town of cullenapp1.lla.state.la.us/publicreports.nsf/bdd4909be6...schedule of compensation paid...

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TOWN OFCUI.LFN, LOUISIANA

ANNUAL FINANCIAL REPORT

JUNE 30, 2011

^nderprovisionsofstafelaw, th/s report is a puon . document. A copy cf the reporl has beer, subniitted to the entity and other appropriate public officials. The report is avi-;ilab!e for public inspect'cn at the Balon Rouge office cf the Legislative Auditor and. where appropriate, at the office of the parish cierk of court.

Re,easeDate J A N 2 5 2012

TOWN OF CUU .FN, LOUISIANA

Aimual Financial Sttileinents

As of and for the Year .8nded .lune 30, 201

TABLE OF CONTENTS

Independent Auditors' Report

Statement Page

1

Management's Discussion and Analysis (Unaudited)

Basic Fiaanciiil Statements:

Government-wide Financial Statements:

Statement of Net Assets

Stafcmcnt of Activities

12

13

Fund Fiucmcial Statements:

Governmental Fund.s

Balance sheet 14

Reconciliation of the Governmental Funds Balance Sheet to

The Government-wide Statement of Net Assets D 15

Statement of Revenues, Expenditures, and Changes in Fund

Balances 16

Reconciliation of the Statement of Revenues, Fxpenditures and

Changes in Fund Balances of Govemmental Funds to the

Statement of Activities 17

Proprietary Funds

Statement of Net Assets

Statement of Revenue, Expenses, and Changes in Net Assets

18

19

TOWN OF CLTLFN, LOUISIANA

Annual Financial Statements

As of and for the Year Ended June 30, 2011

TABLE OF CONTENTS

Statement of Cash Flows

Statement

I

Page

20

Notes to Financial Statements 21

Required Supplemental Information:

Budgetary Comparison Schedules

Notes to Budgetary Comparison Schedules

la 39

42

Other Supplementary Information:

Schedule of Compensation Paid Board Members 43

Other Reports

Report on Intemal Control over Financial Reporting and on

Compliance and Other Matters Based on an Audit of Financial

Statements Performed in Accordance with Gpvcmmcnt Auditing Standards

Schedule of Current Year Findings & Questioned Costs

Management Response

Status of Prior Audit Findings

44

46

49

50

MICHAEL W. WISE, C.PA. CARLOS E. MARTIN, C.P.A. KRIST1NE H. COLE C.P.A.

JENNIFER C. SMITH, C-PA. KR(STIE K. MARTIN, C.P.A.

JAMIESON, WISE & MARTIN A PROFESSIONAL ACCOUNTING CORPORATION

601 MAIN STREET P.O. BOX 897 MINDEN, LOUISIANA 71058-0897

(318)377-3171 FAX (318) 377-3177

WM. PEARCE JAMIESON. C.P.A.(1991)

MEMBERS

AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS

SOCiETY OF LOUISIANA CERTIFIED PUBLIC ACCOUNTANTS

TNDEPENT^ENT AUDITORS' RKPORT

The Honorable Bobby R. Washington, Mayor,

and the.Members of the Board of Aldermen

Town of Cullcn, Louisiana

We have audited the accompanymg financial statements of the govemmental activities, the business-

type activities, each major fund, and the aggregate remaining fund information of Town of Cullen,

Louisiana, as of and for the year ended June 30, 2011, which collectively comprise the Town's basic

financial statements as listed in the table of contents. These financial statements arc the

responsibility of Town of Cullen's management. Our responsibility is to express opinions on these

financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United

States of America. ITiose standards require that we plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free of material misstatement. An audit

includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial

statements. An audit also includes assessing fhe accounting principles used and the significant

estimates niade by management, as well as evaluating the overall financial statement presentation.

We believe that our audit provides a rea^sonable basis for our opinions.

In our opinion, the financial statements referred to above present fairly, in all material respects, the

respective fmaiicial position of the governmental activities, the business-type activities, each major

fund, and the aggregate remaining fund information of the Town of Cullcn, Louisiana, as of June 30,

2011, and the respective changes in financial position and, where applicable, cash flows thereof for

the year then ended in conformity with accoimting principles generally accepted in the United States

of America.

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 10

and 39 through 42 be presented to supplement the basic financial statements. Such information,

although not a part of the basic financial statements, is required by the Governmental Accounting

Standards Board, who considers it to be an essential part of financial reporting for placing the basic

fmancial statcnients in an appropriate operational, economic, or historical context. Wc have applied

certain limited procedures to the required supplcm.entaiy information m accordance with auditing

standards generally accepted in the United States of America, which consisted of inquiries of

management about the methods of prcparmg the information and comparing the infonnation for

consistency with management's responses to our inquiries, the baiiic fmancial statements, and other

knowledge wc obtained during our audit of the basic fmancial statements. We do not express an

opinion or provide any assurance on the information because the hmitcd procedures do not provide

us sufficient evidence to express an opinion or provide any assurance.

Our audit was conducted for the purpose of forming opinions on the fmancial statements that

collectively comprise the Town of Cullen, Louisiana's financial statements as a whole. The

information listed as other supplementary infonnation in the table of contents is presented for purposes

of additional analysis and is not a required part of the financial statements. The infonnation has been

subjected to the auditing procedures applied in the audit of the financial statement and certain additional

procedures, including comparing and reconciling yuch infomiation 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 the

fmancial statements as a whole.

In accordance with Government Auditing Standards, vvc have also issued a report dated December

28, 2011 on our consideration of the Town of Cullen's internal control over iinancial reporting and

on our tests of its compliance with certain provisions of laws, regulations, contracts and grant

agreements and other matters. The purpose of that report is to describe the scope of our testing of

intemal control over financial reporting and compliance and the results of that testing, and not to

provide an opinion on the intemal control over fmancial reporting or on compliance, lliat report is

an integral part of an audit perfonned in accordance with Government Auditing Standards and

important for assessing the results of our audit.

..^^X/v^ fnden, Louisiana

December 28. 2011

TOWN OF CUIXEN, LOUISIANA

Management's Discussion and Analysis As of and for the Year Ended June 30,2011 (Unaudited)

Our discussion and analysis of the Town of Cullen, Louisiana's financial performance provides an overview of the Town's financial activities for the fiscal year ended June 30, 201 L Please read it in conjunction with the Town's financial statements, which begin on page 12.

USING TIIIS ANNUAL REPORT

This annual report consists of a series of financial statements. The Statement of Net Assets and tlie Statement of Activities (on pages 12-13) provide infonnation about the activities of the Town as a whole and present a longer-term view of tlie Town's finances. Fund financial statements start on page 14. For governmental activities, these statements show how these services were financed in the short tenn as well as what remains for future spending. Fund financial statements also report the Town's operations in more detail than the government-wide statements by providing information about the Town's most significant funds. The remaining statements provide financial infonnation about activities for which the Town acts solely as a trustee or agent for the benefit of those outside tlie govemment.

Reporting the Town as a Whole

Our analysis of the Town as a whole begins on page 12. One of the most important questions asked about the Town's finances is, "Is the Town as a whole bettcroff or worse off as a result of the year's activities?" The Statement of Net Assets and the Statement of Activities report information about the Town as a whole and its activities in a way that helps answer this question. These statements include all assets and liabilities using the accrual basis of accountings which is similar to tlie accounting used by most private-sector companies. All of the current year's revenues and expenses are taken into account regardless of when cash is received or paid.

These two statements report fhe Town's net assets and changes in those assets. One can think of the Town's net assets—the difference between assets and liabilities—as one way to measure the Town's financial health, or fijjuncialposition. Over time, increases or decreases in tlie Town's net assets are an indicator of whether its fmancial health is improving or deteriorating. One will need to consider other nonfinancial factors, however, such as changes in the Town's property tax base and the condition of the Town's roads, to assess the overall health of the Town.

In tlie Statement of Net Assets and the Statement of Activities, the Towai is divided into two kinds of activities:

• Govemmental activities - Most of the Town's basic services are reported here, including the police, fire, public works, parks and recreation, sanitation and health, highway and streets, and general administration. Property taxes, sales taxes, franchise fees, and state and federal grants finance most of these activities.

• Business-type activities - The Town charges a fee to customers to help cover all or most of the cost of certain services it provides. The Town's water and sewer systems are reported here.

3

TOWN OF CULLEN, LOUISIANA

Managements Discussion and Analysis As of and for the Year Ended June 30,2011 (Unaudited)

Reporting the Town's Most Significant Funds

Our analysis of the Town's major funds begins on page 14. The ftmd fmancial statements begin on page 14 and provide detailed information about the most significant funds-not the Town as a whole. Some fimds are required to be established by Stiite law and by bond covenants. However, the Town Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes (sales taxes with restricted for specific use). The Town's two kinds of funds - governmerital and proprietary - use different accounting approaches.

• Governmental fimds - Most of the Town's basic services are reported in govemmental funds which focus on how money flows into and out of those funds and the balances left al year-end that are available for spending. Jhese funds are reported using an accounting method called modified accrual accounting, which measures cash and all other fmancial assets that can readily be converted to cash. The govemmental fund statements provide a detailed short-term view of the Town's general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the near future to finance the Town's programs. We describe the relationship (or differences) between govenmiental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental^nt/.? in a reconciliation following the fund financial statements.

• Proprietary fimds - When the Town charges customers for the services it provides -whether to outside customers or to other units of the Town - these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the Town's enterprise funds (a component of proprietary funds) are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information, such as cash flows, for proprietary funds.

THE TOWN AS A WHOLE

As year-to-year financial information is accumulated on a consistent basis, changes in net assets may be observed and used to discuss the changing financial position of the Town as a whole.

Tlie Town's net assets at fiscal year-end arc S5,743,] 26. This is an $33,330 increase from last year's net assets of $5,709,796.


Managemenfs Discussion and Analysis As of and for the Year Ended June 30,2011 (Unaudited)

The following table provides a summary of the Town's net assets at June 30:

Table 1 Summary of Net Assets

Governmental Activities

2011 2010

Business-type Activities

2011 2010 Total

2011 2010

Cunent and other assets $ 448,178 Capital assets

Total assets

Long-term liabilities Other liabilities Total liabilities

Net assets; Invested in capital assets. net of debt

Restricted Unrestricted (deficit) Total net assets

466.887 915-065

8,425 26.072 34.497

466,887 -

413,681 $ 880.568

429,053 1,260,753 1,630,330 502.642 3,750.568 3,719,456 931.695 5,P1.L321 5,349.786

1,708,931 2,059,383 4.217.455 4.222,098 5,926,386 6.281.481

4,814 16.478

.21.292

35,890 112.888 148.778

41,528 44,315 46,342 508,865 138,960 525.343 550,393 183.275 571.685

502,642 3,750,568 3,719,456 4,217,455 4,222,098

407.761 1.J1K990 1.079,937 ,910^4m 4.862.558 4.799,393

1,525.671 1.487.698 5..743.,I26 i

The Town reported positive balances in net assets for both govemmental and business-type activities. Net assets decreased $29,835 for governmental activities and increased S63,165 for business-type activities. The City's overall financial position increased during fiscal year 2011.

ffac largest portion of the i'own's net assets (72%) reflects its investment in capital assets (e.g. land, building, improvements other than buildings, and equipment, less any related debt used to acquire those assets.



Revenues Program revenues: Charges for services Operating grants/contributions Capital grants/contributions

General revenues: Property laxes Sales taxes Franchise taxes Occupational licenses Iiwesmient earnings Other genenil revenues Total revenues

Program expenses: General govemment Public safety Highway and streets Sanitation and health Parks and recreation Water Sewer Total expenses

Excess (deficiency) before special items and transfers

Special item Transfer in (out)

Change in net a.ssets Beginning net assets Ending net assets

Table 2 Change in Net Assets

Governmental Activities

2011

$117,123 22,4.M

-

16,278 85,937 29,092 33,539

1,971 53,059

359,453

129,127 250,774 29,907 33,533 5,947

-.

449.288

(89,835)

-60.000

(29,835) 910,403

$..8.8.0.568

2010

130,857 78,125

-

16,133 95,579 31,.M2 31,868

1,285 3 739

388.928

157,279 216,855

37,270 47790 3,171

--

462.365

(73,437)

~ .50.000

(23,437) 933.840 910.403

Business-type Activities

2011

331,961 -

247,229

----

1,505 -

580,695

-----

193,705 263,825 457,530

123.165

-(60,000)

63,165 4.799.393 4.862.5.18

2010

480,609 -

1,414,094

----

1,406 -

1.896,109

-----

201,504 265.850 467,354

1,428,755

-(50,000)

1,378,755 3.420,638

Ajmm

Total 2011

449,084 22,454

247,229

16,278 85,937 29,092 33,539 3,476

53,059 940,148

129,127 250,774

29,907 33,533 5,947

193,705 263.825 906.818

33,330

-_

33,330 5.709.796 5.743,126

2010

611,466 78,125

1,414,094

16,133 95,579 31,342 31,868

1,285 3.739

2,283,631

157,279 216,855

37.270 47,790 3,171

201,504 265,850 929,719

1,353,912

-_

1,355,318 4,354,478 .5,709.79 .

Governmental Activiiies

The net assets of the governmental activities decrea.sed by $29,835.


Management's Discussion and Analysis As of and for the Year Ended June 30, 2011 (Unaudited)

Business-type activities

During this year, the town received $247,229 in grant funds for wastewater system improvements. The remaining revenues and expenses for the Town's business-type activities were considered normal operating revenues and expenses.

THE TOWN'S FUNDS

As discussed, govenmiental fimds are reported in the fund statements with a short-term, inflow and outflow of spendable resources focus. This infonnation is useful in assessing resources available at the end of (he year in comparison with upcoming financing requirements. Governmental funds reported ending fund balances of $423,363. The total ending fund balances of governmental funds show a $10,689 increase over tlie prior year.

Major Governmental Funds

The General Fund is the Town's primary operating fund and is the largest source of day-to-day operations. In comparison with prior year amounts, revenues decreased 7% and expenditures increased by 6%. The fund balance of the General Fund increased $16,902.

The General Fund had to rely on mcreasing support from the sales tax and sewer funds. The amount of funding transferred into the general fund was $147,668.

The Two Percent and Yi Percent Sales Tax Funds experienced an increase in fund balance of $3,273 and a decrease in fund balance of S9,487, respectively, after the transfers to the General Fund. Sales taxes collected decreased S9,640 compared to the prior year, but the amount transferred to the general fund of $87,668 was an increase from the prior year of $32,886.


Management's Discussion and Analysis As of and for the Year Ended June 30, 2011 (Unaudited)

The following schedule presents a summary of revenues and expendimres of the governmental funds for the fiscal year ended June 30, 2011, and the amount of percentage of increases and decreases in relation to the prior year.

Revenues Taxes Intergovernmental Charges for services Licenses, pemiits Fines and forfeits Interest Miscellaneous

Total revenues

FYE 6/30/11 Amount $ 102,217

24,954 75,908 69,596 33,369

1,971 .50_,286

^ 358,301.

Percent of Total

29% 7%

21% 19% 9% 1%

14%

100%

Increase (decrease)

from FYR 6/30/10 (9,494)

(56,134) (754)

3,436 (13,890)

687 46,974

(2.9,175}

Percent increase

(decrease) (9%)

(225%)

(1%) 5%

(42%) 35% 93%

044%)

]

Expenditures General govemment Public safety Highway and streets Sanitation and health Culture and recreation

Total expenditures

FYE 6/30/11 Amount $ 118,920

229,530 19,748 33,516

5,948

$ 407,662

Percent of Total

29% 56% 5% 8% 2%

imh

Increase (decrease)

from FYE 6/30/10 (32,392) 27,171 (7,373)

(14,274) 2.901

(23.967^

Percent increase

Cdecrease) (27%)

12% (37%) (43%) 49%

s^m Overall expenditures decreased in comparison to prioi year.

The Town's proprietary fimd statements provide the same type of information found in the government-wide financial statements but in more detail. Operations in the proprietary fund statements are comparative to last year's activity except for a decrease in grant funds received to finish wastewater system improvements. Grant funds received for the current year are $247,229 compared to $1,562,981 received in the prior year.


Management's Discussion and Analysis As of and for the Year Ended June 30,2011 (Unaudited) GENERAL FUND BUDGETARY HIGHLIGHTS

The final adopted General Fund budget for fiscal year 2011 included total budgeted revenues and transfers from otljer funds of $416,690 aj]d SI 65,000, respectively.

Over the course of die year, the Town Council revised the budget one time. The budget amendment was approved to recognize changes in the overall revenues and expenditures within the General Fund and both Sales Tax Funds.

CAPITAL ASSET AND DEBT ADMINISTRATION

The Town*s Jnve.stmcnt in capital assets, net of accumulated depreciation, for the governmental and business-type activities as of June 30, 2011, was $466,886 and 53,750,568, respectively. The total decrease in this net investment was 7%. for govemmental and an increase of 1% for business-type activities. The overall decrease was 6% for the Town as a whole.

Land Conslruclion in progress Building Improvements other than buildings Equipment Vehicles Infrailruclurc lotals (net of depreciation)

Govern mental Activities

2011 $ 34,693

-249,096

-3,105

28.466 151,527

$ 466.8iZ

2010 34,693

-260,560

-4,278

4\A?.C> 161.685

. 502442

Business-type Activiiies

2011 2010 7,675 7,675

--

3,574,077 3,516,852 168,816 194,929

-.

.r750,56« 3.719.456

Totals .2011 2010 42,368 42.368

-249,096 260,560

3.574,077 3,516,852 171,921 199,207 28,466 41,426

151,.527 161.685 '1>2»7,455 i.2.22,098

DEBT

Atyear-end June 30, 2011, long term obligations consisted of $11,711 in compensated absences. More detailed information about the City's long-term liabilities is presented in Note 8 to the fmancial statements.

ECONOMIC FACTORS AND NEXT YEAR'S B U D ( ; E T AND RATES

The millage rate for ad valorem taxes is 8.180 mills. This rate will change effective tax year 2011 to 9.74 mills and will slightly increase the amount of revenue that will be collected. At this time, we are not aware of any other changes that will increase or decrease revenue.



CONTACTING THE CITY'S FINANCIAL MANAGEMENT

This fmancial report is designed to provide our citizens, taxpayers, customers, and creditors wilh a general overview of the Town's jfinances and to show the Tow7i's accountabilit}' for the money it receives. If you have questions about tiiis report or need additional information, contact the Town Clerk's office at 405 Coyle Avenue, Cullcn, Louisiana, 71021.

BASIC FINANCIAL STATEMENTS

TOWN OF CULLEN, LOUISIAN.'V Statement of Net Assets June 30, 2011

STATEMENT A

ASSEI'S Current assets: Cash and cash equivalents Investments Receivables Due from other funds Prepaid Items Supplies Inventory

Noncurrent assets: Restricted assets Capital assets (net)

Total assets

Primary Govemment Govemmental

Activities

$ 284,554 134,085 28,879

150 510

-

_

466,887

$ 915,065

Business-Type .Actjyities

525,829 521,921 162,904

--

10,331

39,767 3,750,568

5,011,320

Total

810,383 656,006 191,783

150 510

10,331

39,767 4,217,455

5,926,385

LIABILITIES Current liabilities: Accounts, salaries, and other payables Deferred revenue Due to other funds Due to other govemments

Total current liabilities

Noncurrent liabilities:

Payable from restricted assets

Compensated absences payable

Total noncurrent liabilities

Total liabilities

NET ASSETS Invested in capital as.scts. net of related debt Unrestricted

Total net assets

s

$

$

$

19,038

_

7,034

26,072

_

8,425

8,425

34,497

466,887 413,681

880.568

112,722

150 -

112,872

32,604 3,286

35,890

148,762

3,750,568 1,111,990

4,862,558

131,760

150 7.034

138,944

32,604

n,7n 44,315

183,259

4,217,455 1,525,671

5,743,126

The accompanying notes are an integral part of this statement.

12

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STATEMENT C

TOWN OF CULLEN, LOUISIANA Balance Sheet Governmental Funds June 30^2011

ASSETS Cash and cash equivalents Investments Receivables Due from other funds Prepaid'deposits

Total assets

General Fund

$ 93,761 655

27,758 150 510

Two Percent Sales Tax

fund

114,825 538

14 --

One-half Percent

Sales Tax Fund

75,968 132,893

3 --

Total Governmental

Funds

284,554 134,086 27,775

150 510

$ 122.834 115,377 208,864 447,075

LJAJULrn.ES AND KUN1> BALANCES Liabilities: Accounts, salaries, and other payables Due to other funds Due to otiier govemments

Total liabilities

Fund balances: Unreserved, reported in:

Nonspendable Restricted Unassigned

Totnl fund balance

Total liabilities and fund balances

S 15,306

7,034

22,340

1,372 16,678

7,034

1,372 23,712

s $ s

L

510 3,871

96,113 100,494

122.834

-

115,377 115,377

115,377

-

207,492 207.492

208,864

510 3,871

418,982 423,363

447,075


14

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STATEMENT O


Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Financial Statement of Net Assets

June 30, 2011

Amounts reported for governmental activities in the Statement of Net Assets are different because:

Fund Balances, Total Governmental Funds (Statement C) $ 423,363

Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the governmental funds 466,887

Other assets used in governmental activities that arc not financial resources and, therefore, are not reported in the govemmental funds 1,104

Liabilities including bonds payable arc not due and payable in the current period and, therefore, are not reported in the governmental funds:

Other liabilities (2,361) Compensated absences (8,425)

Net Assets of Govermnental Activities (Statement A) $ 880,568

The accompanying notes arc an integral part of this statement.

15


Statement of Revenues, Expenditures and and Changes in Fund Balances

Governmental Funds

STATEMENT E

For fhe Year Ended June 30, 2011

RKVENUES Taxes:

Ad vaiorem Sales and usu

License,s and permits Charges for services Intergovernmental revenues:

Slate/Parish Other

I'inco and forfeitures Invcslnieiit earnings Other revenues

Total revenues

EXPENDMURKS General government Culture and recreation Piiblie safety Highways and sU-eets Sanitation and health Debt service

Total expenditures

Fxcess (deficiency) of revenues over (under) expenditures

OTHER FINANCING SOURCES (L'SES) Proceeds from .<;alc of assets Transfers in Transfers out

Total other financing sources and uses

Ncr change in fund balance

Kund balances - beginning

Fund balances - ending

General Fund

Two Percent Sales Tax

Fund

16,278

69,596 75,908

24.954

(130,816)

One-hair (Non major) Percent Capital Total

Sales Tax Projects Governmen Fund Fund Funds

68,751 17,188

67.703 13,752

16,278 35,939 69,596 75,908

2'1,954

33,369 1,555

50,286

271,946

117.371 2,597

229,530 19,748 33,516

402,762

• •

100

-68.851

1.148 ---

M4S

316

17,504

401 3,3M

---

3,752

--

- — • • - —

--

-

-

33,369 1,971

50.2S6

358,301

118,920 5,94S

229,530 19,7-18 33,516

407,602

(49,301)

50 147,668

147,718

16,902

83,593

S 100.495

( 6 4 . 4 ^

(64,430)

3,273

112,104

115,377

(23,238)

. ..(23,238)

(9,486)

216,978

207,492

50 147.668 (87,668)

60,050

10,689

412,675

423,364


16

STAJKMENTF

TOWN o r CUIXEN, LOUISIANA

Reconciliation of the Statement of Revenues, ExpenditureSj and Changes in Fund Balances of Govenmiental Funds to the Statement of Activities

For the Year Knded June 30, 2011

Amounts reported for governmental activities in the Statement of Activities arc different because:

Net Change m Fund Balances, Total Governmental Funds, Statement F $ 10,689

Govemmental funds report capital outlays as expenditures. However, in the statement ofactivities tiie cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period. (10,159)

Some expenses reported in the statement of activities do not require the use of current fmancial resouices and, therefore, are not reported as expenditures in govemmental funds _ 32,800

Change in Net Assets of Governmental Activities, Statement B % 33.330


17

STATEMENT C

TOWN OF CULLEN, LOUISIANA Statement of Net Assets, Proprietary Funds June 30, 2011

Business Tvpc Activities En Lerpriye Funds

ASSETS Current assets:

Cash and cash equivalents Investments Accounts receivable - customers Accounts receivable - other Grants receivable Due from other funds Supplies Inventory

Total current assets

Noncurrent as.sets; Restricted a.<;.=;ets -

Cash and interest-bearing bank deposits Investment

Capital a.s.scts (net of accumulated depreciation) Total noncurrent assets

Total assets

LIABILITIES Current liabilities:

Accounts payable

Deferred revenue

Due to other funds

Total current liabilities

Noncurrent liabilities:

Compensated absences payable

Total noncurrent liabilities

Noncurrent liabilities payable from restricted assets

Total liabilities

NET ASSETS Invested in capital assets Restricted net assets Unresrricted Total net assets

Water Fund

$ 166,697

159,561 19,557

1,397

-

10,331

357,543

Sewer Fund

359.068 362,360

37,428

-104,523

£63,379

LCDBC Sswer

irrsioyeoc ;nts

64

----

_64

Tolals

525,829 521,921

56,985 1,397

104,523

10,331

1,220,986

14,811 24,956

1,202.368

1,242,135

S 1,599,673

2.548,200

2.548,200

3,411,579

-

64

14,811

24,956 3,750,568

3,790,335

5,011,321

$ 10,131

,

10,131

1,643

1,643

32,604

44.378

1,202,365

39,767

313,165

$ 1,555,300

102,592

102,592

1,643

1,643

104.235

2,548,200

-759,M4

3,307344

-

150

•50

-

150

-

.(8^') (86)

112,723

150

112,873

3,286

3,286

32,604

143,763

3,750,568

39,767

1,072,223

^;,862,55S


18

STATEMENT H

TOWN OF CULLEN, LOUISIANA Statement of Revenues, Expenses and Changes in Net Assets Proprietary Funds For Uie Year Ended June 30, 2011

Operating revenues: Charges for services

Water Sewerage

Penalties/service charges

Other charges for servicei;

Total operating revenues

Operating expenses: Peisoiuiel services Materials and supplies Insurance claims and expenses Repairs and maintenance Other services and charges Depreciation

Total operating expenses

Operating income (loss)

Nonoperating revenues (expenses): Grant revenues Interest income Gain ( Loss) on asset dispossil Total nonoperating revenues and expenses

Income before contributions and transfers

Business Type Activities Enterprise Funds

Water Fund

S 135,158 --

6,750

i4K908

57,887 8,651

13,740 15,618 27,071 70,728

193,705

Sewer Fund

166,960 23,010

83

190,053

57,817 744

8,082 18,636 33,099

145,447

263,825

LCDBG Sewer

improvenient^

----

------

totals

135,158 166,960 23,010 6,833

331,961

115,704 9,405

21,822 34,254 60,170

216,175

457,530

(51,797) (73,772)

-516

516

(51,281)

247,229 9S9

248,218

174,446

(125,569)

247,229 1,505

248,734

123,165

Transfers in

Trausfcrs out

Change in net assets

Net assets - beginning

Net assets - end of year

(51,281)

1,606,581

$ 1,555,300

(60,000)

114,446

3,192,898

3,307.344

(86)

(86)

(60,000)

63,165

4,799,393

4,862,553

The accompanying notes are an integral part of this financial statement.

19

TOWN OF CULLCN, LOUISTANA Statements of Cash Flows Fniprieiiiry .('"'unds Years Ended June .10,2011

Sl'ATEMENT 1

Cash flows from opemting activities; Ca.' h received from customers Other opcTdting cash receipts Casli payments to employees for service Other operating casIi payments Net casli provitied by opemting acLivi lien

C-H-Sh flows from noncapita] financing nciivitiesi Net increase in meter deposits Due to uther fundii Transfer (to)/'troin other funds

Net cash used for noncapital financing activities

Cash flows from capital and related financing activities: Grant revenues Proceeds on disposition ui'asst:ls Acquisition and constniction of capital assets Net cash used for capital and related financing a.ctivitics

CHSIJ flows from investing activities: Interest on interest-bearin}; deposits Purchase of investments Redemption of investments ,

Net caxh provided by investing activities

Net increafe (decrease) in cash and cash equiva.lciits

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Business Type Activities HnterDrise Funds

Water

Ftind

S 159,725 6,750

(59,791) (62,648)

44,036

(1,830) (91,462)

Sewer-Fund

192,243 302,216 (59,72T)

(367,533)

67,210

91,462 (60,000)

LCDBG Sew«r

improvements

-

-

Totals

351.973 308,966

(119,512) (430,181)

in,24r.

(1,830)

(fjO.OOO)

(93,292) 31,452

247,229

--

517 (330)

187

('19,069)

230,577

% 181,508

(247,287)

(58)

989 (648)

341

98,955

260,113

359,068

(61,830)

;7,229

(?.47,2S7)

(58)

-

-

64

64

1,506 (973)

528

49,836

490,754

540,640

Keconcillutiun of operating tncome to net cash provided by operating activities:

Operating income (loss) Adjustments to reconcile operating income tcj net cash provided by operating, activities: Depreciation Loss on sale of asset Bad debt

Changes in assets and liabilities -Decrease (increase) in accounts receivable Decrease (increase) in inventory Increase (decretise) in accounts payable

Increase (decrease) in accrued compiJTisatcd absences

S (51,797)

70,728

24.567

2,442 (1,904)

(73.77i:

145,448

304,409

(306,972) (1>904)

(i:i5,563)

2,Ui,176

328,976

(304,530) (3,308)

Net cash provided by operating activities $ 44,036 67,210 111,246

The accompanying notes are an integral part of this linancial statement.

20


NO'1-LS TOTHLFfNANCIAL STATHMBNTS As of and for the Year Knded June 30, 2011

INTRODUCTION

The Town of Cullen was incorporated June 16, 1955, under the provisions of the I,awrason Act and is located in northern Webster Parish. The Town operates under a Mayor-Board of Aldermen forni of govemment and provides the foUowing services as authorized by its charter: general administrative services, public safety (police), highways and streets, sanitation, health and social services, cuhure-recreation, public improvements, and planning and zoning. The Board of Aldermen is made up of five members who are elected by the citizens of Cullcn to serve four-year temis. They are compensated for their ser\'ices.

The accounting and reporting policies of the Town of Cullen confonti to generally accepted accounting principles as applicable to governments. Such accounting and reporting procedures also confonn to the requirements of the Louisiana Municipal Audit and Accounting Guide and to the industry audit guide. Audits of State and Local Oovcmmental Units.

GASB Statement No. 14, The Reporting Entity, established criteria for detennining the governmental reporting entity and component units that should be included within the reporting entity. Under provisions of this Statement, the municipality is considered a primary government, since it is a special purpose government that.has a separately elected body, is legally separate, and is fiscally independent of other state or local govenimcnts. As used in GASB Statement No. 14, fiscally independent means that the municipality may, without the approval or consent of another governmental entity, determine or modify its own budget, levy its ovm taxes or set rates or charges, and issue bonded debt.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Govcrnmcnt-Wide and Fund Financial Statements

The govemment-wide fintmciai statements (i.e., Uie Statement of Net Assets and the Statement of Changes in Net Assets) report information on all of the nonfiduciary activities of the primary' government and its component units. For the most part, the effect of intei-fund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

21

TOWN OF CULLEN, LOUISL\NA

NOTES TO TIIE F1NANCL\L STATEMENTS As of aiid for the Year Ended .Tunc 30,2011

The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segments are offset by program revenues. Direct expenses arc those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purciiase, use or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital rcciuircmcnts of a particular function or segment. Taxes and other items not properly included among program revenues arc reported instead as general revenues.

Separate fmancial statements are provided for governmental funds and proprietary fimds. Major individual governmental funds and major enterprise funds arc reported as separate columns in the fund fmancial statements.

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

The govenimcnt-wide fmancial statements arc reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary funds. Revenues are recorded when earned and expenses arc recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met.

GovcmmctUal fund financial statements arc reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues arc recognized as soon as they arc both measurable and available. Revenues arc considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the goverrunent considers revenues to be available if they are collected within 30 days of the end of the current fiscal period. Expenditures generally arc recorded when a liability is incurred, as under accrual accounting, fiowever, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, arc recorded only when payment is due.

Property taxes, franchise taxes, licenses, and interest associated with Lhe current fiscal period are all considered susceptible to accrual and so have been recognized as revenues of tlie current fiscal period. Only the p<mion of special assessment receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the govemment.

? i


NOTES TO TIIE FINANCIAL STATEMENTS As of and for the Year Ended June 30,2011

The municipality reports the following major governmental funds;

The General Fund is the municipality's primary operating fund, ft accounts for all financial resources of the general govemment, except tliose required to be accounted for in anotlier fund.

The Two Percent Sales Tax Fund accounts for the receipt and use of the municipality's two percent (2%) sales and use tax levied by the Town of Cullen to be used for any lawful purpose for the fown.

The One-half Percent Sales Tax Fund accounts for the receipt and use of the municipality's one-half (1/2%) sales and use tax levied by the TOWTI of Cullcn to he used for any lawful purpose other than expenditures for police supplies and equipment.

The municipality reports the following major proprietary fimds:

The Water Fund accounts for the receipts and use of the municipality's water system.

l"he Sewer Fund accounts for the receipts and use of the municipality's sewer system.

The LCDBG - Water and Sewer improvement fund accoimts for LCDBG grant proceeds to be used for water and sewer system improvements.

Private-sector standards of accounting and financial reporting issued prior to December L 1989, generally arc followed in both the government-wide and proprietary fund financial statements to the extent that those standards do not confiict with or contradict guidance of the Governmental Accounting Standards Board. Governments also have the option of following subsequent private-sector guidance for their business-type activities and enterprise funds, subject to the same limitation. The govemment has elected not to follow subsequent private-sector guidance.

As a general rule the effect of interfund activity has been eliminated from the govemment-wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the government's enterprise operations. Eliminations of these chai-ges would distort direct costs and program revenues reported forthe ViU'ious functions concerned.

23


NOTES TO lEIE FINANCIAL STATEMENTS As of and for the Year Ended June 30,2011

Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues ratlier than as program revenues. i..ikewisc, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The principal operating revenues of the proprietary funds are from charges for water and sewerage services. Operating expenses for enterprise funds include the cost of sales and services, admhiistrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

When botli restricted and unrestricted resources arc available for use, it is the municipality's policy to use restricted resources first, then unrestricted resources as they are needed.

C. Deposits and investments

The municipality's cash and cash equivalents are considered to be cash on band, demand deposits, and short-term investment with original maturities of three months or less from the date of acquisition. State law and the municipalit>''s investment policy allow the miinicipaliiy to invest in collateralized certificates of deposits, government backed securities, commercial paper, the state sponsored investment pool, and mutual funds consisting solely of government backed securities.

Investments for the municipality arc reported at fair value. The state investment pool (LAMP) operates in accordance with state laws and regulations. The reported value of the pool is the same as the fair value of the pool shares.

D. Receivables and payables

Activities between funds that arc representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as due to/from other funds. Any residual balances outstanding between the govemmental activities and business-type activities are reported in the government-wide financial statements as "intemal balances."

24

TOWN OF CULLEN, LOUISLANA

NOTES TO '"THE FINANCLAL STATEMENTS

As of and for the Year Ended June 30,2011

In the govemment-wide st.ateinents, receivables consist of all revenues eamed at year-end and not yet

received. Major receivable balances for the governmental activities include sales and use taxes,

franchise taxes, police fines, and grants.

Business-type activities report utilities as their major receivable. The To A'n considers substantially

all customers' utility receivables and other receivables to be fully collectible; accordingly, an

allowance for doubtfiil accounts is not required. If amounts become uncollectible, in the opinion of

management, they are charged to operations at that time.

In the fund tmancial statements, material receivables in governmental funds include revenue accruals

such as sales tax, franchise tax, grants and other intergovernmental revenues since they are usually

both measurable and available. Nonexchange transactions collectible but not available are deferred

in the fund fmancial statements in accordance with modified accrual, but not deferred in the

government-wide financial statements in accordance with the accrual basis. Interest and investment

earnings are recorded when eamed and only if paid within 30 days since they would be considered

both measurable and available.

Ad valorem taxes

For the year ended June 30, 2011, taxes of 8.18 mills were iavlad on property with assessed

valuations totaling $2,339,390 and were dedicated as follows:

General corporate purposes 8.18 mills

Ad valorem taxes attach as an enforceable lien on the valuation of property as of January' 1 of each

year. 'The '1 own of Cullen bills and collects its property taxes using the assessed values determined

by the tax assessor of Webster Parish. Total taxes levied were $16,277.

Sales taxes

The voters of the Town of Cullcn approved a 1% sales and use tax on January 20, 1970. The

proposition approved by the voters specifics that the revenue may be used for any lawful corporate

puipose. On November 21, 1987, the voters approved a 1/2% sales and use tax which specifics that

the revenue may be used forthe purpose of constructing, operating and maintaining the sewer

system, waterworlcs, garbage collection and waste disposal facilities, fire department stations and

related facilities, public parks and related facilities, and streets, alleys, sidewalks and bridges and for

payment of salaries of non-elected municipal employees.

25


NOTES TO THE FINANCIAL STATEMENTS


On .April 29, 1995, the voters approved an additional 1% sales and use tax which specifies that

revenue may be used for any lawful purpose for the town including the issuance of bonds to pay the

costs of any lawful capital improvements forthe town.

F . Restricted assets

Restricted assets in the Water Fund include cash and investments set aside for the rcftmding of

customers' meter deposits. Restricted assets in the General Fund include cash and investments to

repay unused bond proceeds and grant funds to be spent in the next fiscal year.

F. Capital assets

Capital assets which include property', plant, equipment, and infrastructure assets, (e.g. roads,

bridges, sidewalks, and similar items) arc reported in the applicable governmental or business-type

activities columns in the government-wide financial statements. Capital assets are capitalized al

historical cost or estimated cost If hi.slorical cost is not available. Donated assets are recorded as

capital assets at their estimated fair market value at the dale of donation. The municipality maintains

a threshold level of $2,500 or more for capitalizing capital assets.

The costs of normal maintenance and repairs that do not add to the value of the asset or materially

extend asset lives are not capitalized.

Major outlays for capital assets and improvements are capitalized as projects arc constnicted. All

capital assets, other than land, are depreciated using the straight-line method over the following

useful lives:

Estimated

Description _Lives...

Roads, bridges, and infrastructure 25-50 years

Ltmd improvements 10-30 years

Buildings and building improvements 10-40 years

Improvements other than buildings 10-33 years

Fumiture and fixtures 5-15 years

Vehicles 5-15 years

Rquipment 5-10 years

26

TOW"N OF CULLEN, LOUISLANA

NOTES TO TIIE FINANCIAL STATEMENTS As of and for the Year Ended June 30,2011

G. Compensated absences

Employees are allowed to accrue ten days of sick leave each year. Employees can be paid sick leave only when sick. Since the employees' accumulating rights to receive compensation for future absences are contingent upon the absences being caused by future illnesses and such amounts cannot be reasonably estimated, a liability for unused sick leave is not recorded in the fmancial statements.

Employees are granted annual leave as follows: > 3 years of seA'icc 5 days (40 hours) 3-8 years of service 10 days (80 hours) > 8 years of service 15 days (120 hours)

Annual leave is granted to each employee on their anniversary date of employment based on years of service. No carryover is allowed for annuallcave. Uponlermination of employment, an employee will be paid for unused vacation as of the termination date.

Employees are also eligible to accumulate comp time. Comp time is overtime hours that the employee works which are accumulated to be taken at a later date. Any hours worked by an employee which is over the regular time of forty (40) hours are equal to one and one-half (1 V-i) hours of comp time. Upon termination, an employee is paid for unused comp time. Comp time is carried forward indefinitely until used or paid to the employee.

Both annual leave and comp time arc recognized as liabilities as the benefits are earned by the employees when both of the following conditions are met:

1. The employees' rights to receive compensation are attributible to the services already rendered.

2. It is probable thai the employer will compensate the employees for the benefits through paid time off or some other means, such as cash payments at termination or retirement.



As of and forthe Year Ended June 30,2011

The entire compensated absence liability is reported on the govemment-wide financial statements.

For governmental fund financial statements, the cuirent portion of unpaid compensated absences is

the amount that is normally expected to be paid using expendable available financial resources.

These amounts are recorded in the account "compensated absences payable" in the fund from which

the employees who have accumulated leave ai*e paid. The noncurrent portion of the liability is not

reported.

H. Long-term obUgations

In the govemment-wide financial statements and the proprietary fund types in the fimd financial

statements long-term debt and other long-term obligations are reported as liabilities in the applicable

governmental activities, business-type activities, or proprietary fund type statement of net assets.

'The long-term debt consists primarily of accrued compensated absences.

Long-temi debt for governmenial funds is not reported as a liability in the fund financial statements.

The debt proceeds are reported as other financing sources and payment of principle and interest

reported as expenditures.

I. Fund equity classifications

bl the govemment wide statements, equity is classified as net assets and displayed in tiiree

components:

a. Invested in capital assets, net of related debt - Consists of capital assets including restricted

capital assets, net of accumulated depreciation and reduced by tlie outstanding balances of

any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition,

constmction, or improvement of those assets.

b. Restricted net assets - Consists of net assets with constraints placed on the use with by (1)

external groups such as creditors, grantors, contributors, or laws and regulations of odicr

govemments; or (2) law^ through constitutional provisions or enabling legislation.

c. Unrestricted net assets - All other net assets that do not meet the definition of "restricted'"' or

"invested in capital assets, net of related debt"

Proprietary fund equity is classified in the same manner as in the govemment-wide statements. In the

fund financial statements, governmental fund equity is classified as fund balance.

28


NOTES TO fHE FLNANCL\L STATEMENTS

As of and for tlic Year Ended June 30,2011

The Town adopted GASB 54 in the year ended June 30, 2011. As such, fund balances of the

govemmental funds are classified as follows:

Nonspendable - amounts that cannot be spent either because they are in nonspendable form

or because they are legally or contractually required to be maintained intact

Restricted - amounts that can be spent only for specific purposes because of consfitutional

provisions or enabling legislation or becaase of constraints that are extemally imposed by creditors,

grantors, contributors, or the laws or regulations of other governments.

Unassigned-d\\ other spendable amounts.

As of June 30, 2011, fund balances arc composed of the following:

General Sales Tax Sales Tax

Nonspendable:

Prepaid items $ 510 % - % .

Restricted:

Other purposes 3,871

Unassigned; 96,113 UJ321 207,492

Total fund balances S J O P J M LLLLIZZ $ 207.492

X Eshinales

The preparation of financial statements in conformity witli accounting principles generally accepted

in the United Stales of America require mjmagement to make estimates and assumptions that affect

the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the

date of tJie financial statements and the reported amounts of revenues, expenditures, and expenses

during the reporting period. Actual results could differ fi-om those estimates.

29

TOWN OF CULLEN, LOUISLVNA



2, Stewardship, compliance and accountability

The Town follows the following budget practices:

a) The Town Clerk prepares a proposed budget and submits same to the Mayor and Board of

Aldermen no later than fifteen days prior to the beginning of each fiscal year.

b) The public is notified that the proposed budget is available for public inspection. At the same

time, a public hearing is called.

c) A public hearing is held on the proposed budget at least ten days at^er publication of tlie call for

the hearing.

d) After the holding of the public hearing and compiclion of all action necessary to finalize and

implement the budget, the budget is adopted through passage of an ordinance prior to the

commencement of the fiscal year for which the budget is being adopted.

e) Budgetar>' amendments involving the transfer of fimds from one department, program or function

to another or involving increases or decreases in expenditures resulting from revenues exceeding

Or failing to meet amounts estimated require the approval of the Board of Aldermen.

-AU budgetary appropriations lapse at the end of each fiscal year.

Budgets for the General and Special Revenue Funds were adopted on a modified accrual basis

for the year ended June 30, 2011. Budgeted amounts, as originally adopted, are amended from

time to time by tlic Board of Aldermen. Such amendments were not material in relation to the

original appropriations.

30

TOWN OF CULLETN', LOUISLANA

NO'lES TO THE FINANCLAL STATEMENTS


3. Cash and cash equivalents

At June 30, 2011. the Town of Cullen had cash and cash equivalents as

follows:

Petty cash $ 565

Demand deposits 130,118

Certificates of deposit 679,700

Total $ 3MJM

These deposits are stated at cost, which approximates market. Under state law, these deposits (or the

resulting bank balances) must be secured by federal deposit insurance or the pledge of securities

owned by the fiscal agent bank. The market value of the pledged securities plus the federal deposit

insurance must at all times be equal to or greater than the amount on deposit with the fiscal agent.

These securities are held in the name of the pledging fiscal agent bank in a holding or custodial bank

that is mutually acceptable to both parties.

At June 30, 2011, the Town of Cullen had $834,343 in bank deposits. These deposits are secured

from risk by $250,000 of federal deposit insurance and $581,604 of pledged securities held by the

custodial bank in the name of the fiscal agent bank (GASB Category 3). All of the deposits were

secured from risk.

4. Invesiments

hivestments held at tlie Town of Cullen consist of $680,963 (current assets of $656,006 and

restricted assets of $24,957) in the Louisiima Asset Management Pool (LAMP), a local govemment

investment pool. In accordance with GASB Codification Section 150.126, the investment in LAMP

at the Town of Cullcn is not categorized in the three risk categories provided by G.ASB Codification

Section 150.125 because the investment is in the pool of funds and therefore not evidenced by

securities that exist in physical or book entry form.

LAMP is administered by LAMP, Inc., a non-profit corporation organized under the laws of the State

of Louisiana. Only local govemment entifies having contracted to participate in LAMP have an

investment interest in its pool of assets. The primary objective of 1 AMP is to provide a safe

31


NOTES TO THE FINANCIAL STATEMENTS As of and for the Year Ended June 3 0,2011

environment for the placement of public funds in short-temt high quality investments. The LAMP portfolio includes only securities and other obligations in which local govemments in Louisiana are authorized to invest in accordance wilh LSA-R.S. 33:2955. Accordingly, LyVMP investments arc restricted to securities issued, guaranteed, or backed by the U.S. Treasury, the U.S. C^ovcniincnt, or one of its agencies, enterprises, or instrumentalities, as well as repurchase agreements collateralized by those securities.

Effective August 1, 2001, LAMP'S investment guidelines were amended to permit the investment in government-only money market funds. In its 2001 Regular Session, the Louisiana Legislature (Senate Bill No. 512, Act 701) enacted LSA-R.S. 33:2955(A)(l)(h) which allows all municipalifies, parishes, school boards, and any other political subdivisions of the State to invest in "hi vestment grade (A-l/P-l) commercial paper of the domestic United States corporations." Effective October 1, 2001, LAMP'S Investment Guidelines were amended to allow the limited investment in A-1 or A-1 i-coramcrcial paper.

The dollar weighted average portfolio maturity of LAMP assets is restricted to not more thjm 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 account balances. The investments in LAMP are stated at fair value based on quoted market rates. TTic fair value is determined on a weekly basis by LAMP and the value of the position in the external investment pool is the same as the value of the pool shares.

LAMP, Inc. is subject U) the regulatory oversight of the slate treasurer and the boaid of directors. LAMP is not registered with the SEC as an investment company.

5. Receivables

The receivables at June 30, 2011 within the govemmental funds aj-e as follows:

Cla.ss of receivable:

faxes; Ad valorem Sales and use

Cjeneral Fund

$ 1,989 _

Special Revenue

Ftmd

-_

Total

1,98

TOWN OF C L T I E : N , LOIHSLANA

NOTES TO THE FINANCLAL STATEMENTS


Franchise 6,206

Accounts - Garbage service 8,714

OUier 9,101

Total S 26,0.10

6,206

8,714

9,101

26A1M

All receivables are considered fully collectible, therefore, no allowance for uncollectible amounts is

provided. If amounts become uncollectible, they are charged to operations when that determination

is made.

6. Inlerfund receivables/payables

During the course of operations, numerous transactions occur between individual funds for goods

provided or services rendered. These receivables and payables are classified as "due from other

funds" or "due to other funds" on the balance sheet. At June 30,2011, such interfund receivables

and payables were as follows:

Interfund Interfiind

Receivables Payables

General Fund $ 150

Enterprise Fund - 1_5Q

$ 150 1.5Q

7, Capital assets

Capital assets and depreciation activity as of and for the year ended June 30, 2011, for the primary

govemment is as follows: Beginning Tnding Balance Increases Decreases Balance

Governmental activities: Capital assets, not being depreciated Land 34,69." ^ - - 34,693 Constpjction in progress i z _. .- :

Total capital assets, not being depreciated 34.693 z ; 34.693

33

TOWN OF CULLEN, LOlJlSL^NA

NOTES TO TIIE FIKANCLVL STATEMEN fS As of and for tlie Year Ended June 30,2011

Capital assets, being depreciated Buildings 458,569 - - 458,569 Rquipment 28,204 - - 28,204 Vehicles 225,659 - - 225,659

Infhistmctiim 203.,1«4 i : 203,184 Total capital assets being depreciated 915.616 : i ' 15,616

458,569 28,204

225,659 203,184

915.616

198,009

23,926

184,233

4 J,499

447.667

467.^49.

----_

11,465

1,172

12,960

10-159 35,756

J35,7_5_61

Less accumulated depreciation for; Buildings 198,009 11,465 - 209,474

Equipment ^3,926 1,172 - 25,098

Vehicles 184,233 12,960 - 197,193

Infrastnicnire 4],499 J O J 5? : 51,659

Total accumulated depreciation 447.667 35.756 : .48.3,424

Total capital assets being depreciated, net 467.^49. ^35.7561 z i - i 2 4 S

Business-type aciivilies; Capital assets, not being depreciated

Land

Constniction in progress Total capital assets, not being depreciated

Capital assets, being depreciated

Buildings

Improvements other than buildings

Equipment

Total capita! assets being depreciated

Less accumulated depreciation for: Buildings Improvements oilier than buildings Fxquipnienl

Total accumulated depreciation

Total capital assets being depreciated, net

7,675

7,675

3.745

5,893,797

798,833

6.696.375

3,745 2,.3 77,724

603,125 2.984,594

UMM-l

-

_

247,287

.^4.7.2.62

190,062 26.114 _ .

216.176

„3TJii _

7,675

7,675

3,745

6,141,084

798,833 6.943.662

3J45

2,567.786 629,239

3.200.770

_: }.mS92

34


NOTES TO THE FINANCIAL S'f ATEMENTS

As of and for the Year Ended June 30, 2011

8. Long-term obfi^alions

The following is a summary of changes in long-term deht for the year ended June 30, 2011:

Compensated

Absences

Long-term obligations at July 1, 2010 $ 11,908

Additions

Deductions 197

Long-term obligations at June 30, 2011 $11,711

The following is a summary of the current (due in one year or less) and the long-term (due in more

than one year) portions of long-term obligations as of June 30, 2011:

Govemment Business-Type Compensated

Activities Activities Absences

Current portion S -

Long-tcnn portion L425 3,286 11.711

Total S M 2 1 3,286 11.711

9. Retirement system

Prior to the current fiscal year, the employees of the Town elected to terminate their participation in

the Municipal Employee's Retirement System, l h e plan was terminated effective July 1, 1992,

following tlie conclusion of the plan's prescribed waiting period. All funds on deposit witli the

system were subsequently distributed to the employees according to plan terms and conditions.

Subsequent to July 1,1992 employees are covered by the Federal Social Security System.

Muuicipnl Police Employees Retirement System of Louisiana (System)

Plan Description. All full-time & certified police department employees engaged in law

enforcement are required to participate in the System. Employees who retire at or after age 50 with

35

fOWN OF CLT.LEN, LOUISIANA


As of and for the Year Ended June 30,201 \

at least 20 years of creditable service or at or after age 55 with at least 12 years of creditable ser\'ice

are entitled to a retirement benefit, payable monthly for life, equal to 3 1/3 percent of their final

average salaiy for each year of creditable service. Final-average salary is the employee's average

salary over the 36 consecutive or joined months that produce llie highest average. Employees who

terminate with at least ilie amount of creditable service stated above, and do not withdraw their

employee contributions, may retire at the ages specified above and receive the benefit accrued to

their date of termination. The System also provides death and disability benefits. Benefits are

established or amended by state statute.

T'he System issues an annual publicly available financial report that includes financial statements and

required supplementary information for the System. That report may be obtained by writing to tlic

Mimicipal Police Employees Retirement System of Louisiana^ 8401 United Flaza Boulevard, Baton

•Rouge, Louisiana 70809-2250, or by calling (225)929-7411.

Funding Policy. Plan members are required by state statute to contribute 7.5 percent of their annual

covered salarj.' and the Town of Cullen is required to contribute at an actuarially determined rate.

The current rate is 25 percent of annual covered payroll. The contribution requirements of plan

members and the Town of Cullen are established and may be amended by state statute. As provided

by Louisiana Revised Statute 11:103, tlic employer contributions are detennined by actuarial

valuation and are subject to change each year based on the results of the valuation for the prior fiscal

year. The Town of Cullen contributions to the System for the years ended June 3 0,2011 and 2010,

were Si3,627 and $7,115, respectively, equal to the required contributions for each year.

10. Operating leases

The fov m of Cullen has two operating leases with Ccnturytel Telephone System. These leases are

for telephone equipment for both City Hall and the Police Department. Both lease tenns are for 60

months with a monthly minimum rent of $49.99 for the City Hall system and $44.67 for the Police

Department system. Operating lease payments for the year ended June 30, 2011 was $1,136.

36


NOTES FO Tim FINANCIAL STATEMENTS As of and for the Year Ended June 30, 2011

The minimum annual commitments under noncancelable operating leases are as follows:

Fiscal Year Equipment 2012 1,136

2013 1,136

2014 1,136

2015 1,136

2016 687

Total $_ .5,231

n . Resfricted assets

For the business-type activities, restricted assets were applicable to the following at June 30, 2011:

Customers' meter deposits - cash $ 14,811

Customers' meter deposits -- investment _24,956 •fotal $_;i^,767

12. On-behalf payments

During the fiscal year ended June 30, 2011, the town's police chief and officers received 518,708 in police supplemental pay from the State of Louisiana, Department of Public Safely and Corrections. The town recognizes this supplemental pay received by the employees as revenues and expenditiu"es of the town. The revenues arc reported in the general fund and tlie expenditures arc included in the public safet>' expenditures.

13. Contingent Habilities

At June 30, 2011, there was no litigation pending against the Town of Cullen.

14. Risk mana^etneat

The town is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;

37

TOWN OF CUI,LEN, LOUISIANA

NOTES TO THE FINANCIAI. SIXIEMENTS As of and for the Year Ended June 30,2011

errors and omissions; injuries to employees; and natural disasters. T'he town attempts to minimize risk from significant losses through the purchase of insurance.

15. Subsequent F.vents

Subsequent events have been evaluated through December 13, 2011. Tliis date represents the date the

fmancial statements were available to be issued.

38

REQUIRFD SUPPLEMENTAL INl-ORMA'flON

TOWN OF CULLEN, LOUISIANA Statement of Revenues, Expenditures, and Changes in Fund Balances Budget and Actual

General Fund For the Year Ended June 30,20 M

SCHEDULE la

Revenues Taxes - ad valorem Licenses and permits Charges for services I'incs and forfeitures Intergovernmental Interest Miscellaneous

Total revenues

Expenditures General Govemment Public Safely Highway and streets Sanitation and health Debt service

Total expenditures

Excess (deficiency) of revenues over (under) expenditures

Other Financing Sources (Uses) Proceeds from sale of assets Operating transfers in Operating transfers out

Total other financing sources (uses)

Net change in fund balance

Fund balance at beginning of year

Budaetcd Amounts Original

S 16,000 55,815 76,000 42,000 83,200

860 4,800

278,675

155.231 183,764 25.300 51,382

415,677

(137,002)

Final

S 16.250 53,890 80,000 42,000

220,250 100

4,200

416,690

175,252 259.722 167,500 36,679

639,153

(222.463)

-Accual Amounts

S 16,278 69,596 75,908 33,369 24,954

1,555 50.286

271.946

119,968 229,530

19,748 33,516

402,762

(130,816)

Varitmce with Final Budget

Positive (Negative)

S 28 15,706 (4,092) (8,631)

(195.296) 1,455

46,086 (144,744)

55,284 30,192

147,752 3,163

236.391

91,647

-165,000

165,000

27,998

115,196

S 143,194

-165,000

165,000

(57,463)

142,470

$ 85,007

50 147,668

147.718

16,902

83,592

S 100,494

(50) 17,332

17.282

108,929

(58,878)

$ 15,487

The accompanying notes arc an integral part of this .statement.

39

SCHEDULE lb

TOWN OF CULLEN, LOmSIANA Statement of Revenues, Expenditures and Changes in Fund Balances Budget and Actual

Special Revenue Fund - Two Percent Sales Tax Fund For the Year Ended June 30, 2011

Revenues: Taxes - sales Interest

Total revenues

Expenditures: General government Culture and recreation

Total expenditures

Excess of revenues over expenditures

Other financing (uses): Operating transfers out

Total other financing (uses)

Excess (deficiency) of revenues over (under) expenditures and otiier uses

Fund balcuice al beginning of year

Fund balance at end of year

Variance with Final Budget

Budgeted Amounts

Original Final

$ 80,000 g

700

80,700

> 80,000 100

80,100

Actual

Amount

$ 68,751 100

68.851

Positive

(Negative)

$ (11,249)

(11,249)

985 985 1,148 (163)

985

79,715

(60,000)

(60.000)

19,715

108,238

$ 127,953 $

985

79J15

(80,000)

(80,000)

(885)

117,943

117,058 $

1,148

_ 67,703

(64,430)

(64,430)

3,273

130,957

134,230 $

(163)

(11,412)

15,570

15,570

4,158

13,014

17,172


40

SCHEDULE Ic

TOWN OF CULLEN, LOUISIANA Statement of Revenues, Expenditures and Changes in Fund Balances -Budget and Actual

Special Revenue Fund - One-half Percent Sales Tax Fund For the Year Ended June 30, 2011

Variance with Final Budget

Revenues: Taxes - sales Interest

Total revenues

Expenditures: General government Culture and recreation

Total expenditures

Excess of revenues over expenditures

Other financing (uses): Operating transfers out

Total other financing (uses)

Excess (deficiency) of revenues over (under) expenditures and other uses

Fund balance at beginning of year

Fund balance at end of year

Budgeted .

Original

$ 18,000 -

18,000

325 3,000

3,325

14,675

(25,000)

(25,000)

(10,325)

193,701

$ 183,376

Amounts

Final

$ 18,000 -

18.000

5.240 2,500

7,740

10.260

(25,000)

(25,000)

(14,740)

201,062

$ 186,322

Actual

Amounts

$ 17,188 316

17,504

402 3,351

3,753

13,751

(23,238)

(23,238)

(9,487)

198,126

$ 188,639

Positive

(Negative)

$ (812) 316

(496)

4,838 (851)

3,987

3,491

1J62

1,762

5,253

(2,936)

$ 2,317 — iy^.--:-u.—. 7-.


41


NOTES TO BUDGETARY COMPARISON SCFILDULES June 30.2011

Note 1 - Budget basis

The budget for the general fund and special revenues funds are adopted on a modified accrual basis.

42

OTHER SUPPLEMENTARY SCMEDULBS

Schedule 2

TO\W OF CULLEN, LOLTSIANA

SCHEDULE OF COMPENSATION PA.U.) BOARD MEMBERS June 30,2011

The Mayor and Board of Aldermen for the Town of Cullen were compensated forthe year ended June 30, 201 las follows:

Bobby K. Washington Floydean White Barbara Green Tarcus Hawthorne Gary Sullivan Dexter Turner Compensation paid

Mayor $ 12,000

----_

$.1.2,000

Alderman -

1800 1800 1800 ISOO 1800

9.000

OTHER REPORTS

MICHAEL W. WISE, C P A CARLOS E. MARTIN, C.P.A. KRISTINE H. COLE CPA.

JENNIFER C. SMnH, C.P.A. KRISTIE K. MAm'IN. C.P.A.

JAMIESON, WISE & MARTIN A PROFESSIONAL ACCOUhJTING CORPORATION

601 MAIN STREET P.O. BOX 897 MINDEN, LOUISIANA 71058-0897

(318)377-3171 FAX (318) 377-3177

WM. PEARCE JAMIESON, C.P.A.{1991)

MEMBERS AMERICAN INSTITUTE OF

CERTIFIED PUBLIC ACCOUP^ANTS SOCIETY OF LOUISIANA

CERTIFIED PUBLIC ACCOUNTANTS

REPORT ON INTERNAL CONTROL OVER FIN.AJ^CIAL

REPORTING AND ON COMPLIANCE AND OTHER MA ITERS BASED ON AN AUDIT OF

FfVANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVEJiNMENTAUDITING STANDARDS

The Honorable Bobby R. Washington, Mayor,

and the Members of the Board of Aldermen

Town of Cullen, Louisiana

We have audited the financial statements of the governmental activities, the business-type activities., each

major fund, and the aggregate remaining fund information of the Town of Cullen, Louisiana, as of and

for the year ended June 30, 2011, which collectively comprise the Town of Cullen, Louisiana, basic

llnancial statements and have issued our report thereon dated December 2S, 2011. We conducted our

audit in accordance with auditing standards generally accepted in the United States of America and the

standards applicable to financial audits contained in Government Auditing Standards, issued by tlic

Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Town of Cullen, Louisiana's internal control over

financial reporting as a basis for designing our auditing procedures for the purpose of expressing our

opinions on the financial statements, but not for the purpose of expressing an opinion on the

effectiveness of the Town of Cullen, Louisiana's internal conti'ol over financial reporting. Accordingly,

wc do not express an opinion on the effectiveness of the Town of Cullcn, Louisiana, internal control over

financial reporting.

A deficiency in intemal control exists when the design or operation of a control does not allow

management or employees, in tlie 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 intemal control such that there is a reasonable possibility that a maierial misstatcnicni

44

of the entity's fmancial statements will not be prevented, or detected and corrected on a timely basis.

Our consideration of intemal control over fmancial reporting was for the limited purpose described in the

first pai-agraph of this section and was not designed to identity all dctlciencies in internal control over

financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did

not identify any deficiencies in internal conti'ol over financial reporting tliat wc consider to be material

weaknesses, as defined above. However we identified certain deficiencies in intemal control over

financial reporting descnbcd in the accompanying schedule of findings and questioned costs that wc

consider to be significant deficiencies in internal control over fmancial reporting. Item 2011-1 and Item

2011-2. A significajit deficiency is a deficiency, or a combination of deficiencies, in intemal control that

is less severe than a material weakness, yet important enough to merit attention by those charged with

govemance.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Town of Cullcn, Louisiana's financial

statements are free of material misstatement, wc perfomied tests of its compliance with certain provisions

of laws^ regulations, contracts and grant agreements, noncompliance with which could have a direct and

material effect on the deteiinination of financial statement amounts. However, providing an opinion on

compliance with those provisions was not an objective of our audit, and accordingly, we do not express

such an opinion.

'lhe Tov-Ti of Cullen, Louisiana, response to the items identified in our audit as item 2011-3 is described

in the accompanying schedule of findings. We did not audit the Town of Cullcn, Louisiana, response

and, accordingly, we express no opinion on it.

This report is intended solely for the infomiation and use of management, Board of Aldemian, others

within the entity, and federal awarding agencies and pass-through entities and is not intended to be and

should not be used by any other than these specified parties.

^«_oc . . r3^ Minden, Louisiana

December 28. 2011

45


SaiEDULE OF CURRENT YEAR FINDINGS WITH MANAGEMENT'S RESPONSE AND PLANNED CORRECTIVE ACTION

June 30, 2011

Section II - Findmgs reiated to the financial statements which are required lo be reported in accordance with Goveruniental Auditing Standards gcncraUy accepted in the United States of America:

The results of our auditing procedures of the basic financial statements as of and for the year ended June 30, 2011,of the Town of Cullcn, Louisiana, disclosed the following items that are required to be reported in accordance with GAGAS (Generally accepted govemmental auditing standards).

2011-1 Significant Deficiency in Internal Control over Financial Reporting

Condition & Criteria: As is common in small organizations, management has chosen to engage the auditor to propose certain year-end adjusting entries and to prepare their annual financial statements. This condition is intentional by management based upon the Town's financial complexity, along with the cost effectiveness of acquiring the ability to prepare fmancial statements in accordance with generally accepted accounting principles. In relation to this decision, intemal controls over the preparation of year-end adjusting entries and aimual financial statements, complete with notes, in accordance with generally accepted accounting principles, have not been established. Under generally accepted auditing standards, this condition represents a significant deficiency in internal controls.

Statement on Auditing Standards (SAS) 112, effective for audits of financial statements for periods after December 15, 2006, requires that we report the above condition as a control deficiency. The SAS does not provide exceptions to reporting deficiencies that are adequately mitigated with nonaudit services rendered by the auditor or deficiencies for which the remedy would be cost prohibitive or otherwise impractical.

Cause: The condition is due to economic limitations.

Effect: Misstatements in the financial statements or footnotes may not be detected.

Recommendation: No recommendation is made for this deficiency. Management must determine whether the benefit from an internal control exceeds its cost, and therefore it may be

4 6


SCHEDULE OF CURRENT W.AR FINDINGS WITH MANAGHMEKf'S RESPONSE AND PLANNED CORRECTIVE ACTION

June 30,2011

impractical to correct all deficiencies required to be reported under SAS 112. The cost benefit analysis is not a factor in the reporting requirements of SAS 112. We do not believe that correcting the significant deficiency as described above would be cost effective or practical for the Town of Cullcn therefore no corrective action is recommended.

Management Response: See management's response following.

2011-2 Significant DeJicipMcy in Internal Control - Lack of Documentation

Condition & Criteria: It was noted dining our audit of the Town of Cullen that documentation required and requested for expenditure and grant revenue testing could not be located. Out of a sample or40 invoices requested for expenditure testwork, 9 could not be located. Out of 11 pay requests submitted to the State of Louisiana and checks received from the State for grant revenue and expenditure testwork, 2 pay requests and 4 copies of checks received could not be located. As a result of these findings, internal controls over expenditures and revenue were not fiilly established. It was noted that the vendors on the missing invoices were normal vendors the Town used in its day to day operations and none of the expenditures were extraordinary. Expenditures and revenues related to federal grant awards were verified by third parties, specifically, the State of Louisiana and the vendors performing the work.

Cause: 'I'own clerk failed to keep or file invoices con-ectly and failed to keep documentation of expenditures and revenues received related to grants.

Effect: Misstatements in the financial statements or foomotes may not be detected.

Recommendation: It is recommended that the Town Clerk pay special attention to document retention and organization of files.

Management Response: See management's response following.

'FOWN OF CULLEN, LOUISIANA

SCHEDULE OF CURRENT YEAR F.LNDINGS WFTH MANAGEMEKF'S RESPONSE AKT) PLANNED CORRECTI^'E AC flON

June 30, 2011

2011-3 Compliance with Local Government Budget Act

Criteria: The Local Govemment budget act requires when actual receipts and other financing sources plus projected revenue collections and other financing sources for the year fail to meet budgeted revenues and other financing sources by 5% or more, or when actual expenditures and other financing uses plus projected expenditures and other lintmcing uses to year end exceed budgeted expenditures and other financing uses by 5% or more the budget should be amended.

Condition: As of Jmie 30, 2011 actual receipts were 88% short of budgeted revenues and expenditures were 88% short of budgeted expenditures.

Cause: The town had budgeted grant funds expected to be received that were not received. The expenditures were directly related to the expected gi'ant revenue.

Effect: Lack of adherence to Local Government Budget Act.

Recommendation: At the point it is known there will be a 5% variance ihe town should amend the budget at the next appropriate meeting:

Management Response: See management's response follov^nng.

48

THE TOWN OF CULLEN OFFICE OF THE MAYOR

Bobby R. Waaiiington P.O. Box 679 CuUen, Loiusiana 71021 (318)994-2263 (316)994-2191 Fax (318)994-2189

T m r ^ T r n — [ — - r ' ———^^^.>-...,.,.....teg= -, Board of Aldermen: Barbara Grecai Taxcus Hawdiornfi Gary Sullivan Dexter Turner Floydt;ajU White

December 27,2011

Audit Response Letter

I am responding on behalf of management of the Town of Cullen to the items mentioned in the audit r&port for the

Town of Cullen for the year ending June 30/ 2011.

Item 2011-1 - Deficiency in Internal Control over Financial Reporting. We agree with the recommendation, We understand that is our responsibility to prepare the finandal statements, however, due to our limited size we request as an nonaudit service that the auditors assist us In preparing the financial statements in the format required by applicable standards.

Item 2011-2 - Intemal Control over Documentation - We have had turnover In the office personnel over the last few years and this requires training of new personneL We undersrtand the Importance of proper documentation of all expenditures. AM invoices to be paid are approved at council meetings therefore the records are available at time of

payment, I will stress to the office personnel the importance of proper filing of all documentation to support revenues and expenditures. This training will be done Immediately and I will review this process to ensure compliance.

Item 2011-3- Budget Act^ We understand the budget taw and periodically amend the budget as needed. We thought the town would receive and expend the grant money before the yearend therefore the budget was not amended. The town monitors the budget each month.

Sincerely,

Bobby Washington Town of Cullen Mayor

The Town of Cullen Is an Equal Opportunity Employer

A9

TOWN OF CIJIT.EN, LOUISLMSIA

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS June 30, 2011

2010-1 Significant Deficiency in Intemal Control over Financial Rep or tittg

Condition & Criteria: As is cominon in small organizations, management has chosen to engage the auditor to propose certain year-end adjusting entries and to prepare their annual financial statements. This condition is intentional by management based upon tlie Town's fmancial complexity, along with the cost effectiveness of acquiring the abilit>ao prepare fmancial statements in accordance with generally accepted accounting principles. In relation to this decision, intemal controls over the preparation of year-end adjusting entries and aimual financial statements, complete with notes, in accordance with generally accepted accounting principles, have not been established. Under generally accepted auditing standards, this condition represents a significant deficiency in intemal controls.

Statement on Auditing Standards (SAS) 112, effective for audits of financial statements for periods after December 15, 2006, requires that we report the above condition as a control deficiency. The SAS does not provide exceptions to reporting deficiencies that are adequately mitigated with nonaudit services rendered by the auditor or deficiencies for which the remedy would be cost prohibitive or otherwise impractical.

Cause: The condition is due to economic limitations.

Effect: Misstatements in the financial statements or footnotes may not be detected.

Status: There has been no change in the status of this finding.

2010-2: Adequate Pledged Securities over Cash Deposits

Criteria; To comply with Fiscal Agency and CashManagement laws of LSA-RS 39:1211-45 and to maintain proper control over cash, the town should maintain adequate pledged securities to cover cash deposits in excess of FDIC insurance.

Condition: We noted during the audit for the year ended June 30, 2010 that as of June 30, 2010 the town had pledged securities, whose cost was in adequate amount, however the fair market value of the pledged securities left the town uncollateralized by S587.

Cause: Fair market value of pledged securities were less than cost basis of securities

50

TO\\^T OF CUTXEN, LOUISIANA

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS June 30, 2011

Effect: Lack of security over cash deposits

Status: Cash deposits for year ending June 30,2011 were adequately secured.

2010-3: Failure to Publish All Minutes

Criteria: To comply with LSA-RS 43:143-144; which requires the publication of all minutes, ordinances, resolutions, budgets, and proceedings.

Condition: There was no record of the December 18,2009 or April 26, 2010 minutes or their corresponding publications.

Cause: Town employee responsible for duties failed to perform duties.

Effect: Records required by LSA-RS 43:143 not available

Status: Review of minutes for year ending June 30, 2011 revealed all minutes, ordinances, resolutions, budgets, and proceedings were published as required by LSA-RS 43:143-144.

SI

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