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RUSTON CITY JUDGE'S OFFICE

FINANCIAL REPORTSEPTEMBER 30, 2004

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

Release Date


FINANCIAL REPORTSEPTEMBER 30, 2004

CONTENTS

PAGE

INDEPENDENT AUDITOR'S REPORT 1

REQUIRED SUPPLEMENTAL INFORMATION

Management's Discussion and Analysis 3 - 6

BASIC FINANCIAL STATEMENTS

Governmental Fund Balance Sheet and Statement of Net Assets 8

Statements of Governmental Fund Revenues, Expenditures and Changesin Fund Balances and Statement of Activities 9

Statement of Fiduciary Net Assets 10

Notes to Financial Statements 11-15

REQUIRED SUPPLEMENTAL INFORMATION

Schedule of Revenues, Expenditures, and Changes in FundBalances-Budget (GAAP Basis) and Actual-General Fund 17

OTHER REPORTS AND SCHEDULESIndependent Auditor's Report on Compliance and on Internal Control

Over Financial Reporting Based on an Audit of Financial StatementsPerformed in Accordance with Government Auditing Standards 19-20

Schedule of Findings and Questioned Costs 21

Management's Corrective Action Plan 22

Schedule of Prior Year Findings 23

DON A/1. MCGEHEE(A Professional Accounting Corporation)

P.O. Box 1344806 North Trenton

Ruston, Louisiana 71273-1344

INDEPENDENT AUDITOR'S REPORT

Honorable Danny TatumRuston City Judge's OfficeP.O. Box1821Ruston, LA 71273-1821

I have audited the accompanying financial statements of the governmental activities and theaggregate remaining fund information of the Ruston City Judge's Office, a component unit of the Cityof Ruston, Louisiana, as of and for the year ended September 30, 2004, which collectively comprisethe Judge's basic financial statements, as listed in the table of contents. These financial statementsare the responsibility of the Ruston City Judge's Office's management. My responsibility is toexpress an opinion on these financial statements based on my audit.

I conducted my audit in accordance with auditing standards generally accepted in the United Statesand the standards applicable to financial audits contained in Government Auditing Standards, issuedby the Comptroller General of the United States. Those standards require that I plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement An audit includes examining, on a test basis, evidence supporting the amounts anddisclosures in the financial statements. An audit also includes assessing the accounting principlesused and significant estimates made by management, as well as evaluating the overall financialstatement presentation. I believe that my audit provides a reasonable basis for my opinions.

In my opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of the governmental activities and the aggregate remaining fund information of theRuston City Judge's Office as of September 30, 2004, and the changes in financial position thereoffor the year then ended in conformity with accounting principles generally accepted in the UnitedStates of America.

The management's discussion and analysis and budgetary comparison information on pages 3through 6 and page 17, are not a required part of the basic financial statements but aresupplementary information required by accounting principles generally accepted in the United Statesof America. I have applied certain limited procedures, which consisted principally of inquiries ofmanagement regarding the methods of measurement and presentation of the supplementaryinformation. However, I did not audit the information and express no opinion on it

In accordance with Government Auditing Standards. I have also issued a report dated January 28,2005, on my consideration of the Ruston City Judge's Office's internal control over financial reportingand my tests of its compliance with certain provisions of laws, regulations, contracts, and grants.That report is an integral part of an audit performed in accordance with Government AuditingStandaftJs and should be read in conjunction with this report in considering the results of my audit.

IcGeheeCertified Public Accountant

January 28, 2005

(318) 255-9544 / FAX (318) 255-9634

REQUIRED SUPPLEMENTAL INFORMATIONManagement's Discussion and Analysis

RUSTON CITY COURTDANNY W. TATUM p o BQX 1Q21 WANDA W. NEELES

Judge 401 North Trenton Street Clerk

Ruston, Louisiana 71273-1821Phone {Voice & TDD)

(318)251-8614Fax:(318)251-8619

MANAGEMENT'S DISCUSSION AND ANALYSISAS OF AND FOR THE YEAR ENDED SEPTEMBER 30, 2004

The Ruston City Judge's Office has adopted the reporting principles and methods of theGovernmental Accounting Standards Board's (GASB) Statement No. 34. This statementrequires a "management's discussion and analysis" (MD&A) to be presented in financialreports which include the basic financial statements. The MD&A provides an overview of thefinancial activities of the Ruston City Judge's Office based upon currently known facts,decisions, and conditions. Our MD&A follows; please read it in conjunction with the financialstatements which begin on page 8.

Basic Financial Statements

The basic financial statements include government-wide and fund financial statements. Thegovernment-wide statements consist of a Statement of Net Assets and a Statement ofActivities and provide information about the financial activities of our Office as a whole. Thegovernment-wide statements present a long-term view of our finances. Fund financialstatements consist of the respective fund's balance sheet and the fund's statement ofrevenues, expenditures and changes in fund balance, if applicable. The fund statements teilhow our services were financed in the short-term and what remains for future spending. Theprimary difference between the fund and government-wide statement presentation methods isthat expenditures for capital assets are expensed in the fund financial statements butcapitalized and depreciated in the government-wide statements.

Our Office reports all of its financial operating activity as a single governmental activity (i.e.,general fund), and uses a combined approach in presenting the fund financial statements andthe government-wide statements by reconciling, through an adjustment column, the fundstatement amounts to the government-wide statement amounts. Our office reportsinformation about monies we hold as an agent for others in the fiduciary fund. We areresponsible for ensuring that all assets held for others are distributed as ordered by the court.We cannot use the assets held for others to finance our operations.

Statement of Net Assets and Statement of Activities

One of the most important questions asked about our finances is, "Is the Judge's Office as awhole better off or worse off as a result of the year's activities?" The Statement of Net Assetsand the Statement of Activities report information about our Office as a whole and about ouractivities in a way that helps answer this question. These statements include all assets andliabilities using the accrual basis of accounting, which is a method similar to accounting usedby most private-sector companies. All revenues and expenses of the current year arereported under this method regardless of when cash is received or disbursed.

PAGE TWO

These two statements report our Office's net assets and the changes in the net assets. Youcan think of net assets - the difference between assets and liabilities - as one way to measurethe financial health, or financial position, of our Office. !ncreases/(decreases) in our netassets are one indicator of whether our financial health is improving/(deteriorating).

We report the financial activity of all services provided by us in the Statement of Net Assetsand Statement of Activities. Expenses primarily include salaries and related benefits, andoffice expenses. Court costs and fees received from the defendants and plaintiffs of casesbefore the court and the on-behalf payments received from the City of Ruston and the State ofLouisiana finance most of our activities.

Government-Wide Financial Analysis

As noted above, net assets may serve as a useful indicator of an entity's financial position.Our net assets increased $70,145 in the current year. Our analysis below focuses on the netassets (Table 1) and changes in net assets (Table 2) of the governmental activities of ourOffice to help explain this increase.

Table 1Total Net Assets

2003 2004

Current AssetsCapital Assets

Total

Current Liabilities

Net Assets:Investment in Capital AssetsUnrestricted Net Assets

Total Net Assets

$ 265,62255.834

321.456

6.417

55,834259.205

$ 315.039

345,23245.999

391.231

6.047

45,999339.185

$ 385.184

About 88% ($339,185 of $385,184) of total net assets is unrestricted in 2004 compared to82% ($259,205 of $315,039) in 2003. Virtually all of the increase in unrestricted net assets iscomposed of cash. Unrestricted net assets can be used to finance the day-to-day operationsof our office without constraints.

Table 2Change in Net Assets

2003 2004

RevenuesProgram Revenues:

Court Costs and FeesOn-Behalf RevenueOther Program Revenues

General Revenues:Interest Income

Total Revenues

Program ExpensesGeneral Government-JudiciaryOn-Behalf Expenses

Total Expenses

Increase in Net Assets

$ 132,777262,091

693

3.629399.190

79,650262.091341.741

$ 57.449

149,655289,797

686

3.245443.383

83,441289.797373.238

S 70.145

(4)

PAGE THREE

Our court costs and fees revenues increased by about 13% ($149,9655 compared to$132,777) from the prior year. However, our general government expenses also increasedslightly by about 5% ($83,441 compared to $79,650) from the prior year. The net effect,primarily from the increase in revenues, was a $12,696 improvement in the increase in netasset amount from 2003 to 2004.

Fund Financial Statements

As of our year end on September 30, 2004, our general fund reported a fund balance of$339,185, which is about 31% ($339,185 compared to $259,205) higher than last year's fundbalance. During 2004, there was an increase in court costs and fees revenue, as describedabove, and our on-behalf revenues increased 11% ($289,797 compared to $262,091),primarily due to the increase in salaries and an increase in retirement expense (thecontribution rate increased and the salaries covered increased). Expenditures, excluding theon-behalf amounts, decreased about 29% ($73,606 compared to $103,965) from the prioryear mainly due to a decrease in capital outlays.

General Fund Budgetary Highlights

We amend our budget when we determine there are unexpected differences between actualand anticipated revenues and/or expenditures. Our final amended budget was adopted justprior to year end. The differences between the original and final amended budget were a 2%($42,900) decrease in revenues and a 16% ($64,755) decrease in expenditures. The changein budgeted revenues was a result of a $7,000 increase in court costs and fees, representinga 5% change. Budgeted office expense was adjusted downward 24% ($8,345) to moreclosely match anticipated expenditures. An adjustment of $10,000 was made to salaries, a80% decrease, for the additional payroll budgeted that was not needed. Capital outlay wasdecreased 92% ($32,200) for planned purchases that did not occur. There were no othersignificant budget adjustments.

Capital Assets

In 2004, we purchased a shredder. For the upcoming year, we plan to purchase newcomputer software. There are no plans to issue debt to finance this purchase or any otherfuture project.

Next Year's Budget

We considered many factors when setting the budget for the year ending September 30,2005. Anticipated revenues are $412,411, which is a 7% ($30,972) decrease over the actual2004 amounts. This decrease was almost entirely in a $26,386 (a 9% change) decrease inon-behalf revenue. Expenditures are expected to be $403,511, a 12% ($43,108) increasefrom the 2004 actual amounts. This net budgetary increase is primarily due to additionalsalaries of $10,002 to be paid from court costs and fees, an increase in capital outlay of$32,471, reduction in additional salaries and benefits of $26,386 expected to be paid on-behalf of the Judge's Office, and additional office supplies of $7,431. The total governmentfund balance is expected to increase by approximately $5,900.

(5)

PAGE FOUR

Contacting the Judge's Office

This financial report is designed to provide citizens and taxpayers with a general overview ofthe finances of the Judge's Office and to show accountability for the money it receives. If youhave questions about this report or need additional financial information, contact the RustonCity Judge's Office at 401 N. Trenton Street, Ruston, LA 71270.

(6)

BASIC FINANCIAL STATEMENTS


GOVERNMENTAL FUND BALANCE SHEET ANDSTATEMENT OF NET ASSETS

SEPTEMBER 30, 2004

ASSETSCashDue from Governmental UnitsPrepaid InsuranceCapital Assets, Net

TOTAL ASSETS

LIABILITIESAccounts PayableAccrued Liabilities

TOTAL LIABILITIES

GeneralFund

$ 336,2286,1572,847

Q$ 345.232

$ 5,140907

Adjustments(Note 5)

45.99945.999

6.047

Statement ofNet Assets

$ 336,2286,1572,847

45.999391.231

5,140907

6.047

FUND BALANCE/NET ASSETSFUND BALANCE:

UnreservedTOTAL FUND BALANCE

339.185339.185

TOTAL LIABILITIES AND FUND BALANCE $ 345.232

NET ASSETS:Investment in Capital AssetsUnrestricted

TOTAL NET ASSETS

(339.185)(339.185)

45,999339.185

$ 385.184

0

45,999339.185

$ 385.184

See accompanying notes to financial statements.(8)


STATEMENT OF GOVERNMENTAL FUND REVENUES,EXPENDITURES, AND CHANGES IN FUND BALANCE AND

STATEMENT OF ACTIVITIESFOR THE YEAR ENDED SEPTEMBER 30, 2004

EXPENDITURES/EXPENSESCapital Outlay-EquipmentGeneral Government - Judiciary

Audit and Accounting FeesAuto ExpenseContinuing EducationContract ServicesDepreciationDues and SubscriptionsInsuranceJudge Ad HocLibrary ExpenseOffice ExpenseRepairs and MaintenanceRetirement ContributionsSalariesTaxesTelephoneTravel

TOTAL

PROGRAM REVENUESCourt Costs and FeesExpense RecoveryOn-Behalf Revenue

NET PROGRAM REVENUES

GENERAL REVENUESInterest Income

TOTAL GENERAL REVENUES

EXCESS OF REVENUESOVER EXPENDITURES

CHANGE IN NET ASSETS

FUND BALANCE/NET ASSETSBEGINNING OF THE YEAREND OF THE YEAR

GeneralFund

2,529

6,744201

2,5104,483

0905

21,055300

9,01626,640

1,00836,629

238,8753,455

8788.175

363.403

149,655686

289.797

76.735

3.2453.245

79,980

259.205$ 339.185

Adjustments(Note 6)

(2,529)

12,364

9.835

(9.8351

(79,980)

70,145

55.834$ 45.999

Statementof Activities

0

6,744201

2,5104,483

12,364905

21,055300

9,01626,640

1,00836,629

238,8753,455

8788.175

373.238

149,655686

289.797

66.900

3.2453.245

0

70,145

315.039$ 385.184



STATEMENT OF FIDUCIARY NET ASSETSSEPTEMBER 30, 2004

AgencyFunds

ASSETSCash $ 115.521

TOTAL ASSETS 115.521

LIABILITIESHeld for Others 115.521

TOTAL LIABILITIES 115.521

NET ASSETS $ Q



NOTES TO THE FINANCIAL STATEMENTSSEPTEMBER 30, 2004

The Ruston City Judge's Office was created on July 8,1926, under the provisions of Act 157 of theLouisiana Legislature Summer Session. It has territorial jurisdiction extending throughout all of LincolnParish, Louisiana. There is one elected judge. The Judge's Office receives court costs and fees forservices rendered on civil and criminal cases, in accordance with state law.

The accompanying basic financial statements of the Ruston City Judge's Office are prepared inaccordance with governmental accounting principles generally accepted in the United States of America.The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body forestablishing governmental accounting and financial reporting principles.

The more significant accounting policies used by the Judge's Office are discussed below:

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Reporting Entity

The Ruston City Judge's Office is fiscally dependent on the City of Ruston for office space, courtrooms,related utility costs, and providing the primary funding of salary costs. Because the Judge's Office isfiscally dependent on the City, the Judge's Office was determined to be a component unit of the City ofRuston. For the purposes of this financial report this component unit serves as the nucleus for its ownfinancial reporting entity and issues separate financial statements.

B. Basic Financial Statements

The basic financial statements of the Ruston City Judge's Office include both government-wide (reportingthe Judge's Office as a whole) and fund financial statements (reporting each individual fund of theJudge's Office). Since the Judge's Office is engaged in a single government program the government-wide and fund financial statements have been presented in a combined format using an adjustmentcolumn to reconcile the fund statements to the government-wide statements. Both the government-wideand fund financial statements categorize primary activities as either governmental or business type. Allactivities of the Ruston City Judge's Office are classified as governmental activities.

C. Fund Accounting

The Judge's Office uses the fund accounting method to maintain its financial records. Fund accounting isdesigned to demonstrate legal compliance and to aid management by segregating transactions related tocertain court functions and activities. A fund is defined as a separate fiscal and accounting entity with aself-balancing set of accounts. The following funds are used by the Judge's Office:

Governmental FundsGovernmental funds account for all or most of the court's general activities. These funds focus on thesources, uses, and balances of current financial resources. Expendable assets are assigned to thevarious governmental funds according to the purposes for which they may be used. Current liabilitiesare assigned to the fund from which they will be paid. The difference between a governmental fund'sassets and liabilities is reported as fund balance. In general, fund balance represents the accumulatedexpendable resources which may be used to finance future period programs or operations of theRuston City Judge's Office. The Judge's Office uses one fund, the General Fund, to account for allfinancial resources, except those required to be accounted for in other funds. The General Fundresources are available for any purpose provided they are expended or transferred in accordance withstate and federal laws and according to the policy of the Judge's Office.

(11)


NOTES TO FINANCIAL STATEMENTS (CONTINUED)SEPTEMBER 30, 2004

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Fiduciary FundsFiduciary funds reporting focuses on net assets and changes in net assets. The only funds accountedfor in this category by the Judge's Office are agency funds. The agency funds account for assets heldby the Judge's Office as an agent for litigants pending court action. These funds are custodial innature (assets equal liabilities) and do not involve measurement of results of operations.Consequently, the agency funds have no measurement focus, but use the modified accrual basis ofaccounting. Since these assets are being held for a third party and cannot be used for the activities orobligations of the government, these funds are not incorporated into the government-wide statements.

D. Measurement Focus/Basis of Accounting

Fund Financial StatementsThe amounts reflected in the general fund financial statements and agency fund statements areaccounted for using a current financial resources measurement focus. With this measurement focus,only current assets and current liabilities are generally included on the balance sheet. The statementof revenues, expenditures, and changes in fund balances reports the sources and uses of currentfinancial resources. This approach is then reconciled, through adjustment, to a government-wide viewof operations.

The amounts reflected in the general fund financial statements and agency fund statements use themodified accrual basis of accounting. Under the modified accrual basis of accounting, revenues arerecognized when susceptible to accrual (i.e., when they become measurable and available).Measurable means the amount of the transaction can be determined and available means the amountof the transaction is collectible within the current period or soon enough thereafter to pay liabilities ofthe current period. The Judge's Office considers all revenues available if they are collected within sixtydays after the fiscal year end. Expenditures are recorded when the related fund liability is incurred.

Government-Wide Financial StatementsThe column labeled Statement of Net Assets and the column labeled Statement of Activities displayinformation about the Judge's Office as whole. These statements include all the financial activities ofthe court. Information contained in these columns reflect the economic resources measurement focusand the accrual basis of accounting. Revenues, expenses, gains, losses, assets, and liabilitiesresulting from exchange or exchange-like transactions are recognized when the exchange occurs(regardless of when cash is received or disbursed). Revenues, expenses, gains, losses, assets, andliabilities resulting from nonexchange transactions are recognized in accordance with the requirementsof GASB Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions.

Program Revenues - Program revenues included in the column labeled Statement of Activities arederived directly from court defendants and plaintiffs as a fee for services and from on-behalfpayments made by other governmental units for salaries and benefits of employees of the Judge'sOffice; program revenues reduce the net cost of the function to be financed from other sources ofthe court's general revenues.

E. Budgetary Practices

The Judge's Office prepared an operating budget on its General Fund for the year ended September 30,2004. Budgetary data is prepared based on prior year actual operating revenues and expenditures, andexpected differences between actual and anticipated revenues and expenditures. It is monitored bymanagement and amended throughout the year as necessary. The Judge's Office performs only acustodial function in the case of agency funds and therefore a budget for these funds is not appropriate.Appropriations lapse at year-end and must be reappropriated for the following year to be expended.

(12)



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

The 2004 general fund budget was authorized by the Judge, made available for public inspection at theJudge's Office, and adopted by the Judge on September 25, 2003. The budget was legally amendedprior to year end by the Judge.

F. Cash

Cash includes amounts in demand deposits, interest-bearing demand deposits, and time deposits withoriginal maturities of three months or less from the date of acquisition. Under state law, the court maydeposit funds in demand deposits, interest-bearing demand deposits, or time deposits with state banksorganized under Louisiana law or any other state of the United States, or under the laws of the UnitedStates.

G. Capital Assets - Governmental-Wide Financial Statements

Capital assets, with an original cost of $200 or more, are capitalized at cost. Contributed assets arereported at fair market value as of the date received. Additions, improvements, and other capital outlaysthat significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs andmaintenance are expenses as incurred. Depreciation on all assets is provided on the straight-line basisover the following estimated useful lives:

Furniture and Equipment 5-10 years

Improvements 20 years

H. Vacation and Sick Leave

Vacation and sick leave are noncumulative. There are no accumulated and vested benefits relating tovacation and sick leave that require accrual or disclosure at year end.

I. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principlesrequires management to make estimates and assumptions that affect certain reported amounts of assetsand liabilities and disclosure of contingent assets and liabilities at the date of the financial statements andthe reported amounts of revenues and expenses during the reporting period. Actual results could differfrom those estimates.

NOTE 2 -CASH

Cash consists of interest bearing demand deposits. Deposits are carried at cost which approximatesmarket value. Under state law, these deposits (or the resulting bank balances) must be secured byfederal deposit insurance or the pledge of securities owned by the fiscal agent bank. The market value ofthe pledged securities plus the federal deposit insurance must at all times equal or exceed the amount ondeposit with the fiscal agent. Pledged securities are held in the name of the pledging fiscal agent bank ina holding or custodial bank that is mutually acceptable to both parties.

(13)



NOTE 2 - CASH (CONTINUED)

At September 30, 2004, the Judge's Office has $462,312 in deposits (collected bank balances). Thesedeposits are secured from risk by $267,474 of federal deposit insurance and $168,554 of pledgedsecurities held by the custodial bank in the name of the fiscal agent bank. The remaining balance of$26,284 is secured by the pledge of securities.

The pledged securities meet the deposit collateralization requirements of LSA-R.S. 39:1229, whichrequire the custodial bank to advertise and sell the pledged securities within 10 days of being notified bythe Judge's Office that the fiscal agent has failed to pay deposited funds upon demand. However, thedeposits are considered uncollateralized under the provisions of GASB Statement 3.

NOTE 3 - DUE FROM OTHER GOVERNMENTAL UNITS

Amounts due from other governmental units at September 30, 2004, consisted of the following:

Fines and Court Costs Due from the Ruston Ward Marshal $ 6.157

NOTE 4 - CAPITAL ASSETS

Capital assets and depreciation activity as of and for the year ended September 30, 2004, are as follows:

Balance Balance10/01/03 Additions Deletions 09/30/04

Capital Assets at CostFurniture and Equipment $ 175,201 $ 2,529 $ 0 $ 177,730Improvements 6.697 Q Q 6.697

Totals 181.898 2.529 Q 184.427

Less Accumulated DepreciationFurniture and Equipment 122,657 12,029 0 134,686Improvements 3.407 335 Q 3.742Totals 126.064 12.364 Q 138.428

Net Capital Assets $ 55.834 $ (9.835^ $ 0 $ 45.999

NOTE 5 - RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET TO THEGOVERNMENTAL-WIDE STATEMENT OF NET ASSETS

At September 30, 2004, assets reported as available for government activities in the Statement of NetAssets are different from the General Fund Balance Sheet as follows:

Fund Balance - General Fund $ 339,185

Adjustment for Capital Assets - Capital assets used in governmentalactivities are not financial resources and therefore are not reportedin the general fund balance sheet nor reflected in fund balance forthe general fund. 45.999

Total Net Assets of Governmental Activities $ 385.184

(14)



NOTE 6 - RECONCILIATION OF THE STATEMENT OF GOVERNMENTAL FUND REVENUES,EXPENDITURES, AND CHANGES IN FUND BALANCE TO THE GOVERNMENT-WIDESTATEMENT OF ACTIVITIES

At September 30, 2004, amounts reported for government activities in the Statement of Activities aredifferent from the General Fund Revenues, Expenditures, and Changes in Fund Balance as follows:

Net Change in Fund Balance - General Fund $ 79,980

Adjustment for Difference in Capital Outlays and Depreciation -Governmental funds report capital outlays as expenditures while inthe Statement of Activities, the costs of those assets are allocatedover their estimated useful lives as depreciation expense. Theadjustment is for the amount by which depreciation expenseexceeded capital outlays in the current period. (9.835)

Change in Net Assets of Governmental Activities $ 70.145

NOTE 7 - PENSION PLAN

The Ruston City Judge's Office provides retirement benefits to some court employees throughcontributions to the Louisiana State Employment Retirement System, a cost sharing multiple-employerdefined benefit pension plan administered and controlled by a Board of Trustees. The retirement systemprovides retirement, disability, and death benefits to plan members and beneficiaries. The LouisianaLegislature establishes and amends benefit provisions. The retirement system issues a publicly availablefinancial report. That report may be obtained by writing to Louisiana State Employees' RetirementSystem, 8401 United Plaza Boulevard, Baton Rouge, Louisiana 70809, or by calling 1-800-256-3000.

Plan members are required to contribute 11.5% of their annual covered salary, and the Ruston CityJudge's Office is required to contribute at an actuarially determined rate of annual covered salary. Thisyear's rate was 15.8% from October, 2003 through June, 2004, and 17.8% for the remainder of the year.The contribution requirements of employers are established annually by the Board of Trustees basedupon actuarially determined rates. The Ruston City Judge's Office made contributions for the year endingSeptember 30, 2004 of $6,155, an amount equal to the required contribution for that year.

NOTE 8 - ON-BEHALF PAYMENTS

Employees of the Ruston City Judge's Office received salaries and fringe benefits from the City of Rustonand the State of Louisiana. The following is a summary of these on-behalf payments:

Salaries $ 236,377

Fringe Benefits 53.420

Totals $ 289.797

Fringe benefits paid by the City of Ruston and the State of Louisiana include pension plan contributionsto the Louisiana State Employees' Retirement System. The City of Ruston also makes pension plancontributions to the Municipal Employees' Retirement System of Louisiana.

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REQUIRED SUPPLEMENTAL INFORMATIONBudgetary Analysis


SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES-BUDGET (GAAP BASIS) AND ACTUAL-GENERAL FUND

FOR THE YEAR ENDED SEPTEMBER 30, 2004

REVENUESCourt Costs and FeesExpense RecoveryOn-Behalf RevenueInterest Income

TOTAL REVENUES

EXPENDITURESCapital Outlay-EquipmentAccounting FeesAuto ExpenseContinuing EducationContract ServicesDues and SubscriptionsInsuranceJudge Ad HocLibrary ExpenseMiscellaneousOffice ExpenseOn-Behalf ExpensesProfessional FeesRepairs and MaintenanceRetirement ContributionsSalariesTaxesTelephoneTravel

TOTAL EXPENDITURES

EXCESS OF REVENUES OVEREXPENDITURES

FUND BALANCE-BEGINNING

FUND BALANCE-ENDING

Budgeted(GAAP

Oriqinal

$ 139,0000

263,4113.000

405.41 1

35,0008,0003,0003,0006,0001,0002,0001,5006,0001,500

34,550263,411

02,0006,700

12,500550

4,80012.000

403.511

1,900

270.148

$ 272.048

AmountsBasis)

Final

$ 146,0000

263,41 13,000

412.411

2,8008,000

2502,7504,400

9001,550

3008,800

026,205

263,4111,000

06,7002,500

340650

8.200338.756

73,655

270.148

$ 343.803

Actual(GAAP Basis)

Amounts

149,655686

289,7973.245

443.383

2,5296,744

2012,5104,483

9051,385

3009,016

026,640

289,7970

1,0086,1552,498

179878

8.175363.403

79,980

259.205

$ 339.185

Variance withFinal Budget

Positive(Neaative)

$ 3,655686

26,386245

30.972

2711,256

49240(83)(5)

1650

(216)0

(435)(26,386)

1,000(1,008)

5452

161(228)

25(24.647)

6,325

(10.943)

$ (4.618)

(17)

OTHER REPORTS AND SCHEDULES

DON M. MCGEHEE(A Professional Accounting Corporation)

P.O. Box 1344806 North Trenton

Ruston, Louisiana 71273-1344

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ONINTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON

AN AUDIT OF FINANCIAL STATEMENTS PERFORMED INACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Honorable Danny TatumRuston City Judge's OfficeP.O. Box 1821Ruston, LA 71273-1821

I have audited the accompanying financial statements of the governmental activities and theaggregate remaining fund information of the Ruston City Judge's Office, a component unit ofthe City of Ruston, as of and for the year ended September 30, 2004, which collectivelycomprise the Ruston City Judge's Office's basic financial statements and have issued myreport thereon dated January 28, 2005. I conducted my audit in accordance with auditingstandards generally accepted in the United States of America and the standards applicable tofinancial audits contained in Government Auditing Standards, issued by the ComptrollerGeneral of the United States.

Compliance

As part of obtaining reasonable assurance about whether the Ruston City Judge's Office'sfinancial statements are free of material misstatement, I performed tests of its compliancewith certain provisions of laws, regulations, contracts, and grants, of which noncompliancewith could have a direct and material effect on the determination of financial statementamounts. However, providing an opinion on compliance with those provisions was not anobjective of my audit and, accordingly, I do not express such an opinion. The results of mytests disclosed no instances of noncompliance that are required to be reported underGovernment Auditing Standards.

Internal Control Over Financial Reporting

In planning and performing my audit, I considered the Ruston City Judge's Office's internalcontrol over financial reporting in order to determine my auditing procedures for the purposeof expressing my opinion on the financial statements and not to provide assurance on theinternal control over financial reporting. However, I noted certain matters involving the internalcontrol over financial reporting and its operation that I consider to be a reportable condition.Reportable conditions involve matters coming to my attention relating to significantdeficiencies in the design or operation of the internal control over financial reporting that, inmy judgement, could adversely affect the Ruston City Judge's Office's ability to record,process, summarize, and report financial data consistent with the assertions of managementin the financial statements. This reportable condition is described in the accompanyingschedule of findings and questioned costs as item #2004-1

(318) 255-9544 / FAX (318) 255-9634

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A material weakness is a condition in which the design or operation of one or more of theinternal control components does not reduce to a relatively low level the risk thatmisstatements in amounts that would be material in relation to the financial statements beingaudited may occur and not be detected within a timely period by employees in the normalcourse of performing their assigned functions. My consideration of the internal control overfinancial reporting would not necessarily disclose all matters in the internal control that mightbe reportable conditions and, accordingly, would not necessarily disclose all reportableconditions that are also considered to be material weaknesses. However, I consider thereportable condition described above to be a material weakness.

This report is intended solely for the information of the Ruston City Judge's Office, the City ofRuston, and the Legislative Auditor of Louisiana and is not intended to be and should not beused by anyone other than these specified parties. Under Louisiana Revised Statute 24:513,this report is distributed by the Legislative Auditor as a public document.

M. MeGeheeirtified Public Accountant

January 28, 2005

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SCHEDULE OF FINDINGS AND QUESTIONED COSTSFOR THE YEAR ENDED SEPTEMBER 30, 2004

I have audited the financial statements of the Ruston City Judge's Office as of and for the yearended September 30, 2004, and have issued my report thereon dated January 28, 2005. Iconducted my audit in accordance with U.S. generally accepted auditing standards and thestandards applicable to financial audits contained in Government Auditing Standards, issuedby the Comptroller General of the United States. My audit of the financial statements as ofSeptember 30, 2004 resulted in an unqualified opinion.

Section I Summary of Auditor's Reports

Report on Internal Control and Compliance Material to the Financial Statements

Internal ControlMaterial Weaknesses M Yes D No Reportable Conditions ^ Yes D No

ComplianceCompliance Material to Financial Statements D Yes E3 No

Section II Financial Statement Findings

2004-1. The Ruston City Judge's Office has too few personnel involved in the accountingsystem to have adequate separation of duties for internal control.

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MANAGEMENT'S CORRECTIVE ACTION PLANFOR THE YEAR ENDED SEPTEMBER 30, 2004

SECTION I INTERNAL CONTROL AND COMPLIANCE MATERIAL TO THE FINANCIALSTATEMENT

FINDINGS RESPONSE2004-1. Separation of Duties. Too few The Judge's Office has an accountingpersonnel involved in the accounting workload that can be easily managedsystem to have adequate separation of by one employee. The hiring ofduties for internal control. additional employees to provide

enhanced internal control does notappear to be the best use ofresources.

SECTION II MANAGEMENT LETTER

No findings have been reported under this section.

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SCHEDULE OF PRIOR YEAR FINDINGSFOR THE YEAR ENDED SEPTEMBER 30, 2004

SECTION I INTERNAL CONTROL AND COMPLIANCE MATERIAL TO THE FINANCIALSTATEMENT

FINDINGS STATUS2003-1. Separation of Duties. Too few Unresolved. See 2004-1.personnel involved in the accountingsystem to have adequate separation ofduties for internal control.

SECTION II MANAGEMENT LETTER

No findings were reported under this section.

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