^

^57^

VILLAGE OF FENTON, LOUISIANA ANNUAL FINANCIAL REPORT AND INDEPENDENT AUDITORS' REPORTS YEAR ENDED JUNE 30, 2012

Under pi'ovisions of state law tiiis report is a puolic docunienf Acopy of the report has been subniftted to the entity and Oiher appropnate fxiblic officials The report is available for public inspection at the Baton Rouge office of the Legisiative Auditor and where appropnate, ai the office of the parish clerk of court Release Date APR 2 4 2013

GRACSON, CASIDAY &

GUILLORV,

LLP

CERTIFIED PUBLIC ACCOUNTANTS

CONTENTS Page MANAGEMENTS DISCUSSION AND ANALYSIS (UNAUDITED) INDEPENDENT AUDITORS' REPORT BASIC FINANCIAL STATEMENTS GOVERNMENT-WIDE FINANCIAL STATEMENTS Statement of net assets Statement of activities FUND FINANCIAL STATEMENTS Balance sheet-governmental funds Reconciliation of the balance sheet-Governmental Funds to the statement of net assets Statement of revenues, expenditures, and changes in fund balancesgovernmental funds Reconciliation ofthe statement of revenues, expenditures, and changes in fund balances-governmental funds to the statement of activities Statement of net assets-propnetary fund Statement of revenues, expenses and changes in net assets - propnetary fund Statement of cash flows - propnetary fund NOTES TO BASIC FINANCIAL STATEMENTS REQUIRED SUPPLEMENTAL INFORMATION Budgetary companson schedule-general fund and special revenue fund INDEPENDENT AUDITORS" REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS SCHEDULE OF FINDINGS AND RESPONSES 15 16 19 20 21 22 23 24 25 26-40 42-43 3-11 12

44-45 46-48

GRACSON, CASIDAV & G L I I LOin, L L P CERTIFIED PUBLIC ACCOUNTANTS

VILLAGE OF FENTON. LA Management's Discussion and Analysis Within this section of the Village of Fenton, LA's (Village) annual financial report, the Village's management is pleased to provide this narrative discussion and analysis ofthe financial activities of the Village for the year ended June 30, 2012 The Village's financial performance is discussed and analyzed within the context of the accompanying financial statements and disclosures following this section FINANCIAL HIGHLIGHTS The Village's assets exceeded its liabilities by $1,995,884 (net assets) for the fiscal year reported Total revenues of $859,355 exceeded total expenditures of $739,356, which resulted in a current year surplus of $119,999. compared to pnor year surplus of $228,892 Total net assets are compnsed of the following (1) Capital assets, net of related debt, of $1,720,328 include property and equipment, net of accumulated depreciation, and reduced for outstanding debt related to the purchase or construction of capital assets (2) Restncted for special revenue, capital outlay and debt sen/ice of $82,403 (3) Unassigned/unrestncted net assets of $193,153 represent the portion available to maintain the Village's continuing obligations to citizens and creditors The Village's govemmental funds reported total ending fund balance of $248,603 this year This compares to the pnor year ending fund balance of $207,138, reflecting an increase of $41,465 dunng the current year, compared to an increase of $100,118 in the pnor year At the end of the current fiscal year, unassigned fund balance for the General Fund was $166,200 Overall, the Village continues to struggle financially although an improvement has been made over the pnor fiscal years The Village is continuing to work to improve on this financial position

The above financial highlights are explained in more detail in the "financial analysis" section of this document OVERVIEW OF FINANCIAL STATEMENTS This Management's Discussion and Analysis document introduces the Village's basic financial statements The basic financial statements include (1) govemment-wide financial statements, (2) fund financial statements, and (3) notes to the basic financial statements The Village also includes in this report additional information to supplement the basic financial statements Comparative data is presented when available

GUACSON, CASIOAN & Gi;iLLOR\, L L P CERTIFIED PUBLIC ACCOUNTANTS

VILLAGE OF FENTON, LA Management's Discussion and Analysis (Continued) GOVERNMENT-WIDE FINANCIAL STATEMENTS The Village's annual report includes two govemment-wide financial statements These statements provide both long-term and short-term information about the Village's overall financial status Financial reporting at this level uses a perspective similar to that found in the pnvate sector with its basis in accrual accounting and elimination or reclassification of activities between funds The first of these govemment-wide statements is the Statement of Net Assets This is the govemment-v*nde statement of position presenting information that includes all of the Village's assets and liabilities, with the difference reported as not assets Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the Village as a whole is improving or detenorating Evaluation of the overall health of the Village would extend to other nonfinancial factors such as diversification of the taxpayer base, or the condition of Village infrastructure in addition to the financial information provided in this report The second govemment-wide statement is the Statement of Activities, which reports how the Village's net assets changed dunng the current fiscal year All current year revenues and expenses are included regardless of when cash is received or paid An important purpose of the design of the statement of activities is to show the financial reliance of the Village's distinct activities or functions on revenues provided by the Village's taxpayers Both govemment-wide financial statements distinguish govemmental activities of the Village that are pnncipally supported by sates tax and from business-type activities that are intended to recover all or a significant portion of their costs through user fees and charges Govemmental activities include pnncipally general govemment and public safety Busmess-type activities mclude the water and sewer systems The govemment-wide financial statements are presented on pages 15 through 16 of this report FUND FINANCIAL STATEMENTS A fund IS an accountability unit used to maintain control over resources segregated for specific activities or objectives The Village uses funds to ensure and demonstrate compliance with financerelated laws and regulations Within the basic financial statements, fund financial statements focus on the Village's most significant funds rather than the Village as a whole Major funds are separately reported while all others are combined into a single, aggregated presentation The Village has two Kinds of funds Govemmental funds are reported in the fund financial statements and encompass the same functions reported as govemmental activities in the govemment-wide financial statements However, the focus IS very different with fund statements providing a distinctive view of the Village's governmental funds These statements report short-term fiscal accountability focusing on the use of spendable resources and balances of spendable resources available at the end of the year They are useful tn evaluating annual financing requirements of govemmental programs and the commitment of spendable resources for the near-term Since the govemment-wide focus includes the long-term view, compansons between these two perspectives may provide insight into the long-term impact of short-term financing decisions Both the governmental fund balance sheet and the govemmental fund operating statement provide a reconciliation to assist in understanding the differences between these two perspectives

GRACSON, CASII:)A> & Guii i.oin, L L CERTIFIED PUBLIC ACCOUNTANTS

VILLAGE OF FENTON, LA Management's Discussion and Analysis (Continued) The basic govemmental fund financial statements are presented on pages 19 through 22 of this report Propnetary funds are reported in the fund financial statements and generally report services for which the Village charges customers a fee The one Village propnetary fund is classified as an enterpnse fund This enterpnse fund essentially encompasses the same functions reported as business-type activities in the govemment-wide statements Sen/ices are provided to customers extemal to the Village organization for water and sewer utilities The basic enterpnse fund financial statements are presented on pages 23 through 25 of this report NOTES TO THE BASIC FINANCIAL STATEMENTS The accompanying notes to the financial statements provide information essential to a full understanding of the govemment-wide and fund financial statements The notes to the financial statements begin on page 26 of this report OTHER INFORMATION In addition to the basic financial statements and accompanying notes, this report also presents certain required supplemental information conceming the Village's budget presentations Budgetary companson statements are included as "required supplemental information" for the general fund and the special revenue fund These statements and schedules demonstrate compliance with the Village's adopted and final revised budget Required supplemental information can be found on pages 42 through 43 of this report

GRACSON, CASIOAY & Gun IOR^, L L P CERTIFIED PUBLIC ACCOUNTANTS

VILLAGE OF FENTON, LA Management's Discussion and Analysis (Continued) FINANCIAL ANALYSIS OF THE VILLAGE AS A WHOLE Over time, as year-to-year financial information is accumulated on a consistent basis, changes m net assets may be observed and used to discuss the changing financial position of the Village as a whole The Village's net assets at fiscal year-end are $1,995,884 The following table provides a summary of the Village's net assets
Governmental Activities Assets Current assets and other assets Capital assets Total assets Liabilities Current liabilities Long-term liabilities Total tiabitrtres 2012 2011 Business-type Activities 2012 2011 2012 Percentage Total 2011 2012 2011 16% 14% _84 _86 J^% lfiQ%

Total

$ 300,043 $ 241,645 S 38,701 $ 35.924 $ 338.744 $ 277,569 935.301 1.750,959 1.821.031 921,598 815.658 899.433 1.221.641 1.057.303 938.134 971.225 2.159.775 2.028.528

78,267 52.620 130.887

63.552 42.904 106.456

18.613 14.391 33.004

20,879 21.809 42.688

96.880 67.011 163.891

67,015 85.628 152.643

59% 44% 41 56 lilQ% 1QQ%

Net assets Investment in capita) 906.671 1,646.881 1,720.328 assets, net of debt 842,151 590,618 878,177 128,345 Restncted 82.403 82,403 116,476 100.659 Unasstged/Unrestncted 21.866 193.153 166,200 (9,456) 26.953 1,090,754 fi 697 638 905.130 fi 928,537 S 1,995.864 S 1.875.585 Total net assets

86% 88% 4 7 _iO __5

iQQ% im%

The Village maintains a reasonable current ratio The current ratio compares cun-ent assets to current liabilities and is an indication of the ability to pay cun'ent obligations The current ratio for govemmental activities is 3 8 to 1 and 5 2 to 1 for 2012 and 2011, respectively, and for business type activities IS 2 1 to 1 and 1 7 to 1 for 2012 and 2011. respectively For the Village overall, the curent ratio IS 3 5 to 1 and 2 5 to 1 for 2012 and 2011, respectively Note that approximately 77% (78% for 2011) of the governmental activities' net assets are tied up in capital The Village uses these capital assets to provide services to its citizens However, wtth business type activities, the Village has spent approximately 97% (98% for 2011) of its net assets on capital Capital assets in the business-type activities also provide utility sen/ices, but they also generate revenues for this fund Overall, 86% (88% for 2011) of the Village's total net assets are included in capital assets

GRACSON, CASIDAY

& Gun i.oio, L L P

CERTIFIED PUBLIC ACCOUNTANTS

VILLAGE OF FENTON, LA Management's Discussion and Analysis (Continued) The following table provides a summary of the Village's changes in net assets
Governmental Activities 2012 2011 Revenues Program Charges for services /fines $ 542.534 Operating grants 135.977 General 30,839 Sales taxes 45.923 Other taxes 11 Interest 16.520 Other Total Revenues Program expenses General govemment Public safety Police Streets Interest Water and sewer Total Expenses Excess (deficiency) Transfers Change in net assets Beginning net 947.348 Ending net assets S i.090 754 697.638 s 947 ^AA fi 928.537 949_J55 1 875.885 1.646.993 905 ian fi ggflsa? 1,9gfi,flB4 fi 1,675,685 771.804 390,038 197.572 3.338 590.948 180.656 137.4501 Business-Type Activities 2012 2011 Total 2012 2011 Percentage Total 2011 2012

$ 388,443 195,046 32,497 49,435 17 9.672 352.975 244,823 151.176 3,928 399.927 275,183 (25.473)

87.551

96,626

S 630,085 135 977 30,639 45,923 11 16.520

487.269 195 046 32.497 49,435 17 9.672

73% 16 4 5 2 100% 53% 27 1 _19

1QQ%

63% 25 4 7 1 100% 45% 27 1 27

1QQ%

87.551

98.826

859.355 390.038 197,672

773,936 244 823 151,176 3,928 145.117

545.044

1 492 146.916 148.408 (60 857) 37.450 (23.407)

145_.117 145.117 (46 291) 25.473 (20 818)

4,630 146.916 739.356 119,999

228,892

143,406

249 710

119,999

226.892

GRACSON, CASIDAY & G L I I LOIO, L L P CERTIFIED PUBLIC ACCOUNTANTS

VILLAGE OF FENTON, LA Management's Discussion and Analysis (Continued) GOVERNMENTAL REVENUES The Village is heavily reliant on fines and grants to support governmental operations These provided 86% (87% for 2011) of the Village's total revenues Also note that program revenues, excluding grants, cover 70% (58% for 2011) of govemmental operating expenses This means that the government's taxpayers and the Village's other general revenues fund 30% (42% for 2011) of the govemmental activities As a result, the general economy and the local businesses have a major impact on the Village's revenue streams GOVERNMENTAL FUNCTIONAL EXPENSES This table presents the cost of each of the Village's programs, including the net costs (i e , total cost less revenues generated by the activities) The net costs illustrate the financial burden that was placed on the Village's taxpayers by each of these functions Govemmental Activities Total Cost of Services General govemment Public safety Police Streets Interest on long-term debt Total BUSINESS-TYPE ACTIVITIES Revenues vs Costs The operating revenues for the utility fund were 11% less than 2011 and operating expenses 2% more than 2011 Within the total business type activities ofthe Village, these activities reported a $60,857 operating loss compared to an operating loss of $46,291 for the pnor year 2012 $390,038 197,572 . 3.338 $ 590.948 2011 $244,823 151,176 3.928 $ 399 927 $ Net Cost of Services 2012 $ (254,061) 344.926 . (3.338) 87.563 2011 $(49,777) 237,267 . (3.928) $ 183.562

GRACSON, CASIUAY & GUH.LOIO, L L P CERTIFIED PUBLIC ACCOUNTANTS

VILLAGE OF FENTON, LA Management's Discussion and Analysis (Continued) FINANCIAL ANALYSIS OF THE VILLAGE'S FUNDS Govemmental Funds As discussed, govemmental funds are reported in the fund statements with a short-term, inflow and outflow of spendable resources focus This information is useful in assessing resources available at the end of the year in companson with upcoming financing requirements Govemmental funds reported ending fund balances of $248,603 ($207,138 for 2011), of which $82,403 is restncted for special revenue, capital outlay and debt service ($128,345 for 2011), and $166,200 is unassigned ($78,793 for 2011) indicating availability for continuing Village service requirements The total ending fund balances of governmental funds show an increase of $41,465. compared to a increase of $100.118 for the pnor year MAJOR GOVERNMENTAL FUNDS The General Fund is the Village's pnmary operating fund and the largest source of day-to-day service delivery The General Fund's fund balance increased by $87,407 tn fiscal year 2011, the fund balance increased by $88,249 The revenues show an increase of $160,898 or 33% from the pnor year, mainly due to fines The expenditures side shows an increase of $156,146 or 40% over the pnor year, mainly due to general and administrative expenses and capital outlay The Sales Tax Fund continues to fund street repairs and capital outlay For the cuirent year sales tax revenues decreased 5% THE PROPRIETARY FUND The propnetary fund statements share the same focus as the government-wide statements, reporting both short-term infonnation about financial status Operating revenues decreased by $11,275 or 11% and operating expenses increased by $1,799 or 1% BUDGETARY HIGHLIGHTS The General Fund - the revenue and the expenditure side of the final budget for the General Fund were increased by $179,969 and $101,391 respectively this year from the pnor year's final budget The revenues were increased mainly for fines Expenditures were increased mainly for general and administrative and public safety expenditures The actual revenues were less than the final budget by $40,472, mainly due to fines, and the actual expenditures exceeded the final budget by $60,067, mainly due to general and administrative and capital outlay The Sales Tax Fund - The actual sales taxes revenues were more than the final budget by $804

GRACSON, CASIOAY & GUILLOR'V, L L P CERTIFIED PUBLIC ACCOUNTANTS

VILLAGE OF FENTON, LA Management's Discussion and Analysis (Continued) CAPITAL ASSETS AND DEBT ADMINISTRATION Capital assets The Village's investment in capital assets, net of accumulated depreciation, for govemmental and business-type activities as of June 30, 2012, was $921,598 and $899,433 respectively See Note D for additional information about changes in capital assets dunng the fiscal year and outstanding at the end of the year The following table provides a summary of capital asset activity
Govemmental Activities
2012 2011

Business-Type Activities
2012 2011 2012

Total
2011

Non-depreciable asset Land Construction in progress Depreciable assets Buildings Fumrture & equipment Transportation equipment Total depreciable assets Less accumulated depreciation

35,065 37,900 803,270 218,412 211.061 1.232.743 384.110

1,900 79.016 530,114 177,845 91.762 799.721 247.115

14,790

14,790

49.855 37.900 2,202,822 216,661 239.691 2.661.174 918.898

16,690 18,456 1.919.701 107.946 81.381 2.109,028 654.335

1,399,552 249 28.630 1.428,431 543.788

1.399.552 249

1,399,801 447.637

Book value-depreciable assets 848.633 Percentage depreaated Book value-all assets 31% 921,598

552.606 31% 633522

884643 38%

952,164 32%

1 742,276 1.454 693 31% 31%

899433

966 954

1 821,031 1.489 839

At June 30, 2012, the depreciable capital assets for governmental activities were 3 1 % depreciated, compared to 31 % at June 30,2011 With the Village's business type activities, 38% of the asset values were depreciated at June 30, 2012 compared to 36% at June 30. 2011 The major additions for the year were the purchase of 3 acres of land, a metal building, a police automobile, and the LCDBG-Housing Accessibility Project Long-term debt At the end of the fiscal year, the Village had total debt outstanding of $100,703 All of this amount is backed by the full faith and credit of the Village This includes lease obligations payable of $69,478 at the end of the fiscal year Dunng the year, the Village issued $26,718 in debt and retired $30,093 of the outstanding debt balance See Note C for additional information regarding long-term debt

GRACSON, CASIDAY & GUILLOIO, L L P CERTIFIED PUBLIC ACCOUNTANTS

10

VILLAGE OF FENTON, LA Management's Discussion and Analysis (Continued) ECONOMIC CONDITIONS AFFECTING THE VILLAGE Since the pnmary revenue stream for the Village is utility charges and fines, the Village's utility charges and fine revenues are subject to changes in the economy CONTACTING THE VILLAGE'S FINANCIAL MANAGEMENT This financial report is designed to provide a general overview of the Village's finances, comply with finance-related laws and regulations, and demonstrate the Village's commitment to public accountability If you have any questions about this report or would like to request additional information, contact the Village's Mayor, Eddie Alfred Jr P O Box 310, Fenton, LA 70640

GRACSON, CASIOAY & GUILLOK^,

LLP

CERTIFIED PUBLIC ACCOUNTANTS

11

G R A G S O N , CASIDAY & GUILLORY, L.L.P.

CERTIFIED P U B L I C A C C O U N T A N T S

W GEORGE GRAGSON C P A RICHARD W CASrOAV C P A RAYMOND GUILLORY JR C P A GRAHAM A PORTUS E A COY T VINCENT C P A MICHELLE LEE C P A BRADLEY J CASIDAY C P A C V A JUUA W PORTUS C P A KATHRYN BLESSINGTON C P A JACKLYN 8RANEFF C P A

INDEPENDENT AUDITORS' REPORT November 20, 2012 To the Honorable Eddie Alfred, Jr, Mayor and the Village Council Village of Fenton, Louisiana We have audited the accompanying basic financial statements of the governmental activities, the business type activities and each major fund of the Village of Fenton, Louisiana, as of and for the year ended June 30, 2012, as listed in the table of contents These basic financial statements are the responsibility of the Village of Fenton, Louisiana's management Our responsibility is to express an opinion on these basic financial statements based on our audit Partial pnor year summanzed comparative information has been denved from the Village's 2011 financial statements and, in our report dated December 12, 2011, we expressed unqualified opinions on the respective financial statements of the governmental activities, the business-type activities, and each major fund We conducted our audit in accordance with auditing standards generally accepted in the United States of Amenca and the standards applicable to financial audits contained in Govemment Auditing Standard issued by the Comptroller General of the United States Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the basic financial statements are free of matenal 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 the accounting pnnciples used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation We believe that our audit provides a reasonable basis for our opinion tn our opinion, the baste financial statements referred to above present fairly, in all matenal respects, the respective financial position of the govemmental activities, the business type activities and each major fund of the Village of Fenton, Louisiana, as of June 30, 2012, and the respective changes in financial position and cash flows for the year then ended in conformity with accounting pnnciples generally accepted in the United States of Amenca In accordance with Govemment Auditmg Standards, we have also issued our report dated November 20, 2012 on our consideration of the Village of Fenton, Louisiana's intemal control over financial reporting and our tests of its compliance wtth certain provisions of laws, regulations and contracts and other matters The purpose of that report is to descnbe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance That report is an integral part of an audit perfonmed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit Accounting pnnciples generally accepted in the United States of Amenca require that the management's discussion and analysis and budgetary companson information on pages 3 through 11 and 40 through 41 be presented to supplement the basic financial statements Such infomiation, although not a part of the basic financial statements, is required by the Govemmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropnate operational, economic, or histoncal context We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of Amenca, which consisted of inquines of management about the methods of prepanng the infonnation and companng the information for consistency with management's responses to our inquines, the basic financial statements, and other knowledge we obtained dunng our audit of the basic financial statements We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance

145 EAST STREET P O DRAWER 1847 LAKE CHARLES LOUISIANA 7O602 1847 TEL (337439 1986 FAX 4337)439 1360

12

BASIC FINANCIAL STATEMENTS

GRACSON, CASIOAY & Gun LOR"^, L L P CERTIFIED PUBLIC ACCOUNTANTS

13

GOVERNMENT-WIDE FINANCIAL STATEMENTS

GRACSON, CASIDAY & GUILI.ORY, LLP

CERTIFIED PUBLIC ACCOUNTANTS

14

VILLAGE OF FENTON, LA STATEMENT OF NET ASSETS June 30, 2012

Govemmental Activities ASSETS Cash Receivables Prepaids Capital assets Land Capital assets, net Total assets LIABILITIES Accounts and other accrued payables Customer deposits Long-temi liabilities Due within one year Due after one year Total liabilities NET ASSETS Invested in capital assets, net of related debt Restncted Unrestncted Total net assets $ 263,323 33,525 3.195 35.065 886.533 1.221,641 $

Business-Type Activities 26,124 10.988 1.589 14,790 884,643 938,134 $

Total 289.447 44,513 4,784 49,855 1,771.176 2.159.775

51.440 26,827 52,620 130,887

7,852 3,896 6,865 14.391 33,004

59.292 3,896 33,692 67,011 163.891

842,151 82.403 166.200 1,090,754

878,177 26,953 905,130

1,720,328 82,403 193.153 1.995.884

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

GRACSON, CASIDAY & Guii.i.oio, L L P CERTIFIED PUBLIC ACCOUNTANTS

15

VILLAGE OF FENTON, LA STATEMENT OF ACTIVITIES Year Ended June 30, 2012

Program Revenues Operating Grants and Contnbutions $ 542,634 135,977

in

Activities Govemmental activities General and administrative Police Interest on long-term debt Total Governmental Activities Business-type activities Water and sewer Interest on long-term debt Total primary government

Expenses $ 390,038 197,572 3,338 590,948 146,916 1.492 739,356

Fees. Fines and Charaes for Services $

Net (Expense) Revenues and Changes in Net Assets Primary Government Govemmental Business-Type Activites Activities $ (254,061) 344.962 (3.338) 87,563 (59,365) (1.492) (60,857) $ $

Total (254,061) 344.962 (3,338) 87,563 (59,365) (1.492) 26.706

542,534 87,551 $ 630,085 $

135,977

135.977

87.563

Oi

> o a o =
> w Z ~

General revenues TaxesProperty taxes, levied for general purposes Sales and use taxes, levied for general purposes Franchise taxes Licenses and pemriits Intergovemmental - state revenue shanng Interest Miscellaneous Transfers Total general revenues Change in net assets Net assets - Beginning Net assets - Ending $

15,155 30.839 20.932 9.836 3.153 11 13.367 (37,450) 55,843 143,406 947.348 1.090,754 $

. 37,450 37.450 (23.407) 928.537 905,130 $

15,155 30.839 20.932 9,836 3,153 11 13.367 93,293 119,999 1.875,885 1,995,884

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

FUND FINANCIAL STATEMENTS

GRACSON, CASIDAY & GUILLORY, L L P CERTIFIED PUBLIC ACCOUNTANTS

17

MAJOR FUND DESCRIPTIONS General Fund The general fund is used to account for resources traditionally associated with governments which are not required to be accounted for in another fund Special Revenue Fund The special revenue fund is used to account for specific revenues that are legally restricted to expenditures for particular purposes The fund accounts for the receipt and use of proceeds of the Village's 2 % sales and use tax Capital Protects Fund The capital projects fund is used to account for financial resources to be used for the acquisition or constnjction of maior capital facilities (other than those financed by propnetary funds and trust funds) Debt Service Fund To account for proceeds from debt sen/ice to pay on capital project debt Propnetary Fund To account for the provision of water and sewerage services to residents of the Village All activities necessary to provide such services are accounted for in this fund, including, but not limited to, administration, operations, maintenance, financing and related debt service, and billing and collection

GRACSON, CASIDAY & GUILLORY,

LLP

CERTIFIED PUBLIC ACCOUNTANTS

18

VILLAGE OF FENTON. LA BALANCE SHEET - GOVERNMENTAL FUNDS June 30, 2012

General ASSETS Cash Receivables Accounts Intergovemmental Prepaid insurance Due from other funds TOTAL ASSETS LIABILITIES Accounts payable Due to other funds TOTAL LIABILITIES FUND BALANCES Assigned Unassigned TOTAL FUND BALANCES TOTAL LIABILITIES AND FUND BALANCES

Special Revenue S 49.796

Capital Projects

Debt Service

2012 Totals

2011 Totals

213.437

90

263,323

191.634

2,186 3.195

2.186 3.195 31.339 300.043

J=
$

216.632

T
s

21,968 73,950

1,008 1,098

A
$

8.363 8,363

X
$

1.382 9,925 2,620 36.084 241.645

26,697 23.735 50.432

$
1.008 1,008

26,697 24.743 51,440

5.019 29.488 34.507

72,942 166,200 166.200 72,942

1,098 1,098

8,363 8.363

82,403 166.200 248.603

128,345 78.793 207,138

216,632

_$_

73,950

J.

1,098

J-

8.363

300.043

241.645

The accompanying notes are an integral part ofthe basic financial statements

GRACSON, CASIDAY & GUILLORY,

LLP

CERTIFIED PUBLIC ACCOUNTANTS

19

VILLAGE OF FENTON. LA RECONCILIATION OF THE BALANCE SHEET - GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS June 30. 2012

Total fund balance for governmental fund at June 30, 2012 Total net assets reported for govemmental activities in the statements of net assets is different because Capital assets used in governmental activities are not financial resources and, therefore, are not reported in the funds Those assets consist of Land Capital assets, net of $384,110 accumulated depreciation Long-temi liabilities at June 30, 2012 Bonds payable Total net assets of govemmental activities at June 30. 2012

248,603

35,065 886,533

921.598

(79.447) $ 1.090.754

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

GRACSON, CASIDAY & GUILLORV L L P CERTIFIED PUBLIC ACCOUNTANTS

20

VILLAGE OF FENTON, LA STATEMENT OF REVENUES. EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS Year Ended June 30.2012

General REVENUES Taxes Licenses and permits Intergovernmental Fines Interest Misoeltaneous TOTAL REVENUES EXPENDITURES Current General and administrative Police Capital outlay Debt service Pnncipal Interest TOTAL EXPENDITURES EXCESS (DEFICIENCY) OF REVENUES OVER EXPENDITURES OTHER FINANCING SOURCES (USES) Proceeds from borrowings Operating transfers in Operating transfers out TOTAL OTHER FINANCING SOURCES (USES) NET CHANGES IN FUND BALANCES FUND BALANCES, BEGINNING FUND BALANCES, ENDING $ 36.087 9.636 40.124 542 534 13.367 641,948

Speaal Revenue S 30.839 1.000

Capital Proiecls

Debt Service

2012 Total $ 66.926 9.B36 139,130 542.534 11 13.367 771.804

2011 Total $ 69.323 12.609 198.139 388 443 17 6.579 675.110

96.006

11 31,850

98.006

236,283 176.726 114.743 12,093 1,964 543.809 98139 26.718

351 55,516

107.931

238.634 176,726 278,190 22,719 3.338 719.607

174,211 133,332 270,592 11.726 3.928 593.789 81.321 44.270 23.935 (49.408) 18.797 100,118 107.020 $ 207.138

10.626 1,374 67.867 (36.017)

107.931

(9.925)

52 197 26 718

(37.450) (10.732) 87,407 78,793 $ 166,200 (36.017) 108.959 $ 72.942 $

(37.450) (10,732), .

(9.925) 11,023 1.098 $

8.363 8.363

41.465 207.138 $ 248.603

The accompanyinfl notes are an integral part of these financtal statements

G R A G S O \ , C A S I D A Y & Guii.i.OR^, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON. LA RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES Year Ended June 30, 2012

Total net changes in fund balances at June 30, 2012 per Statement of Revenues, Expenditures and Changes in Fund Balances The change in net assets reported for govemmental activities in the statement of activities is different because Governmental funds report capital outlays as expenditures However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense Capital outlay which is considered expenditures on the Statement of Revenues, Expenditures and Changes in Fund Balances Depreciation expense for the penod ended June 30, 2012 Govemmental funds reported bonded debt repayments as expenditures However, this expenditure does not appear in the Statement of Activities since the payment is applied against the bond payable in the Statement of Net Assets Govemmental funds report debt proceeds as revenues However, this revenue does not appear in the statement of activities since the debt IS reported in the statement of net assets Total changes in net assets at June 30, 2012 per Statement of Activities

41,465

180,936 (74,996)

105,940

22,719

(26,718) $ 143,406

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

G R A C S O N , CASIDAY & Gull.l.ou^, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON, LA STATEMENT OF NET ASSETS - PROPRIETARY FUND June 30, 2012

2012 ASSETS Current assets Cash and cash equivalents Receivables, accounts, net Prepaid insurance Total current assets Fixed assets, net of accumulated depreciation Total assets LIABILITIES Current liabilities Accounts payable Due to other funds Customer deposits Current portion of long-term debt Total current liabilities Long-term debt, net of current portion NET ASSETS Invested in capital assets, net of related debt Unrestncted Total net assets TOTAL LIABILITIES AND NET ASSETS $ _

2011

26,124 10,988 1.589 38,701 899,433 938,134

20,559 13,618 1,747 35,924 935,301 971,225

1.256 6.596 3.896 6,865 18,613 14,391

4,225 6,596 3,237 6,821 20,879 21,809

878,177 26,953 905.130 938,134 $

906,671 21,866 928,537 971,225

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

GRACSON, CASIDAY & GLn.i.om, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON, LA STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - PROPRIETARY FUND Year Ended June 30, 2012

2012 OPERATING REVENUES Water sales Sewer sen/ice charges Miscellaneous Total Operating Revenues
OPERATING EXPENSES

2011

51,997 32,217 3,337 87.551

60,115 36.463 2.248 98,826

Insurance Licenses and fees Miscellaneous Personal services Payroll taxes Postage Professional fees Repairs and maintenance Supplies Telephone Testing fees Utilities Depreciation Total Operating Expenses OPERATING INCOME (LOSS) NON-OPERATING REVENUES (EXPENSES) Interest expense INCOME (LOSS) BEFORE OPERATING TRANSFERS Operating transfers in, net CHANGE IN NET ASSETS NET ASSETS. BEGINNING NET ASSETS, ENDING

10.194

829 57
34.820 2.630

6,996 1,246

32,021 2,420

598
4.350 17.527 17.728 1,726 2,859 17,730 35,868 146,916 (59,365)

420 815
25.291 28.250

616
1,500 15,401 30,141 145,117 (46,291)

1.492 (60,857) 37.450 (23,407) 928.537 (46,291) 25,473 (20,818) 949,355

905,130

928,537

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

GRACSON, CASIDAY & Gun I.OR>, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON, LA STATEMENT OF CASH FLOWS PROPRIETARY FUND Year Ended June 30. 2012

2012 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees Net cash flows from operating activities CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES Operattng transfers in, net CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of fixed assets Proceeds from capital leases Pnncipal paid on debt Interest paid on debt Net cash flows from capital and related financing activities NET INCREASE (DECREASE) IN CASH CASH - BEGINNING CASH - ENDING Reconciliation of operating income (loss) to net cash from operating activities Operating income (loss) Adjustment to reconcile operating income (loss) to net cash provided (used) by operating activities Depreciation (Increase) decrease in receivables (Increase) decrease in prepaids Increase (decrease) in accounts payable and accrued expenses Net cash from operating activities _$ 90,339 (78,538) (34.820) (23.019)

2011 91.676 (82.561) (32.021) (22,906)

37 450

25.473

(28,630) 28,630 (7.374) (1.492) (8,866) 5.565 20.559 26.124 2.567 17,992

20,559

(59.365)

(46,291)

35,868 2.630

30.141 (7,150)

158
(2.310) (23.019)

394 (22,906)

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

GRACSON, CASIDAY & Gbii I.ORV L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON, LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1 Reporting Entity As the governing authonty of the Village, for reporting purposes, the Village of Fenton, Louisiana is the financial reporting entity The financial reporting entity consists of (a) the pnmary govemment (Village), (b) organizations for which the pnmary government IS financially accountable, and (c) other organizations for which nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete Govemmental Accounting Standards Board Statement No 14 established cnteria for determining which component units should be considered part of the Village of Fenton. Louisiana for financial reporting purposes The basic cntenon for including a potential component unit within the reporting entity is financial accountability The GASB has set forth cntena to be considered in determining financial accountability This cntena includes 1 Appointing a voting majority of an organization's governing body, and a The ability of the Village to impose its will on that organization and/or b The potential for the organization to provide specific financial benefits to or impose specific financial burdens on the Village Organizations for which the Village does not appoint a voting majonty but are fiscally dependent on the Village Organizations for which the reporting entity financial statements could be misleading if data of the organization is not included because of the nature or significance of the relationship

2 3

Based upon the application of these cntena, there are no component units included in the Village's reporting entity 2 Basis of Presentation

The accompanying basic financial statements of the Village of Fenton, LA have been prepared in conformity with governmental accounting pnnciples generally accepted in the United States of Amenca The Governmental Accounting Standards Board (GASB) IS the accepted standard setting body for establishing governmental accountmg and finanaal reportmg pnnciples The accompanying basic financial statements have been prepared in confonnity with GASB Statement 34, "Basic Financial Statements and Management's Discussion and Analysis-for State and Local Governments", issued in June 1999

Continued
GRACSON, CASIDAY & GLII.I.OK>, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON, LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Government-Wide Financial Statements The Statement of Net Assets and the Statement of Activities display information about the Village as a whole They include all funds of the reporting entity The statements distinguish between governmental and business-type activities Governmental activities generally are financed through taxes, intergovemmental revenues, and other nonexchange revenues Business-type activities are financed in whole or in part by fees charged to external parties for goods or services The statement of activities presents a companson between direct expenses and program revenues for each of the functions of the Village's governmental activities and business-type activities Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function Program revenues include (a) fees and charges paid by the recipients of sen/ices offered by the Village, and (b) grants and contnbutions that are restncted to meeting the operational or capital requirement of a particular program Revenues that are not classified as program revenues, including all taxes, are presented as general revenues Fund Financial Statements The Village uses funds to maintain its financial records dunng the year Fund accounting is designed to demonstrate legal compliance and to aid management by segregating transactions related to certain Village functions and activities A fund is defined as a separate fiscal and accounting entity with a self-balancing set of accounts The vanous funds of the Village are classified into two categones govemmental and propnetary The emphasis on fund financial statements is on major funds, each displayed on a separate column A fund is considered major if it is the pnmary operating fund of the Village or its total assets, liabilities, revenues, or expenditures of the individual govemmental and enterpnse fund is at least 10 percent of the corresponding total for all governmental and enterpnse funds of that category or type, and total assets, liabilities, revenues, or expenditures/expenses of the individual govemmental or enterpnse fund are at least 5 percent of the corresponding total for all governmental and enterpnse funds combined The Village reports the following major funds The General Fund is the pnmary operating fund of the Village It accounts for all financial resources except those that are required to be accounted for in other funds The Special Revenue Fund is used to account for specific revenues that are legally restncted to expenditures for particular purposes This fund accounts for the receipt and use of proceeds of the Village's 2% sales and use tax Continued

G R A C S O N , CASIDAY & GUII.LOR'V, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON. LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED The Capital Projects Fund is used to account for the acquisition and construction of major capital facilities other than these financed by the Enterpnse Fund The Debt Service Fund is used to account for debt proceeds utilized for capital projects The Enterprise Fund is used to account for operations (a) that are financed and operated in a manner similar to pnvate business enterpnses-vt/here the mtent of the governing body is that the costs (expenses, including depreciation) of providing goods or sen/ices to the general public on a continuing basis be financed or recovered pnmanly through user charges, or (b) where the governing body has decided that penodic determination of revenues earned, expenses incurred, and/or net income is appropnate for capital maintenance, public policy, management control, accountability, or other purposes The Village's enterpnse fund accounts for water and sewer services 3 Measurement Focus/Basis of Accounting

Measurement focus is a term used to descnbe '^A/hlch" transactions are recorded within the vanous financial statements Basis of accounting refers to "when" transactions are recorded regardless ofthe measurement focus applied Measurement Focus On the government-wide statement of net assets and the statement of activities, both governmental and business-type activities are presented using the economic resources measurement focus as defined in item b below In the fund financial statements, the "current financial resources" measurement focus or the "economic resources" measurement focus is used as appropriate a All governmental funds utilize a "current financial resources" measurement focus Only current financial assets and liabilities are generally included on their balance sheets Their operating statements present sources and uses of available spendable financial resources dunng a given penod These funds use fund balance as their measure of available spendable financial resources at the end of the penod The propnetary fund utilizes an "economic resources" measurement focus The accounting objectives of this measurement focus are the determination of operating income, changes in net assets (or cost recovery), financial position, and cash flows All assets and liabilities (whether current or noncurrent) associated with their activities are reported Proprietary fund equity is classified as net assets

Contmued

G R A C S O N , C A S I D A Y & Gbiu.ORV L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON, UK NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Basis of Accounting In the government-wide statement of net assets and statement of activities, both governmental and business-type activities are presented using the accrual basis of accounting Under the accrual basis of accounting, revenues are recognized when eamed and expenses are recorded when the liability ts Incurred or economic asset used Revenues, expenses, gams, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accmal basis of accounting Revenues are recognized as soon as they are both measurable and available Revenues are considered to be available when they are collectible within the current penod or soon enough thereafter to pay liabilities of the cun^ent penod For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal penod Expenditures (including capital outlay) generally are recorded when a liability is incurred, as under accrual accounting However, debt service expenditures are recorded only when payment is due The propnetary fund utilizes the accrual basis of accounting Under the accrual basis of accounting, revenues are recognized when eamed and expenses are recorded when the liability is incurred or economic asset used The Village applies all applicable FASB pronouncements in accounting and reporting for its propnetary fund 4 Budgets and Budgetary Accounting Budgets are adopted on a basis consistent with accounting pnnciples generally accepted in the United States of Amenca Annual appropnated budgets are adopted for all funds All annual appropnations lapse at fiscal year end Pnor to the beginning of each fiscal year, the Mayor submits a budget to the Village Alderman The budget is prepared by fund, function and activity, and includes infomiation on the past year, current year estimates and requested appropnations for the next fiscal year The Village Alderman holds public heanngs and may add to, subtract from or change appropnations, but may not change the fonn of the budget Any changes in the budget must be within the revenues and reserves estimated or the revenue estimates must be changed by an affirmative vote of a majonty of the government's council Expenditures may not legally exceed budgeted appropnations at the activity level The budget was amended twice dunng 2012 Continued

GRACSON, CASIDAY & Gun i o i n , LLP CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON, LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 5 Cash and Cash Equivalents

Cash includes amounts in demand deposits and time deposits with ongmal matunties of 90 days or less Under state law, the Village may deposit funds in demand deposits, interest-beanng demand deposits, money market accounts, or time deposits with state banks organized under Louisiana law and national banks having their pnncipal offices in Louisiana 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 secunties owned by the fiscal agent bank The market value of the pledged secunties plus the federal deposit insurance must at all times equal the amount on deposit with the fiscal agent These secunties 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, 2012, the Village has $313,864 in deposits (collected bank balances) These deposits are secured from nsk by federal deposit insurance 6 Statement of Cash Flows

For the purpose of the Statement of Cash Flows, for the enterpnse fund, the Village considers all highly liquid investments with a matunty of three months or less when purchased to be cash equivalents 7 Interfund Receivables/Payabies

Dunng 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 8 Accounts Receivable

Accounts receivable include all amounts due from the customers ofthe Village's water and sewer systems The Village provides an allowance for doubtful accounts, as needed, for accounts deemed uncollectible This amount is $3,954 as of June 30, 2012 Uncollectible amounts due for ad valorem taxes and other receivables of govemmental funds are recognized as bad debts at the time infomiation becomes available which would indicate that the particular receivable is not collectible

Continued

GRACSON, CASIDAY & Gbii lOin, L L P

CERTIFIED PUBLIC ACCOUNTANTS

30

VILLAGE OF FENTON. LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED There appears to be concentration of credit nsk with regard to general accounts receivable and more specifically accounts receivable for water and sewer user fees in the Enterpnse Fund The Village's ability to collect the amounts due from the users of the Village water and sewer system and others (as reflected on the financial statements) may be affected by significant economic fiuctuations, natural disaster or other calamity in this one concentrated geographic location
9 Use of Estimates

The preparation of the financial statements in confonnity with accounting pnnciples generally accepted in the United States of Amenca requires management to make estimates and assumptions that affect certain reported amounts and disclosures Accordingly, actual results could differ from those estimates 10 Capital Assets Capital assets, which include property, plant and equipment are reported in the applicable govemmental or business-type activities columns in the govemment-wide financial statements Capital assets are capitalized at histoncal cost or estimated cost if histoncal is not available Donated assets are recorded as capital assets at their estimated fair market value at the date of donation The costs of nonnal maintenance and repairs that do not add to the value ofthe asset or matenally extend assets' lives are not capitalized Depreciation of all exhaustible capital assets is recorded as an allocated expense in the statement of activities, with accumulated depreciation reflected in the statement of net assets Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation The range of estimated usefiji lives by type of asset is as follows Buildings, plant and improvements Equipment Transportation and equipment 10-50 years 3-10 years 5 - 7 years

In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the govemmental fund upon acquisition Capital assets used in propnetary fund operations are accounted for the same as in the government-wide statements

Continued

G R A C S O N , C A S I D A Y & Guii.i.OR'v, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON. LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 11 Compensated Absences Vested or accumulated vacation leave that is expected to be liquidated with expendable available financial resources is reported as an expenditure and a fund liability of the governmental fijnd that will pay it Amounts of vested o r accumulated vacation leave that are not expected to be liquidated with expendable available finanaal resources are reported in the general long-term debt account group No liability/expenditure is reported for these amounts Vested or accumulated vacation leave of propnetary funds is recorded as an expense and liability of those funds as the benefits accrue to employees In accordance with the provisions of Statement of Financial Accounting Standards No 43, Accounting for Compensated Absences, no liability is recognized for that portion of accumulating sick leave benefits that it ts estimated will be taken as "terminal leave" pnor to retirement At June 30, 2012 the Village's liability for compensated absences was $0 12 Long-Term Debt The accounting treatment of long-term debt depends on whether the assets are used in govemmental fund operations or propnetary fund operations and whether they are reported in the government-wide or fund financial statements All long-term debt to be repaid from governmental and business-type resources are reported as liabilities in the govemment-wide statements The long-term debt consists pnmanly of bonds Long-term debt for govemmental funds is not reported as liabilities in the fund financial statements The debt proceeds are reported as other financing sources and payment of pnncipal and interest reported as expenditures The accounting for propnetary fund long-term debt is the same in the fund statements as it is in the govemment-wide statements 13 Equity Classification In the government-wide statements, equity is classified as net assets and displayed in three components a invested in capital assets, net of related debt - Consists of capital assets including restncted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attnbutable to the acquisition, construction, or improvement of those assets Restncted net assets - Consists of net assets with constraints placed on the use either by (1) external groups such as creditors, grantors, contnbutors, or laws or regulations of other govemments, or (2) law through constitutional provisions or enabling legislation Continued

GRACSON, CASIDAY & Gun i.oio, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON, LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED c Unrestncted net assets - All other net assets that do not meet the definition of the above mentioned categones

Propnetary fund equity is classified the same as in the govemment-wide statements In the fund statements, governmental fund equity is classified as fund balance Fund balance is further classified as assigned or unassigned a Assigned fund balance - Includes fund balance amounts that are intended to be used for specific purposes b Unassigned fund balance - Includes positive fund balance within the general fund which has not been classified within the above mentioned categones 14 Sales Taxes Proceeds of a 2 % sales and use tax levied by the Village of Fenton, LA are dedicated for the maintenance and overlay of streets and capital outlay 15 Revenues, Expenditures, and Expenses Program Revenues Program revenues included in the Statement of Activities are denved directly from the program itself or from parties outside the Village's taxpayers or citizenry, as a whole, program revenues reduce the cost of the function to be financed from the Village's general revenues Revenues Ad valorem taxes and the related state revenue shanng are recorded in the year taxes are due and payable Ad valorem taxes are assessed on a calendar year basis, become due on November 15 of each year, and become delinquent on December 31 The taxes are generally collected in December, January and February of the fiscal year Sales taxes are considered as "measurable" when in the hands of sales tax collector and are recognized as revenue at that time Interest on interest-beanng deposits IS recorded or accrued as revenues when earned Substantially all other revenues are recorded when received Expenditures The Village pnmary expenditures include salanes and insurance, which are recorded when the liability is incurred Capital expenditures and purchases of vanous operating supplies are regarded as expenditures at the time purchased Continued

GRACSON, CASIDAY & GUII.LOR>, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON. LA NOTES TO FINANCIAL STATEMENTS June 30. 2012 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Other Financing Sources Transfers between funds that are not expected to be repaid are accounted for as other financing sources (uses) when the transfer is authonzed by the Village 16 Subsequent Events Management has evaluated subsequent events through November 20, 2012, the date the financial statements were available to be issued 17 Comparative Data Comparative totals for the pnor year have been presented in the accompanying financial statements, although not on every statement, in order to provide an understanding of changes in the governments financial position and operations NOTE B - PROPERTY TAXES Taxes were levied on property as follows Millaoe General corporate purposes 8 32 Assessed Valuations $ 991,583

Property tax millage rates are adopted in July ofthe calendar year in which the taxes are levied and recorded All taxes are due and collectible when the assessment rolls are filed on or before November 15th of the current year, and become delinquent after December 31st Property taxes not paid by February 28th are subject to property lien NOTE C - LONG-TERM LIABILITIES The following is a summary of changes in long-term liabilities of the Village of Fenton, LA Beginning of Year Governmental Activities Bonds payable $ 41,851 Other Liabilities Capital Lease Obligations 33,597 Governmental Activities Long-Term Liabilities 75.448 Business Type Activities Capital Lease Obligations 28.630 Total $104,078 $ Issued Retired $ (10,626) (12.093) (22,719) $ End of Year 31.225 48.222 79.447 21.256 $ 100.703 Due Within One Year $ 10.833 15.994 26,827 6.865 S 33.692 Continued

26.718 26,718

_ (7.374) 26.718 $ ^30.093)

G R A C S O N , C A S I D A Y & Guii.LOin, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON, LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE C - LONG-TERM LIABILITIES - CONTINUED The payments on the bonds payable are made by the Special Revenue Fund The capital lease obligations liability will be paid by the General Fund and Enterpnse Fund General obligation bonds and capital lease obligations are compnsed of the following individual issues General obligation bonds $47,500 2004 Public Revenue Bonds due in monthly installments of $238, including interest at 4 25% through December 15. 2034, serviced by excess revenues of the Village The Village is required to maintain a resen/e and a contingency account as required by the USDA Rural Development Loans However, the Village does not maintain such resen/e accounts nor has any monetary deposits been made to such accounts Capital lease obligations $22,135 capital lease dated July 2, 2010, due in monthly installments of $512 through June 2, 2014, interest at 6 0%, collateral of a 2010 Dodge Charger $22,135 capital lease dated July 2, 2010, due in monthly installments of $512 through June 2, 2014, interest at 6 0%, collateral of a 2010 Police Charger $28,630 capital lease dated June 30, 2011, due in monthly installments of $663 through June 1, 2015, interest at 6 0%, collateral of a 2011 Chevrolet Crew Cab $26,718 capital lease dated May 1, 2012, due in monthly installments of $503 through Apnl 1, 2017. interest at 5 5%, collateral of a 2012 Chevrolet Police Tahoe $

31,225

11,514

11,513

21,256

25.195 100.703

Continued

GRACSON, CASIDAV & GUILLORY, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON. LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE C - LONG-TERM LIABILITIES - CONTINUED The annual requirements to amortize all debt outstanding, including interest Year ending June 30.
2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2032 2033-2035 $ 37,155 35,432 22,944 6,039 7.889 14.273 14,273 14,273 7.135

The Village leases vehicles under capital leases The economic substance of the lease is that the Village is financing the acquisition of the assets through the lease, and accordingly, it is recorded on the Village's assets and liabilities The following is an analysis of the leased assets included in property and equipment Governmental Activities Transportation equipment Less accumulated depreciation Business Type Activities Transportation equipment Less accumulated depreciation $ $ $ $ 70,988 18.599 52.389 28,630 5.726 22.904

GRACSON, CASIDAY & GUII.LORV L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON, LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE D - CAPITAL ASSETS A summary of changes in capital assets for the year ended June 30, 2012 follows
6/30/2011 Governmental activities Land $ Buildings and improvements Fumiture and equipment Transportation
Equipment

Additions $ 33.165 29.980 22.147 67,669 107.931 260,892 $

Deletions $ (79.956) (79.956)

6/30/2012 35,065 803,270 218,412 211,061 37.900 1.305,708

1,900 773,290 196,265 143,392 9.925 1,124,772 for 140,915 99.981 68.218 309.114

Construction in progress Totals at histoncal cost

Less accumulated depreaation Buildings and improvements Fumiture and Equipment Transportation Equipment _ Total accumulated depreciation Govemmental activities capital assets. Net Business Type Activities Land Buildings and plant Transportation equipment Fumiture and equipment Totals at histoncal cost

32.188 18.597 24.211

. .

173.103 118,578 92.429 384.110 921.598

74.996 $ 185.896

815 658
14,790

1,399.552
28,630

14,790 1.399,552 28.630

249
1,443,221 for 507,671 249 507.920 935,301 35.868

249
1.443.221

Less accumulated depreciation Buildings and plant Transportation equipment Furniture and equipment Total accumulated depreciation Business-type activities capital assets, net S

30.142 5,726

537.813 5,726 249

543.788

35868

% ^

$ $ S_

899.433

Depreaation expense was charged to govemmental activities as follows General and administrative Police Total The construction in progress consists of the following projects Total Budgeted $ 108,209 (1) 178.361 (2) Construction In Progress $ 10,474 27.426 $ 37.900

54.150 20.846 74.996

Sewer system improvements Emergency generators Total

s 2msm

(1) $104,800 to be funded from grant funds (2) 100% to be funded from grant funds

GRACSON, CASIDAV & GUILLOIO, L L P CERTIFIED PUBLIC ACCOUNTANTS

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VILLAGE OF FENTON, LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE E - RISK MANAGEMENT The Village is exposed to vanous nsks of loss related to torts, theft of. damage to and destruction of assets, errors and omissions, injunes to employees, and natural disasters The Village maintains commercial insurance coverage covenng each of those nsks of loss Management believes such coverage is sufficient to preclude any significant uninsured losses to the Village Settled claims have not exceeded this commercial coverage in any ofthe past three fiscal years NOTE F - CONTINGENCIES The Village participates in a number of federal and state grant programs that are either partially or fully funded by grants received from other governmental units Such grants are subject to audit by the grantor agencies which could result in requests for reimbursement to the granting agency for expenditures that are disallowed under the terms of the grant Based on past expenence. the Village believes that any disallov^ed costs as a result of such audits will be immatenal NOTE G - PER DIEM Each council member receives monthly compensation The following is a list of council members and their compensation for the fiscal year ended June 30, 2012 E Alfred, Sr W Lemelle M Jones 3,600 3.600 3.600 $ 1Q-8QQ $

The compensation paid to the Mayor for the year ended June 30, 2012 is as follows E Alfred. Jr NOTE H -AGING OF ACCOUNTS RECEIVABLE Aging of Accounts Receivable - propnetary fund as of June 30, 2012 are as follows 0-30 Days $10,988 31-60 Days $ $ 61-90 Days over 90 Days $ Total $ 10,988 $ 30.000

NOTE I - SUBSEQUENT EVENT There is an ongoing investigation by the State of Louisiana Legislative Auditor that is not complete as ofthe date ofthe audit report, November 20. 2012 and the effect on the financial statements as of November 20. 2012 is not known

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VILLAGE OF FENTON, LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE J - SCHEDULE OF INSURANCE COVERAGE The schedule of insurance coverage as of June 30, 2012 is as follows Limits Automobile liability Commercial general liability Premises/Operations $500,000 bodily injury and physical damage $500,000 per occurrencebodily injury and physical damage $500,000 in the aggregatebodily injury and physical damage $1,000 per person $10,000 per accident $50,000 per occurrence $150,000 building $20,000 contents $10,000 $100,000/$500.000/$100,000 Expiration Date March 19, 2013

March 19, 2013

Products/Completed operation

March 19,2013 March 19,2013 March 19.2013

Medical payments

Fire legal liability Commercial property

July 15, 2012 May 19. 2013 September 24, 2012

Surety bond Workers compensation

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VILLAGE OF FENTON, LA NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE K- SCHEDULE OF RATES AND NUMBER OF CUSTOMERS At June 30, 2012, the number of customers were as follows Residential - 165 Commercial 5 The schedule of rates for the proprietary fund is as follows
Sewer

Residential -In-town

Out-of-town

$12 50, first 2,000 gallons 2 00 per 1,000 gallons thereafter, up to 10,000 gallons 1 00 per 1,000 gallons afier 10,000 gallons $15 00. first 2,000 gallons 2 00 per 1,000 gallons thereafter, up to 10,000 gallons 1 00 per 1,000 gallons after 10,000 gallons $15 00, first 2,000 gallons 2 OOper 1,000 gallons thereafter, up to 10,000 gallons 1 00 per 1,000 gallons after 10,000 gallons

Commercial

Water Residential -In-town -Out-of-town $12 50 first 2,000 gallons 1 00 per 1,000 gallons thereafter $15 00 first 2,000 gallons 1 00 per 1,000 gallons thereafter

Commercial -In-town

$18 00 first 2,000 gallons 1 00 per 1,000 gallons thereafter $20 00 first 2.000 gallons 1 00 per 1.000 gallons thereafter

-Out-of-town

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REQUIRED SUPPLEMENTAL INFORMATION

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VILLAGE OF FENTON, LA BUDGETARY COMPARISON SCHEDULE - GENERAL FUND AND SPECIAL REVENUE FUND Year Ended June 30, 2012 General Fund Vanance Favorable (Unfavorable) $ (9,388) 7,409 (48,040) (3,820) 13.367 (40,472)

Budget Ongmal Revenues Taxes Licenses and permits Intergovemmental Fines Miscellaneous Interest Total revenues Expenditures Current General govemment Public safety Capital outlay Debt service Pnncipal Interest Total expenditures Excess (deficiency} of revenues over Expenditures other finanong sources (uses) Proceeds from borrowing operating transfers m operating transfers out Total other finanang sources (uses) Excess (deficiency) of revenues and other sources over expenditures and other uses Fund balance at beginning of year Fund balance at end of year
Si

Final

Actual

43.600 2,500 63,600 300,000 5,600 415,300

45.475 2,427 40.124 590.674 3.820 682,420

36,087 9.836 40.124 542,534 13.367 641,948

192.175 153.325 61,500

219,461 183,020 81,261

238,283 176,726 114,743 12,093 1,964 543,809

(18.822) 6.294 (33,482) (12,093) (1.964) (60.067)

407.000

483.742

8.300

198,678

98,139

(100,539)

26,718 (37,450) (10,732)

26.718 (37.450) (10.732)

8,300 78,793

198,678 78,793

87,407 78,793

(111,271)

$
g

87.093

277,471

_$

166,200

(111.271)

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Speaal Revenue Fund

Budget Original $ 35,000 $ Final 30,035 1.000 $ Actual 30,839 1,000 Vanance Favorable (Unfavorable) $ 804

35,000

11 815

;
31,035

11 31,850

320 20,000 12.000 32,320

254 54.770 12,000 67.024

351 55,516 10,626 1.374 67,867

(97) (746) 1,374 (1.374) (843)

2,680

(35,989)

(36.017)

(26)

2,680 108.959 _ $ _ 111,639 $_

4,000 (746) 3,254 (32,735) 108,959 76,224 $

(36.017) 108,959 72.942 $

(4.000) (746) (4,746) (4,774)

(4.774)

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W GEORGE GRAGSON C P A

G R A G S O N , CASIDAY & GUILLORY, L.L.R

CERTIFIED P U B L I C A C C O U N T A N T S

RICHARD W C : A S I D A Y

CPA

RAVMOND GUILLORY JR C P A GRAHAM A PORTUS E A COY T VrNCENT C P A MICHELLE LEE C P A BRADLEY J CIASIDAY C P A C V A JUUA W PORTUS C P A KATHRYN BLESSINGTON C P A JACKLYN BRANEFF C P A

INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS November 20, 2012 The Village Council Village of Fenton, Louisiana We have audited the financial statements of the governmental activities, the business-type activities and each major fund of the Village of Fenton, LA, as of and for the year ended June 30, 2012, which collectively compnse the Village of Fenton, LA's basic financial statements and have issued our report thereon dated November 20, 2012 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 the Comptroller General ofthe United States Internal Control Over Financial Reporting Management of the Village is responsible for establishing and maintaining effective internal control over financial reporting In planning and performing our audit, we considered Village of Fenton, LA'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 Village of Fenton, LA's internal control over financial reporting Accordingly, we do not express an opinion on the effectiveness of the Village of Fenton, LA's t nternal 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 the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis A matenal weakness is a deficiency, or a combination of deficiencies, in intemal control such that there is a reasonable possibility that a matenal misstatement of the entity's financial statements will not be prevented, or detected and corrected on a timely basis Our consideration of intemal control over financial reporting was for the limited purpose descnbed in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or matenal weaknesses We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above However, we identified certain deficiencies in internal control over financial reporting, descnbed in the accompanying schedule of findings and responses that we consider to be significant deficiencies in internal control over financial reporting as item 2012-1 A significant deficiency is a deficiency, or a combination of deficiencies, in intemal control that is less severe than a matenal weakness, yet important enough to merit attention by those charged with governance

145 EAST STREET P O DRAWER IB47 LAKE CHARLES LOUISIANA 706O2 1847 TEL (3371439 t9S6 F A X ( 3 3 7 ) 4 3 9 1366

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Village of Fenton, Louisiana November 20. 2012 Page Two Compliance And Other Matters As part of obtaining reasonable assurance about whether the Village of Fenton, LA's financial statements are free of matenal misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Govemment Auditing Standards and which are described in the accompanying schedule of findings and responses as items 2012-2, 2012-3 and 2012-4 Village of Fenton, LA's response to the findings identified in our audit are descnbed in the accompanying schedule of findings and responses We did not audit Village of Fenton, LA's response and, accordingly, we express no opinion on it This report is intended solely for the information and use of management and the Council and is not intended to be and should not be used by anyone other than these specified parties Under Louisiana Revised Statute 24 513, this report is distnbuted by the Legislative Auditor ofthe State of Louisiana as a public document

j l , ^ ^ ^ C ^ t ^:i<^

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VILLAGE OF FENTON, LA SCHEDULE OF FINDINGS AND RESPONSES Year Ended June 30, 2012 Summary of Auditors' Results Financial Statements Type of auditors' report issued unqualified Intemal control over financial reporting Matenal weaknesses(es) identified'? Control deficiency(s) identified that are not considered to be matenal weakness(es)'? Noncompliance matenal to financial statements noted'?

yes X yes yes

no none reported

no

Findings Relatino To The Financial Statements Which Are Required To Be Reported In Accordance With Generally Accepted Governmental Auditing Standards Finding 2012-1; Inadequate Segregation of Duties Condition Because of the small size of the Village's office staff, the opportunity for segregation of duties is limited Effective internal control requires adequate segregation of duties among entity personnel Without proper segregation of duties, misstatements in amounts may occur and not be detected within a timely penod by employees in the normal course of performing their assigned functions To the extent cost effective, duties should be segregated and management should attempt to mitigate this weakness by supervision and review procedures

Effect

Recommendation

Corrective Action Planned Management has responded that it does not believe that it is cost effective to employ adequate personnel to achieve appropriate segregation of duties Management has implemented supervision and review procedures such as review and approval of supporting documents related to expenditures, review listings of revenue received and review of bank reconciliations on a monthly basis Finding 2012-2: Budgetary Authority and Control Condition Inadequate budgeting procedures resulted in general fund revenues being under budget by 5% or more and general government expenditures being over budget by 5% or more Inadequate budgeting procedures Continued
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VILLAGE OF FENTON. LA SCHEDULE OF FINDINGS AND RESPONSES - CONTINUED Year Ended June 30, 2012 Effect Cause Violations of Louisiana Revised Statute 39 1310 Administrative lack of oversight The budget was amended twice dunng the year, however, a violation still occurred The Village should review actual revenues and expenditures on an intenm basts and amend the budget if necessary

Recommendation

Corrective Action Planned The Village agrees with the finding and will implement the recommendations Finding 2012-3: Prohibited Transaction Condition The Village entered into three transactions involving dirt work dunng the year totaling $6,779 with an immediate family member, a brother of a councilman Per LRS 42 1113 A(1)(a) no member of a public servant's immediate family shall enter into any contract that is under the junsdiction of the agency of such public servant Violations of Louisiana Revised Statute 42 1113 Administrative and management lack of oversight The Village should terminate any contract with such family member Also, Village should strengthen controls to detect and ensure future compliance

Cntena

Effect Cause Recommendation

Management Response/Corrective Action Planned Management agrees with finding Controls have been improved to ensure fijture compliance with LRS 42 1113 Effective January 1, 2013, the councilman will no longer be on the Village Council Finding 2012-4: Bond Covenant Violation Condition The Village is required to maintain a reserve and a contingency account as required by the general obligation USDA Rural Development Loan However, the Village does not maintain such reserve accounts nor has any monetary deposits been made to such accounts Violation of loan covenant

Effect

Continued
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VILLAGE OF FENTON, LA SCHEDULE OF FINDINGS AND RESPONSES - CONTINUED Year Ended June 30, 2012 Cause Administration and management's determination of lack of sufficient cash fiows and available funds The Village should become compliant with loan covenant required reserves

Recommendation

Management Response/Corrective Action Planned Management agrees with finding The Village will fund the required reserves as soon as excess unrestricted funds become available without putting the Village into a financial bind - Federal Award Findings and Questioned Costs -N/A IV - Prior Year Audit Findings Finding 2011-1: Inadequate Segregation of Duties Condition Because of the small size of the Village's office staff, the opportunity for segregation of duties is limited Effective internal control requires adequate segregation of duties among entity personnel Repeat finding in 2012

Status Finding 2011-02:

Budgetarv Authority and Control Condition Inadequate budgeting procedures resulted tn General Fund revenues being under budget by 5% or more and Special Revenue Fund expenditures being over budget by 5% or more Repeat finding in 2012

Status Finding 2011-03: Public Bid Law Condition

The Village purchased three vehicles (an administrative vehicle, a police vehicle and a public works vehicle) at vanous times dunng the year and failed to comply with the public bid law (LSA-RS 38 2211-2251) Each vehicle cost less than $30,000 but more than $10,000 and three quotes were not obtained pnor to purchase, as required Satisfactonly corrected

Status

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