 115,569

ECONOMIC FACTORS AND NEXT YEAR'S BUDGET

JEDCO anticipates an increase of 3.6% in its share of occupational licenses received fi-om Jefferson Parish for 2012,

Several factors will influence whether or not. JEDCO will experience an increase or decrease of revenues (i.e., occiipancy of tenants in the new Incubator facility at the Churchill Park location and investment tools). JEDCO anticipates an increase in operational expenses largely due to tiie occupancy of JEDCO's new administrative building. Exanqiles of such increases include insurance, maintenance, janitorial utilities, and security and building supplies.

Revenues and expenses allocated for the Jefferson Edge Project are project oriented and are reflected as such. Planned infrastructure construction spending was delayed in 2006 and 2007 due to Hunicane Katrina, but began during 2008. JEDCO signed a cooperative endeavor agreement with Jefferson Parish which provides Parish reimbursement for approximately $2 million of construction related expenditures for tiie lacubator building. Therefore, a significant increase in capital expenditures and Parish CDBG fimding will continue through 2011.

Revenues and expenses diocated for the Patrick F. Taylor Science and Technology Academy Conference Center are project oriented. The Patrick F. Taylor Science and Technology Academy Conference Center construction began in December 2011.

CONTACTING JEDCO'S FINANCLVL MANAGEMENT

This financial report is designed to provide taxpayers, customers, and creditors with a general overview of JEDCO's finances and to show JEDCO's accountability for the money it receives. If you have any questions about this report, or need additional financial information, contact JEDCO at 700 Churchill Parkway Boulevard, Avondale, Louisiana 70094 or call (504) 875-3908 during regular office hours.

11

BASIC FINANCIAL STATEMENTS

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION STATEMENT OF NET ASSETS

December 31.2011

ASSETS Cash and cash equivalents Investments Receivables:

Accounts Notes

Due fix)m JEDCO Due from other governments Prepdd expenses Promises to give - Jefferson Edge Note receivable and accrued interest Capital assets

Land Infrastructure assets, net Office equipment, net Building, net TOTAL ASSETS

LABILITIES Accounts payable Due to FORJ Escrow deposits Deferred revenue Compensated absences payable, long-term Long term debt

TOTAL LABILITIES

NETASSETS Invested in capital assets Restricted for:

EDA Revolving Loan Fund Jefferson Edge BRGL/LRCF Funds JEDCO Building Fund

Unrestricted

TOTAL NET ASSETS

The notes to the basic financial statements are an integral part of this statement.

Governmental Activities

$ 3.932,570 1.216,915

12,195 6,618,086

-138,523

19,167 66,500

708.471

2.141.697 5,447,055

237^64 -

20,538.443

45.333 519,402

6.750 47.900 60.919

-680,304

Discretely Presented

Component Unit

$ 74,192 -

_ -

519,402 . -

60,078 --

_

--

5,793,484 6.447.156

351.715 ----

3,964.375 4,316.090

7,826,016

1,191.856 606.310

7.759,437 451,203

2,023,317

$ 19,858,139 J_

----

2,131,066

2,131,066

12

.9

o u

,_, o VO

5 >n

VO m o \

^" 5v

m

^ •»—•

rtl *-<l

- o

« ^ ^ ?! S < Cb

O

[x E A &b H < fe U i

cs

m

1 i I

Q •o % T B Ed h a

« >< •) h o b

5 1 1

en oo o fS

vr> t—<

VO

o 1—1 n

csf

«

^„^ VO 00 o ^ vo" r -.—1

—'

V I i n o o" r-

. •~*

f -c>. »r» r r r J

^

.- r -oo «n «—I 1—1

N

/- o \ tr> •O oo oo Tj-

e

t—l

m r^ oC ON

•n

m VO r-; «o" oo cs

o o o (S" 1—I

oo •«!f ON • * "

es

r- •

n VO VO «n ^ • ^ ^

VO t n m

V (S TT

o" M

Ov en

oo" WI 00 ON"

•* o o\ o Ov o

cn 00 oo' t "

v o o ^ m ^ o O v « n ^ - ^ ^ o o v o ^ < - < a v T t - t ^ o o •*. ' ^ •*- 'H **\ °L. 'R. " . fS vo" ^ " •— VO w-T VI « " o o o m — o O " * ^ O >n v> <s f— (Si t s CN

.a -

^ i ^»-' 2

B 2 K O u U.

.a Q

o >n

c s VO*

ir> vO ' O m r-o \ oe o (N ^o \ o o r- v t —• 00* 00 r f oo ^ r- ' ' - - CN m —'

VO —• — vo"

^

m VO (s fn O O r^ r-^ • _ v-T (s oC • * (N —

— m

o o i n O

t ^ -m m o 00 »r> 'O O m ON ^O "O CJ "Ti ^ -<t — 1 - " CM* •* ' OO ON VI m (sj t^ t^ t t m

^ r^ V i Tf"

oo cn " " •

t N VO NO VO CN

(N T M

M

o ^

03 ^

ON oo O O f (S

h-" v ^ vo" O ON —• en

m o CN •—1

V i • « *

O

m

Q NO

• ^

w

3& r- o - * ON f n . o

< I I

w

3 K

VO *n 00^

ON

*-• •»•

•~l oo v^

"1 o o CN

« ""

«^

y UI s. § 1 S2 & iS V

-«*. -^ •oo CS

S.8 —. •*

.

o o o o

Vt VO vT o VO

T3

§ U H

*T3

C o a

m • ^ v ^ C3N VO 00 V VD

•>!r oo

«o Ov

( N

NO

o ^ <N <N

m r-<N — •0, f oo oo < * 1 —

0 0

oo VO t n •«r

•n

^m

ON ON_

t ^ " m

CN - o 00 «n —. r^ ' m " VO cs

f n CN ON

i r-VO

O 00 V I a-. v^ - r CN V m CN

en

V I NO r-; vT r-en

oo 00 VO

rn • < *

"T

«

i l "5 Z

8 i s i ei U < D

"S

6 o

a

c

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION RECONCILIATION OF THE GOVERNMENTAL FUNDS

BALANCE SHEET TO THE STATEMENT OF NET ASSETS December 3L 2011

Total fund balances at December 31,2011 - Governmental Funds

Cost of capital assets at December 31, 2011 Less- accumulated depreciation as of December 31,2011:

Office equipment infrastructure

Long Term NMTC Note Receivable Note receivable due from COCREF Investor 1, LLC Accrued interest

Elimination of interftmd assets and liabilities: Due from other funds Due to other fimds

$

$

$

8,479,450

(137,321)

(516,113)

500,000

208,471

122,706

(122,706)

$ 11,384,571

7.826,016

708,471

Long-term liabilities at December 31,2011: Compensated absences payable (60,919)

Net assets of governmental activities at December 31,2011: $ 19,858,139

The liotes to the basic financial statements are an integral part of this statement.

15

•-• (n r*- ON* ON VI

(N

r* tK o f-i

r-' (N r-oo cs VI

cs oo cs m V*

• (*!

o r-_ PT" 00

g o (S'

cs

00

(S

00 • * ON

rf" fS

o o

Vl' t*> (S

VN

o vo" t^ CS M"

r- o\ M M o\ in t-. f-i —

c VI m (S — N

•T <n

V) fS - J

ON

0\ •a-M

NO VO r r* ov Ov Vl* >n" 00 00 cs cs

g n rr> r-_

^

r VN • * "

OO (*i

— (-»

ON

s g" cs m

(N

VO • « •

Os 00

tn a n Vl

^

«e

ill VI VN

t CS

s i ^

g VO

_-* s 00

*n t Q ^ VI

n

<B

f-- f~. i^-0\ ee Ov

vo: r-_

s VI

•n

_ •v" Vl

m ON' — e

n*. _* lO — o vy cs

_ 1*.. ' O vT '!j-

CS

VI fn n r-VO

CS

t P-"

t*-(n ON,

c* 00 NO cs

<S NO p»

cs

(S

00

=s M NO •-a

VI VO

•VN r* in

M "I I

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION RECONCILUTION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES. EXPENPrTURES. AND

CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVmES December 3L 2011

Total net decrease in fund balances- governmental fiinds (349,119)

Amounts reported for.govemmental activities in the Statement of Activities are different because:

Capital outlays are reported in governmental funds as expenditures. - However, in the Statement of Activities, the cost of those assets is

allocated over their estimated useful lives as depreciation expense;. This is the amount by which depreciation exceeds capital outlays in the pen'od:

Capital outlays Depreciation expense

Net book value of capital assets disposed during the year

$ 17,712 (302,350) (284,638)

(8^57)

Accrued interest on the note receivable is included in interest income. and investment earnings on the Statement of Activities and is not recorded as income on the fund finahcial statements until the interest is collected. 80,951 80.951

Payment of compensated absences is an expenditure in the governmental funds, but reduces long-term liabilities in the Statement of Net Assets by the excess of compensated absences earned over amounts used; (5,054)

Decrease in net assets of governmental activities (566,217)

The notes to the basic financial statements are an integral part of this statement

17

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION FIDUCIARY FUNDS DESCRIPTION

December 31.2Q11

FIDUCIARY TYPE FUNDS - AGENCY FUNDS

Agency Funds account for assets held by an entity as an agent for individuals, private organizations, other governments, and/or other entity'sfunds.

HUD Revolving Loan Fund The HUD Revolving, Loan Fund accounts for loans made by the Department of Housing and Urban Development Commuriity Development Block Grant.Loan Guarantee Program to borrowers in the community for economic development

18

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION STATEMENT OF FIDUCIARY NET ASSETS

FIDUCIARV FUNDS December 31,2011

HUD Revolving

Loan Agency Fund

ASSETS Cash and cash equivalents $ 428,976 Notes receivable 348J44

Total Assets $ 777,720

LIABILiriES Due to Jefferson Parish

Department of Community Development $ 111,110

Total liabilities and fimd balance $ 111,120

The notes to the basic financial stateinentis are an integral part of this stateme^^^

19

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION JEFFERSON PARISH, LOUISIANA

NOTES TO BASIC FINANCIAL STATEMENTS

1. INTRODUCTION

The Jefferson Parish Economic Development Commission ("JEDCO") is a special district of Jefferson Parish, Louisiana v^hich was created by House Bill No. 908 of the 1987 Regular Session of the Louisiana Legislature. The name under which it was created is Jefferson Parish Economic Development and Port District, but ui accordance with its bylaws, it operates under the name Jefferson Parish Economic Development Commission or JEDCO.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES

Basis of Presentation

The accompanying fmancial statements of JEDCO have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The GASB authoritative guidance is documented in the GASB Codification.

Reporting Entity

GASB authoritative guidance documents the criteria for determining the governmental reporting entity and component units that should be included within the reporting entity. The basic criteria for including a governmental organization as a part of the reporting entity for a government^ unit is the ability to exercise oversight responsibility over such organization by the unit's elected officiab. Oversight responsibility is derived from, among other things, the governmental unit's power to appoint the governing board and the ability to significantly influence operations.

Based on the foregoing criteria, JEDCO was determined to be a component unit of Jefferson Parish, Louisiana, which is the governing body with oversight responsibility. The accompanying basic financial statements present information only on the funds maintained by JEDCO and its discretely presented component unit and do not present information on Jefferson Parish, the general govenmient services provided by Jefferson Parish, or the other governmental units that comprise the governmental reporting entity of Jefferson Parish. These financial statements present JEDCO (the primary govermnent) and its discretely presented component unit Forward Jefferson Corporation (a non-profit organization) (FORJ). As defined in GASB authoritative guidance component units are legally separate entities that are included in JEDCO's reporting entity because of the significance of their operating or financial relationships with JBDCO. The purpose of FORJ is to assist in facilitating the New Market Tax Credit financing for the construction of the new JEDCO Administrative building as described in Note 17. Separate financial statements for FORJ are not issued.

20



2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Governmerit-wide Financial Statements

JEDCO's basic financial statements include both government-wide (reporting the JEDCO as a whole) and fimd financial statements (reporting the JEDCO's major fimds). Both the govemment-wide and fimd finahcial statements categorize primary activities as either governmental or business type. JEDCO's activities are classified as govenmieiital activities.

In the government-wide Statement of Net Assets, the govermnental activities column is reported on a fiill accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligations. JEDCO's net assets are reported in three parts—invested in ca:pital assets, net of related debt; restricted net assets; and unrestricted net assets.

The govemmeait-wide Statement of Activities reports both tiie gross and net cost of each of JEDCO's functions. The functions are also supported by general govermnent revenues (occupational license revenue and investment earnings). The Statement of Activities reduces gross expenses (including depreciation) by related program revenues, operating and capital grants^ Program reventues must be directiy associated with the function. Operating grants mclude operating-specific and discretionary (either operating or capital) grants w)nh the capital grants column reports capital-specific graiits.

The net costs (by function or busniess-type activity) are niormally covered by general revenue (property, sales or gas taxes, intergovernmental revenues, interest income, etc).

JEDCO does not allocate mdirect costs. Depreciation expense^ which can be specifically identified by fimction, is included in the direct expenses of each function. This govemment-v^dde focus is more on the sustainabiiity of JEDCO as an entity and the change m JEDCO's net assets resulting from the current year's activities.

Fund Financial Statements

The fiiiEincial transactions of JEDCO are reported in individual fimds in the fimd financial statements. Each fund is accoimted for by providing a separate set of self-balancing accounts that comprises its assets, liabilities, reserves, fund equity, revenues and expenditures/expenses. Fimd accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities.

The emphasis in fund financial statements is on the major funds. Non-major funds by category are summarized into a single column. GASB authoritative guidance sets forth mmimum criteria (percentage of the assets, liabilities, revenues or expenditures/expenses of either fond category or the governmental and enterprise combined) for die determination of major fimds. JEDCO electively added funds, as major fimds, which either had debt outstanding or specific community focus. The non-major funds are combined in a column in the fimd financial statements.

21




Fund Financial Statements - Governmental Funds

The focus of the governmental.funds' measurement (in the fiind statements) is upon determination of financial position and changes in financial position (sources, uses, and balances of financial resources) rather than upon net mcome. JEDCO reports these major governmental fiinds and fimd types;

The General fimd \s the government's primary operating fimd. It accoimts for all financial resources of the general government, except those required to be accounted for in another fimd.

Special Revenue Funds

The Jefferson .Edge fimd is the government's primary fimd for the Jefferson Edge program. This program supports the overall economic development strategic plan for Jefferson Parish. This fiind is supported by the State of Louisiana, Jefferson Parish and the private sector throu^ annual or multi-year conmiitments.

The EDA Revolving Loan fimd accounts for the grants received fi-om the Economic Development Adnunistration.

The BRGL/LRCF Fund was created.m 2007 to account for the activity of the Business Recover Grant and Loan program as fimded by the Department of Housmg and Urban Development through the State of Louisiana Office of Economic Development

CapitalProiect.Funds

The JEDCO Building Fimd was created to account for the fimds reserved for fiirnituTe and equipment expenditures of JEDCO's admmistrative offices/technology incubator ui the Churchill Technology and Business ParL

The Patrick F. Taylor School Capital Project Fund was created to account for the activity relating to the construction of die Patrick F. Taylor Science and Technology Academy Conference Center in die Churchill Busmess Park.

The activities reported in these fimds are reported as governmental activities m the govemment-wide fuiancial statements.

22

.JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION JEFFERSON PARISH. LOUISIANA

NOTES TO BASIC FINANCUL STATEMENTS

2. SUMMARY OF SIGNEFICANT ACCOUNTING POLICIES (continued)

Fund Financial Statements - Fiduciary Funds

Fiduciaiy Funds are used to report assets held in a trustee or agency capacity for others and therefore are not available to support JEDCO, The reporting focus is on net assets and changes in net assets which are reported usmg accounting principles similar to proprietary fimds.

JEDCO's fiduciary fimds are presented in the fiduciaiy fimd financial stateinents by type (pension, private purpose and agency). Because by defmition these assets are being held for the benefit of a

- third party (other local governments) and cannot be used to address activities or obligations of the government, these fimds are not incorporated into the govemment-wide statements.

Budgetary Accounting

Formal budgetary accounting is employed as a management.control device during the year. The level of budgetary control is at the fimd/department level and expenditures may not exceed budgeted appropriations. Appropriations which are not expended la^se at year-end, A budget is adopted for the General Fund and die Jefferson Edge Special Revenue Fund on a basis consistent with generally accepted accounting principles. A budget was not adopted for the EDA Revolviog Loan Special Revenue Fund and the BRGL/LRCF Loan SpecialRevehue Fund because its expenditures are limited by the terms of the grant arrangements undo* which its revenues are received.

Operating transfers are not included for budget purposes. The adopted budget of expenditures operates as an appropriation for that year. Any unexpended balance of the amount appropriated reverts to the fimd balance and becomes available for fiiture appropriation. Encumbrance accounting is employed in governmental fimds. Enciimbrances (e.g. purchase orders, contracts) outstanding at year-end are reported as reservations of fimd balances and do not constitute expenditures or liabilities because die commitments will be re-2^propriated and honored during the subsequent year.

Basis of Accounting-Accrual/Modified Accrual Method

Basis of accoimting refers to the pomt at which revenues or e3q)enditures/expenses are recognized in the accounts and reported in the financial statements. It relates to the timing of the measurements made regardless of the measurement focus £q)plied.

Governmental activities in the govemment-wide fmancial statements and the fiduciary fimd financial statements are presented on the accrual basis of accounting. Non-exchange revenues, mcluding tatergovemmental revenues and grants, are reported when all eligibility requirements have been met. Fees and charges and other exchange revenues are recognized when earned and expenses are recognized when incurred. Revenue from shared occupational licenses is considered measurable and available when received and are recorded as revenue at that time.

23

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION JEFFERSON PARISH. LOUISLiNA


2. SUMMARY OF SIGNIFICANT ACCOUNTING POUCIES (continued)

Basis of Accounting-Accrual/Modified Accrual Method (continued)

The governmental fimds financial statements are presented on the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual; i.e., both measurable and. available. "Available" means collectible within the cmrent period or within 60 days after year end. Intergovernmental revenues and grants are recognized when all eligibility requirements are rnet and the revenues are available. Expenditures are recognized \\iien the related liability is incurred

Cash. Cash EqurvaJents. and Investments

Cash and cash equivalents mclude amounts in demand deposits and certificates of deposit with a maturity date within three months of the date acquired by JEDCO. Louisiana State statutes permit JEDCO to invest in dnect obligations of the United States Treasury, the principal and interest of which are fiilly guaranteed by the federal government, bonds, debentures, notes, or other evidence of iiidebtedness issued or guaranteed by federal agencies or U.S. goyernment instrumentalities^ direct security repurchase agreements of any federal book entry only securities, and certificates of deposit of state banks, organized under the State of Louisiana, and national banks having dieir principal office m the State of Louisiana, or in mutual or trust fund institutions which have underlymg investments limited to securities of the U.S. government or its agencies, and the Louisiana Asset Management Pool (LAMP). Investments for JEDCO are reported at, fair value. LAMP operates in accordance with appropriate state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect die reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at die date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ fix)m those estimates.

24

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION JEFFERSON PARISH LOUISIANA



Promises to Give

Promises to give are fiiture donations from businesses that are pledged over the next year for the Jefferson Edge program. Upon receipt, the promise to give will be recogruzed as revenue.

An allowance for estimated uncollectible receivables is established when collectibdity of a loan or an account becomes doubtfiil. As of December 31,2011, management had established no allowance for estimated uncollectible receivables and all accounts were considered collectible.

Deferred Revenue

Deferred revenues arise when resources are received by JEDCO before it has a legal claun to them. In subsequent periods, when JEDCO has legal claun to the resources, the liability for deferred revenue is removed from the balance sheet and the revenue is recognized.

Capital Assets and Depreciation

For the goyemment-wide financial statements, capital assets purchased or acquired wdtli an original cost of $500 are recorded at cost in the statement of net assets. Donated assets are valued at their estimated fair tnarket value on the date received. Additions, improvements and other capital outiays thait significantiy extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Depreciation is computed using the strai^f line metiiod over the follovv'ing usefiil lives-

Depreciation Estimated Lives

Buildmg 40 years Infrastructure 25 - 40 years Leasehold improvements 5-10 years OflGce fiimiture 5 — 7 years

For fimd financial statements, capital acquisitions are reflected as a capital outiay expenditures m the governmental fimds at the time purchased- GASB authoritative guidance requires JEDCO to report and depreciate new infi astructure assets. Infrastructure assets for JEDCO consist of the roads and sewer work performed for die Churchill Technology and Busmess Park.:

25

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION JEFFERSON PARISH. LOUISIANA



Compensated Absences

In the governmental fimds, ordy that portion which is expected to be liquidated from expendable available financial resources is accrued at year-end. The remainder of the accrued liability which is applicable to governmental fimd types is reported in the govemment-wide financial statements. The amount of accumulated annual leave at December 31, 2011 applicable to governmental fimd types was $60,919 none of which met the condition for accrual in the governmental fimd types; hence, the entire amoimt is reported in the govemment-wide financial statements. In accordance with GASB authoritative guidance, no liability is recorded for accumulated sick pay benefits because such benefits can be iised only for sick leave.

Fund Balance

In the governmental fimd financial statements, fimd balances are classified as follows:

1. Non-Spendable, Fund Balance- amounts that caimot be spent either because they are in a non-spendable form or because they are legally or contractually required to be maintained intact

2. Restricted Fund Balance - amounts that can be spent only for specific purposes because of the Bylaws, Parish ordinances, or externally imposed conditions by grantors, creditors, or citizens.

3. Committed Fund Balance - amounts that can be used only for specific purposes determined by a formal action by an ordinance or resolution by the Board of Commissioners.

4. Assigned Fund Balance - amounts that are constramed by JEDCO's intent that they will be used for specific purposes. The Board of Commissioners is die oidy body authorized to assign amounts for a specific purpose and is die highest level of decision-making. Therefore, amounts must be reported as committed.

5. Unassigned Fund Balance - all amounts not included in otiier spendable classifications.

JEDCO considers restricted fimd balances to be spent for governmental expenditures first when both restricted and unrestricted resources are available. JEDCO also considers committed fimd balances to be spent first when other unrestricted fimd balance classifications are available for use.

26

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION JEFFERSON PARISH LOUISIANA


3. LEGAL COMPLIANCE - BUDGET

Under state law, JEDCO is required to complete and submit a budget for its General and Special Revenue Funds to die governing authority of Jefferson Parish no later than fifteen days prior to the beginning of the fiscal year to which the budget applies. The total proposed expenditures may not exceed the total of estimated fimds available at the fimd level. Public participation in the budgetary process prior to adoption of the budget is required if die total proposed expenditures are $250,000 or more.

The EDA Revolving Loan fimd and the BRGL/LRCF fiind revenues and expenditures are driven by the timing of economic development loan closings, repayments on existing loans and new fimds provided by federal grants through the U.S. federal goyernment. Therefore, the EDA Revolving Loan fimd and the BRGL/LRCF fimd are not required to adopt a budget,

4. CASH, CASH EQUIVALENTS. AND INVESTMENTS

JEDCO's cash, cash equivalents, and investments consist primarily of demand deposits and certificates of deposits with financial mstitutions.

Custodial Credit Risk

Custodial credit risk is the risk that in the event of a bank failure, the government's deposits may not be returned to it Statutes require that JEDCO's cash and certificates of deposit be covered by federal depository insurance or collateral. At Decethber 31,2011, the carrying amount of JEDCO's deposits was $4,361,544 of which $428,976 is reported in the agency fimds and $3,932,570 is reported in the Statement of Net Assets. Money market fiinds included in the cash amount are $818,509 at December 31,2011, The bank balance of die deposits at December 31,2011 was $3,907,638. Of die bank balance, $800,000 was covered by federal deposit insurance and $3,107,638 was covered by collateral held by the pledging financial institution's agent in JEDCO's name.

Investments

State statutes audiorize the government to invest in obligations of the U.S. Treasuiy, agencies, and instrumentalities; commercial paper rated AAA 1, 2, or 3; repurchase agreements; and the Louisiana Asset Management Pool (LAMP).

LAMP investmeiits are restricted to securities issued guaranteed or backed by the U.S. Treasuiy, the U.S. government, or one of its agencies, enterprises, instmmentalities, as well as repurchase agreements collateralized by those securities. LAMP may also mvest m commercial paper of domestic United States Corporations rated A-1 or A-1+ by Standard & Poor's. The dollar weighted average portfolio maturity of LAMP assets is restricted to not more than 90 days, and consists of no securities with a maturity in excess of 397 days. LAMP is designed to be highly liquid to give its participants immediate access to their funds. Certificates of deposit were covered by securities investor protection through JEDCO's broker.

At December 31,2011, the canying amount of LAMP investment was $ 1,216,915.

27



5. INTERFUND TRANSACTIONS

Interfimd transactions consist of interfiind receivables/payables and transfers, receivables/payables at December 31,2011 are as follows:

Interfimd

General Fund Jefferson Edge Fimd EDA Fund iBRGL/LCRFFund JEDCO Buildmg Fund

GeneralFund JEDCO Building Fund

Due From Odier Funds

$ 122,706 ----

Due To Odier Funds

$ 1.112 8,731

105,578 7,285

$ 122,706

Transfers From Odier Funds

$ 232,694 53,282

$ 285,978

$ 122,706

Transfers To Odier Funds

$ 53,282 232,694

$ 285,976

28



6. CAPITAL ASSETS

The following presentation of capital asset balances and current year activity for the fiscal year ended December 31 was as follows:

Land Infi-astructure Office Equipment Leasehold Improvements Construction in progress

Total

Less: total accumulated depreciation

Capital assets, net

Balance January 1,

2011

$ 2,123,985 5,963,169

253,207 15,042

323,756

8,679,159

(560,148)

$ 8,119,011

$

—

1=

Additions

17.712 -

314,575 --

332,287

(301,706)

301581

Deletions/ Transfers out

$ _

193,198 15,042

323,756

531,996

(208,420)

$ 323,576

Balance December 31,

$

L

2011

2,141,697 5,963,169

374,584 --

8,479,450

(653,434)

7,826,016

Depreciation expense of $301,706 for the year ended Decemb^ 31, 2011 is presented on the Statement of Activities as follows:.

Governmental Activities Administrative T€x;lmology Park Mrastmcture

Total

90,763 210,943 301,706

7. PENSION PLAN

JEDCO's employees are covered by its sin^jlified employee pension (SEP) plan and are subject only to Medicare portion of social security taxes. JEDCO makes a contribution to an IRA account established for each fiill-time employee. The amount contributed by JEDCO is 6.2% of die employee's total compensation. JEDCO's total contribution under this plan for 2011 was $64,450 based on a covered payroll of $ 1,039,516. JEDCO's total current year payroll for all employees was $1,039,516. JEDCO'also participates in a retirement plan in which all fidl time employees are eligible to participate. The annual contribution by JEDCO is 6% of the employee's annud salary. JEDCO's total contribution under this plan for 2011 was $62,371 based on covered payroll of $1,039,516.

29



8, OPERATING LEASES

JEDCO leases a suite on the third floor of an office building in Metairie that it uses for its administrative office. The lease was considered an operating lease for accounting purposes. The lease term expired on December 31, 2009. The lease was extended through May 2010 and had an option for a three.month renewal. The lease was renewed through March 2011. Lease payments under the lease for the year ended December 31,2011 were $29,353.

As part of the NMTC transaction as described in Note 17, JEDCO entered into the following lease agreements with the discretely presented component unit, FORJ. The operating lease for the new Adnainistration facility in the Churchill Technology and Busings Park fi^om February 2009 through February 2016 provides that JEDCO shall occupy the Administratioii facility throughout the fiill term of die lease and shall operate its business attraction, business retention, financing, and incubator programs widiin the facility, The lease requires mondily rental payments by JEDCO to FORJ in ah amount to be determined which shall be based upon the amount of debt service required by FORJ to repay its Promissory Notes principal and interest obligations incurred in the fmancing and construction of the Administration facility plus an amoimt equal to twenty-five jpercent of any principal and interest owed by FORJ pursuant to the Promissoiy Notes.

Estimated future minimum lease payments, based oii the interest rate on FORJ's debt service of LIBOR plus 2% (2.581% at pecember31,2011) are as follows:

2012 $ 178,319 2013 176,022. 2014 173,724 2015 431,845

Total $ 959,910

JEDCO agrees to purchase the building fi-om FORJ at the expiration of the lease term for a price equal to any outstanding principal and interest plus any and all costs owed by FORJ pursuant to the terms of the Promissory Notes. The purchase shall occur on tiae maturity date of the lease in February 2016. At December 31, 2011, the estimated purchase price pursuant to this provision is approxiniately $3,485,438.

30

$

$

12,000 12,000 12,000 12,000 2,000

50,000


NOTES TO BASIC FINANCLIL STATEMENTS

8. OPERATING LEASES fcontinued)

The operating lease for the use of the land in the Churchill Technology and Business Park by FORJ to construct the new Administration facility term is February 2009 through Febniaiy 2016 and requires rental payments from FORJ to JEDCO of $1,000 per month. Future minimum lease payments by FORJ to JEDCO are as follows:

2012 2013 2014 2015 2016

Total

Included in misc. income in the general fund is $12,000 for lease income for the year ended December 31,2011.

COMPENSATED ABSENCES PAYABLE

Changes in compensated absences payable for the year ended December 31,2011 were as follows:

Balance Balance January 1, December 31,

2011 Additions Payments 2011

Compensated absences $ 55,865 $ 63,381 $ 58,327 $ 60,919

The entire balance of compensated absences payable is considered to be a long-term liability by JEDCO.

10. CONDUIT DEBT (NOT INCLUDED IN THE FINANCIAL STATEMENTS)

In 2000, die State of Louisiana audiorized JEDCO to issue $8.5 million in Variable Rate Demand Industrial Development Bonds. The bonds were issued for the purpose of financing the acquisition and installation of equipment of a manufacturing facility on behalf of a local corporation at its manufacturing plant located in Jefi"erson Parish. JEDCO's obligations under the Series 2000 Bonds are limited. These special obligations are payable solely fi-om lawfidly available fimds fi*om payments made by the corporation (as defined in the Loan Agreement) and certain fimds held by the Trustee pursuant to the Trust Indenture. The bonds do not constitute a debt or pledge of faith and credit of JEDCO and, accordingly, have not been reported in the accompanying financial statements.

31



10. CONDUn DEBT (NOT INCLUDED IN THE FINANCIAL STATEMENTS) (continued^

No other assets are available for payment of the principal or interest on the bonds. The bonds may be' called for redemption by die corporatioia at the option of JEDCO before maturity, in whole or in part, in the inverse order of maturity, on any interest date.

In 2008, the State of Louisiana authorized JEDCO to issue up to $4.5 million in Variable Rate Taxable Revenue Bonds. The Bonds were issued in 2009 in the amount of $2,866,500 (Durr Heavy Construction Project, L.L.C, Project Series 2009) for the purpose of financing the acquisition and construction of an office building on behalf of a local company located m Jefferson Parish. The facilities are to be leased by JEDCO to the company pursuant to a Lease Agreenient between JEDCO and the coihpany. JEDCO's obligations under the Series 2009 Bonds are limited. These special obligations are payable solely from the revenues and other amounts derived fix>m the leasing of the facility by JEDCO to the corporation. The bonds do not coiistitute debt or pledge of faith and credit of JEDCO and, accordingly, have not been reported in the accompanying financial statements. No other assets are available for payment of the principal or interest on die bonds. The bonds shall be subject to optional redemption prior to maturity, in whole, or in part, and if in part then in inverse order of maturity, on an interest payment date, at a redemption price equal to 100% of the principal amount to be redeemed plus accrued interest to the redemption date, and without any redemption premium. The bonds are subject to mandatory redemption in fiill at the option of the Bondholder on. the tenthi and fifteenth anniversary of die delivery date and ninety days aifter any date on v^ch the mterest rate on the bonds equals or exceeds 14% per aimum.

11. CONTRIBUTED SERVICES

The twenty-one members of the Board of Commissioners of JEDCO and members of the Board's various advisory committees serve without compensation. The value of these contributed services is not included in JEDCO's financial statements.

12. NOTES RECEIVABLE

Revolving Loan Fund

JEDCO has notes receivable recorded in the EDA Revolving Loan Fund which are made to various businesses under the terms of the capitalization grant received from the Economic Development Administration. These notes total $904,711 at December 31, 2011. The notes have various maturity dates and interest rates. During die year ended December 31,2011, a loan with a balance of $151,846 was determmed to be uncollectible and is included in administrative expense.

32



12, NOTES RECEIVABLE (continued)

Revolving Loan Fund

JEDCO has notes receivable recorded in the BRGL/LRCF Fund which are made to various businesses under the terms of the cooperative endeavor agreement received fi"om the State of Louisiana Office of Economic Development These notes total $5,713,375 at December 31, 2011. The notes have various maturity dates and are at zero percent mterest. The borrowers are required to begin making principal payments beginning m 2010. During the year eiided December 31, .2011, three loans witii a total balance of $306,863 were detennined to be uncollectible and are included in administrative expense.

New Market Tax Credit

On February 20,2009, as part of die New Market Tax Credit (NMTC) transaction, JEDCO advanced $500,000 to GGCRF Investor 1, LLC, in the form of a subordinate loan note. The note will accrue interest at 12.2066% and the maturity date is February 20, 2016. Accrued interest of $208,471 is included in the Statement of Net Assets at December 31, 2011. Included in interest and investment earnings on the Statement of Activities for the year ended December 31, 2011 is $80,951. The principal balance of $500,000 and accrued interest of approxiinately $680,000 are due in fidl on February 20, 2016, subject to prior payment in fidl by FORJ of all Senior Debt

13. CHANGES PJ ASSETS AND LIABILmES OF AGENCY FUNDS

The following summarizes the changes in the assets and liabilities of the agency fimds during.2011.

HUD Revolvmg Loan Fund

Assets: Cash and cash equivalents $ Notes receivable

Total assets Liabilities:

Due to Jefferson Parish Department of Community Development:

Drawdowns Net income

Total liabilities

Balance January 1,

201 i

351,677 428,525

Additions

Balance Payments/ December 31, Write-offs 2011

97,180 $ (19,881) $ 428,976 (79,781) 348,744

$ 780,202 $ 97,180 $ (99,662) $ 777,720

$ 506,615 273,587

12,923 $ (14,144) (1,261)

505,394 272,326

$ 780,202 $ 12,923 $ (15,405) $ 777,720

33



13. CHANGES IN ASSETS AND LIABILTIIES OF AGENCY FUNDS rcontinued)

The HUD Revolvmg Loan Fund accounts for loans made by the Department of Housing and Urban Development Community Development Block Grant Loan Guarantee Program to borrowers in the community for economic development. The fiinds are held for the Jefferson Parish Department of Community Development.

14. ESCROW DEPOSTTS

JEDCO assists local businesses in obtaining loans from the Small Business Administration. JEDCO collects an application fee at the beginning of the loan process. These application fees are held m an account until the loan process is completed. All application fees are returned to the applicant even if the loan is not obtained. Escrow deposits totaled $6,750 at December 31,2011.

15. JEDCO DEVELOPMENT CORPORATION

On August 22, 1990, JEDCO formed a corporation called the JEDCO Develojiment Corporation to operate as a Certified Development Corporation (the "Corporation") pursuant to Section 504 of Title V of the Small Business Investment Act of 1958^ as amended. The Corporation is to be governed by all requirements of Section 504. The Corporation was formed under the non-profit, corporation statutes of the State of Louisiana. Tlie Corporation assists m the growth and development of small business concerns in the state of Louisiana pursuant to Section 504 of the Development Company Program of the Small Business Investmeiit Act of 1958, as amended, and its regulations. The Corporation has no assets or liabilities and had no activity for the year ended December 31,2011.

16. PATRICK F. TAYLOR SCIENCE AND TECHNOLOGY ACADEMY AND CONFERENCE CENTER

In Febniaiy 2008, JEDCO entered into a cooperative endeavor agreement (CEA) with the State of Louisiana Office of Facility Planning and Control for fimding of $22 million for construction of the Patrick F. Taylor Science and Technology Academy and Conference Center (Academy and Conference Center) in the Churchill Technology and Business Park. In Februaiy 2008, JEDCO also entered into a Cooperative Endeavor Agreement vnUi the Jefferson Parish School Board (JPSB) for the JPSB Facilities department to administer the construction of the Academy and Conference Center in accordance with the requirements of the CEA between JEDCO and the State of Louisiana. The design phase of the project began in 2009 and had no activity for the year ended December 31, 2011. In August 2011, JEDCO and JPSB amended the agreement such that JEDCO appointed JPSB as the agent and granted JPSB fiill power and audiority to do and perform all acts with reference to the receipt of fimding from the State of Louisiana.

In October 2008, JEDCO entered mto a lease agreement with JPSB for use of the Academy Building land and the to-be constructed facility for a term of 99 years at $ 1 per year to be paid at the inception of the lease. The School Board will be responsible for all mamtenance of any Idnd at the Academy Buildmg and the leased land. All repairs and maintenance will be contracted for, supervised by and paid for by JPSB with no responsibility of any kind borne by JEDCO.

34

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION JEFFERSON PARISH. LOUISL^NA


17. NEW MARKET TAX CREDTF

In Februaiy 2009, JEDCO and FORJ entered into a New Market Tax Credit Transaction (NMTC) to provide $4 tpillion of financing for the construction of JEDCO's new Administration building and Incubator facility in the Churchill Technology and Busmess Park. Forward Jefferson Corporation (FORJ) is a qualified 501 (c) (3) non-profit corporation created for and on behalf of-JEDCO to provide economic assistance to JEDCO in its economic development mission. FORJ will acquire and construct the proposed administration office and Incubator facility in the Churchill Technology and Business Park. FORJ is a component unit of JEDCO as described in Note 1 to the financial statements.

In February 2009, JEDCO contributed $500,000 to the NMTC transaction as described in Note 12 to the financial statements. In December 2009, FORJ obtained the financing of $4 million. Cash amoimts of $7,268 maintained in FORJ at December 31,. 2011 are resbicted for use m the construction of the Administration building and Incubator facility. At December 31, 2011, the net book value of the buildmg was $5,793,484 representing building construction costs of $5,908,869 and accumulated depreciation of $115,385. Depreciation expense on the bmlding is computed using the straight line method over a 39 year estimated usefid life.

At December 31,2011 the folloviTng. Facility Notes are outstandmg on FORJ:

Facility Note A due to AmCREF Fund 1, LLC, and interest at LIBO Rate plus 2.00% (2.28969% at December 31, 2011). Maturity date of Februaiy 20, 2016 $ 2,794,375

FacUity Note B due to ArnCREF Fund 1, LLC, interest at 0%. Maturity date February 20,2016 500,000

Facility Note C due to AmCREF Fund 1, LLC, interest at 0%. Maturity date Februaiy 20, 2016 670,000

Total $ 3,964,375

35


NOTESTO BASIC FINANCIAL STATEMENTS

17. NEW MARKET TAX CREDTT fcontinned^

Future principal payments are as follows:

2012 $ 53,437 2013 71,250 2014 71,250 2015 283,000 2016 3,485,438

Total $ 3,964,375

FORJ will pay interest only on Facility Note A quarteriy in arrears on the first day of each calendar quarter, beginning on January 1,2010. Included in construction in progress at December 31,2011 is capitalized interest of $70,072. FORJ may not prepay the Facility Note A, B, or C in fiiU or in part any tinie prior to the Note Maturity date on Februaiy 20, 2016. The Facility Notes are collateralized by a first priority mortgage and security interest in the Land and improveinents (Administratiori Building ajad Incubator facility) and separately guaranteed by JEDCO aiid Jefferson Parish. FORJ and JEDCO have also entered into lease agreements (as described in Note 8) as part of the NMTC transaction.

18. COMMTTMENTS AND CONTINGENCIES

In February 2009, JEDCO entered into a CEA to provide incentive payments to a business located in Jefferson Parish upon reaching several benchmarks, including retaining its headquarters m Jefferson Parish, expanding its business, andhiring new employees who reside in Louisiana. JEDCO agrees to pay, but only to the extent funds are available from die Jefferson Economic Future Fund (a Fund maintained by Jefferson Parish) to the extent the performance objectives have been met, incentives payments consist of a maximum of $229,000 in 2012. hicluded.hi parish fimds is $200,000 received fi^m Jefferson Parish and included in Administrative expenses is $200,000 paid to the business during the year ended December 31,2011.

19. INTENTIONS TO GIVE

JEDCO has entered into agreements with two families that have loaned 59 pieces of framed artwork with an estimated fan value of $740,500 to display in die new JEDCO Administratiori Buildmg in the Churchill Technology and Business Park. The artwork is on long-term loaii to JEDCO widi die intent to donate the artwork to JEDCO in fiiture years. No amounts have been recorded in the financial statements relating to this artwork as the agreements represent the donors' mtent and are not legally enforceable.

36



20. SUBSEOUENT EVENTS

Management has evaluated subsequent events through April 10, 2012; die date that the financial statements were available to be issued, and determined the following items require disclosure.

37

REQUIRED SUPPLEMENTARY INFORMATION

PARTII

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION GENERAL FUND AND MAJOR FUND DESCRIPTIONS

DECEMBER 31.2011

GENERALFUND

The general fimd accounts for resources traditionally associated with JEDCO which are not requked legally or by sound financial management to be accounted for in another fiind,

SPECIAL REVENUE FUNDS

Special revenue fimds account for the proceeds of specific revenue sources (other than expendable trusts, or for major capital projects) that are legally restricted to expenditures for specific purposes.

Jefferson Edge Fund

The Jefferson Edge Fund was created for the purpose of implementing the Jefferson Edge program which is a five year economic development strategic plan for Jefferson Parish. Funding for the implementation cbrnes from, the State of Louisiana, Jefferson Parish and the private sector through aimual or multi-year commitments.

EDA Revolving Loan Fund

The EDA Revolving Loan Fund accounts for the grants received from, the Economic Development Administration.

Business Recovery Grant and Loan Program FundrBRGLt/Louisiana Recovery Capital FundfLRCF)

The Business Recovery Grant and Loan Program Fund (BRGL)/ Louisiana Recovery Capital Fund (LRCF) accounts for the grants received from the federal government through the Louisiana Office of Economic Development.

38

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION GENERAL FUND

STATEMENT OF REVENUES. EXPENDITURES. AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL

For the Year Ended December 31.2011

PROGRAM REVENUES Intergovernmental:

Share of Jefferson Parish occupational licenses

Jefferson Parish fimds Jefferson Parishfiinds - Incubator CDBG State funds

Charges for services: Loan processing and servicing

Lease income ; Interest Miscellaneous Donations

Total revalues

Budgeted Amounts

Original Final

1,519,731 $ 295.000

17,550

283,000 12,000 2,000

47,212 200,000

1.519,731 225,000 571^13

257.875 12,000 2,500

25,100

2,376,493 ;2,613,4I9

Actual Amounts, Budgetary

Basis

1,519,731 .393,712 528,727

53,282

183,703 12.000 4.539

24.948

2,720.642

Variance with Final Budget

Positive (Negative)

168.712 (42,486) 53;282

(74.172)

2.039 24,948

(25,100) 107,223

PROGRAM EXPENDITURES Current:

Administrative Economic Development Services Enterprise Center West/incubalor Incubator CDBG Financing the Future Marketing KennCT Program

Total expenditures

EXCESS OF REVENIJES OVER EXPENDITURES

OTHER FINANCING USES: Transfers to otiier fimds Transfers from other funds

Total other financing uses

NET CHANGE IN FUND BALANCES

FUND BALANCES - BEGINNING

FUND BALANCES - ENDING

1,139,478 550;i50

106,700 67,212

222,600 464;300 75.000

2.625,440

(248,947)

_

277,228 277,228

28,281

1,163,648

$ 1.191,929 :

1.036.269 532.475 60.800

556,313 218,700 259,600 75,000.

2.739.157

(125.738)

(10.000) 253,969 243.969

118.231

1.163,648

I 1,281.879

1,078,825 506,769 54,413

511,213 206,599 245,071 67^35

2,670,225

50.417

(53,282) 232.694 179,412

229,829

1.163,648

S 1,393,477 $

(42,556) 25,706 6,387

45.100 12,101 14,529 7,665

68,932

176,155

43^282 21,275 64,557

240,712

.

240,712

See accompanying indepoident auditors' report

39

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION JEFFERSON EDGE

STATEMENT OF REVENUES. EXPENDmJRES. AND CHANGES IN FUND BALANCES BUDGET AND ACTUAL

For the Year Ended December 31.2011

PROGRAM REVENUES Iniergovertunental:

Share of Jefferson Parish occupational licenses

Interest Donations

Total revenues

PROGRAM EXPENDIl URES Current:

Marketing Technology. Development Administrative

Total e)q)enditures

Budgeted Amounts Original

$ 80,000 -

400,000. 480.000

35.000 150,000 152,000 337,000

$

Final

80,000 700

300,000 380,700

31,500 52,000 34,500

118.000


Basis

$ 80,000 639

275,100 355,739

30,740 46,629 27,676

.105.045


Positive (Negative)

$ (61)

(24,900) (24,961)

760 5,371 6,824

12,955.

EXCESS OF REVENUES OVER EXPENDITURES

OTHER FINANCING SOURCES: Transfers to other fiinds Transfers from o^er funds

Total other financing sources

NET CHANGE IN FUND BALANCES



143,000

143,000

355.616

498.616

262,700

.262,700

355,616

618,316

250,694

250,694

355.616

606,310

(12,006)

(12,006)

(12,006)

See accompanying independent auditors' report.

40

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION EDA REVOLVING LOAN FUND

CTATEMENT OF REVENUES. EXPENDITURES. AND CHANGES IN FUND BALANCES

PROGRAM RE VENUES Interest

Total revenues

PROGRAM EXPENDITURES Current

Administrative Total expenditures

DEFICUfiNCY OF REVENUES OVER EXPENDITURES


JFUND BALANCES - ENDING

BUDGET AND ACTUAL For the Year Ended December 31,2011

Budgeted Amounts Original Final

$ - $. -

-

-

• $ • • - . , $


Basis

% 42,009 42,009

168,225 168,225

(126,216)

1,318,072

$ 1,191,856


Positive (Negative)

$ 42,009 42,009

(168.225) (168,225)

(126,216)

1,318,072

$ 1;191.856

See accompanying independent auditors' report:

41

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION LOUISIANA BUSINESS RECOVERY GRANT & LOAN PROGRAM

SCHEDULE OF REVENUES. EXPENDITURES. AND CHANGES IN FUND BALANCE BUDGET AND ACTUAL

For the Year Ended December 31,2011

PROGRAM REVENUES Federal Funds Interest

Total revenues

Budgeted Amounts

Original Final


Basis.

$ 157,133 157,133

Variance vi ith Final Budget

Positive (Negative)

S 157.133 157,133

PROGRAM EXPENDITURES Current:

Administrative Uncollectible loan expense

Total expenditures

EXOESS (DEFICIENCY) OF

REVENUES OVEREXPENDTTURES



84,095 315,293 399,388

(242,255)

8,001,692

$ 7,759,437

(84,095) ^ (315,293)

(399.388)

(242,255)

(8,001i692)

$ (8,243.947)

Seie accompanying independent auditors' rcirort.

42

SINGLE AUDIT SECTION

i i S f c i l Postlethwaite .«»i : i & Netterville

A Professional Accoun'irsg Corpoiotion Associoled OfFicei in hincipal Ciliesot the United Slaws

www.pncpo.com

REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLUNCE AND OTHER MATTERS BASED ON AN AUDTT OF FINANCIAL

STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT A UDITING STANDARDS

Board of Commissioners Jefferson Parish Economic Development Commission Jefferson Parish, Louisiana

We have, audited the accompanying financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component unit, each major fund, and the aggregate remaining fund mformation of Jefferson Parish Economic I>evelopment Commission (JEDCO), a component unit of Jefferson Parish, Louisiana, as of and for the year ended December 31/2011, which collectively comprise JEDCO's basic financial statements aiid have issued our report thereon dated April 10, 2012. We conducted our audit in accordance with auditing standards generaUy accepted in the United States of America and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Fmancial Reporting

In plaiming and performing our audit, we considered JEDCO's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing om* opinion on the financial statements, but not for the purposes of expressing an opinion on the effectiveness of JEDCO's internal control over financial reporting; Accordingly, we do not express an opinion on the effectiveness of JEDCO's internal control over financial reporting.

A deficiency hi internal control exists when die design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency or combination of deficiencies, in mtemal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis.

Our consideration of internal control over financial reporting was for the limited purpose described in the fu^t paragraph in this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether JEDCO's fmancial statements are firee of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a du-ect and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those

43

30th Fioor - Energy Centre • 1100 Poydras Street • New Orleans, lA 70163-3000 • Te!: 504.569.2978 One Gaileria Blvd.. Suite 2100 • Metairie. lA 70001 • Tel: 504.837.5990 • Fax: 504.834.3609


provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed ah instance of non-compliance or other matters that are required to be reported under Government Auditmg Standards and which are described m the accompanying schedule of findings and questioned costs as item 2011-1.

We noted certain matters that we reported to management of JEDCO in a separate letter dated April 10, 2012.

JEDCO's response to the findings identified in our audit is described in the accompanymg schedule of findings and questioned costs. We did not audit JEDCO's response, and accordingly, we express no opinion on it.

This report is intended solely for the infonnation and use of management, the Board of Commissioners, and federal awarding agencies and pass-through entities such as the State of Louisiana and Legislative Auditor's Office and is not mtended to be and should not.be used by anyone other than these specified parties.

-/-.

Metairie, Louisiana April lb-2012

44

P&N

trallShl Postlethwaite .iJJiJi ^Netterville

A PfofoEsionol Accounling CorpofoliOT Associated Offices In Prindiiol Cilios of ihe United Staiei

www.pncpo.com

REPORT ON COMPLLVNCE WITH REOUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN

ACCORDANCE WITH OMB CIRCULAR A-133 AND THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

Board of Commissioners Jefferson Parish Economic Development Commission Jefferson Parish, Louisiana

Compliance

We have audited the compliance of Jefferson Parish Economic Development Commission (JEDCO), a component unit of Jefferson Parish, Louisiana, with the types of compliance reqxiirements described in the U.S. Office of Management and Budget (OMB) Circular A-ISS Compliance Supplement that are applicable to each of its major federal programs for the year ended December 31, 2011. JEDCO's major federal programs are identified in the summary of auditors' results section of the accompanymg schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of JEDCO's management Our responsibility is to express an opmion on JEDCO's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program.occurred. An audit includes examining, on a test basis, evidence about JEDCO's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of JEDCO's compliance with those requu^ments.

In our opinion, JEDCO, complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended December31,2011.

Litemal Control Over Compliance

The management of JEDCO is responsible for establishing and maintaming effective internal control over compliance with the requu-ements of laws, regulations, contracts, and grants appUcable to federal programs. In planning and performing our audit, we considered JEDCO's internal control over compliance with requirements Aat could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opmion on compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of JEDCO's intemal control over compliance.

45


One Gaileria Blvd., Suite 2100 • Metairie, lA 70001 • Tel: 504.837.5990 • Fax: 504.834.3609


A deficiency in intemal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in intemal control over compliance is a deficiency, or combination of deficiencies, m intemal control over compliance, such that there is a reasonable possibility that a material rioncoiripliance with a type of compliance requhement of a federal program will not be prevented, or detected and corrected, on a timely basis.

Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in intemal control over compliance that we consider to be material weakness, as defined above.

Schedule of Expenditures of Federal Awards

We have audited the financial statements of the governmental activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of JEDCO as of and for the year ended December 31, 2011 and have issued our report thereon dated April 10, 2012. Our audit was performed for the purpose of forming our opinions on the financial statements as a whole. The schedule of expenditures of federal awards is presented for the purposes of additional analysis as required by U;S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Prbfit Organizations, and is not a required part of the financial statements. Such mformation is the responsibilify of management and was derived from and relates directly to the underlying accountmg and other records used to prepare the financial statements; The information has been subjected to the auditing procedures applied in the audit of the fmancial statements and certain additional procedures, mcludmg comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

This report is intended solely for the mformation and use of management, the Board of Commissioners, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

Metairie, Louisiana April 10, 2012

46

P&N

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION SCHEDULE OF EXPENDITURES OF FEDERAL APWARDS


Funding Agencies/ Program Title

Federal

CFDA Number

Grant Number

Loans Disbursed

Federal Expenditures

Department of Housing and Urban Development Block Grant Loan Fund

Special Economic Development and Domestic Assistance Program Long Term Economic Deterioration (LTED) Revolving' Loan Find

Community Development Block Grants

Total Federal Awards

14.248 BOO-UC-22-0001

11.307 08-39-02686 08-79-04083

14.228

51,995

844.134

348,744 «

1,056,557

$ 896,129 $ 7,805,101

•Major Program

The accompanying Notes to the Schedule Expenditures of Federal Award are an integral part of this sdiedule.

47

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The accompanying Schedule of Expenditures of Federal Awards has been prepared on the accrual basis of accounting. Grant revenues are recorded for financial reportmg purposes when JEDCO has met the quahfications for the respective grants.

NOTE B - DESCRIPTION OF GRANTS

Department of Housing and Urban Development (HUD) - Community Development Block Grant LoanFund

HUD through Jefferson JParish jprovides JEDCO widi fimds for loan pools which finance business development activities consistent with local economic development strategies. Loan repayments, interest and other related mcome create a revolving source of capital to stimulate economic activity and provide financing to businesses "wiien private credit is unavailable.

Special Economic Development and Domestic Assistance Programs Long Term Economic Deterioration (LTED) (EDA)

The Economic Development Administration provides JEDCO witti funds for loan pools which finance business development activities consistent with local economic development strategies. Loan repayments, mterest and other related income create a revolving source of capital.to stimulate economic activity and provide financing to businesses when private credit is unavailable.

Business Recovery Grant and Loan Program (BRGL)/ Louisiana Recovery Capital Fund (LRCF)

The State of Louisiana Office of Economic Development provides U.S. Department of Housing and Urban Development CDBG fiinds to JEDCO for grants and loans issued to busmesses located in the parishes impacted by Hurricane Katrina. The BRGL program was transferred into the LRCF program in 2009. The Louisiana Recovery Capital Fund accounts for the reimbursement for the Busmess Recoveiy Grant and Loan Program Phase 11 fimds through the State of Louisiana OfQce of Economic Development.

48

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

For the Year Ended December 3L 2011

NOTE C - OUTSTANDING LOANS

The value of loans outstanding is as follows at December 31,2011:

EDA Revolving Loan Fund $ 1,056,557 HUD Revolving Loan Fund 348,744 BRGL/LRCF Loan Fund 5,766,640

$ 7,171,941

49

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION SCHEDULE OF FINDINGS AND OUESTIONED COSTS

For the Year Ended December 3L 2011

(1) Summary of Auditors' Results

(a) The type ofreport issued on the basic financial statements: unqualified opinion

(b) Significant deficiencies in mtemal control were disclosed by the audit of the financial statements: no; Material weaknesses: no

(c) Noncompliance which is material to the financial statements: no

(d) Significant deficiencies in intemal control over major programs: rio; Material weaknesses: no

(e)- The type ofreport issued on compliance for major programs: unqualified opinion

(f) Any audit findmgs which are required to be reported under Section 510(a) of OMB Cu-cular A-133: no

(g) Major programs:

Department of Housing and Urban Development Community 14.228 Development Block Grant

Department of Housing and Urban Development- Community 14.248 Development Block Grant Loan Ftmd

Ol) Dollar threshold used to distinguish.between Type A and Type B programs: $300.000

(i) Auditee qualified as a low-risk auditee under Section 530 of OMB Circular A-133: yes

50

JEFFERSON PARISH ECONOMIC DEVELOPMENT COMMISSION SCHEDULE OF FINDINGS AND OUESTIONED COSTS

For the Year Ended December31,2011

(2) Fmdings Relating to the Financial Statements Reported in accordance with Government Auditing Standards:

2011-1 ACTTVITIES OF THE ORGANIZATION

Condition: During the course of our audit procedures for the year ended December 31, 2011, we were made aware of certain JEDCO employees that were engaged in political campaign activities during the year ended December 31, 2010. We observed the deminunis use of JEDCO's email system to engage in these activities. •

Criteria: Louisiana R.S. 18:1465 provides that no public fimds shall be used to urge any elector to vote for or against any candidate or proposition, or be appropriated to a candidate or political organization.

Effect: JEDCO is not m compliance with the reqmrements as described in Louisiana RS. 18:1465.

Cause: JEDCO ernployees were not aware that the de mmunis use of email as described above was not in compliance with Louisiana R.S. 18:1465.

Recommendation: We recommend that the Board review its policies and procedines with regard to political activities of employees and make changes as needed to the policies and procedures.

Management response: We concur with the comment. To that end, current policies and procedures are under review and meetings scheduled with staff to address the items in your cbmihents. We will make amendments to effect the changes needed in order, to have a more effective process with checks and balances in place. It is our intention to have revisions in place by July 31, 2012. This allows us time to ensure that the commissioners and employees are included m the process and necessary revisions put in place.

(3) Fmdings and Questioned Costs relating to federal awards: None

51

'ii Postlethwaite & Netterville

A Professrooal Accounting Corporalion Associaled Offices in Principal Cities of the United Slotes

www.pncpa.com

The Board of Commissioners Jefferson Parish Economic Development Commission Metairie, Louisiana

We have audited the financial statements of the governmental activities, the aggregate discretely presented component units, and each major fund, of the Jefferson Parish Economic Development Commission (JEDCO) as of and for the year ended December 31, 2011, which collectively comprise JEDCO's basic fmancial statements and have issued our report thereon dated April 10,2012. In planning and performing our audit of the financial statements of JEDCO, we considered mtemal control as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements but not for the purpose of expressing an opinion on the effectiveness of JEDCO's intemal control. Accordingly, we do not express an opinion on the effectiveness of JEDCO's mtemal control.

During our audit we noted certain matters involving internal control and other operational matters that are presented for your consideration. These comments and recommendations, all of which have been discussed with the appropriate members of management, are intended to improve mtemal control or result in other operating efficiencies and are summarized as follows:

2011-1 Compliance with Jefferson Parish Ordinance

Observation:

Recommendation:

Jefferson Parish Ordinance Number 20248 Sec. 2-875.13.3 details the qualifications of the Executive Director of JEDCO. The director of JEDCO shall be a resident of Jefferson Parish or shall become a resident of Jefferson Parish withui six months after appointment, and shall have a strong knowledge of government, a strong history of involvement with business organizations and economic development, and should have some previous governmental service.

We recommend that the Board implement a policy and procedure to perform a regular review of the Executive Director's residency to monitor compliance with the Parish ordinance described above. This review should be documented.

Management's Response: We concur with the comment. To that end, current policies and procedures are under review and meetings scheduled with staff to address the items m yoin* comments. We will make amendments to effect the changes needed in order to have a more effective process with checks and balances in place. It is our intention to have revisions in place by July 31, 2012. This allows us time to ensure that the commissioners and employees are included in the process and necessary revisions put in place.


One Gaileria Blvd., Suite 2100 • Metairie, LA 70001 • Tel: 504.837.5990 • Fax: 504.834.3609

http://www.pncpa.com

The Board of Commissioners Jefferson Parish Economic Development Commission Page 2 April 10, 2012

2011-2 Travel and Expense Reimbursements

Observation: We performed testing of travel and expense rehnbursements for employees. We tested all travel and expense reimbursements totaling $6,074.88 to the Executive Director for the year ended December 31, 2011. We noted the following when testmg the travel and expense reimbursements to the Executive Director.

Recommendation:

• Itemized receipts were not provided on 14 of the 17 reimbursement requests for a total of $2,105.20. The amounts were supported by summary receipts from the vendor.

• Rehnbursements of $1,557.51 for meals were paid to the Executive Director prior to the Executive Dkector making payment to the vendor. The reimbursement amounts were supported by detail or summary receipts from the vendor.

• Rehnbursements include amounts for mileage of $757.31. The Executive Director also receives a monthly automobile allowance as agreed to in the employment agreement.

We recommend that JEDCO require detail supporting documentation for all expense reimbursements. The detail supporting documentation or invoice would provide a complete list of die items purchased. In addition, the expense reimbursement should not be paid to the employee until the employee has incurred and paid for the expense. We also reconunend that JEDCO clarify the policy on mileage reimbursements paid to the Executive Director in addition to the monthly automobile allowance.

Management's Response: We concur with the comment. To that end, current policies and procedures are under review and meetings scheduled with staff to address the items in your comments. We will make amendments to effect the changes needed in order to have a more effective process with checks and balances in place. It is our intention to have revisions in place by July 31, 2012. This allows us tune to ensure that the commissioners and employees are included in the process and necessary revisions put in place.

P&N

The Board of Commissioners Jefferson Parish Economic Development Commission Page 3 Aprill0,20l2

2011-3 Vacation and Sick Leave

Observation: The employment agreement with the Executive Director does not clearly indicate the policy for use of vacation and sick leave by the Executive Director.

Recommendation:

Management's Response:

We recommend that the Board clarify the policy for use of vacation and sick leave by the Executive Du-ector.

We concur with the comment. To that end, current policies and procedures are under review and meetings scheduled with staff to address the items in your comments. We will make amendments to effect the changes needed in order to have a more effective process with checks and balances m place. It is our mtention to have revisions m place by July 31, 2012. This allows us time to ensxue that the commissioners and employees are included in the process and necessary revisions put in place.

Our audit procedures are designed primarily to enable us to form an opmion on the financial statements, and therefore may not bring to l i^ t all weaknesses in policies or procedures that may exist. We aim, however, to use our knowledge of JEDCO's organization gained during our work to make comments and suggestions that we hope will be useful to you.

We would be pleased to discuss these comments and recommendations with you at any time.

JEDCO's written response to our comments and recommendations has not been subjected to the auditmg procedures apphed in the audit of the financial statements and, accordingly, we express no opinion on it.

This report is intended solely for the information and use of management, the Board of Conmiissioners, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties.

Metairie, Louisiana April 10, 2012

P&N

jefferson economic development commission [jedco]

Documents