st. tammany parish fire protection district no. 4 · 2021. 1. 11. · st. tammany parish fire...

St. Tammany Parish Fire Protection District No. 4Comprehensive Annual Financial ReportFor the Year Ended December 31,2007

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

Release Date '7 / '

TABLE OF CONTENTS

Page

INDEPENDENT AUDITORS' REPORT 1

MANAGEMENT'S DISCUSSION AND ANALYSIS 3

GOVERNMENT-WIDE FINANCIAL STATEMENTS

Statement of Net Assets 7Statement of Activities 8

FUND FINANCIAL STATEMENTS

Balance Sheet - Governmental Fund 9Reconciliation of Government Fund Balance Sheet

to the Statement of Net Assets 10Statement of Revenues, Expenditures, and

Changes hi Fund Balance 11Reconciliation of the Statement of Revenues,

Expenditures and Changes in Fund Balance ofGovernmental Funds to the Statement of Activities 12

NOTES TO FINANCIAL STATEMENTS 13

Budgetary Comparison Schedule - General Fund 25Schedule of Compensation Paid to Board of Commissioners 26

OTHER INDEPENDENT AUDITORS* REPORT

Independent Auditors' Report on Compliance andOn Internal Control Over Financial Reporting BasedOn an Audit of Basic Financial Statements PerformedIn Accordance With Government Auditing Standards 29

CURRENT YEAR FINDINGS, RECOMMENDATIONS, ANDCORRECTIVE ACTION PLAN 30

SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 31

& Associates, LLCCertified Public Accountants

Brent A. Silva, CPA Craig A. Silva, CPAKenneth J. Abney, CPA, MS Acct-Tax Thomas A. Gurtner, CPA

INDEPENDENT AUDITORS' REPORT

To the Board of CommissionersSt. Tammany Parish Fire Protection District No. 4Mandeville, Louisiana

We have audited the accompanying financial statements of the St. Tammany Parish Fire Protection DistrictNo. 4 (the District) as of December 31, 2007 as listed in the table of contents. These financial statementsare the responsibility of the District's management. Our responsibility is to express an opinion on thesefinancial statements based on our audit.

We conducted our audit iri accordance with auditing standards generally accepted in the United States ofAmerica, the standards for financial audits contained in Government Auditing Standards, issued by theComptroller General of the United States, and the Louisiana Governmental Audit Guide, Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the basic financial statements referred to above present fairly, in all material respects, thefinancial position of the St. Tammany Parish Fire Protection District No. 4 as of December 31, 2007, andthe results of its operations for the year then ended, in conformity with accounting principles generallyaccepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued a report dated May 22, 2008 onour consideration of St. Tammany Parish Fire Protection District No. 4*s internal control over financialreporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grantagreements and other matters. The purpose of that report is to describe the scope of our testing of internalcontrol over financial reporting and compliance and the results of that testing and not to provide an opinionon the internal control over financial reporting or on compliance. That report is an integral part of an auditperformed in accordance with Government Auditing Standards and should be considered in conjunctionwith this report in considering the results of our audit.

The management's discussion and analysis and budgetary comparison information as listed in the table ofcontents are not a required part of the basic financial statements but are supplementary information requiredby accounting principles generally accepted in the United States of America. We have applied certainlimited procedures, which consisted principally of inquires of management regarding the methods ofmeasurement and presentation of the supplementary information. However, we did not audit theinformation and express no opinion on it.

4330 Dumaine Street 4565 Lasalle St, Ste 300New Orleans, LA 70119 Mandeville, LA 70471(504) 833-2436 (985) 626-8299(504) 484-0807 www.silva-cpa.com (985) 626-9767

Our audit was made for the purpose of forming an opinion on the basic financial statements of the St.Tammany Parish Fire Protection District No. 4 taken as a whole. The accompanying schedule ofcompensation paid to Board of Commissioners is presented for purposes of additional analysis and is not arequired part of the basic financial statements. The information in that schedule has been subjected to theprocedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in allmaterial respects in relation to the basic financial statements taken as a whole.

May 22,2008

FIRE PROTECTION DISTRICT NO. 4ST. TAMMANY PARISH

709 GIROD STREET Commissioners:MANDEVILLE, LOUISIANA 70448 THOMAS W. DRUEN

Phone: (985) 626-8671 ChairmanFax: (985) 626-8082 WILLIAM H. DOBSON, JR.

MERRICK TASSIN Vice-ChairmanFire€h*f MARIE TAYLOR

WILLIAM ESQUINANCE _ , „_.. . ,, jj. . _ „. Secretary/TreasurerDirector of Administration " J

DAVID WALKER

C. T.WILLIAMS JR.

MANAGEMENTS DISCUSSION AND ANALYSIS

Management's discussion and analysis (MD&A) is a required element of the new reportingmodel adopted by the Government Accounting Standards Board (GASB) hi their statement No.34. Its purpose is to provide an overview of the financial activities of the District based oncurrently known facts, decisions or conditions.

The basic financial statements include government-wide and government fund statements. Thegovernment-wide Statement of Net Assets and Statement of Activities present information for allthe activities of the Fire District's office, from an economic resources measurement, focus usingthe accrual basis of accounting. Primarily for our office the difference between these statementsand Governmental Funds statements is that assets are capitalized and depreciated over theirestimated useful life versus expensed hi the Governmental funds statements. The government-wide statements also include provisions for compensated absences and capital lease obligationsto be paid future years The Balance Sheet - Governmental Funds details the assets andliabilities of the governmental funds while the Reconciliation of the Government Fund BalanceSheet to the Statement of Net Assets reflects the differences from the amounts reported hi theStatement of Net Assets. The Statement of Revenues, Expenditures and Changes in FundBalance reflects the current year receipt and disbursement of funds and the ReconciliationStatement reports the differences hi the changes hi fund balance to the change in net assets of theGovernment activities. The differences between the adopted budget and the actual activities arereflected hi the Budgetary Comparison Schedule - General Fund.

The District has been determined to be a component unit of St. Tammany Parish. Theaccompanying financial statements only present information hi the funds maintained by theDistrict

The District's combined net assets as of December 31, 2007, were:

Invested in capital assets, net of related debt $ 4,873,430Unrestricted assets 10.511.227

Total Net Assets for 2007 $15,384,657

The District's combined net assets as of December 31,2006 were:

Invested in capital assetsUnrestricted assets

Total Net Assets for 2006

$ 3,430,15910,090,567

$13,520,726

Investment in capital assets is directly related to the property, plant and equipment asset ledger of$8,202,335 less accumulated depreciation of 3,328,906.

FINANCIAL HIGHLIGHTS

A summary of the basic government-wide financial statements is a follows:

SUMMARY OF STATEMENT OF NET ASSETS2007 2006

ASSETS:Other assets $ 13,303,845 $12,849,004Capital assets, net of 4,873,430 3,435,396Accumulated depreciation

Total assets $ 18,177,275 $ 16,284,400

LIABILITIES:Other liabilitiesNon-Current LiabilitiesCompensated Absences current

Total liabilities

NET ASSETS:Invested in capital assetsUnrestricted assets

Total Net Assets

$ 665,8031,859,449

267,366$ 2,792,618

$ 4,873,43010,511,227

$ 15,384,657

SUMMARY OF STATEMENT OF ACTIVITIESGeneral Revenues:

Ad valorem taxes $ 9,128,622Intergovernmental revenues:

State revenue sharing 347,884Fire insurance tax 159,577Interest income 379,427Other 32,551Total general revenues $ 10,480,061

Expenses and Program Revenues:Public Safety fire protection $ 4,694,094Emergency medical services 1,445,856Training Center Services 449,092Insurance and other costs $2,765,694

Charges for services (1,028,318)

$ 686,8781,820,571256,225

$ 2,763,674

$ 3,430,15910,090,567

$ 13,520,726

$ 8,278,018

262,589146,636262,733

50,323$ 9,000,299

$ 5,663,1651,815,968

(608,694)

Operating Grants (142,288) (52,881)Total Expenses $ 8,184,130 $ 6,817,558

Changes in net assets: 1,863,931 2,182,741

Net assets - beginning of year $13,520,726 $11,337,985

Net assets - end of year $ 15,384,657 $13,520,726

The emergency medical service receivable balance at December 31'2007 is $317,887, which is adrop of $365,392. The receivable for emergency medical services has historically been carryingamounts designated as non-allowable or a contractual adjustment by insurance, resulting in anoverstatement of collectable balances. The emergency medical services collection percentagehas declined from 69% to 53% for 2007.

With regard to the ad valorem tax millages, on August 29, 2006 the Board of Commissioners ofSTFD#4 voted to continue to levy the Ml 25.0 and 2.0 mills for fiscal year 2007 in accordancewith state law.

At December 31, 2007, employees of the District have accumulated and vested $542,164 ofemployee leave benefits, which was computed in accordance with GASB Codification SectionC60. At December 31, 2006, employees of the District have accumulated and vested $455,066of employee leave benefits, which was computed in accordance with GASB Codification SectionC60. Therefore, there was an increase of $87,098 or 19%.

For the year ended December 31, 2007, $266,422 in depreciation expense was allocated to fireprotection activities and $66,606 to emergency medical service activities. For the year endedDecember 31, 2006, $242,173 hi depreciation expense was allocated to fire protection activitiesand $62,058 to emergency medical service activities. Therefore, there was a $29,249 increase indepreciation allocated to fire protection activities and increase of $4,548 hi depreciation expenseallocated to emergency medical service activities. We were very conservative with respect tocapital asset purchases for the year 2007.

The district is not aware of any pending medical malpractice suits as of December 31,2007. TheDistrict has continued to be and is currently in litigation with a former employee over wrongfultermination in which the district consistently denies.

During 2004, the District was awarded a grant from the Federal Emergency ManagementAgency (Assistance to Firefighters Grant) and received $52, 881 in 2007. This funding hasenabled the Fire District to purchase 2 RIT kits, 2 Two Rescue Aire II portable Air-SupplySystems for Rapid Intervention Teams, 1 Bullard T3 MAX Thermal Imaging Camera for search-and-rescue and salvage/post-fire overhaul assignments especially in low or no-visibilityenvironments and 32 self-contained ultra-light breathing apparatus with integrated pass devices.

During 2007, the District also received grant funds from LHAEMS in the amount $14,625 topurchase medical equipment and supplies for mass casualty incidents.

During 2006, the District was awarded a Safer grant and received proceeds of $55,694 in 2007.The addition of the Safer grant increased overall grant receipts for 2007 by $98,407.

Capital expenditures for 2007 were $1,199,005 which includes a capitalized lease for twoambulances of $642,888 and an aerial ladder truck $755,000 and a Ford diesel ambulance of$120,000.

Hie fire district continues to experience increases in salaries and related costs of healthinsurance, workers compensation, other benefits in 2007. hi April/May of 2007, the fire districtimplemented an across the board cost of living increase that has resulted in additional salarycosts of approximately $500,000 on an annualized basis.

During the year ended December 31, 2007, the full time employees received additional pay inthe amount of $376,060 from the State of Louisiana in the form of State FirefighterSupplemental pay. These intergovernmental funds are not reflected hi the financial statements ofthe District for the year ended December 31,2006. In comparison, for 2006 $303,800.

Due to unanticipated hurricane expenses, time delay in receiving FEMA reimbursements and adelay in receipt of Advalorm revenue the Fire District secured a Community Disaster Loan in theamount of $1,587,794 as approved by the state bond commission in 2005. A requirement of theloan specifies the funds can only be used for operating expenses. The fire district received fundsfrom the Community Disaster Loan (CDL) in March of 2006. The Fire District placed the loanproceeds in a separate account that was used for the operation expense of salaries in complianceof the CDL requirement. The balance due on the loan as of December 31,2007 is $1,664,412.

This financial report is designed to provide our citizens, taxpayers, customers and creditors witha general overview of the District's finances and to show the District's accountability for moneyit receives. If you have any questions about this report or need additional financial information,contact Comptroller Wayne Thompson, St. Tammany Fire District No. 4, 709 Gerard St.,Mandeville, La. 70448.

^ ^ DateWayneCFhompsonComptrollerSt Tammany Fire District #4

ST TAMMANY PARISH FIRE PROTECTION DISTRICT NO. 4STATEMENT OF NET ASSETS

DECEMBER 31,2007

ASSETSCurrent assets

Cash and cash equivalentsReceivables, netPrepaid insuranceDeposits

3,399,3799,878,951

25,43283_

13,303,845

Non-current assetsCapital assets - net of

accumulated depreciation

Total Assets

LIABILITIESCurrent liabilities

Accounts payableSalary benefits payableCompensated absences - currentCapital lease - current

Non-current liabilitiesCompensated absences - non-currentRevenue anticipation note payable - non-current

Total Liabilities

NET ASSETSInvested in capital assets, net of related debtUnrestricted assets

Total Net Assets

4,873,430

18,177,275

63,610602,193267,366

933,169

195,0371,664,4121,859,449

2,792,618

4,873,43010,511,227

15,384,657

The accompanying notes are an integral part of this statement.7

ST TAMMANY PARISH FIRE PROTECTION DISTRICT NO. 4STATEMENT OF ACTIVITIES

FOR THE YEAR ENDED DECEMBER 31,2007

EXPENSESPublic safety - fire protection:Emergency medical services:

Total governmental activities

EXPENSES

PROGRAM REVENUESCHARGES CAPITAL/ NET

FOR OPERATING (EXPENSES)/SERVICES GRANTS REVENUE

8,285,770 $1,445,856

142,288 $1,028,318

$ 9,731,626 $ 1,028,318 $ 142,288

(8,143,482)(417,538)

(8,561,020)

GENERAL REVENUESAd valorem taxesIntergovernmental revenues:

State revenue sharingFire insurance tax

Interest incomeOther

Total general revenues

Changes in net assets

Net assets - beginning of year

Net assets - end of year

9,128,622

347,884159,577379,427409,441

10,424,951

1,863,931

13,520,726

15,384,657

The accompanying notes are an integral part of this statement.

ST. TAMMANY PARISH FIRE PROTECTION DISTRICT NO. 4BALANCE SHEET - GOVERNMENTAL FUND

DECEMBER 31,2007

ASSETS

Cash and cash equivalentsReceivables:

Ad valorem taxes, net of allowancefor uncollectible taxes of $407,330

Emergency medical service, net of allowancefor uncollectible fees of $534,820

State revenue sharingGrants and other

Prepaid expendituresDeposits

TOTAL ASSETS

$ 3,399,379

9,242,271

317,886260,913

57,88125,432

83_

$ 13,303,845

LIABILITIES AND FUND BALANCELiabilities

Accounts payableAccured payroll and benefits

Total liabilities

Fund balanceDesignatedUndesignated

Total fund balance

TOTAL LIABILITIES AND FUNDBALANCE

63,610602,193

665,803

100,00012,538,042

12,638,042

$ 13,303,845


ST. TAMMANY PARISH FIRE PROTECTION DISTRICT NO. 4RECONCILIATION OF THE GOVERNMENTAL FUND BALANCE SHEET

TO THE STATEMENT OF NET ASSETSDECEMBER 31,2007

Fund balances - total governmental funds

Capital assets used in governmental activities are notfinancial resources and therefore are not reported in the funds

Governmental capital assetsLess accumulated depreciation

Long term Habilites are not due and payable in thecurrent period therefore they are not reportedin the funds. Long term liabilities consist of the following:

Community disaster loanCompensated absensesCapital lease obligations

Net assets of governmental activities

$ 12,638,042

8,202,3353,328,906 4,873,429

(1,664,412)(462,402)

$ 15,384,657


ST. TAMMANY PARISH FIRE PROTECTION DISTRICT NO. 4STATEMENT OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCE - GENERAL FUNDFOR THE YEAR ENDED DECEMBER 31,2007

REVENUESAd valorem taxesState revenue sharing2% fire insurance taxEmergency medical serviceInterest incomeGrant incomeOther income

Total revenues

EXPENDITURESBad debt expenseContracted servicesDues, subscriptions and licensesFire prevention education and trainingFuel and oilInsuranceInterest expenseLegal and professionalMedical supplies and feesOfficeOtherOccupancyPersonnel services and benefitsRepairs and maintenanceStation suppliesTravel and mealsCapital outlayCapital lease principalCapital lease interest

Total expenditures

Excess (deficiency) of revenues over expenditures

Other financing sources:Community Disaster Loan proceeds

Fund balance-beginning of year

Fund balance-end of year

9,128,622347,884159,577

1,028,318379,427142,288409,441

11,595,557

266,597144,852

17,67638,95969,641

1,611,04542,771

103,68380,32040,205

1,58673,055

6,829,597205,188

67,55514,107

1,555,178

5,546

11,167,561

427,996

42,683

12,167,363

$ 12,638,042


ST TAMMANY PARISH FIRE PROTECTION DISTRICT NO. 4RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCE OF GOVERNMENTAL FUND TOSTATEMENT OF ACTIVITIES


Net changes in fund balance - Total governmental fund $ 470,679

Amounts reported for governmental activities in the statementof net assets are different because:

Governmental funds report capital outlays as expenditures. In thestatement of activities, the costs of those assets are allocatedover the estimated useful lives as depreciation expense. This is theamount of capital expenditures over depreciation 1,523,033

Governmental funds report compensated absences as expenditures whenthe amount is paid. In the statement of activities, the net accretion/decretion isreported as an expense (87,098)

The issuance of long-term debt (bonds, leases, etc.) provides current financialresources to governmental funds, while the repayment of the principal oflong-term debt consumes the current financial resources of governmentalfunds. Neither transaction, however, has any effect on net assets. Also,governmental funds report the effect of issuance costs, premiums, discounts,and similar items when debt is issued, whereas these amounts are deferredand amortized in the statement of activities. This amount is the net effect ofthese differences in the treatment of long-term debt and related items. (42,683)

Governmental funds report a capital lease obligation as a financing source ingovernmental funds and thus contribute to the change in fund balances.Repayment of this obligation is reported as an expenditure hi the governmental funds.The obligation is reported as an increase in long-term liabilites in the statementof net assets and the repayments are a reduction of the liabilities in thestatement of net assets. This is the net decrease of the capital lease obligation. I_

Changes in net assets of governmental activities $ 1,863,931


ST. TAMMANY PARISH FIRE PROTECTION DISTRICT NO. 4

NOTES TO FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Formation and Operations

The St. Tammany Parish Fire Protection District No. 4 (the District) is a component unit of St. TammanyParish created by ordinance of the St. Tammany Parish Council on January 16, 1958. The Fire District isadministered by a Board of Commissioners of five members. Two members are appointed by the St.Tammany Parish and two members are appointed by the City of Mandeville, These four members selectthe fifth member who serves as the chairman. Each commissioner is entitled to receive a per diem paymentof $100 for each board meeting attended. The Fire District provides fire protection and emergencymedical services for the entire fourth ward of St. Tammany Parish which has a population of 54,050. TheSt. Tammany Parish Fire Protection District No. 4 maintains and operates four fire protection facilities, atraining center and employs approximately 100 employees.

Fire protection districts are created for the purpose of acquiring, maintaining, and operating facilities,machinery, equipment, water tanks, water hydrants, water lines, and other things necessary to provideproper fire protection and control of the property within the District.

Reporting Entity

As the governing authority of the Parish, for reporting purposes, the St. Tammany Parish Council is thefinancial reporting entity for St. Tammany Parish. The financial reporting entity consists of (a) the primarygovernment (Council), (b) organizations for which the primary government is financially accountable, and(c) other organizations for which nature and significance of their relationship with the primary governmentare such that exclusion would cause the reporting entity's financial statements to be misleading orincomplete.

Governmental Accounting Standards Board No. 14 established criteria for determining which componentunits should be considered part of St. Tammany Parish for financial reporting purposes. The basic criterionfor including a potential component unit within the reporting entity is financial accountability. The GASBhas set forth criteria to be considered in determining financial accountability. This criteria includes:

a) Appointing a voting majority of an organization's governing body, and the ability of theCouncil to impose its will on that organization and/or the potential for the organization toprovide specific financial benefits to or impose specific financial burden on the organization.

b) Organizations for which the Council does not appoint a voting majority but are fiscallydependent on the Council.

c) Organizations for which the reporting entity's financial statements would be misleading ifdata of the organization is not included because of the nature or significance of therelationship.

13



NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, (continued)

The St. Tammany Parish Fire Protection District No. 4 was determined to be a component unit of St.Tammany Parish, the reporting entity, because the reporting entity's financials statements would bemisleading if data of the St. Tammany Parish Fire Protection District No. 4 was not included due to thesignificance of the relationship and scope of public services. The accompanying financial statementspresent information only on the funds maintained by the St. Tammany Parish Fire Protection District No. 4and do not present information on the Parish, the general government services provided by the Parish, orother governmental units that comprise the financial reporting entity.

Basis of Presentation

The accompanying basic financial statements of the St. Tammany Parish Fire Protection District No. 4 havebeen prepared in conformity with governmental accounting principles generally accepted in the UnitedStates of America. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Theaccompanying basic financial statements have been prepared in conformity with GASB Statement 34,Basic Financial Statements-and Management's Discussion and Analysis—for State and LocalGovernments, issued in June 1999.

Government-Wide Statements

The statement of net assets and the statement of activity display information about the District. TheDistrict's activities are financed through taxes, intergovernmental revenues, and other non exchangetransactions. The governmental-wide financial statements are reported using the accrual basis ofaccounting. Revenues are recorded when earned and expenses are recorded at the time liabilities areincurred, regardless of when the related cash flows take place. Non-exchange transactions, in which theDistrict gives (or receives) value without directly receiving (or giving) equal value in exchange, includeproperty taxes and are recorded in the year assessed. On an accrual basis, revenue from property taxes isrecognized in the fiscal year for which the taxes are levied.

Assets used in operation with an initial useful life that extends beyond one year are capitalized. Equipment,furniture and fixtures, leasehold improvements, and building are depreciated over their estimated usefullives. Depreciation is not calculated on land, land improvements or construction in progress. Accumulateddepreciation is recorded at net of depreciable assets in the statement of net assets.

The statement of activities presents a comparison between direct expenses and program revenues for theactivities of the District. Program revenues consist of charges for services which are revenue fromexchanges or exchange like transactions with external parties that purchase, use or directly benefit from theprogram's goods, services, or privileges. These revenues include fees charged for emergency medicalservices. Program revenues also consist of operating grants and contributions which are resourcesrestricted for operating purposes of a program. These include grants and contributions with restriction thatpermit the resources to be used for a program's operating of capital needs at the recipient government'sdiscretion.

14

ST. TAMMANY PARISH FERE PROTECTION DISTRICT NO. 4



The financial statements of St. Tammany Parish Fire Protection District No. 4 have been prepared inconformity with generally accepted accounting principles (GAAP) as applied to governmental units. TheGovernmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishinggovernmental accounting and financial reporting principles.

Fund Accounting

The District uses funds to report on its financial position and the result of its operations. Fund accountingis designed to demonstrate legal compliance and to aid financial management by segregating transactionsrelated to certain government functions or activities. A fund is a separate accounting entity using themodified accrual method to report revenues and expenditures.

Funds of the District are classified as governmental funds. Governmental funds account for the District'sgeneral activities, including the collection and disbursement of specific or legally restricted monies, and therenovation a fire station. The only fund in 2007 for the District was the General Fund (Non designatedfund) which is the operating fund. The General Fund accounted for all of the financial resources includingconstruction of a training facility.

Basis of Accounting

The accounting and financial reporting treatment applied to a fund is determined by its measurement focus.All governmental funds are accounted for using a current financial resources measurement focus. With thismeasurement focus only current assets and current liabilities generally are included on the balance sheet.The operating statement of the fund presents increases (i.e., revenues and other sources) and decreases (i.e.,expenditures and other uses) in net current assets.

The modified accrual basis of accounting is used by all governmental fund types and agency funds. Underthe modified accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., whenthey become both measurable and available). "Measurable" means the amount of the transaction can bedetermined and "available" means collectible within the current period or soon enough thereafter to be usedto pay liabilities of the current period. Expenditures are recorded when the related fund liability is incurred.Principal and interest on general long-term debt and compensated absences are recorded as fund liabilitieswhen due. Proceeds of general long-term debt and acquisitions under capital leases are reported as otherfinancing sources. General capital asset acquisitions are reported as expenditures when incurred.

Those revenues of the District susceptible to accrual are ad valorem taxes, insurance taxes, state revenuesharing, emergency medical services and interest. Substantially all other revenues are recorded whenreceived.

Budget and Budgetary Accounting

Formal budgetary accounting is employed as a management control device during the year for the generalfund. The budget is adopted for the general fund on a basis consistent with generally accepted accountingprinciples (GAAP). All appropriations, which are not expended, lapse at year-end. Unexpendedappropriations and any excess revenues over expenditures are carried forward to subsequent year asbeginning fund balance.

15




Cash and Cash Equivalents

Cash includes amounts in demand deposits, interest bearing demand deposits and money market accounts.It is the policy of the District to treat highly liquid investments with a maturity of ninety (90) days or less ascash equivalents. Investments are stated at cost.

Louisiana revised statutes authorize the District to invest in (1) United States bonds, treasury notes orcertificates, or time certificates of deposit of state banks organized under the laws of Louisiana and nationalbanks having their principal offices in the State of Louisiana, an investment as stipulated in LSA-R.S.39:1271, or any other federally insured investments or (2) in mutual or trust fund institutions, which areregistered with the Securities and Exchange Commission under the Securities Act of 1933 and theInvestment Act of 1940, and which have underlying investments consisting solely of and limited tosecurities of the U.S. Government or its agencies.

Prepaid Expenses

Prepaid expenses represent the unused portion of insurance and equipment maintenance policies in effect atthe balance sheet date.

Fixed Assets

Fixed assets are recorded as expenditures at the time of purchase and the related assets are capitalized. Allpurchased fixed assets are valued at cost where historical records are available and at estimated historicalcosts where no historical records exist Donated fixed assets, if any, are valued at their estimated fan-market value on the date received. The costs of normal maintenance and repairs that do not add to thevalue of the asset or materially extend asset lives are not capitalized. Prior to 2008, assets over $500 werecapitalized. Starting in 2008, assets over $1,000 will be capitalized.

Depreciation is computed using the straight-line method over the following estimated lives:

Asset Class Estimated Useful Lives

Buildings 40 yearsLeasehold improvements 40 yearsFurniture and fixtures 5 yearsFirefighting equipment 10 yearsTransportation equipment (fire truck, ambulance) 15 yearsMedical equipment 5 years

16

ST. TAMMANY PARISH FIRE PROTECTION DISTRICT NO, 4



Use of Estimates in the Preparation of Financial Statements

The preparation of the District's financial statements, in conformity accounting principles generallyaccepted in the United States of America, requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and revenues and expenditures during the reportingperiod. Adjustments to the reported amounts of assets and liabilities and revenues and expenditures may benecessary in the future to the extent that future estimates or actual results are different from the estimatesused in 2006 financial statements.

Ad Valorem Taxes

Ad valorem taxes are normally levied in November and billed in December. These taxes are due in Januaryof the following year. Any unpaid taxes are collected in connection with an auction held in May. TheSheriffs department bills and collects the District's ad valorem taxes. Ad valorem taxes are levied based onproperty values determined by the St. Tammany Parish Assessor (a separate entity). All land andresidential improvements are assessed at 10 percent of its fair market value, and other property at 15percent of its fair market value. The District's ad valorem tax revenues are recognized when levied to theextent that they are determined to be currently collectible.

Emergency Medical Services

In 1994, the District started providing emergency medical transportation to the residents of the FourthWard of St. Tammany Parish, Residents who use the medical transportation service are charged a feeranging from $403 to $571 based type of medical care. Mileage is billed at $7.14 per mile.

Compensated Absences

The District has the following policies relating to annual and sick leave:

Annual leave - Annual leave accrues at the rate of 7.76 hours for employees hired prior to June 9,1986 andat the rate of 7.34 hours for employees hired after June 9, 1986 per pay period for two weeks of serviceperformed by employees on a 56 hour work week and 12.0 hours for each month of service performed byemployees on a 40 hour work week. After 10 years of service, annual leave accrues at the rate of 8.18hours per pay period for each two weeks of service performed by employees on a 56 hour work week.Annual leave not taken during a year can be accumulated. Accumulation of annual leave is limited to 450hours per employee on December 31st of each calendar year. Effective December 2006 the Board ofCommissioners amended the sick leave policy. As of December 2006, the maximum accumulation of totalleave balance of each year shall be evaluated on an annual basis by the Board of Commissioners. TheBoard of Commissioners will have the authority to reduce or increase the total accumulated annual leavehours allowed on an annual basis.

The cost of current leave privileges, computed in accordance with GASB Codification Section C60, isrecognized as current-year expenditure in the General Fund when the leave is actually taken. The total costof leave privileges is recorded in the Statement of Net Assets.

17




Fund Equity

Designated fund balances consist of the following activity as of December 31,2007:

Balance 01/01/2007 $ 100,000Increases per BoardDecreases per Board -

Balance 12/31/2007 $ lQQ,Q"oo'

Designated Fund Balances are for the following:Emergency Fund $ 100,000

NOTE B - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY

Budget

The budgetary process is prescribed by Louisiana Revised Statutes 39:1304 and 39:1305. The budget isprepared by management and is presented to the Board of Commissioners. A public hearing is held toaddress priorities and the allocation of resources. The District approves the budget hi December before thestart of the next fiscal year. Periodically, individual items of budgeted revenues and expenditures arecompared to actual amounts and revision is approved if necessary. Expenditures may not exceed availablefunds.

NOTE C - CASH AND CASH EQUIVALENTS

At December 31,2007 the District has cash and cash equivalents totaling $0 as follows:

Cash on hand $ 150Interest bearing demand deposits 3,399,229

Total $3,399,379

18



NOTE C - CASH AND CASH EQUIVALENTS, (continued)

These deposits are stated at cost, which approximates market. Under state law, these deposits (or theresulting bank balances) must be secured by federal deposit insurance or the pledge of securities owned bythe fiscal agent bank. The market value of the pledged securities plus the federal deposit insurance must atall times equal the amount on deposit with the fiscal agent. These securities are held in the name of thepledging fiscal agent bank in a holding or custodial bank that is mutually acceptable to both parties. AtDecember 31, 2007, the district had $3,399,299 in deposits (collected bank balances) with one SoutheastLouisiana banking institution. These deposits are secured from risk by $100,000 of federal depositinsurance and $9,199,732 of pledged securities held by the custodial bank in the name of the fiscal agentbank (GASB Category 3). The District has no custodial credit risk policy.

Even though the pledged securities are considered uncollateralized (Category 3) under the provision ofGASB Statement 3, Louisiana Revised Statute 39:1229 imposes a statutory requirement on the custodialbank to advertise and sell the pledged securities within 10 days of being notified by the district that thefiscal agent has failed to pay deposited funds upon demand.

NOTE D - RECEIVABLES

Receivables at December 31,2007, were comprised of the following:

Ad valorem taxes $9,242,271State revenue sharing 260,913Emergency medical service 317,886Grants 57,881

$9,878,951

The receivable for Ad valorem taxes is net of an allowance at December 31, 2007 of $407,330. Theallowance is set up at 4% of the total Ad valorem tax allocated to the St. Tammany Parish Fire ProtectionDistrict No. 4 and is expected to be collected.

The emergency medical service is net of an allowance at December 31, 2007 of $534,820. The allowancehas been setup at 59% of the outstanding receivable balance at December 31,2007.

NOTE E - AD VALOREM TAXES

There were two ad valorem tax millages authorized and levied for the year ended December 31,2007. Onetax millage was 25 and there was an additional 2 tax millage.

19



NOTE F - CHANGES IN CAPITAL ASSETS

The following is a summary of changes in capital assets for the year ended December 31,2007:

CostLandBuildingsEquipmentFurniture and fixturesTransportation equipmentMedical equipment

Accumulated DepreciationBuildingsEquipmentFurniture and fixturesTransportation equipmentMedical equipment

Net Capital Assets

BeginningBalance

$ 653,5602,367,1221,094,160

156,0671,829,058

250,408

Additions Deletions

$ - $69,556

788,63321,586

970,1732,014

EndingBalance

$ 653,5602,436,6781,882,793

177,6532,799,231

252,4226,350,375 1,851,962 8,202,337

$ 672,695 :683,990134,441

1,237,002186,851

2,914,979

S 62,102 $157,67911,629

148,91833,598413,927

- $ 734,797841,669146,070

1,385,920220,449

3,328,906

$ 3,435,396 $ 4,873,430

For the year ended December 31, 2007, $331,142 in depreciation expense was allocated to fire protectionactivities and $82,785 to emergency medical service activities.

NOTE G - 2% FIRE INSURANCE TAX

The District is eligible and receives a pro-rata share of the fire insurance tax collected by the State ofLouisiana. The amounts received by the District are based on the population of the areas that it serves. Inaccordance with the revised statutes, such funds shall be used only for the purpose of "rendering moreefficient and efficacious" fire protection as the District shall direct.

NOTE H - PENSION PLAN

Substantially all employees of the St. Tammany Parish Fire Protection District No. 4 are members of theLouisiana Firefighters Retirement System (System), a multiple-employer (cost-sharing), public employeeretirement system (PERS). The System is a statewide public retirement system for the benefit of firedistricts and their staff, which is administered and controlled by a separate board of trustees. Contributionsof participating fire districts are pooled with the System to fund accrued benefits, with employer/employeecontribution rates approved by the Louisiana Legislature.

20



NOTE H - PENSION PLAN, (continued)

Membership in the Louisiana Firefighters Retirement System is mandatory for all full-time firefightersemployed by a municipality, parish, or fire protection district that did not enact an ordinance prior toJanuary 1,1980, exempting itself from participation in the System. Employees are eligible to retire at orafter age 55 with at least 12 years of creditable service or at or after age 50 with at least 20 years ofcreditable service. Upon retirement, members are entitled to a retirement benefit, payable monthly for life,equal to three and one-third per cent of then- final-average salary for each year of creditable service, not toexceed 100 percent of their final-average salary. Final-average salary is the employee's average salaryover the 36 consecutive or joined months that produce the highest average. Employees who terminate withat least 12 years of service and do not withdraw their employee contributions may retire at or after age 55(or at or after age 50 with at least 20 years of creditable service at termination) and receive the benefitaccrued to their date of termination. The System also provides death and disability benefits. Benefits areestablished by state statute.

In addition to certain dedicated taxes that are remitted to the System, (which constitute major funding of theSystem), covered employees are required by state statute to contribute 8.00% of their annual covered salaryand the District is required to contribute at an actuarially determined rate. The rates during the year endedDecember 31, 2005 ranged from 15.5% to 13.75%. The contributions for the years ended December 31,2007, 2006, and 2005 were $1,058,027, $693,238, and $649,996, respectively. The District's total payrollas of December 31,2007 was $5,252,232 and covered payroll totaled $4,609,781.

The System issues an annual publicly available financial report that includes financial statements andrequired supplementary information for the System. That report may be obtained by writing to theFirefighters' Retirement System, Post Office Box 94095, Baton Rouge, Louisiana 70804, or by calling(225)925-4060.

NOTE I ~ DEFERRED COMPENSATION PLAN

The District offers its employees a deferred compensation plan created in accordance with InternalRevenue Code Section 457. The plan available to all employees permits them to defer a portion of theirsalary until future years. The deferred compensation is not available to employees until termination,retirement, death, or an unforeseeable emergency. The District has no liability for losses under the Planand does not guaranty any of the benefits under the plan.

NOTE J - LITIGATIONS AND CLAIMS

The District is currently named as defendant in several lawsuits that arose during the normal course of itsoperations. The District intends to vigorously defend itself against these claims. An outcome or anyestimate of loss cannot reasonably be determined at this time.

21



NOTE K - GRANTS

During 2007, the District was awarded four grants:

Safer Grant $ 55,694 Additional FiremenEMS Grant $ 14,625 Hospital SuppliesHSRA Grant $ 16,557 EMS SuppliesFireman's Fund $ 56.012 Hoses and AdaptersTotal

NOTE L~ SUPPLEMENTAL SALARIES

During the year ended December 31,2007, the full time employees received additional pay in the amountof $376,890 from the State of Louisiana. These intergovernmental funds are reflected in the financialstatements of the District for the year ended December 31, 2007.

NOTE M - CAPITAL LEASES

In October 2004, the District entered into a capital lease for the acquisition of an EMS billing system in theamount of $14,490. The final amount of $5,327 was paid off in full in January 2007. The Board approvedthe lease -purchase of fire apparatus equipment in April 2007 with the first installment of $237,363 dueMay 31,2008.

NOTE N - LONG-TERM OBLIGATIONS

The following is a summary of the changes in long-term obligations:

Balance BalanceJanuary 1, December 31, Due within

2007 Additions Reductions 2007 one year

Compensated absences $455,066 $434,998 $267,366 $542,16403 $267,366Capital lease 5,237 - 5,237Revenue anticipation notes 1,621,729 43,625 1,664,412 -_

$2,082,032 $478,623 $432,898 $2,162,815 $267,366

22



NOTE 0 - REVENUE ANTICIPATION NOTES

On November 17, 2005, the State Bond Commission granted the District approval to issue $1,587,794 inRevenue Anticipation Notes under the Special Community Disaster Loan Program administered by theDepartment of Homeland Security. The program allows for loans to be awarded up to 25% of the District'sannual operating budget to be utilized for local governmental operations after a major disaster or to expandoperations to meet disaster-related needs. Principal and interest of 2.69% per annum is due on December19, 2010. The balance of the loan as of December 31, 2007, including accrued interest of $43,625, was$1,664,412.

23

SUPPLEMENTAL INFORMATION

ST. TAMMANY PARISH FIRE PROTECTION DISTRICT NO. 4STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE-BUDGET AND ACTUALFOR THE YEAR ENDED DECEMBER 31, 2007

OriginalBudget

REVENUESAd valorem taxesState revenue sharing2% fire insurance taxEmergency medical serviceInterest incomeGrant incomeOther income

Total revenues

EXPENDITURESBad debt expenseContracted servicesDues, subscriptions and licensesFire prevention education and trainingFuel and oilInsuranceInterest expenseLegal and professionalMedical supplies and feesOfficeOtherOccupancyPersonnel services and benefitsRepairs and maintenanceStation suppliesTravel and mealsCapital outlayCapital lease principalCapital lease interest

Total expenditures

Excess of revenues over expenditures

Other financing sources:Community Disaster Loan proceeds

Fund balance-beginning of year

7,984,838240,000147,000810,000

72,000

35,000

9,288,838

7,000163,770

14,500160,40070,000

1,528,95637,588

480,00078,00047,100

1,60037,000

6,071,696221,500188,903

8,0002,256,700

750

11,373,463

(2,084,625)

12,167,363

FinalBudget

$ 8,069,367 3234,425159,577

1,017,778336,14770,03339,468

9,926,795

275,000145,59316,01268,53369,791

1,541,88354,073116,93095,51038,204

56985,893

6,399,804210,61656,56311,891

2,256,700

750

11,444,315

(1,517,520)

1,587,794

12,167,363

$ 10,649,843

Actual

& 9,128,622347,884159,577

1,028,318379,427142,288409,441

11,595,557

266,597144,85217,67638,95969,641

1,611,04542,771103,68380,32040,2051,586

73,0556,829,597205,18867,55514,107

1,555,178

5,546

11,167,561

427,996

1,664,412

12,167,363

$ 14,259,771

VarianceFavorable

(Unfavorable)

1,059,255113,459

10,54043,28072,255

369,973

1,668,762

8,403741

(1,664)29,574

150(69,162)11,30213,24715,190(2,001)(1,017)12,838

(429,793)5,428

(10,992)(2,216)

701,522

(4,796)

276,756

1,945,518

76,618

See independent auditors' report25


SUPPLEMENTAL INFORMATION SCHEDULE


COMPENSATION PAID TO BOARD OF COMMISSIONERS

The schedule of compensation paid to the board of commissioners is presented in compliance with HouseConcurrent Resolution No. 54 of the 1979 Session of the Louisiana Legislature. Payment per diem is madein accordance with Louisiana Revised Statute 40:1498 which authorizes per diem payments of $30 perboard meeting attended through August 14, 2001. Effective August 15, 2001, the authorized per diempayment was increased to $100 per board meeting and $50 per committee meeting. The maximum numberof committee meetings per month allowed is 2.

Name Amount

William Dobson $1,600Thomas Druen 1,650C. T. Williams, Jr. 1,650David Walker 1,450Marie Taylor 1,050

Total $ 7,400

26

OTHER INDEPENDENT AUDITORS' REPORTS

& Associates, LLCCertified Public Accountants

Brent A. Silva, CPA Craig A. Silva, CPAKenneth J. Abney, CPA, MS Acct-Tax Thomas A. Gurtner, CPA

To the Board of CommissionersSt. Tammany Parish Fire Protection District No. 4Covington, Louisiana

We have audited the financial statements of the St. Tammany Parish Fire Protection District No. 4 as of andfor the year ended December 31, 2007 and have issued our report thereon dated May 22, 2008. Weconducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica and the standards applicable to financial audits contained in Government Auditing Standards,issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered St, Tammany Parish Fire Protection District No. 4'sinternal control over financial reporting as a basis for designing our auditing procedures for the purpose ofexpressing our opinion on the financial statements, but not for the purpose of expressing an opinion on theeffectiveness of the St. Tammany Parish Fire Protection District No. 4*s internal control over financialreporting. Accordingly, we do not express an opinion on the effectiveness of the St. Tammany Parish FireProtection District No. 4's internal control over financial reporting.

A control deficiency exists when the design or operation of a control does not allow management oremployees, in the normal course of performing their assigned functions, to prevent or detect misstatementson a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies,that adversely affects the entity's ability to initiate, authorize, record, process, or report financial datareliably in accordance with generally accepted accounting principles such that there is more than a remotelikelihood that a misstatement of the entity's financial statements that is more than inconsequential will notbe prevented or detected by the entity's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results inmore than a remote likelihood that a material misstatement of the financial statements will not be preventedor detected by the entity's internal control.

Our consideration of internal control over financial reporting was for the limited purpose described in thefirst paragraph of this section and would not necessarily identify all deficiencies in internal control thatmight be significant deficiencies or material weaknesses. We did not identify any deficiencies in internalcontrol over financial reporting that we consider to be material weaknesses, as defined above.

4330 Dumaine Street 4555 Lasalle St., Ste 300New Orleans, LA 70119 Mandeville, LA 70471(504) 833-2436 (985) 626-8299(504) 484-0807 www.silva-cpa.com (985) 626-9767

Compliance and Other Matters

As part of obtaining reasonable assurance about whether St. Tammany Parish Fire Protection District No.4*s financial statements are free of material misstatement, we performed tests of its compliance with certainprovisions of laws, regulations, contracts and grants, noncompliance with which could have a direct andmaterial effect on the determination of financial statement amounts. However, providing an opinion oncompliance with those provisions was not an objective of our audit and, accordingly, we do not expresssuch an opinion. The results of our tests disclosed no instances of noncompliance or other matters that arerequired to be reported under Government Auditing Standards.

This report is intended for the information of the St. Tammany Parish Fire Protection District No. 4'smanagement and the Legislative Auditor of the State of Louisiana, and should not be used for any otherpurpose. This restriction is not intended to limit the distribution of this report, which, upon acceptance bythe Board of Commissioners of the St. Tammany Parish Fire Protection District No. 4, is a matter of publicrecord.

May 22,2008

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