THEAS'TWATERWORKSD STRIC'T

Transcription

1 37/,"J'P384fl:I THEAS'TWATERWORKSD STRIC'T sou Nu~. R S~OFVER BER2 ~ILION, OFTsIS'sTEA~OFLOUISIANA yearendeddecembe~1,196 FinancialReport

2 TABLEOFCONTENTS INDEPENDENTAUI)ITOR'SREPORT GENERALPURPOSEFINANCIALSTATEMENTS ProprietaryFundType-UtilityFund: Comparativebalanceshets Comparative.';tatementsofrevenues,expenses Comparativestatementsofcashflows [Notestofinancialstatements andchanges~nretainedearning INTERNALCONTROL,COMPLIANCEANDOTHERGIh~NTINFORMATION IndependentAuditor'sReportonIntelnalControl StructureBasedonanAuditofGeneralPurpose FinancialStatementsPerformedinAcordancewith [IndependentAuditor'sReportonComplianceBased GovernmentAudltin~Standards onanaudit:ofgeneralpurposefinancialstatements PerformedinAcordancewith IndependentAuditor'sReportonInternalControl Standards StructureUsedinAdministeringFederalFinancial IndependentAuditer'sReportonCompliancewiththe AsistancePrograms SpecificRequirementAplicabletoMajorFederal IndependentAuditor'sReportonCompliancewiththe FinancialAsistanceProgram GeneralRequirementAplicabletoMajorFederal IndependentAnditor'sReportonScheduleofFederal FinancialAsistanceProgram ScheduleofFederalFinancialAsistance FinancialAsistance OTHERSUPLEMENTARYINFORMATION Scheduleofwaterexpenses Scheduleofgenera],andadministzativexpenses Scheduleofnumberofutilitycustomers(unaudited) Scheduleofinsuranceinforce(unaudited) Page

3 EusmeIt.Dam~.,~A.RC.t~190 IL"+~,xFS~k~.~pA l~,im)"r.pdcrl+k,cpa CIaylonEl[~rn~U,(~A EugeneI,Omu.lil.CPA U<yOP+DO~'.Jr.CPA C~dl.'.m-~nd~,CPA P+tlD.Bthm,CPA Stq+AameM.lip~inlmlm,eta )mhkent.ra,u,cp* JcturJI+$.Z,legIcLCPA StCl)h~ILebdcr,Ml~kCPA ChtbA-M.LO~,CPA AJ~nM.TIyl~',CPA ~nceklk"f,cpa ChrmtncA.;~Ul~enT.CPA )olinp./~+r~to.cpa ~ocng.m~.cp* ~urnpcnrdson,cpa "[afa~l~ry,cpa DARNAL,SIKES&FREDERICK (ACORPORATIONOFCERT1HEDPUBLICACOUNTANTS) INDEP~NDENTAUDITOR'SREPORT TheBoardofComisioners SoutheastWaterworksDistrictNumber2 oftheparishofvermilion,stateoflouisiana Abevile,Louisiana ~ahy~(r,la"~oso8 018)212~12 2)1[t~+clA*e.~ (~ls)4~ S~rA~nu~ S~a+:sOl Mcq~mCity,IJ~7o~o tsc4)~it46~64 404~Mesm Ahcvtlk,I~70510 Ola)89'.SO 201+.t+c~h+im,.e (~1.)4~s64 Wehaveauditedtheacompanyingeneralpurposefinancialstatementsofthe SoutheastWaterworksDistrictNumber2oftheParishofVermilion,Stateof Louisiana(theDistrict),acomponentunitoftheVermilionParishPoliceJury,as ofandfortheyearendeddecember31,196,aslistedinthetableofcontents. ThesegeneralpurposefinancialstatementsaretheresponsibilityoftheDistrict's management.ouresponsibilityistoexpresanopiniononthesegeneralpurpose financialstatementsbasedonouraudit. Weconductedourauditinacordancewithgeneralyaceptedauditing standards;governmentaudltin~standards,isuedbythecomptrolergeneralofthe UnitedStatesandtheprovisionsofOficeofManagementandBudgetCircularA-12~, "AuditsofStateandLocalGovernments".~hosestandardsm~dOM5CircularA-I~S requirethatweplanandperformtheaudittoobtainreasonableasuranceabout whetherthegeneralpurposefinancialstatementsarefreofmaterialmistatement+ Anauditincludesexamining,onatestbasis,evidencesuportingtheamountsat~d w disclosuresinthegeneralpurposefinancialstatements.anauditalsoincludes asesingtheacountingprinciplesusedandsignificant;estimatesmadeby management,aswelasevaluatingtheoveralgeneralpurposefinancialstatement pre:;entation.~ebelievethatourauditprovidesareasonablebasisforour opinion İnouropinion,thegeneralpurpose presentfairly,inalmaterialrespects, WaterworksDistrictNumber2oftheParish financialstatementsreferedtoabove thefinancialpositionofthesoutheast ofvermilion,stateoflouisiana,asof December31,196,andtheresultsofitsoperationsandcashflowsfortheyear thenendedinconformitywithgeneralyaceptedacountingprinciples. InacordancewithGovernmentAudltlnmStandards.wehavealsoisued datedjunei0,197,onourconsiderationofthedistrict'sinternal structureandareportdatedjunei0,197,onitscompliancewith regulations. areport control lawsand MEMBERor AMERICANINSTITtrl]EOf CERTIFIEDPUBUCACOUNTANT~ $0C1~E31~OFLOUISIANA CERTIFIEDPUBUCACOUNTANT~.

4 purposefinancialstatementsofthesoutheastwaterworksdistrictnumber2ofthe ParishofVermilion,StateofLouisiana,takenasawhole.Theacompanying Ouraudit:wasconductedforthepurposeoforminganopiniononthegeneral financialinformationlistedas"othersuplementaryinformation"inthetableof contentsispresentedforpurposesofaditionalanalysisandisnotarequiredpart ofthegeneralpurposefinancialstatementsofthesoutheastwaterworksdistrict NuJnber2oftheParishofVermilion,StateofLouisiana.Suchinformation,except fo:~theportionmarked"unaudited",onwhichwexpresnoopinion,hasben subjectedtotheauditingproceduresapliedintheauditofthegeneralpurpose financialstatementsand,inouropinion,isfairlystatedinalmaterialrespects inrelationtosuchgeneralpurposefinancialstatementstakenasawhole. comparativepurposes,wastakenfromthefinancialreportforthatyearinwhichwe expresedanunqualifiedopiniononthefinancialstatementsofthesoutheast Thefinancialinformationfor~leprecedingyear,whichisincludedfor WaterworksDistrictNumber2oftheParishofVermilion,StateofLouisiana. Darnal,Sikes&Frederick ACorporationofCertifiedPublicAcountants Abevile,Louisiana Junei0.197

5 GENERALPURPOSEFINANCIALSTATEMENTS

6 ASETS SOUTHEASTWATERWORKSDISTRICTNUMBER2 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA ProprietaryFundType UtilityFund Curentasets: Cash Acountsreceivable [Federalgrantreceivable Totalcurentasets ComparativeBalanceShets December31,196and195 Restrictedasets: Revenuebondsinkingfund- Interest-bearingdeposits Waterworksreservefund- Interest-bearingdeposits Waterworkscontingencyfund Interest-bearingdeposits Securitydepositfundo Interest-bearingdeposits Totalrestrictedasets Property,plant:andequipment: Property,plantandequipmentatcost 'netofacumulatedepreciation Intangibleasets: Bondisuecosts,netofcumulative uamortization(196-$583) Organizationcosts,netofcumulative amortization(196-$375) Totalintangibleasets Totalasets _ $30,520 25,026 _2,634-58,180 25,84 1, _I, $30, _2,508,592,60,0(~ _2, ,2 $2,612,906$3,054,081 Theacompanyingnotesareanintegralpartofthistatement

7 Liabilities: LIABILITIESANDFUNDEQUITY Curentliabilities(payablefromcurentasets) Acountspayable Payroltaxes Othercurentliabilities 8,62 Curentportionoflong-termdebt 2,065 Acruedinterestpayable 6,40 $ Constructioncontractspayable 3, Totalcurentliabilities(payablefrom Curentliabilities(payablefromrestrictedasets)- curent:asets) _.43,83Z 4!8, Long-termliabilities- Customerdeposits Revenuebondspayable Fundequity: Totaliabilities _835, , _I 794,0 Contributedcapital- Retainedearnings Waterworksdistrictcustomers Federalgrants 41,40 Unresel~ed 1,764,0 Totalfundequity _L27,630) ,40 Totaliabilitiesandfundequity $21612,906 1,7,70 1,841,40 $3,054,081

8 SOUTHEASTWATERWORKSDISTRICTNUMBER2 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA ProprietaryFundType UtilityFund Con~arativeStatementsofRevenues,Expensesand ChangesinRetainedEarnings FortheYearsEndedDecember31.196and195 Operatingrevenues: Chargesforservices- Watersales Conectionfes Totaloperatingrevenues Operatingexpenses: Waterexpenses Generalandadministrativexpenses Total.operatingexpenses Operatinglos Nonoperatingincome(expenses) Interestincome Miscelaneousincome Refunds Interestexpense Totalnonoperatingincome(expenses) Netlos Ad:Depreciationonfixedasetsacquired byeapitalgrantsexternalyrestricted forcapitalacquisitionsandconstruction thatreducescontributedcapital Decreaseinretainedearnings Retainedearnings,begining Retainedearnings,ending $139,978 6, ,169 82, _152,681 _(6,512) 1, (165) _C58,539) _(57,18) (63,630) _36,0 (27,630) $ $(27,630) Theacompanyingnotesareanintegralpartofthistatement 6

9 Netlos Adjustmentstoreconcilenetlostonet cashprovidedbyoperatingactivities- Depreciation Amortization (Increase)decreaseingrantreceivables (Increase)inacountsreceivable Increaseinothercurent]labilities Increaseinacountspayable Increaseinacruedliabilities Increaseincustomerdeposit Increase(decrease)inconstructioncontracts payable Totaladjustments L(65,630)$ 49, 404, (25,7,8,2, ) ,053) _9,435 (406,743) Ii,938 Netcashprovidedbyoperatingactivities _.35,805.12,93~ CASHFLOWSFROMINVESTINGACTIVITIES: Purchaseofproperty,plantandequipment Netcash(used)byinvestingactivities CASHFLOWSFROMFINANCINGACTIVITIES: Procedsfromfederalgrants Procedsfromsaleofrevenuebonds Procedsfromconectioncharges Paymentofbondisueandorganizationalcosts Netcashprovidedbyfinancingactivities Netincreaseincash Cash,beginingofperiod Cash,endofperiod _.(5,538).(2,60,0) _(5,538).(2,60,0Q) 30,267 _30,I16 1,80,0 794,0 41,40 (17,2.Z) 2618,178 30,16 $60,383$30,16 Suplementaldisclosuresofcashflowinformation: Cashpaiduringtheyearfor: Interest $35,730 Theacompanyingnotesareanintegralpartofthistatement

10 OFTHEPARISHOFVERM]I~ON,STATEOFLOUISIANA SOUTHEASTWATERWORKSDISTRICTNUMBER2 ProprietaryFundType ComparativeStatementsofCashFlows Util~t~Fund~ FortheYearsEndedDecember31,196and].95 Reconciliationofcash Cash,begining: flowstothebalanceperstatementofcash shet: Cash-unrestricted Interest-bearingdeposits-unrestricted Interest-bearingdeposits-restricted $30,16 Totalcash $30,16$ Cash,ending: Cash-unrestricted Interest-bearingdeposits-unrestricted Interest-bearingdeposits-restricted $30 30,20 Totalcash _.29,863 $60,383 $ 30,16 $30,16

11 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA SOUTHEASTWATERWORKSDISTRICTNUMBER2 NotestoFinancialStatements (i) SumaryofSignificantAcountingPolicies StateofLouisiana(theDistrict),whichisacomponentunitoftheVermilion ParishPoliceJury,wascreateduridertheprovisionsofLouisianaRevised TheSoutheastWaterworksDistrictNumber2oftheParishofVermilion, Statutes3:381,forthepurposeofprovidingwatertotheruralareasof VermilionParish.TheDistrictisgovernedbyabosrdofcomisioners composedofivemembersapointedbythevermilionparishpolicejury. generalyaceptedacountingprinciplesasaplicablet:ogovernments.such acountingandreportingproceduresalsoconformtothe~ndustryauditguide, TheacountingandreportingpoliciesoftheDistrictconformto AuditsofStateandLocalGovernmentalUnits A.FinancialReDortineEntity Thefolowingisasumaryofcertainsignificantacountingpolicies bythedistrict'sboardofcomisionersandcontroledbythevermilion ParishPoliceJury.Theacompanyingfinancialstatementspresent Thisreportiscomprisedofaproprietaryfundthatisadministered informationonlyontheproprietaryfundmaintainedbythedistrictand donotpresentinformationonthevermilionparishpolicejuryandthe B.bevelo~entSta~ generalgovernmentalservicesprovidedbythatgovernmentalunit. waterworksystemandoperationscomenced.fortheyearendeddecember 31,195,therewerenoincomeand/orexpensesfromoperationstobe AsofMarchI,196theDistrictcompletedtheconstructionofthe reflectedonthestatementofrevenues,expenses,andchangesin retainedearnings;therefore,therewasnoinformationpresentedfo~ comparativepurposes.thedistrictwasconsideredtobeadevelopment C.FundA_Ac_q_counti_i~ stagenterpriseatdecember3[,195. proprietaryfund,ofwhichtherexistsonlyanenterprisefund. Enterp:cisefundsareusedtoacountforoperations(a)thatare TheacountsoftheDistrictareorganizedonthebasisof financedandoperatedinamanersimilartoprivatebusines enterprises-wheretheintentofthegoverningbodyisthathecosts (expenses,includingdepreciation)ofprovidingodsorservicestothe generalpubliconacontinuingbasisbefinancedorecoveredprimarily throu~]usercharges;or(b)wherethegoverningbodyhasdecidedthat periodicdeterminationofrevenuesearned,expenses~ncured,and/ornet incomeisapropriateforcapitalmaintenance,puhlicpolcy,management control,acountability,orotherpurposes.

12 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA SOUTHEASTWATERWORKSDISTRICTNUMBER2 NotestoFinancialStatements D.FixedAsetsandLonE-Termliabilities measurementfocus. andlong-termliabilitiesasociatedwithafundaredeterminedbyits Theacountingandreportingtreatmentapliedtothefixedasets "capitalmaintenance"measurementfocus,andalbsetsandliabilities (whethercurentornoneurent)asociatedwithitsactivitiesare Theproprietaryfundwilbeacountedforonacostofservicesor includedonitsbalanceshet. fundwilbechargedasanexpenseagainstitsoperations.depreciation wilbeprovidedoverthestimatedusefulivesoftheasetsusingthe Depreciationofalexhaustiblefixedasetsusedbytheproprietary Buildings straight-linemethod.~estimatedusefulivesareasfolows: UtilitySystemandImprovements E.BasisofAceountin~ Equipment years recognizedintheacountsandreportedinthefinancialstatements. Basisofacountingrelatestothetimingofthemeasurementsmade, Basisofacountingreferstowhenrevenuesandexpensesarc regardlesofthemeasurementfocusaplied. acountingwherebyrevenuesarerecognizedwhentheyareearnedand expensesarerecognizedwhenincured. Theproprietaryfundisacountedforusingtheacrualbasisof F.Interest-Bearin~Deposits market.alshort-terminvestmentsthatarehighlyliquidare consideredtobecashequivalents.cashequivalentsarereadily %nterest-hearingdepositsarestatedatcost,whichaproximates eonw~rt:ibletoknownamountsofcash,andathedateofpurchase,they C.FundE_quitv haveamaturitydatenotlongerthanthremonths. receivedcapitalgrantsorcontributionsfromdevelopers,customersor otherfunds. Contributedcapitalisrecordedinproprietaryfundsthathave l0

13 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA SOUTHEASTWATERWORKSDISTRICTNUMBER2 NotestoFinancialStatements H.CapitalizationofInterestE~>ense interestresultingfromborowingsacountedforintheproprietaryfund inthecourseoftheconstructionofixedasets.atdecember31,196 ItisthepolicyoftheDistrictocapitalizematerialamountsof and195,$-0-and$8,152respectfuly,wasrecordedascapitalized I.RestrictedAsets interestexpenseinthefinancialstatements. certainresourcessetasidesfortheirepayment,areclasifiedas restrictedasetsonthebalanceshetbecausetheiruseislimitedby Certainprocedsofenterprisefundrevenuebonds,aswelas aplicablebondcovenants.~e"revenuebondsinkingfund"isusedto setasideresourcesnecesarytometanualdebtservicerequirements. The"WaterworksReserveFund"isusedtosegregatefromoperations, fundsequaltofivepercentof'theoriginalbondisuance.thesefunds servetopreventhedistrictfromdefaultingondebtservicepayments intheventofdeficienciesinutilityoperations.the"waterworks ContingencyFund"reportsresourcessetasidetometunexpected contingenciesortofundsignificantasetreplacementsorrepairs. "CustomerDeposits"representadvancedepositsreceivedfromwater customerswhichshalbeitherefundeduponterminationofservicesor J.ComparativeData apliedtowardbilingsinarears. acompanyingfinancialstatementsinordertoprovideanunderstanding ofchangesinthedistrict'sfinancialpositionandoperations. Comparativetotaldatafortheprioryearhaw~benpresentedinthe K.UseofEstimates generalaceptedacountingprinciplesrequiresmanagementomake estimatesandasumptionsthatafecthereportedamountsofasetsand Thepreparationofthefinancialstatementsinconformitywith liabilitiesathedateofthefinancialstatementsandthereported amountsofrevenuesandexpensesduringthereportingperiod.actual L.VacationandSickLeave resultscouldiferfromthosestimates. earnedaysdonotvest;therefore,noliabilityhasbenrecordedin theacompanyingfinancialstatements.thedistrict'spolicyisto EmployesoftheDistrictarentitledtoaonewekvacation.The recognizethecostofcompensatedabsenceswhenactualypaidtothe employes. 1

14 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA SOUTHEASTWATERWORKSDISTRICTNUMBER2 NotestoFinancialStatements (2) CashandInterest-BearinmDeposits bankorganizedunderthelawsofthestateoflouisiana,thelawsofany otherstateintheunion,orthelawsoftheunitedstates.thedistrictmay Understatelaw,theDistrictmaydepositfundswithinafiscalagent investincertificatesandtimedepositsofthestatebanksorganizedunde~ LouisianalawandnationalbankshavingprincipaloficesinLouisiana.At December31,196,theDistricthascashandinterest-bearingdeposits(bok balances)totaling$60,383ofwhich$29,863isrestrictedcash. Demandeposits $60,383 statelaw,thesedeposits,(ortheresultingbankbalances)mustbesecured byfederaldepositinsuranceorthepledgeofsecuritiesownedbythefiscal Thesedepositsarestatedatcost,whichaproximatesmarket.Under agent.themarketvalueofthepledgedsecuritiesplusthefederaldeposit insurancemustataltimesequaltheamountondepositwiththefiscalagent bank.3~esesecuritiesareheldinthenameofthepledgingfiscalagent bankinaholdingorcustodialbankthatismutualyaceptabletoboth parties.depositbalances(bankbalances)atdecember31,196weresecured asfolows: Bankbalances $61,62 Federaldepositinsurance Pledgedsecuritiesincludesuninsuredorunregisteredinvestmentsfor $61,62 whichthesecuritiesareheldbythebrokerordealer,orbyitstrust departmentoragent,butnotinthedistrict'sname.i~enthoughthepledged securitiesareconsidereduneol]ateralized,statelawimposesastatutory requirementonthecustodialbanktoadvertiseandselthepledged securitieswithini0daysofbeingnotifiedbythedistricthathefiscal agenthasfailedtopaydepositedfundsupondemand. 12

15 SOUTHEASTWATERHORKSDISTRICTNUMBER2 OFTHEPARISHOFVERHI.ION,STATEOFLOUISIANA (3)FixedAsets NotestoFinancialStatements Asumaryofproprietaryfundtypeproperty,plantandequipmentat December31.folows: Land Buildings Furniture,fixturesand equipment Constructioninprogres watersystem Les:Acumulatedepreciation Total 196 $17, ,381,056 2,58, $2,508, $17,47 160,0 2,04,465 ~418, $2,60,0 Thefolowingisasumaryofthelong-termdebtoftheDistrictforthe yearendeddecember31,196: UtilityRevenueBondswithinterest paymentsdueonmay12,196,and May12197andmonthlyinstalment of$3,64d~roughmay12,2035,payable at4.5percentperanum. Les:curent-portion Long-termdebt 196 $794,0 3,901 $790,09 TheanualrequirementstoamortizealdebtsoutstandingatDecember31 196,includinginterestpaymentsof$936,747,areasfolows: Year &After Total 13 Total $61,242 43,734 43,734 43,734 43,734 _%,494,569 $i,730,747

16 (5) (6) (7) SOUTHEASTWATERWORKSDISTRICTNUMBER2 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA NotestoFinancialStatements F]owofFunds:RestrictionsonUse-UtiltvRevenues Underthetermsofthebondindentureonthe$794,0,waterutility revenuebondsdatedmay12,196,alincomeandrevenues(hereinafter referedtoasrevenue)ofeverynature,earnedorderivedfromoperationsof thewaterutilitysystemarepledgedandedicatedtotheretirementofsaid bondsandaretobesetasideintothefolowingspecialfunds. BegininginJune,196,theDistrictisrequiredtoset "WaterworksRevenueBondandInterestSinkingFund",anamount acumulatetheamountnededtoasurethepromptpaymentof andinterestinstalmentsastheybecomedue,andmaybeused payment. aside,intoa suficiento theprincipal onlyforsuch Thereshalalsobesetaside$183monthly,intoa"WaterworksReserve Fund",beginingJune,196,untilthesumof$43,734hasbenacumulated. Funds Contingency fundshal wilalsobeset Fund"of$210per beusedtopay unforesencatastrophesand depreciationofthesystem. asideintoa"waterworksdepreciationand monthbeginingjune,].96.moniesinthis themajorepairsduetodamagecausedby forreplacementsmadenecesarybytile Aloftherevenuesreceivedinanyfiscalyear,andnotrequiredtobe paidintoanyoftheabovenotedf%mdsinsuchfiscalyear,shalberegarded asurplusandmaybeusedforan),lawfulpurpose. TheSoutheastWaterworksDist:rietNumber2oftheParishofVermilion, StateofLouisiana,wasincempl~ancewithalsignificantlimitationsand restrictionsinthebondindentureatdecember31,196. Pendln~Litigation Thereisnolitigationpelting Number2oftheParishofVermilion ContributedCanital againsthesoutheastwaterworksdistrict StateofLouisianatDecember31,196. Amountscontributedtoenterprisefundsforacquisitionorconstruction ofixedasetsarerecognizedascontributedcapital.contributedcapital generatedthroughgrantsexternalyrestrictedforcapitalacquisitionswi] beamortizedbasedonthedepreciationrecognizedonthatportionofthe asetsacquiredorconstructedfromsuchgrants.thisamortizationisclosed totheapropriatecontributedespitalacountandisreflectedasan adjustmentonetincomeonthecomparativestatementofrevenues,expenses, andchangesinretainedearnings. 14

17 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA SOUTHEASTWATERWORKSDISTRICTNUMBER2 NotestoFinancialStatements facilitiesforthenterprisefundareas Thesourcesofcontributedcapital folows usedtoacquireandconstruct Contributedcapital $1,80,0$41,40$1,841,40 (8) Cnmn~!n~At~onofBoardMembers nocompensationduringtheyearended (9) contractstoconstructawatersystemwithanestimatedcompletiondateof March.196.ContractcostasofDecember31,196isasfolows: DuringtheyearendedDecember31,195,theDistrictenteredinto Contract Total Cost, Incured Cost WaterSystem $2,60,0 $2,60,0 todate Cost Paid $2,60,0 todate Contracts Payable (io) DeficitRet:ainedEarnin~s December3].,196.Thisdeficitwilbeliminatedbyfuturearnings. TheDistricthadadeficitretainedearningsbalanceof$36,672asof 15

18 INTEPJ~ALCONTROL,COHPLIANCE

19 EusencI.D~m~U,CrX,Rels~l]90 E~s*ke,CFa DanyP.F~derl,:k,CPA Eugene.l)ar.~lLI.Il,CpA UoydF.I)or'.Jr.CPA CrdlXIter~nd~,CPA hubd.luhm.or^ $tephardemlgp~nbotham.cpa KJthlet,T.D'arnaJ,CPA )enrtl/~$.7jt$iez,cpa StephenitI;~clflcr.MBA,CPA C~AMHIcr.CpA.ManM"[ay]~,CpA J~neEmitT.CPA ChrlstLqeA.Easpbero'.EPA JohnP.M~to,CPA SirenG.M~.CPA tilenpen.xi~n,c.pa T~e~IJM~.C:P^ DARNAL,SIKES&FREDERICK (ACORPORATIONOFCERTIFIEDPUBLICACOUNTANTS) INDEPENDENTAUDITOR'SREPORTONINTERNALCONTROL STRUCTUREBASEDONANAUDITOFGENERALPI~POSE FINANCIALSTATEMENTSPERFORMEDINACORDANCEWITH BoardofComisioners SoutheastWaterworksDistrictNumber2 oftheparishofvermilion,stateoflouisiana ~bevile.louisiana lz~k~sca*c~ard Ltayn,~.LA7O~(~B {~1$)2}z.3M2 z3lelj~^~n~ (318)4, ~,rash~Avtn~ (S04)~ CMP~cMegrt ~IL~LATOSIO <~18)S9~ on~Dr~e ~nsl AI~drULATI~01 (~18)45.5[~o4 WehaveauditedthegeneralpurposefinancialstatementsoftheSoutheast WaterworksDistrictNumber2oftheParishofVermilion,StateofLouisiana(the District),acomponentunitoftheVermilionParishPoliceJury,asofandforthe },earendeddecember31,196,andhaveisuedoureporthereondatedjunei0, 1.97 Ẇeconductedourauditinacordancewithgeneralyaceptedauditing standardsandgovernmentauditingstal]0~rds,isuedbythecomptrolergeneralof theunitedstates;andoficeofmanagementandbudgetcirculara-128,"auditsof StateandLocalGovernments".ThosestandardsandO~iBCircularA-128requirethat weplanandperformtheaudittoobtainreasonableasuranceaboutwhetherthe generalpurposefinancialstatementsarefreofmaterialmistatement. ThemanagementoftheSoutheastWaterworksDistrictNumber2oftheParishof Vermilion,StateofLouisiana,isresponsibleforestablishingandmaintainingan internalcontrolstructure.infulfilingthisresponsibility,estimatesand judgmentsbymanagementarerequiredtoasesthexpectedbenefitsandrelated costsofinternalcontrolstructurepoliciesandprocedures.theobjectivesofan ~nternalcontrolstructurearetoprovidemanagementwithreasonable,butnot absolute,asurancethatasetsaresafeguardedagainstlosfromunauthorizeduse ordisposition,andthatransactionsarexecutedinacordancewithmanagement's authorizationandrecordedproperlytopermithepreparationofgeneralpurpose financialstatementsinacordancewithgeneralyaceptedacountingprinciples. Becauseofinherentlimitationsina~internalcontrolstructure,erorsor iregularitiesmayneverthelesocurandnotbedetected.also,projectiono~any evaluationofthestructuretofutureperiodsisubjectotheriskthatprocedures maybecomeinadequatebecauseofchangesinconditionsorthathefectivenesof thedesignandoperationofpoliciesandproceduresmaydeteriorate. Inplaningandperformingourauditofthegeneralpurposefinancial statementsofthesoutheastwaterworksdistrictnumber2oftheparishofvermilion, StateofLouisiana,fortheyearendedDecember31,196,weobtainedan understandingoftheinternalcontrolstructure.withrespectotheinternal controlstructure,weobtainedanunderstandingofthedesignofrelevantpolicies 17 MEMtI:Ro~ AMERICANINSn~trTEOF CERTIFIEDPUBUCACOUN~[M'.FC$ SOCI~OF~O~IStANA CERTIFIEDPUBUCACOUNTANTS

20 andproceduresandwhethertheyhavebe~*placedinoperation,andweasesed controlriskinordertodetermineourauditingproceduresforthepurposeof expresingouropiniononthegeneralpurposefinancialstatementsandnoto provideanopinionontheinternalcontrolstructure.acordingly,wedonot expresuchanopinion. operationthatweconsidertobeareportableconditionunderstandardsestablished bytheamericaninstituteofcertifiedp*~licacountants.reportableconditions Wenotedacertainmaterinvolvingtheinternalcontrolstructureandits involvematerscomingtouratentionrelatingtothesignificantdeficienciesin thedesignoroperationoftheinternalcontrolstructurethat,inourjudgment, couldadverselyafectheentity'sabilitytorecord,proces,sumarize,and reportfinancialdataconsistentwiththeasertionsofmanagementinthegeneral purposefinancialstatements. TnadeouateSemre~ationofAcountingFunctions Finding segregationofunctionswithintheaceo%mtingsystem. DuetothesmalnumberofemployestheDistrictdidnothaveadequate Recomendation personel,itmaynotbefeasibletoachievecompletesegregationofduties. Baseduponthesizeoftheoperationandthecost-benefitofaditional Response: Noresponseisconsiderednecesary ofoneormoreof"thespecificinternalcontrolstructurelementsdoesnotreduce to~relativelylowleveltheriskthaterorsoriregularitiesinamountsthat Amaterialweaknesisareportableconditioninwhichthedesignoroperation wouldbematerialinrelationtothegeneralpurposefinancialstatementsbeing auditedmayocurandnotbedetectedwithinatimelyperiodbyemployesinthe normalcourseofperformingtheirasignedfunctions. disclosealmatersintheinternalcontrolstructurethatmightbereportable conditionsand,acordingly,wouldnotnecesarilydisclosealreportable Ourconsiderationoftheinternalcontrolstructurewouldnotnecesarily conditionsthatarealsoconsideredtobematerialweaknesesasdefinedabove. However,webelievethereportableconditiondescribedaboveisamaterialweaknes ComisionersandtheVermilionParishPoliceJury.However,thisreportisa materofpublicrecordanditsdistributionisnatlimited. ThisreportisintendedfortheinformationoftheDistrict'sBoardof ACol~,orationofCertifiedPublicAcountants Darnal,Sikes&Frederick Abevile,Louisiana JuneI

21 t:~gcneh.i?~'~,c]pa,rclred19'90 i:.t~rys*kct.cpa I~nyP.r~dcrtc~,~A Ctl~onEI~u~lJ,CPA Eug~fie LDarel,Il,CPA UoydF.Dore'.Jr.CPA C~c~lAH~naez.CPA PauL,D.luran.CPA StcphanJeMIghal~th.~m,CPA KamlecaT,Darn~J,CPA Jcnlf~$.ZJqlct.CPA Stepheng.Dt~chlcr,MBA.CPA Ch.sAvaucr,CI'A AlanMTaylor,CPA Janet!~Bey.CPA ChristineKRaspberly,CPA JM~nP,Ar~to,CPA $tetcngm~.cpa ~ucnpcnrd~n,cpa 1arn~oLandr-/.CPA DARNAL,SIKES&FREDERICK (ACORPORATIONOFCERTIFIEDPUBLICACOUNTANTS) INDEPENDENTAUDITOR'SREPORTONCOMPLIANCEBASED ONANAUDITOFGENF,RALPURPOSEFINANCIAL STATEMENTSPERFORMEDINACORDANCEWITH BoardofComisioners SoutheastWaterworksDistrictNumber2 oftheparishofvermilion,stateoflouisiana Abevile,Louisiana 125k~Beturlord IMayot,L~70",~ (518)2~ ELaurelA~n~ Zuni~,L*70535 (5IS) OlBrashz-~xAvcn~ stat~y,0i M~mOr)LA7o3,80 C,04)~46Z(,4 4o4P*e~turt Ab~LA76510 (~,le)eg~.~,(?0 2OtI),t~c~hwDrh~ {~i~)4,~,64 WehaveauditedthegeneralpurposefinancialstatementsoftheSoutheast WaterworksDistrictNumber2oftheParishofVermilion,StateofLouisiana(the District),acomponentunitoftheVermilionParishPoliceJury,asofandforthe yearendeddecember31,196,andhaveisuedoureporthereondatedjunei0, 19(.17 Ẇeconductedourauditinacordancewithgeneralyaceptedauditing standardsandgovernmentauditingstandardsisuedbythecomptrolergenera]of theunitedstates;andoficeofmanagematitandbudgetcirculara-128,"auditsof StateandLocalGovernments".ThosestandardsandOMBCircuIarA-128requirethat weplanandperformtheauditobtainreasonableasuranceaboutwhetherthe financialstatementsarefreofmaterialmistatement. Compliancewithlaws,regulations,contracts,andgrantsaplicabletothe SoutheastWaterworksDistrictNumber2oftheParishofVermilion,Stateof Louisiana,istheresponsibilityoftheDistrict'smanagement.Aspartofobtaining reosonableasuranceaboutwhetherthefinancialstatementsarefreofmateria] mistatement,weperformedtestsofthedistrict'scompliancewithcertain previsionsoflaws,regulations,contracts,andgrants.however,theobjectiveof ourauditofthegeneralpurposefinancialstatementswasnotoprovideanopinion onoverall,compliancewithsuchprovisions.acordingly,wedonotexpresuchan opinion Ṫheresultsofourtestsdisclosednoinstancesofnoncompliancethatare requiredtobereportedundergovernment:auditidestandards. ThisreportisintendedfortheinformationoftheDistrict'sBoardof ComisionersandtheVermilionParishPoliceJury.Howew~rțhisreportisa materofpublicrecordanditsdistributionisnotlimited. Abevile,Louisiana Junei0.197 Damal,Sikes&Frederick ACorporationofCertifiedPublicAcountants 19 MZMaEROF AMERICANINSTITUT~OF CERTIFIEDPUBUCACOUh'TA~Is SOCIETYOFLOUISIANA CERTIFIEDPUBUCACOUNWAN'IS

22 Eug~neH.~,CFA,Retb'cd190 E,larySRes,CPA DanyP.Frederick,CPA CU)lonE.I)armu.CPA EugeneH.D~H,IlLCPA UoytlF.DO~',Jr.,CPA CeCilAIlermnd~.CPA P~ulaDBUm,CPA StepimrdeMHIglntx,tkam,CPA KalhlecnT.D2tn,~l,CPA Jenrdfer$ZJegler,CPA StephenP.eLschler,MBA.CPA c.~,~a.mat.c-'~a AlanMTaylor.CPA JaneERiley,CPA ChristineA~Ra~pbcrp/,CPA Jo~mP.&rmto,CPA S~cnG.M~,CPA EUer,Pcnrd~on,CPA Tamc~L~nary,CPA DARNAI].~SIKES&FREDERICK (ACORPORATIONOFCERTIFIEDPUBLICACOUNTANTS) INDEPENDENTAUDITOR'SREPORTONINTERNALCONTROLSTRUCTURE USEDINADMINISTRATING FEDERALFINANCIALASISTANCEPROGRAMS TheBoardofComisioners SoutheastWaterworksDistrictNumber2 oftheparishofvermilion,stateoflouisiana Abevile.Louisiana 125RuCBeaurt'~d laday~tla"~o',ob (~t81232~12 23,1Ela~rlAvcn~ Eu~OeLA?O'J~S (MBJ4S Bnuh."~"Av~n~ Suite~01 MOrganOayLA70~P~ (~,041~ PeteMejtf~t Al~:.evlUeLA70"~I0 (BIB1eg~S Mac~h~BuJklr4I AIc~reM~L~?I~01 (~I8~4S~I WehaveauditedthegeneralpurposefinancialstatementsoftheSoutheast WaterworksDistrictNumber2oftheParishofVermilion,StateofLouisiana(the District),acomponentunitoftheVermilionParishPoliceJury,asofandforthe yearendeddecember31,196,andhaveisuedoureporthereondatedjune10, 197.WehavealsoauditedthecomplianceoftheSoutheast;WaterworksDistrict Number2oftheParishofVermilion,StateofLouisiana,withrequirements aplicabletomajorfederalfinancialasistanceprogramsandhaveisuedoureport thereondatedjune Weconductedourauditsinacordancewithgeneralyaceptedauditing standards;governmentauditingstandards,isuedbythecomptrolergeneralofthe UnitedStates;andOficeofManagementandBudgetCircularA-128,"AuditsofState andlocalgovernments".thosestandardsandombcirculara-128requirethatweplan andperformtheauditoobtainreasonableasuranceaboutwhetherthegeneral purposefinancialstatementsarefreofmaterialmistatementandaboutwhetherthe SoutheastWaterworksDistrictNumber2oftheParishofVermilion,Stateof Louisiana,compliedwithlawsandregulations,noncompliancewithwhichwouldbe materialtoamajorfederalfinancialasistanceprogram. InplaningandperformingourauditfortheyearendedDecember31,196,we consideredtheinternalcontrolstructureofthedistrictinordertodetermineour auditingproceduresforthepurposeofe~)resingouropiniononthegeneralpurpose financialstatementsofthedistrict,andonthecomplianceofthedistrictwith requirementsaplicabletomajorprogramsandtoreportontheinternalcontrol structureinacordancewithombcirculara-128.thisreportadresesour considerationofinternalcontrolstructurepoliciesandproceduresrelevanto compliancewithrequirementsaplicabletofederalfinancialasistanceprograms. Wehaveadresedinternalcontrolstructurepoliciesandproceduresrelevantour auditofthegeneralpurposefinancialstatementsinaseparatereportdatedjune I MEMBEROF AMERICANINSTI~'trTEOF CERTIFIEDPUBLICACOtJNHANTs SOCIETYOFL(-)UISIANA CERTIFIEDPUBLICA(COUIWIAN]S

23 Vermilion,StateofLouisiana,isresponsibleforestablishingandmaintainingan internalcontrolstructure.infulfilingthisresponsibility,estimatesand ThenlanagementoftheSoutheastWaterworksDistrictNumber2oftheParishof judgmentsbymanagementarerequiredtoasesthexpectedbenefitsandrelated costsofinternalcentrolstructurepoliciesandprocedures.theobjectivesofan internalcontrolstructurearetoprovidemanagementwithreasonable,butnot: absolute,asurancethatasetsaresafeguardedagainstlosfromunauthorizeduse ordisposition,thatransactionsarexecutedinacordancewithmanagement's authorizationandrecordedproperlytopermithepreparationofthegeneralpurpese financialstatementsinacordancewithgeneralyaceptedacountingprinciples, andthatfederalfinancialasistanceprogramsaremanagedincompliancewith aplicablelawsandregulations.becauseofinherentlimitationsinanyinternal controlstructure,erors,iregularities,orinstancesofnoncompliancemay neverthelesocurandnotbedetected.also,projectionofanyevaluationofthe structuretofutureperiodsissubjecttotheriskthatproceduresmaybecome inadequatebecauseofchangesinconditionsorthathefectivenesofthedesign andoperationofpoliciesandproceduresmaydeteriorate. Forthepurposeofthisreport,wehaveclasifiedthesignificantinternalcontrol structurepoliciesandproceduresusedinadministeringfederalfinancialasistance pregramsinthefolowingcategories: Purehases~)isbursements Receipts/Revenue AeountiDg Property,Plant:andEquipment Reporting AdministrativeControls Genera]R PoliticalActivity CivilRights CashManagement Typesofservicesalowedor SpecificRequlr~ments AlowableCost/CostPrinciples FederalFinancialReports Claimsforadvancesand unalowed DrugFreWorkplace reimbursemants AdministrativeRequirements Reporting whethertheyhavebenplacedinoperation,andweasesedcontrolrisk. anunderstandingofthedesignofrelevant:policiesandproceduresandetermined Foraloftheinternalcontrolstructurecategorieslistedabove,weobtained Number2oftheParishof~ermilion,StateofLouisiana,expended10%ofitstotal federalfinancialasistanceundermajorfederalfinancialasistanceprograms. DuringtheyearendedDecember31,196,theSoutheast:WaterworksDistrict 2].

24 thefectivenesofthedesignandoperationofinternalcontrolstructurepolicies andproceduresthatwehaveconsideredrelevantopreventingordetectingmaterial Weperformedtestofcontrols,asrequiredbyOMBCircularA-128,toevaluate noncompliancewithspecificrequirements,generalrequirements,andrequirements governingclaimsforadvancesandrei~ursementsthatareaplicabletothe District'smajorfederalfinancialasistanceprogram,whichisidentifiedinthe acompanyingscheduleoffederalfinancialasistance.ourprocedureswerelesin scopethanwouldbenecesarytorenderanopinionontheseinternalcontrol structurepoliciesandprocedures.acordingly,wedonotexpresuchanopinion. operationthatweconsidertobeareportableconditionunderstandardsestablished bytheamericaninstituteofcertifiedp~)licacountants.reportableconditions Wenotedacertainmaterinvolvingtheinternalcontrolstructureandits involvematerscomingtouratentionrelatingtothesignificantdeficienciesin thedesignoroperationoftheinternalcentrolstructurethat,inourjudgment, couldadverselyafecthentity'sabilitytorecord,proces,sumarize,and reportfinancialdataconsistentwiththeasertionsofmanagementinthegeneral purposefinancialstatements. InadeauateSe~relzationofAcountin~Functions Finding segregationofunctionswithintheacountingsystem. DuetothesmalnumberofemployestheDistrictdidnothaveadequate Recomendation personel,itmaynotbefeasibletoachievecompletesegregationofduties. Baseduponthesizeoftheoperationandthecost-benefitofaditional Response: Noresponseisconsiderednecesary ofoneormoreof"thespecificinternalcontrolstructurelementsdoesnotreduce toarelativelylowleveltheriskthaterorsoriregularitiesinamountsthat Amaterialweaknesisareportableconditioninwhichthedesignoroperation wouldbematerialinrelationtothegeneralpurposefinancialstatementsbeing auditedmayocurandnotbedetectedwithinatimelyperiodbyemployesinthe normalcourseofperformingtheirasignedfunctions. usedinadministeringfederalfinancialasistanceprogramwouldnotnecesarily disclosealmatersintheinternalcontrolstructurethatmightbereportable Ourconsiderationoftheinternalcontrolstructurepoliciesandprocedures conditionsand,acordingly,wouldnotnecesarilydisclosealreportable conditionsthatarealsoconsideredtobematerialweaknesesasdefinedabove. However,webelievethereportableconditiondescribedaboveisamaterialweaknes. Thisconditionwasconsideredindeterminingthenature,timing,andextentofthe procedurestobeperformedinourauditofthecomplianceofthesoutheast WaterworksDistrictNumber2oftheParishofVermilion,StateofLouisiana,with requirementsaplicabletoitmajorfederalfinancialasistanceprogramsforthe yearendeddece~)er31,196,andthisreportdoesnotafectoureporthereon datedjunei

25 ComisionersandtheVermilionParishPoliceJury.However,this materofpublicrecordanditsdistributionisnotlimited. ThisreportisintendedfortheinformationoftheDistrict 'sboardof reportisa Darnal,Sikes&Frederick ACorporationofCertifiedPublicAcounta*Lts Abevile,Louisiana Junei

26 EuseneH.Dar~U,CPA,Retir.'d190 E,LifO'SJk~,cP/~ Dal~nyP+P~derlck,CPA CW/,onEDart,art,CpA EugeneI,Darnalr,mCPA ~doytlf.t~o~',.h.,ct'.', ~ul,t).n0un,cpa Stcph~m~MIge.mbot,am,CPA IOthJecn%DanmJl,CPA Jc~LI~S,7Jegler,CpA StephenK.D[schler.,~:BA.CPA C~*&Miner,CPA A12nM.Taylor,CPA Ja,cI~I~ey.CPA C.hr~,lineA.'&aspbertyCPA JohnP.Knxato.CPA St'~t~1G.M~.CPA EUcaP~,ra,~.CPt, Tam(l~LIodry.CpA DARNAL,SIKES&FREDERICK (ACORPORATIONOFCERTIFIEDPUBL1CACOUNTANTS) INDEPENDENTAUDITOR'SREPORTONCOMPLIANCE WITHSPECIFICREQUIREMENTSAPLICABLETOMAJOR FEDERALFINANCIALASISTANCEPROGRAM TheBoardofComisioners SoutheastWaterworksDistrictNumber2 oftheparishofvermilion,stateoflouisiana Abevile,Louisiana 12~R~P.~urg:.rd L~d~y~t~l~70%06 (~,18J2~2-5~,I2 231~La~,i^ven~ ]~unacla~o~+'+$ (~*1B)4S74146 uotm'~aav~m Stat~,Ol Mot~mCay.LA'm~0 (so4)~ ]~.MeS,-a ~./2,70%Io (~IS)sg)S4"~O 201M~cAJrlhurD~vt AJe~fl~.i~.71,&o1 (~18)4S64 WehaveauditedthegeneralpurposefinancialstatementsoftheSoutheast WaterworksDistrictNumber2oftheParishofVermilion,StateofLouisiana,a componentunitofthevermilionparishpolicejury,asofandfortheyearended December31,196,andhaveisuedoureporthereondatedJune10,197. WehavealsoauditedtheSoutheastWaterworksDistrictNumber2oftheParish ofvermilion,staueoflouisiana'scompliancewiththerequirementsgoverningtypes ofservicesaliowedorunalowed;reporting;andclaimsforadvancesand reimbursementsthatareaplicabletoeachofitsmajorfederalprograms,whichare identifiedintheacompanyingscheduleoffederalfinancialasistance,forthe yearendeddecember31,196.themanagementofthedistrictisresponsibleforthe District'scompliancewiththoserequirements.Ouresponsibi].ityistoexpresan opiniononcompliancewiththoserequirementsbasedonouraudit. Weconductedourauditofeomplanewiththoserequirementsinacordance withgeneralyaecept~!dauditingstandards;governmentauditingstandards,isued bythecomptrolergeneraloftheunitedstates;andoficeofmanagementandbudget CircularA-128,"AuditsofStateandl~calGovernments."ThosestandardsandOMB CircularA-128requirethatweplanandperformtheauditobtainreasonable asuranceabout%~ethermaterialnoncompliancewiththerequirementsreferedto aboveocured.anauditincludesexamining,onatestbasis,evidenceabouthe SoutheastWaterworksDistrictNumber2oftheParishofVermilion,Stateof Louisiana'scompliancewiththoserequirements.Webelievethatourauditprovides areasonablebasisfo~ouropinion. Theresultsofourauditproceduresdidnotdiscloseanyimaterialinstances ofnoncompliancewiththerequirementsreferedtoabove. 24 gegsgoy AMERICANINSnTUI~Op CERTIFIEDPUBLIC^OCUr<r^~,'IS SOCIETYOFLOUISIANA CERTIFIEDPUBLICACON~IAN'TS

27 Vermilion,StateofLouisiana,complied,inalmaterialrespectșwiththespecific requirementsreferedtointhesecondparagraphthatareaplicabletoeachofits Inouropinion,theSoutheastWaterworksDistrictNumber2oftheParishof majorfederalfinancialasistanceprogramsfortheyearendeddecember31,196. ComisionersandtheVermilionParishPoliceJury.However,thisreportisa materofpublicrecordanditsdistributionisnotlimited. ThisreportisintendedfortheinformationoftheDistrict'sBoardof Da1~tl,Sikes&Frederick Abevile,Louisiana ACorporationofCertifiedPublicAcountants JuneI0,197 25

28 EugeneH,D~,CpA.R~lr~d]90 E.lm-o'Sk~l,CPA DanyP,F~dcHck.CPA Ct2~onE.Paoli.CpA ~u~,:cneh(>x~u.ih,cpa LloydF.Dote',Jr.,CFA C~IAH~nc~z.CPA PaulaD.Bflun.CPA step~j~m.higlnbolum,cpa K~t~ecnT.DarnaU,cP^ je~o,f~s.zjcg~cr,ci'a StephenR.Dlschler.MBA,CPA C~tsA.MUJ~,CpA AhnMTayLor.CPA J~n,:E~J~cy.CPA Cl~ls~ne~.spbc~.CPA JohnP.Ar~to.CP^ st~cn6.m~.cpa ElLenPcnlson.CPA Tame~l~ndr~,CPA DARNAL,SIKES&FREDERICK (ACORPORATIONOFCERTIFIEDPUBLICACOUNTANTS) INDEPENDENTAUDITOR'SREPORTONCOMPLIANCE WITHTHEGENERALREQUIREMENTSAPLICABLETO FEDERALFINANCIAl,ASISTANCEPROGRAMS TheBoardofComisioners SoutheastWaterworksDistrictNumber2 oftheparishofvermilion,stateoflouisiana Abevile.Louisiana l~2y~tcla?0~ (MS)232.S~ E~1Avrn~ EU~.tA?O',$S (2518)457414i6 120lBrast~Avenu,t Sm,cSOl Moqb~nc.r.cA7os8o 0O4)~e O4~Mcltrt /d~evm*la~i0 201]~lCAJlh~[N~vC mc=ml~,t.~?i~1 WehaveauditedthegeneralpurposefinancialstatementsoftheSoutheast WaterworksDistrictNumber2oftheParishofVermilion,StateofLouisiana,a componentunitofthevermilionparishpolicejury,asofandfortheyearended December31,196,andhaveisuedoureporthereondatedJuneI0,197. WehaveapliedprocedurestotestheSoutheastWaterworksDistrictNumber 2oftheParishofVermilion,StateofLouisiana'scompliancewiththefolowJng requirementsaplicabletoitsfederalfinancialasistanceprograms,whichare identifiedinthescheduleoffederalfinancialasistance,fortheyearended December31.196: PoliticalActivity CivilRights CashManagement FederalFinancialReports AlowableCosts/CostPrinciples DrugFreWorkplace AdministrativeRequirements Ourprocedureswerelimitedt:otheaplicableproceduresdescribedinthe OficeofManagementandBudget's"ComplianceSuplementforSingleAuditsofState andlocalgovernments".ourproceduresweresubstantialylesinscopethanan audit,theobjectiveofwhichisthexpresionofanopiniononthesoutheast WaterworksDistrictNumber2oftheParishofVermilion,StateofLouislana's compliancewiththerequirementslistedintheprecedingparagraph.acordingly, wedonotexpresuchanopinion. Withrespectotheitemstested,theresultselthoseproceduresdisclosed nomaterialinstancesofnoncompliancewiththerequirementslistedinthesecond paragraphofthisreport.withrespectoitemsnotested,nothingcametour atentionthatcausedustobelievethat:thesoutheastwatex~worksdistrictnumber 2oftheParishofVermilion,StateofLouisiana,hadnotcomplied,inalmaterial respects,withthoserequirements. ~EM~EROF AMERICANINSTITUTEOF CERTIFIEDPU~WCACtI]~.r]A%'TS SOClE~OP[O[ISIANA 26 CERTIFIEDPUBLICAC(OiIt'lANTS

29 ComisionersandtheVermilionParishPoliceJury.However,thisreportise materofpublicrecordanditsdistributionisnotlimited. ThisreportisintendedfortheinformationoftheDistrict'sBoardof Dan~dl,Sikes&Frederick ACorporationofCertifiedPublicAcountants Abevile,Louisiana JuneI

30 ~ugcneh,da~n~,cpa.retired 90 EI~ry~keJ.CPA ~nyr.p~dc~ck.cpa CU~onEl~a~.,Or^ EuiPeneILDarnalJ,IlLSPA uoydv.do~.jr.,cp^ CeOIAH~ndez,CPA PaubD.mn.CP,~ stephardem.itgmt~lm.crx K=mJec,T.l~m~Jl.Or^ JCn.~ers.2Jcgler.CP^ StephenR+Distiler,MBA.CPA ChrksA.~+~t~el,SPA AL*nM.T+y~or,SPA J=n~Ei~k-y,cr^ ChilstlncA+Paspbc~r.SPA JohnP.A~malo+CpA st~'cn6moo~.spa Els:np~l~rd~n.SpA Tamenl~ndry,CPA DARNAL,SIKE$&FREDERICK (ACORPORATIONOFCERTIFIEDPUBLICACOUNTANTS) INDEPENDENTAUDITOR'SREPORTON SCHEDULEOFEDERALFINANCIALASISTANCE TheBoardofComisioners SoutheastWate~orksDistrictNumber2 oftheparishofvermilion,stateoflouisiana Abevile.Louisiana tz~mb~qtara Lalayct,~LA?O~O~ O18)252~MZ 251Lla~elAvrn~ Eura~.L~7os~s (318)4~ ~ X~nm S~a,~501 (~04~N~46;~64 4~4per+~rv~'~ Al:~x~mL~?OSlO 201tV,~c,t.rOt~Ort,~ (+ls~4%5~64 WehaveauditedthegeneralpurposefinancialstatementsoftheSoutheast WaterworksDistrictNumber2oftheParishofVermilion,StateofLouisiana,a componentunitofthevermilionparishpolicejury,asofandfortheyearended December31,196,andhaveisuedoureporthereondatedJunei0,197.These generalpurposefinancialstatementsaretheresponsibilityofthedistrict's management.ouresponsibilityistoexpresanopiniononthesegeneralpurpose financialstatementsbasedonouraudit. Weconductedourauditinacordancewithgeneralyaceptedauditing standards,governmentauditingstandards,isuedbythecomptrolergeneralofthe UnitedStates,andtheprovisionsofOficeofManagementandBudgetCircularA-128, "AuditsofStateandLocalGovernments".ThesestandardsandOMBCircularA-128 requirethatweplanandperformtheauditobtainreasonableasuranceabout whet~erthegeneralpurposefinancialstatementsarefreofmaterialmistatement. An~uditincludesexamining,onatestbasis,evidencesuportingtheamountsand disclosuresinthegeneralpurposefinancialstatements.anauditalsoincludes asesingtheacountingprinciplesusedandsignificantestimatesmadeby management,aswelasevaluatingtheoveralfinancialstatementpresentation.we believethatourauditprovidesareasonablebasisforouropinion. Ourauditwasconductedforthepurposeoforminganopiniononthegenera] purposefinancialstatementsofthedistrict,takenasawhole.theacompanying ScheduleofFederalFinancialAsistanceispresentedforpurposesofaditional analysisandisnotarequiredpartofthegeneralpurposefinancialstatements. 28 ~E.~BERO~ AMERICANINSTITU'mor CtR~I~I~DPuI~Uc^SOt)~C~Ah~s SOCIETYOFLOUISIANA Ct:gtFt~DPU~UC~COU~T~CTS

31 Theinformationinthatschedulehasbensubjectedtotheauditingprocedures apliedintheauditofthegeneralpurposefinancialstatementsand,inour opinion,isfairlypresentedinalmaterialrespectsinrelationtothegeneral purposefinancialstatementstakenasawhole. DarTu~l,Sikes&Frederick ACorporationofCertifiedPublicAcountants Abevile,Louisiana Junei

32 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA SOUTHEASTWATERWORKSDISTRICTNUMBER2 ScheduleofFederalFinancialAsistance FortheYearEndedDecember UnitedStatesDepartmentofAgriculture ~arned/expended Grant Funds FarmersHomeAdministration: WaterandDisposalSystemsforRural ComunitiesWaterSystem Total $ *Denotesamajorfederalfinancialasistanceprogram $404,109 30

33 OTHERSUPI2~TARYINFOI~TION 31

34 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA SOUTHEASTWATERWORKSDISTRICTNUMBER2 ProprietaryFundType UtilityFund FortheYearEndedDecember31,196 ScheduleofWaterExpenses Watertesting Chemicals Depreciation Salt $4,92 Salaries Suplies 49,934 2,827 18,40 1,145 Totalwaterexpenses $82,37 5,039 32

35 Adw~rtising Amortization Auto&truckexpense Bankcharges Contractlabor Consultingservices Insurance Legal&acounting Licenses Linelocationfes Miscelaneous Ofice Postage Taxes-payrol Repairs&maintenance Telephone Salaries Utilities Totalgeneralandadministrativexpenses $340 1, ,029 5, ,310 5, ~15,07] 1,235 3,329 $70,34 3

36 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA SOUTHEASTWATERWORKSDISTRICTNUMBER2 ProprietaryFundType ScheduleofNumberofUtilityCustomers UtilityFund December31,196 (Unaudited) Water(metered) 620

37 OFTHEPARISHOFVERMILION,STATEOFLOUISIANA SOUTHEASTWATERWORKSDISTRICTNUMBER2 ScheduleofInsuranceinForce December31,196 (Unaudited) Workmen'scompensationfCovera,e CoverageAmounts Suretybends- Statutory Positionbonds: Boardpresident Vice-Presldent Generaliability- Secretary $50,0 Fireandli~Itningcoverageonbuilding $50,0 35