ward 9 recreation district des parish,...

WARD 9 RECREATION DISTRICTDES PARISH, LOUISIANA

ANNUAL FINANCIAL REPORTFOR THE YEAR ENDED DECEMBER 31,2007

Under provisions of state law, this report is a publicdocument. Acopy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.

Release Date

TABLE OF CONTENTS

PAGE

REQUIRED SUPPLEMENTAL INFORMATION (PART I)Management's Discussion and Analysis , 2-5

GOVERNMENT-WIDE FINANCIAL STATEMENTSStatement of Net Assets ~ „ 6Statement of Activities 7

FUND FINANCIAL STATEMENTSGovernmental Funds

Balance Sheet 8Statement of Revenues, Expenditures and Changes in Fund Balance 9

NOTES TO FINANCIAL STATEMENTS 10-15

REQUIRED SUPPLEMENTAL INFORMATION (PART D)General Fund - Statement of Revenues, Expenditures andChanges in Fund Balances (Budget and Actual) 16

SUPPLEMENTAL INFORMATIONIndependent Auditors' Report On Compliance And On

Internal Control Over Financial Reporting BasedOn An Audit Of Financial Statements PerformedIn Accordance With Government Auditing Standards 17-18

Schedule of Findings and Questioned Cost 19Management's Corrective Action Plan 20Schedule of Prior Year Findings and Questioned Cost 21

ROZIER, HARRINGTON & MCKAYCERTIFIED PUBLIC ACCOUNTANTS1407 PETERMAN DRIVE • ALEXANDRIA, LOUISIANA 71301

JOHN s. ROZIER, IV, CPA MAILING ADDRESSM. DALE HARRINGTON, CPA (RETIRED) POST OFFICE Box 12178

MARK s. MCKAY, CPA ALEXANDRIA, LOUISIANA 71315*2178LEEW.WILUS.CPA TELEPHONE (318) 442-1608

STEVEN E. KIMBALL, CPA TELECOPIER (318) 487-2027RHONDA L RACHAL, CPA

June 04,2008

independent Auditors' Report

To the Board of CommissionersWard 9 Recreation DistrictRapides Parish, Louisiana

We have audited the accompanying basic financial statements of the governmental activities and each major ftmd of theWard 9 Recreation District, Rapides Parish, Louisiana, as of and for the year ended December 31,2007, as listed in thetable of contents. These basic financial statements are the responsibility of the Ward 9 Recreation District's management.Our responsibility is to express an opinion on these basic financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America and thestandards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller Generalof the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the basic financial statements are free of material misstatement. An audit includes examining, on a test basis,evidence supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing dieaccounting principles used and significant estimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the basic financial statements referred to above present fairly, in all material respects, the respectivefinancial position of the governmental activities and each major fund of the Ward 9 Recreation District, as of December31, 2007, and the respective changes in financial position thereof for the year then ended in conformity with accountingprinciples generally accepted in the United States of America.

The management's discussion and analysis and budgetary comparison information listed in the accompanying table ofcontents are not a required part of the financial statements but are supplementary information required by theGovernmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally ofinquires of management regarding the methods of measurement and presentation of the required supplementalinformation. However, we did not audit the information and express no opinion on it.

In accordance with Government Auditing Standards, we have also issued a report dated June 04, 2008, on ourconsideration of the Recreation District's internal control over financial reporting and our tests of its compliance withcertain provisions of laws, regulations, contracts, and grants. That report is an integral part of an audit performed inaccordance with Government Auditing Standards and should be read in conjunction with this report in considering theresults of our audit.

ROZ1ER, HARRINGTON & McKAYCertified Public Accountants

.Members-American Institute of Certified Public Accountants • Society of Louisiana CPAs

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Ward 9 Recreation DistrictRapides Parish, Louisiana

Management's Discussion And AnalysisDecember 31, 2QQ7

This section of the Ward 9 Recreation District's annual financial report presents our discussion and analysis of theDistrict's financial performance. The District began operating on or around August 1,2001, and completed constructionactivity in 2006.

OVERVIEW OF FINANCIAL STATEMENTSThe basic financial statements include government-wide financial statements and fund financial statements. These twotypes of financial statements present the District's financial position and results of operations from differing perspectives,which are described as follows:

Government-Wide Financial Statements

The government-wide financial statements report information about the District as a whole using accounting methodssimilar to those used by private-sector companies. These report all revenues and expenses regardless of when cash isreceived or paid. Furthermore, the government-wide statements include all of the District's assets and all of the District'sliabilities (including long-term debt). Expenses incurred in connection with the operation and maintenance of theDistrict's recreational facilities are reported as governmental activities. The governmental activities are financed by taxes,proceeds from debt and investment income.

Fund Financial Statements

Fund financial statements provide detailed information regarding the District's most significant activities and are notintended to provide information for the District as a whole. Funds are accounting devices that are used to account forspecific sources of funds. The District's funds are all classified as governmental funds. These funds are used to accountfor essentially the same functions that are reported as governmental activities in the government-wide financialstatements. However, unlike government-wide financial statements, the governmental fund use a modified accrual basisof accounting that provides a short-term view of the District's finances. Assets reported by governmental funds arelimited to amounts that are available for current needs. In addition, liabilities are limited to amounts that are expected tobe paid from currently available assets.

FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLEA comparative analysis of government-wide data for the current and previous year is presented as follows:

Net Assets

A condensed version of the government-wide Statement of Net Assets is presented as follows:

December 31,2007 2006

Assets;Current and Other Assets $ 3,234,073 $ 1,315,367Capital Assets 7,421,948 7,597,657Total Assets 10.656,021 8,913,024

Liabilities:Current and Other Liabilities 373,627 376,688Long-term Liabilities 5,695,000 5,955,000

Total Liabilities 6,068,627 6,331,688

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Management's Discussion And AnalysisDecember 31, 2OO7

Net Assets:Invested in Capital Assets, NetRestrictedUnrestrictedTotal Net Assets

1,466,9482,183,154

937,292$ 4,587,394

1,397,657784,118399,561

$ 2,581,336

As presented above, the largest portion of net assets (47.6%) are restricted for debt service and investment in capitalassets. In addition, a portion of the District's net assets (32%) are invested in capital assets, net of related debt. Theremaining net assets (20.4%) are unrestricted and may be used to meet the District's ongoing obligations to citizens andcreditors.

Changes in Net Assets

A condensed version of the government-wide Statement of Changes in Net Assets is presented as follows:

For the Year Ended December 31,2007 2006

Program Revenues:Charges for ServicesOperating Grants and ContributionsCapital Grants and ContributionsTotal Program Revenue

General Revenues:

$ 74,174 $ 24,235

— 150,000

Expenses:Culture and RecreationInterest on Long-Term DebtTotal Expenses

Change in Net Assets - Before Special ItemsSpecial Item - Disputed Taxes

Change in Net AssetsNet Assets Beginning

Net Assets Ending

As presented above, the District's net assets have increased. The increase is attributable to a property tax settlementawarded to the District by the Court of Appeals and establishing sufficient debt service millages to establish a reserve fordebt service. In addition, the District has also earned income from the temporary investment of bond proceeds that will beused to meet the District's ongoing obligations to citizens and creditors.

74,174

1,122,88845,832

1,168,7201 ,242,894

536,306298,146834,452

408,4421,597,616

2,006,0582,581,336

$4,587,394 $

174,235

945,87817,521

963,3991,137,634

466,982312,359779,341

358,293

358,2932,223,043

2,581,336

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Ward 9 Recreation DistrictRaoides Parish, Louisiana

Management's Discussion And AnalysisDecember 31, 2OO7

FINANCIAL ANALYSIS OF THE DISTRICT'S FUNDSFor die year ended December 31, 2007, the only differences between amounts reported by the District's funds andactivities reported in the government-wide financial statements are attributable to excluding capital assets and long-termdebt that appear the government-wide presentation.

The general fund is the only fund required by law to adopt a budget. A summary of the general fund budget compared toactual amounts is presented as follows:

Budget AmountsOriginal

$ 266,000266,000

—

—

Final

$ 326,000278,250

47,750

$ 47,750

ActualAmounts

$ 898,329360,596

537,733

$ 537,733

Variance withFinal Budget

Positive(Negative)

$ 572,329(82,346)

489,983

$ 489,983

Total RevenuesTotal ExpendituresExcess (deficiency) of revenues

over expendituresOperating Transfers OutChange in Net Assets

Revisions were made to include additional property taxes that were excluded from the initial budget due to a protest bythe taxpayper. Expenditures exceeded appropriations because general funds were expended that had not been anticipatedwhen the budget was amended.

CAPITAL ASSET ADMINISTRATIONCapital asset activity for the year ended December 31, 2007 included purchases of additional equipment necessary tooperate and maintain the site. Expenditures are summarized as follows:

Equipment Purchases $ 20,853Construction of Batting Cages and Fencing 21,768Miscellaneous 1,950

Total Capital Expenditures $ 44,571

DEBT ADMINISTRATIONFor the year ended December 31, 2007, no new debt was incurred. Activity associated the District's existing debt ispresented as follows:

Beginning BalanceDebt ProceedsRetirementsEnding Balance $ 675,000 S 5,280,000

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GeneralObligation

Bonds Series2005

$ 700,000

25,000

GeneralObligation

Bonds Series2002

$ 5,500,000

220,000


Management's Discussion And AnalysisDecember 31,2OO7

FACTORS EXPECTED TO EFFECT FUTURE OPERATIONSThe Court of Appeals has ruled in favor of the District regarding a substantial property tax protest The resolution of thismatter will provide additional future revenue to support operations, maintenance and debt service.

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Statement of Net Assets

December 31, 2007

ASSETSCash and Cash EquivalentsReceivables (net)Restricted Assets:

Cash and Cash EquivalentsReceivables (net)

Capital Assets - Land ImprovementsCapital Assets - Depreciable

Total Assets

GovernmentalActivities

586,022362,423

1,505,578780,050

2,583,3524,838,596

10,656,021

LIABILITIESAccounts PayableLiabilities Payable From Restricted Assets

Accrued Interest Payable from Restricted AssetsLong-term Debt Payable from Restricted Assets:

Due Within One YearDue in More than One Year

Total Liabilities

4,516

109,111

260,0005,695,000

6,068,627

NET ASSETSInvested in Capital Assets, Net of Related DebtRestricted for:

Debt ServiceUnrestricted

Total Net Assets (deficit)

1,466,948

2,183,154937,292

4,587,394

The accompanying notes arc an integral part of the financial siaiemenLi.

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Statement of Activities

For the Year Ended December 31, 2O07

Expenses:Culture and RecreationInterest on Long-Term Debt

Total Expenses

Program Revenues:Charges for ServicesOperating Grants and ContributionsCapital Grants and Contributions

Net Expenses

GovernmentalActivities

$ 536,306298,146

834,452

74174

760,278

General Revenues:Property TaxesInvestment Income

Total General Revenues

Change in Net Assets - Before Special ItemsSpecial Item - Disputed Taxes

1,122,88845,832

1,168,720

408,4421,597,616

Change in Net AssetsNet Assets - Beginning

Net Assets - Ending

2,006,0582,581,336

$ 4,587,394

The accomptinying notes lire an integral part of die financial statements.

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Balance Sheet - Governmental FundsDecember 31, 2OO7

TotalCapital Debt Governmental

General Project Service FundsAssets

Cash and Cash Equivalents $ReceivablesDue From Other Funds

Total assets $

Liabilities and Fund Balance

LiabilitiesAccounts Payable $Accrued Interest PayableDue to Other Funds

Total liabilities

Fund BalanceUnreserved

Total Fund Balances

Total Liabilities and Fund Balance $

586,022 $362,423

948,445 $

4,515 $

6,63611,151

937,294

937,294

948,445 $

$ 1,505,578 $780,050

6,636$ 2,292,264 $

$ - $109,111

109,111

2,183,1532,183,153

$ 2,292,264 $

2,091,6001,142,473

6,6363,240,709

4,515109,111

6,636120,262

3,120,4473,120,447

3,240,709

Reconciliation of the Governmental FundsBalance Sheets to the Statement of Net Assets

Total Fund Balances - Governmental Funds

Amounts reported for governmental activities in the statement of net assets arc

diflirrent because:

Long term liabilities arc not due and payable in tlic current period and

therefore they tiro not reported in the Governmental Fund Balance Sheet

Capital assets used in governmental ucth'ittcs ore not financial resources and

therefore arc not reported in the funds.

Nel Assets of Governmental Activities

3,120/147

(5,955,000)

7,421,947

4,587,394

Tlic nccompunying nolcs tire on integral part oftim flnunuiul stnlcmenls.

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Ward 9 Recreation DistrictParish, Louisiana

Statement of Revenue, Expenditures and Changes inFund Balance - Governmental Funds

For the Year Ended December 31, 2OQ7

TotalDebt Governmental

Revenues:Property TaxesInvestment IncomeOther

Total revenues

Expenditures:Culture and RecreationCapital ExpendituresDebt Service

InterestPrincipal

Total expenditures

Special Item RevenueDisputed Taxes

Net Change in Fund BalancesFund balance - Beginning of YearFund balance - End of Year

General

$ 357,672 $13,25574,174

445,101

316,02544,571

--

360,596

453,228

537,733399,561

S 937,294 $

Service

765,216 $32,577

-

797,793

--

298,146245,000543,146

1,144,388

1,399,035784,118

2,183,153 $

Funds

1,122,88845,83274,174

1442,894

316,02544,571

298,146245.000903,742

1,597,616

1,936,7681,183,6793,120,447

Reconciliation of the Statement of Revenues, Expenditures, and Changes inFund Balances of Governmental Funds to the Statement of Activities

Net change in fund balances of Governmental Funds

Amounts reported Ibr governmental activities in the statement of

activities are different because:

Repayment ofband principal is nn expenditure in the governmental

lunds, bul (lie repayment reduces long-term liabilities in the

statement of net assets

Governmental funds report capital outlays ns expenditures. However,,

in the statement of activities the cost of those assets is ullocuicd

over estimated useful lives and reported as depreciation expense.

This is Hie amount by which depreciation exceeded capital outlays

in the current period

Change in net assets of governmental activities

1,936,768

245,000

(175,710)

2.006.058

Tlic accompanying noles arc an integral pan of ilie financial slalcmtfnis.

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Notes To Financial StatementsDecember 31, 2OO7

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe Ward 9 Recreation District (the District) was established by the Rapides Parish Police Jury for the purpose ofacquiring, operating and maintaining recreation facilities. The District is governed by a Board of Commissionersappointed by the Rapides Parish Police Jury.

The accompanying policies conform to generally accepted accounting principles for governmental units.

Financial Reporting Entity

The Governmental Accounting Standards Board (GASB) Statement No. 14 established criteria for determining whichcomponent units should be considered part of a financial reporting entity. The basic criterion for including a potentialcomponent unit within a reporting entity is financial accountability. The GASB has set forth criteria to be considered indetermining financial accountability. This criteria includes:

1. Appointing a voting majority of an organization's governing body, and

a. The ability of die reporting entity to impose its will on that organization and/or

b. The potential for the organization to provide specific financial benefits to or impose specificfinancial burdens on the reporting entity.

2. Organizations for which the reporting entity does not appoint a voting majority but are fiscally dependenton the reporting entity.

3. Organizations for which the reporting entity financial statements would be misleading if data of theorganization is not included because of the nature or significance of the relationship.

Based on the previous criteria, the District is a component unit of the Rapides Parish Police Jury. The accompanyingcomponent unit financial statements present information only on the funds maintained by the District and do not presentinformation on the police jury, the general government service provided by that governmental unit, or other governmentalunits that comprise die financial reporting entity.

Basic Financial StatementsThe District's operations are classified as governmental activities. Governmental activities involve government servicesthat are normally supported by taxes and intergovernmental revenues. The basic financial statements include bothgovernment-wide and fund financial statements. The government-wide and fund financial statements present theDistrict's financial position and results of operations from differing perspectives which are described as follows:

Government-Wide Financial Statements

The Statement of Net Assets and the Statement of Activities display information about the District as awhole. The effect of interfund activity is eliminated from these financial statements. Furthermore,government-wide financial statements exclude any fiduciary activities which are reported in the fondfinancial statements.

Program revenues reported in the Statement of Activities consist of amounts that are directly associatedwith a governmental service. Program revenues include charges for services, fees, contributionsassociated with a particular function and most grants.

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Fund Financial StatementsFunds are separate accounting entities that are designed to assist with demonstrating legal complianceand segregating transactions by activity. Major individual funds are reported as separate columns inthe fund financial statements. The District's major funds are described as follows:

• General Fund - The general fond is the primary operating fund and is used to account for allgovernmental activities that are not required to be presented elsewhere.

• Debt Service Fund - Is used to account for the collection of special taxes that are assessed for thepurpose of paying principal and interest on the District's general obligation bonds.

Basis Of Accounting and Measurement FocusBasis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported inthe financial statements. Basis of accounting relates to the timing of the measurements made, regardless of themeasurement focus applied. The basis of accounting and measurement focus used for various financial statementpresentations are described as follows:

Financial Statement Presentation Basis of Accounting Measurement FocusGovernment-Wide Financial Statements Accrual Basis Economic ResourcesFund Financial Statements Modified Accrual Basis Current Financial Resources

Under the accrual basis of accounting and the economic resources measurement focus, revenues are recorded whenearned and expenses are recorded when a liability is incurred.

Under the modified accrual basis of account and the current financial resources measure focus revenue Is recognizedwhen it is considered measurable and available. Revenue is considered available if it is collected within 90 days of yearend. In addition, expenses are generally recorded when a liability has been incurred. Furthermore, when the currentfinancial resources measure focus is used, amounts recorded as assets exclude capital assets and the acquisition of capitalassets is treated as an expenditure. In addition, long-term debts are excluded from amounts reported as liabilities.Proceeds from issuing long-term debt is reported as an other financing source and repayment of long-term debt isreported as an expenditure.

Use Of EstimatesThe preparation of financial statement in conformity with generally accepted accounting principles requires managementto make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual resultscould differ from those estimates.

Budget PracticesThe District prepares an annual budget for the its general fund. This budget is submitted to the Board of Commissionersand an approved budget is adopted before the beginning of each year. If necessary, amended budgets are prepared priorto the conclusion of each fiscal year. The amended budgets are prepared and approved in the same manner as the originalbudget.

The general fund budget presents revenue and expenditures on a basis which is consistent with generally acceptedaccounting principles. No annual budget is required for the District's remaining funds.

Capital AssetsCapital assets include significant acquisitions of facilities and equipment that are expected to remain in service for aperiod of years. Capital assets are reported in the government-wide financial statements but are excluded from the fund

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financial statements. Instead, the funds report the acquisition of capital assets as expenditures rather than assetacquisitions.

All capital assets are reported at historical cost less accumulated depreciation. Depreciated is computed using thestraight-line method and estimated useful lives that are based on the expected durability of the particular asset. A usefullife of seven years is typically used for equipment. At the present time, facilities remain under construction. Since thefacilities have not been placed in service, no provision for depreciation of facilities has been recorded.

Cash And Cash Equivalents:

Amounts reported as cash and cash equivalents (restricted and unrestricted) include all cash on hand, cash in bonkaccounts, certificates of deposit and highly liquid investments.

Internal Balances:

The District's funds occasionally use resources provided by another fund. When resources are provided withoutexpectation of repayment, the transaction is reported as a transfer. Transfers are treated as a source of income by therecipient and as an expense or expenditure by the provider. If repayment is eventually expected to occur, interfimdreceivables and payables are recorded. Internal balance are eliminated in preparing government-wide financialstatements.

NOTE 2 -CASH AND CASH EQUIVALENTSCash and cash equivalents at December 31,2007 are presented as follows:

Unrestricted $ 586,022Restricted 1,505,578Total $ 2,091,600

At December 31,2007, the collected bank balance was secured by FD1C coverage and securities pledged to the RapidesParish Police Jury. Even though the pledged securities are considered uncollateralized (Category 3), State law imposes astatutory requirement on the custodial bank to advertise and sell the pledged securities within 10 days of being notifiedthat the fiscal agent has failed to pay deposited funds on demand.

NOTE 3 - ACCOUNTS RECEIVABLEAccounts receivable at December 31,2007 consisted entirely of property taxes. Management considers the property taxesto be fully collectible and there is no allowance for uncollectible amounts.

NOTE 4 - CAPITAL ASSETSCapital asset activity for the year is summarized as follows:

Beginning EndingBalance Additions Disposals Balance

Non Depreciable Capital AssetsImprovements to Land £ 2.583.352 $ = $ — $ 2.583,352Non Depreciable Capital Assets 2,583,352 — — 2.583,352

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Beginning EndingBalance Additions Disposals Balance

Depreciable Capital AssetsEquipmentBuildings and ImprovementsAccumulated DepreciationDepreciable Capital Assets (Net)

Total Capital Assets

211,0925,032,154(228,941)

5,014,305

$ 7,597,657 $

20,85323,718

(220,280)(175,709)

(175,709) £

— 231,945— 5,055,872— (449,221)

4,838,596

— S 7,421,948

As part of the construction process improvements were needed to level the site and make it suitable for operations. Theseimprovements are permanent in nature and therefore are not subject to depreciation. Depreciation on equipment andother improvements in the amount of $220,280 has been reported as part of culture and recreation expenses.

NOTE 5 - ACCOUNTS PAYABLEAccounts payable at December 31, 2007 consist entirely of trade payables incurred in connection with the operation ofthe facility.

NOTE 6 - LONG-TERM DEBTThe following is a summary of transactions involving long-term debt for the year ended December 31,2007:

$ 6,200,000

245,000

Bonds payable, January 1,2007New issuesRetirementsBonds payable, December 31,2007Due within one yearDue in more than one year

5,955,000260,000

$ 5,695,000

Long-term debt consist entirely of general obligation bonds that are described as follows:

General obligation bonds, Series 2002 in the original amount of $6,300,000. Thebonds feature interest rates ranging from 4.35% to 6.00%. The bonds mature seriallywith the initial payment due March 1, 2003 and the final payment due March 1,2022. The bonds are secured by a special property tax that was approved by thecitizens of the District. $ 5,280,000

General obligation bonds, Series 2004 in the original amount of $700,000. Thebonds feature interest rates ranging from 4.90% to 5.15%. The bonds mature seriallywith the initial payment due March I, 2007 and the final payment due March 1,2024. The bonds are secured by a special property tax that was approved by thecitizens of the District. 675,000

Total General Obligation Bonds $ 5,955,000

A schedule of maturities for these bonds is presented as follows:

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Principal Interest

Year Ended December 31sl

2007 S 260,000 $ 287,5012008 275,000 272,9262009 290,000 257,5382010 305,000 242,9072011 320,000 228,9732012-2016 1,900,000 894,5522017-2021 2,495,000 353,9072022-2024 110,000 5,665

Total $ 5,955,000 $ 2,543,969

NOTE 7 - INTERFUND ACTIVITYInternal activity includes interfund receivables and payables as well as operating transfers. Details related to internalactivity are presented as follows:

Receivable Fund Payable Fund Amount PurposeDebt Service General $ 6,636 Accrued interest included in bond proceeds was not

deposited in the debt service fund. However, since theaccrual interest is actually payable to bond holders anmterftmd payable to the debt service fund has beenestablished.

NOTE 8 - PROPERTY TAXESThe District levies property taxes using the assessed values determined by the Tax Assessor of Rapides Parish. For theyear ended December 31,2007, the District levied property taxes as follows:

[MillsDescription Levied

Levied per proposition approved November 17,2001 authorizing 6 mills for a period of 10year beginning with 2002 for the purpose of acquiring, constructing, improving,maintaining and operating recreational facilities of the District, including necessaryequipment in connection therewith. Proceeds from this tax are considered unrestrictedincome, which is reported as general fund revenue in the accompanying statement ofrevenue, expenditures and changes in fund balance 6.04

Levied per proposition approved November 17, 2001, authorizing general obligation debtto run for a period of 20 years payable from a levy of property taxes, for the purpose ofconstructing, purchasing and acquiring, lands, buildings, equipment and other facilities tobe used in providing recreational facilities for the District Proceeds from this tax arerestricted for debt service. Tax revenues are reported as debt service fund revenue in theaccompanying statement of revenue expenditures and changes in fund balance 13.00

19.04

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Notes To Financial StatementsDecember 31, 2QQ7

Property taxes are assessed on a calendar year basis and are due on or before December 31 in the year the tax is levied.Revenues from property taxes are recognized as revenue in the year billed.

NOTE 9 - SPECIAL ITEMFor the year ended December 31, 2007, special items are attributable to successfully resolving a major tax dispute. Thedispute arose when a major taxpayer protested taxes assessed by the Recreation District Tax payments collected over aperiod of years were held in escrow while the matter was addressed by the court system. During 2007, all appeals wereexhausted and the funds were awarded to the Recreation District. Amounts collected are presented as follows:

Operations andMaintenance Debt Service Total

Taxes Protested in Previous Year S 411,861 $ 1,039,936 $ 1,451,797Totallnterest 41,367 104,452 145,819

TotalSpecialltem Revenue $ 453,228 $ 1,144,388 $ 1,597,616

NOTE 10 - RISK MANAGEMENTThe District is exposed to various risks of loss related to torts; theft, damage or destruction of assets; errors andomissions; injuries to employees; and natural disasters.

The District insures against these risks by participating in a public entity risk pool that operates as a common insuranceprogram and by purchasing commercial insurance. Settled claims resulting from these risk have not exceeded insurancecoverage in any of the past three fiscal years.

NOTE 11 - RESTRICTED RESOURCESPropositions authorizing general obligation bonds require the District to establish bank accounts which serve as debtservice sinking funds. Funds on deposit in these accounts may only be used to repay bonds, pay interest accrued on thebonds, or pay related fees.

NOTE 12-LEASESThe District's facilities have been constructed on 163 acres that the State of Louisiana has leased to the City of Pineville.Under the terms of its cooperative endeavor with the City of Pineville, the District has access to the property for a periodof 50 years beginning January 1,2003. In addition, the District has an option to renew the sublease for an additional 40years. In exchange for access to the property, the District is required to spend $6,300,000 on improvements and makeimprovements available to residents of Pinecrest Development Center.

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Ra&ides Parish* Louisiana

Statement of Revenue, Expenditures and Changes inFund Balance - General Fund Budget and Actual

For the Year Ended December 31, 2007

Budget Amounts

Revenues:Property Taxes

Grants - State of LouisianaInvestment IncomeOther

Total revenues

Expenditures:Culture and Recreation:

Salaries, Wages and BenefitsInsuranceLegal and ProfessionalUtilitiesMaintenanceOther

Capital Expenditures

Total expenditures

Special Item RevenueDisputed Taxes

Net Change in Fund BalancesFund balance - beginning of year

Original

$ 260,000 $

-6,000

-

266,000

126,7507,500

10,00035,00048,25023,50015,000

266,000

_

399,561

Variance withFinal Budget

Actual PositiveFinal Amounts (Negative)

320,000 $-

6,000.

326,000

135,5007,500

12,00035,00048,25025,00015,000

278,250

_

47,750399,561

357,672 $-

13,25574,174

445,101

138,1358,168

15,04729,21574,52250,93844,571

360,596

453,228

537,733399,561

37,672

-7,255

74,174

119,101

(2,635)(668)

(3,047)5,785

(26,272)(25,938)(29,571)

(82,346)

453,228

489,983-

Fund balance - end of year $ 399,561 $ 447,311 $ 937,294 $ 489,983

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ROZIER, HARRINGTON & MCKAYCERTIFIED PUBLIC ACCOUNTANTS1407 PETERMAN DRIVE • ALEXANDRIA, LOUISIANA 71301

JOHN S. RQ2JER, IV, CPA MAILING ADDRESSM. DALE HARR/WSTOW, CPA Posr OFFICE Box 12178

MARK S. MCKA Y, CPA ALEXANDRIA, LOUISIANA 71315-2178LEEW.WILUS.CPA TELEPHONE (318) 442-1608

STEVEN IE. KIMBALL, CPA TELECOPIER (318) 487-2027RHONDA L. KACHAL, CPA

June 04,2008

To the Board of CommissionersWard 9 Recreation District

We have audited the basic financial statements of the Ward 9 Recreation District, as of and for the year ended December 31,2007, and have issued our report thereon dated June 04,2008. We conducted our audit in accordance with auditing standardsgenerally accepted in the United States of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.

INTERNAL CONTROL OVER FINANCIAL REPORTINGIn planning and performing our audit, we considered the Ward 9 Recreation District's internal control over financialreporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the basic financialstatements, but not for the purpose of expressing an opinion on the effectiveness of the Recreation District's internal controlover financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Recreation District's internalcontrol over financial reporting.

Our consideration of internal control over financial reporting was for the limited purpose described in the precedingparagraph and would not necessarily identify all deficiencies in internal control over financial repotting that might besignificant deficiencies or material weaknesses. However, as discussed below, we identified certain deficiencies in internalcontrol over financial reporting that we consider to be significant deficiencies.

A control deficiency exists when the design or operation of a control does not allow management or employees, in thenormal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A significantdeficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Recreation District'sability to initiate, authorize, record, process, or report financial data reliably in accordance with generally acceptedaccounting principles, such that there is more than a remote likelihood that a misstatement of the Recreation District'sfinancial statements that is more than inconsequential will not be prevented or detected by the Recreation District'sinternal control. We consider the deficiency described in the accompanying schedule of findings and questioned costs tobe significant deficiencies in internal control over financial reporting, which is described in the accompanying scheduleof findings and questioned costs as 2007-1,

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than aremote likelihood that a material misstatement of the financial statements will not be prevented or detected by theorganization's internal control.

Our consideration of the internal control over financial reporting was for the limited purpose described in the first paragraphof this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies and,accordingly, would not necessarily disclose all significant deficiencies that are also considered to be material weaknesses.However, we believe that none of the significant deficiencies described above is a material weakness.

-Membere-Amarlcan Institute of Certified Public Accountants • Society of Louisiana CPAs

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Ward 9 Recreation DistrictJune 4, 2008Page 2

COMPLIANCEAs part of obtaining reasonable assurance about whether the Ward 9 Recreation District's basic financial statements are freeof material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts andgrants, noncompliance with which could have a direct and material effect on the determination of financial statementamounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and,accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance thai isrequired to be reported under Government Auditing Standards, which is described in the accompanying schedule of findingsand questioned costs as 2007-1

This report is intended for the information of management However, this report is a matter of public record and itsdistribution is not limited.

ROZIER, HARRINGTON & McKAYCertified Public Accountants

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WARD 9 RECREA TION DISTRICT

SCHEDULE OF FINDINGS AND QUESTIONED COST

For the Year Ended December 31, 2OO7

PARTI- SUMMARY OF AUDITOR'S RESULTS:

• The Independent Auditors* Report on the basic financial statements of the Ward 9 Recreation District as of December31,2007 and for the year then ended expressed on unqualified opinion.

• The audit disclosed a control deficiency which was required to be reported as a significant deficiency, however it wasnot considered to be a material weakness.

• The results of the audit disclosed an instance of noncompliance that is considered to be material to the baste financialstatements of the Ward 9 Recreation District

PARTH - FINDINGS RELATING TO THE FINANCIAL STATEMENTS WHICHABE REQUIRED TO BE REPORTED IN ACCORDANCE WITH GENERALLYACCEPTED GOVERNMENTAL AUDITING STANDARDS:

2007-1: Internal ControlThe Rapides Parish Police Jury provides accounting services for most the Recreation District's activity. Due to the distancefrom the courthouse and weekend activity at the complex, it is not considered practical for all transaction to be processed bythe Police Jury. Accordingly, the Board of Director's maintains a separate account that is used in limited circumstances whenfunds are needed on short notice. Financial records associated with the separate account are currently limited to check stubsand bank statements. However, in order to provide information necessary to manage financial affairs and monitor budgets,bookkeeping procedures should be adopted to properly report activity associated with the account described above.

2007-2: Budget ViolationsFor the Recreation District's general fund, expenditures exceeded appropriations by more than variances allowed by slatelaw.

PART in - FINDINGS AND QUESTIONED COSTS FOR FEDERAL AWARDSWHICH SHALL INCLUDE AUDIT FINDINGS AS DEFINED BY OMBCIRCULAR A-133:

• N/A

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MANAGEMENT'S CORRECTIVE ACTION PLANFor the Year Ended December 31,2QQ7

SECTION IINTERNAL CONTROL AND COMPLIANCE MATERIAL TO THE FINANCIAL

STATEMENTS.

2007 - 1 : INTERNAL CONTROLThe Rapides Parish Police Jury provides accounting servicesfor most the Recreation District's activity. Due to the distancefrom the courthouse and weekend activity at the complex, it isnot considered practical for all transaction to be processed bythe Police Jury. Accordingly, the Board of Director'smaintains a separate account that is used in limitedcircumstances when funds are needed on short notice.Financial records associated with the separate account arecurrently limited to check stubs and bank statements.However, in order to provide information necessary to managefinancial affairs and monitor budgets, bookkeeping proceduresshould be adopted to properly report activity associated withthe account described above.

2007-2: BUDGET VIOLATIONSFor the Recreation District's general fund, expendituresexceeded appropriations by more than variances allowed bystate law.

2007-1: RESPONSEManagement intends to appoint a qualified person toprepare a detailed general ledger reporting aUtransactions affecting any account that is notadministered by the Rapides Parish Police Jury.

2007-2: RESPONSEManagement is confident that information provided bythe general ledger described above will provideinformation necessary to properly monitor the budgetand prevent expenditures in excess of appropriations.

SECTION nINTERNAL CONTROL AND COMPLIANCE MATERIAL TO FEDERAL AWARDS

No findings that are material to the financialstatements were reported.

Response -N/A

SECTION mMANAGEMENT LETTER

No management letter was issued with this report. Response— N/A

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SUMMARY OF PRIOR YEAR FINDINGS AND QUESTIONED COSTFor the Year Ended December 31, 2OO7

SECTION IINTERNAL CONTROL AND COMPLIANCE MATERIAL TO THE FINANCIAL

STATEMENTS.

No findings of this nature were reported. Response-N/A

SECTION nINTERNAL CONTROL AND COMPLIANCE MATERIAL TO FEDERAL AWARDS

No findings of this nature were reported. Response-N/A

No management letter was issued with this report. Response — N/A

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