jefferson parish volunteer fire department no. 1 - grand islefile/...> the bp deepwater horizon...

GRAND ISLE VOLUNTEER FIRE COMPANY NO. 1

(GIVFD) d/b/a

FIRE PROTECTION DISTRICT NO. 9 OF JEFFERSON PARISH

ANNUAL FINANCIAL REPORT Year Ended December 31,2014

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TABLE OF CONTENTS

FINANCIAL SECTION Page

INDEPENDENT AUDITOR'S REPORT 1 MANAGEMENT'S DISCUSSION AND ANALYSIS 3 BASIC FINANCIAL STATEMENTS

Government-wide Financial Statements Statement of Net Position 14

Fund Financial Statements Balance Sheet - Governmental Funds 16 Reconciliation of the Governmental Funds Balance Sheet

to the Statement of Net Position 17 Statement of Revenues, Expenditures, and Changes in

Fund Balances - Governmental Funds 18 Reconciliation of the Statement of Revenues, Expenditures, and Changes in

Fund Balances of Governmental Funds to the Statement of Activities 19 Notes to Financial Statements

Note A - Summary of Significant Accounting Policies 21 Note B - Reconciliation of Government-wide and Fund Financial Statements 25 Note C - Stewardship, Compliance, and Accountability

Note C.l - Compliance with Cooperative Endeavor Agreement 25 Note D - Detailed Notes on All Activities and Funds

Note D.l - Deposits and Investments 25 Note D.2 - Receivables 26 Note D.3 - Capital Assets 27 Note D.4 - Intergovernmental Contracted Services 28 Note D.5 - Long-term Debt 28

Note E - Economic Dependence 29 Note F - Commitments and Contingencies

Note F. 1 - Risk Management 30 Note F.2 - Litigation 30

Note G - Other Information Note G.l - Retirement 30 Note G.2 - Htirricanes Katrina and Rita 31 Note G.3 - Hurricanes Gustav and Dee 31 Note G.4 - Hurricane Isaac 32 Note G.5 - BP Deepwater Horizon Oil Spill 32

TABLE OF CONTENTS (CONTINUED)

Page

INDIVIDUAL FUND STATEMENTS AND SCHEDULES General Fund

Schedule of Revenues - Actual 34 Schedule of Expenditures - Actual 35

SUPPLEMENTARY INFORMATION Schedule of Expenditures of Federal Awards 38 Schedule of Compensation, Benefits and Other Paymoits to

Agency Head or Chief Executive Officer 39

COMPLIANCE SECTION

Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 41

Schedule ofFindings and Responses 43

FINANCIAL SECTION

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Paul C. Rivera, CPA 2612 Crestway Road Marrero, lA 70072

(504) 371-4390

INDEPENDENT AUDITOR S REPORT

To the President and Board of Grand Isle Volunteer Fire Company No. 1 (GIVFD) Grand Isle, Louisiana

Report on the Financial Statements

I have audited the accompanying financial statements of the governmental activities and each major fund (i.e., the General Fund) of Grand Isle Volunteer Fire Company No. 1 ("GIVFD"), a non-profit entity d/b/a Fire Protection District No. 9 of Jefferson Parish, as of and for the year ended December 31, 2014, and the related notes to the financial statements, which collectively comprise GIVFD's basic financial statements as listed in the table of contents.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

My responsibility is to express opinions on these basic financial statements based on my audit. I conducted my audit in accordance with auditing standards generally accepted in the United States and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material missMement.

An audit involves performing procedures to obtain audit evidenced about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor^s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, I express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence 1 have obtained is sufficient and appropriate to provide a b^is for my audit opinions.

Opinions

In my opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of GIVFD as of December 31,2014 and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Member: AmeriCMi Institute of Certified Public Accountants ^ Louisiana Society of Certified PubUc Accountants

Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United Stales of America require that the Management's Discussion and Analysis on pages 3 through 12 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. I have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to my inquiries, the b^ic financial statemoits, and other knowledge I obtained during my audit of the basic financial stetemente. I do not expmss an opinion or provide any assurance on the information because the limited procedures do not provide me with sufficient evidence to express an opinion or provide any assurance.

Other Information

My audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise GIVFD's financial statements. The individual fund statements, schedules and supplemental information are presented for purposes of additional analysis and are not a required pmt of &e financial stetements.

These individual fund statements, schedules and supplementary information are die responsibility of management and were derived fi*om and relate directly to the underlying accounting and other records used to prepare the basic fmancial statements. Such information has been subjected to the auditing procedures applied in die audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the imderlying accounting and other records used to prepare the financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In my opinion, the individual fund, schedules, and siqiplementary information are fairly stated in all material respects in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, I have also issued a report dated June 20,2015, on my consideration of GIVFD's internal control over financial reporting and on my tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of my testing of internal control ova: financial reporting and compliance and tiie results of that testing, and not to provide an opinion on the internal control over financial reporting or on <»mpliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering GIVFD's internal control over fmancial reporting and compliance.

June 20,2015

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GRAND ISLE VOLUNTEER FIRE COMPANY NO, 1 C'GIVFD") PO BOX 550

GRAND ISLE, LA 70358

MANAGEMENT'S DISCUSSION AND ANALYSIS

As management of Grand Isle Volunteer Fire Company No. 1 ("GIVFD"), a non-profit entity d/b/a Fire Protection District No. 9 of Jefferson Parish, we offer readers of GIVFD*s financial statements this narrative overview and analysis of the fmancial activities of GIVFD for the fiscal year ended December 31,2014. We encourage readers to consider the information presented here in conjunction with the financial statements, which begin on page 14.

FINANCIAL HIGHLIGHTS

> The assets of GIVFD exceeded its liabilities at the close of the most recent fiscal year by $432,057 {Net Position). Of this amount, $364,476 or 84.4 percent is invested in capital assets, such as building, vehicles md firefighting equipment, net of any related debt. The remaining balance of $67,581 {Unrestricted Net Position) or 15.6 percent represents the amount available to meet the entity's ongoing obligations to citizens aid creditors.

> GIVFD's total Net Position decreased by $(92,259) or 17.6 percent during the current year because total expenses exceeded revenues by that amount. Despite cut backs in many areas, personnel and related costs went up $61,791 (mostly in medics' salaries).

> As of the close of the current fiscal year, GIVFD's governmental fund (the General Fund) reported a fund balance of $67,581, a decrease of $(65,877) or 49.4 percent in comparison with the prior year. The primary reason for the decrease was the increase seen in payroll related costs.

> GIVFD has a cooperative agreement with the Grand Isle Volunteer Emergency Services (i.e., ambulance) Department (GIVES) for it to provide GIVES with administrative and operating support. All of the employees of GIVES were transferred to GIVFD in the prior year. GIVES paid GIVFD $308,162 during the year vmder this agreement.

> GIVFD removed $298,954 of fixed assets fiom the books which was made up of $42,887 of furniture and fixtures and $256,067 of vehicles and heavy equipment that have been disposed of and/or scrapped. These disposals were offset by the removal of $292,953 in accumulated depreciation, resulting in a loss on disposal of equipment of $(6,001). Some of these assets were lost/damaged in previous hurricanes and others were broken and in disrepair.

> GIVFD had $106,770 in outstanding debt at year end. This amount is made up of two capital leases on the purchase of a fire truck in 2007 and the purchase of a brush truck in 2014. GIVFD made debt service payments totaling $36,243 in 2014 ($30,229 in principal and $6,014 in interest).

> GIVFD is still feeling the effects of Hurricanes Katrina. Rita, Gustav and Ike. Project worksheets continue to be worked through and reimbursements and costs continue.

> The BP Deepwater Horizon oil rig exploded and sank in April 2010. Oil spewed into the Gulf of Mexico for months and affected the Grand Isle area. The area is still feeling the effects of the oil spill as winter storms and hurricanes bring residual oil mats onto the Town's beaches on occasion. While the short-term impact of the BP oil spill was positive due to the money spent in the area during the spill response, it is unknown what long-term effects this oil spill may have on the area's seafood or tourism industries.

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OVER VIEW OF THE FINANCIAL STATEMENTS

This discussion and analysis are intended to serve as an introduction to GIVFD's basic fuiancial statements. GIVFD's basic iinancial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves.

Government-wide financial statements. The "government-wide financial statements" are designed to provide readers with a broad overview of GIVFD's finances, in a manner similar to a private-sector business.

The "Statement of Net Position" presents information on all of GIVFD's assets and liabilities, with the difference between the two reported as Net Position. Over time, increases or decreases in Net Position my serve as a useful indicator of whether the financial position of GIVFD is improving or deteriorating.

The "Statement of Activities" presents information showing how the government's Net Position changed during the most recent fiscal year. All changes in Net Position are reported as soon as the underlying ev^t giving rise to the change occum, regardless of the timing ofrelated cash flows. Tht^, revenues and expenses are reported in this statement for some items that will only result in cash flows in ftiture fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both of the government-wide finaicial statements are designed to distinguish functions of GIVFD that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intendai to recover all or a significant portion of their costs through user fees and charges (business-type activities). It should be noted that GIVFD only has governmental activities.

Die government-wide financial statements include only the financial activities of GIVFD, which are made up of the "private" account and the "public funds" account. The government-wide financial statements can be found on pages 14 and 15 of this report.

Fund financial statements. A "fund" is a grouping of related accounts that is used to maintain control over resources diat have been segregated for specific activities or objectives. GIVFD, because it is a "quasi-public" entity, uses fund accounting like state and local governments to ensure and demonstrate compliance with finance-related legal requirements.

GIVFD's funds can be classified into three categories: governmental funds, proprietary funds, and fiduciary funds. As discussed below, GIVFD only presents governmental funds.

Governmental funds, "Governmental funds" are used to account for essentially the same functions reported as "governmental activities" in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements.

Because the focus of governmental funds is narrower than that of the govanment-wide financial statements, it is useful to compare the information presented for "governmental funds" with similar information presented for "governmental activities" in the government-wide financial statements. By doing so, readers may better understand the long-term impact of die government's near-term financing decisions. Both the governmental fund balance sheet and the government^ fimd statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between "governmental fund" and "governmental activities".

GIVFD maintains only one fund (the General Fund). Information is presented in the governmental fund balance sheet and in the governmental statement of revenues, expenditures, and changes in fund balances for the General fund.

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GIVFD is a "quasi-public" entity and is not required to adopt an annual budget. Thus, a budgetaiy comparison statement is not shown.

The basic governmental fund rinancial statements can be found on pages 16 to 19 of this report.

Notes to the Financial Statements. The notes provide additional information that is essential to a fiill understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 21 to 32 of this report.

Other information, hidividual fund statements and schedules, which show additional detailed financial information on the Goieral Fund, are found on pag^ 34 and 35. Supplementary informarion, which includes a Schedule of E^ienditures of Federal Awards and the newly required Schedule of Compensation, Benefits and Payments to the Agency Head, is found on pages 38 mid 39.

GOVERNMENT-WIDE FINANCIAL ANALYSIS

As noted earlim-, Net Position may serve over time as a useful indicator of a government's financial position. In the case of GIVFD, assets exceeded liabilities by $432,057 at December 31,2014, a decrease of $(92,259) or 17.6 percent.

A large portion of GIVFD's Net Position ($364,476 or 84.4 percent) reflects its investment in capital assets (e.g., land, buildings, furniture and fixtures, vehicles and firefighting equipment); less any related debt used to acquire those assets that is still outstanding. GIVFD used these capital assets to provide services to citizens; consequently, these assets are not available for future spending. Although GIVFD's investment in its capi^ assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other resources, since the capital assets themselves cannot be used to liquidate these liabilities.

Below is a comparison of GIVFD's Statement of Net Position for 2014 and 2013.


Governmental Activities

Current and other assets Capital assets

Total assets

Long-term liabilities outstanding Other liabilities

Total liabilities

Net assets: Invested in capital assets, net of

related debt Restrictni Unrestricted

Total net assets

Governmental Activities

2014 2013

S 160,652 S 232,146 471,246 527.857 631,898 760,003

106,770 136,999 93,071 98,688

199,841 235,687

364,476 84.4% 390,858 74.5% 0 0.0% 0 0.0%

67,581 15.6% 133.458 25.5% S 432,057 $ 524,316

The balance of Unrestricted Net Position is $67,581 at December 31,2014.

At December 31,2014, GIVFD is able to report positive fund balances in all three categories of Net Position.

GIVFD's Net Position decreased by $(92,259) or 17.6 percent during the current fiscal year.

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Governmental Activities. During 2014, governmental activities decreased GIVFD's Net Position by $(92,259). Key elements of this increase are shown below as compared to 2013.

GRAND ISLE VOLUNTEERFIRE COMPANY Na 1

Govanmental Activiti«

Qovontnental Activities

Revames Program revenues:

Chffiges for seivices Qperatii^ grants and contributions C^tal grants and contnlnitiais

Gaieral revalues:

Lbirestrictedintaest Gain (loss) ai sale of equipment Unrestricted gifts and donations Miscellaneous

Total revenues

Ejqmses: PlMicSafe^

Total esqiesses

bicrease in net assets Net assets - B^inning of year Net assets - Old of year

2014 2013

$ ao% $ 0.0% 308,162 3a6% 364^701 35.3%

- 0.0% - 0.0%

669,520 66.4% 648,959 617% 241 0.0% 460 0.0%

(6,001) -0.6% - 0.0% 10,950 1.1% 3,387 0.3% 25,065 2.5% 16,791 1.6%

1,007,937 100.0% 1,034,298 100.0%

1,100,196 100.0% 1,19^340 100.0% 1,100,196 100.0% 1.190340 100.0%

(92,259) 524,316

(156,042) 680,358

$ 432,057 524,316

> Operating grants represent the proceeds from a cooperative agreement with the Grand Isle Volunteer Emergency Services Department (GIVES). Under the agreement with GIVES, all of the employees of GIVES were transferred to GIVFD and GIVFD now provides GIVES with administrative and operating support. GIVES reimburses GIVFD up to 85.0 percent of the proceeds of the money it receives from the Parish to operate an ambulance district within the Town boundaries. During 2014, GIVES paid GIVFD $308,162, a decree of $(56,539). The decrease was due to overtime incurred in the prior year by the ambulance drivers over and above their normal levels and GIVES reimbursed GIVFD for this excess. This did not recur in 2014.

Intergovernmental revenues come from the Parish of Jefferson and the State. The Parish levies an ad valorem tax in Grand Isle and remits a certain amount to GIVFD each month to provide funding to the Fire District. For 2014, the millage rate levied was 19.20 mills (the same as last year). This allocation came in at $660,000 for 2014 and $639,416 for 2013. The State also remits a fire insurance rebate to each fire company. For 2014 and 2013, this amount was $9,520 and $9,543, respectively. The graph shows the amount of intergovernmental revenues received by GIVFD over the past five years.

$700,000

Intergovernmental Revenues Last 5 Years

2010 2011 2012 2013 2014

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> Loss on sale/disposal of equipment totaled $(6,001) in the current year due to the disposal and replacement of some old broken down vehicles and equipment in disrepair.

> Unrestricted gifts and donations totaled $10,950 in 2014 and $3,387 in 2013. This amount was made up of donations from businesses and citizens to help finmice the office (and varies by year).

y Miscellaneous income totaled $25,065 in 2014 and $16,791 in 2013, mostly dividends fix)m LWCC on workers compensation program ($24,184 in 2014 and $16,771 in 2013).

> A breakdown of the revenues received by GIVFD's governmental activities is as follows:

Revenues by Source - Governmental Activities

Donations 1.1%

Interest & Other *1.9%

Operating & Capital Grants 30.6%

Intergovt'l 66.4%

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Expenses totaled $1,100,196, including current year dqjreciation of $79,157 and interest on long-term debt of $6,014. As a fire district, the only function GIVFD provides is the public safety function. These ejq)enses of GIVFD were offset by program revenues (service charges and grants) totaling $308,162 (see above), leaving a net revenue (cost) to citizens of GIVFD of $(792,034). The cost is primarily funded by the general revenues discussed above. A graph comparing the expenses with the program revenue generated is presented below.

Expenses and Program Revenues By Function

$1,200,000-1^

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0

ElExpenses QPn^rem Revenues

FINANCIAL ANALYSIS OF THE GOVERNMENTS FUNDS

As noted earlier, GIVFD uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

Governmental Funds. The focus of GlVFD's "governmental funds'^ is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing GIVFD's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.

As of December 31,2014, GIVFD's governmental fund (i.e., the General Fund) reported ending fund balance of $67,581, a decrease of $(65,877) or 49.4 percent in comparison with the prior year. This change was caused by a number of factors, which are discussed below.

As noted above, the governmental funds include the general operating funds of GIVFD (i.e., the General Fund). Overall, as the graph shows, revenues of the Governmental Funds increased and decreased greatly over the past years. Because of the small size of the operating fund, operating and capital grants can create large swings in revenues when recognized. This is especially true since the hurricanes in

Governmental Fund Revenues Last 5 Years

2010 2011 2012 2013 2014

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2005 and 2008, as well as the oil spill in 2010. The cooperative agreement with Grand Isle Voluntea* Emergency Services to provide administrative support brought in $308,162 in 2014 (down $(56,539)) and assistance from FEMA brought in $-0-. The allocation fiom the Parish brought in $660,000, an increase of $20,584 over the prior year due to the Parish collecting slightly more in taxes (higher assessments).

Miscellaneous income totaled $25,065 in 2014 (up $8,274). This amount is primarily made up of refunds from the workman's compensation carrier (LWCC). The 2014 refund totaled $24,184 and was $16,771 in 2013.

As a measure of the General fund's liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 6.3 percent of total general fund expenditures. This is a decrease from the 11.3 percent noted last year.

The fund balance of GIVFD's General fund decreased by $(65,877) during the current fiscal year. Key factors in this change are as follows:

> The General Fund's revenues totaled $1,013,938, while expenditures totaled $1,079,815. > Revenues were made up of:

• Intergovernmental revenues included $-0- in assistance from FEMA for emergency measures and damage to facilities relating to Hurricanes Katrina, Rita, Gustav and Ike (although these projects are still open).

• Intergovernmental revenues included $9,520 of state fire insurance rebates. • Intergovernmental revenues also indued an allocation from Jefferson Parish (i.e.. Property taxes)

totaling $660,000. This amount is $20,584 higher than 2013, as the monthly allocation was adjusted to reflect the an increase in the taxes collected due to higher assessments. The number of mills levied on the 2013 tax roll was 19.20 due to a roll-back of the rate by the Parish Council designed to keep revenues flat (the same as last year).

• Intergovernmental revenues also included $308,162 fix)m the cooperative agreement with the Grand Isle Volunteer Emergency Services to provide administrative support to the mnbulance department. This amount decreased from last year GIVES reimbursed GIVFD for additional overtime worked by the medics in 2013 (and this did not recur in 2014).

• Donations and gifts totaled $10,950. These r^nesent donations fix>m citizens and businesses to help support the operations of the office.

• Miscellaneous revenues total $25,065, including $24,184 from LWCC dividends.

> Expenditures totaled $1,079,815:

• Personnel and related costs totaled $850,307 or 78.8 percent of expenditures - salaries amounted to $664,021 and benefits totaled $186,286. This category increased $61,791 or 7.8 percent from 2013. Most of the increase relates to salaries for medics (up $74,143), as an additional enqrloyee as added to the staff and the medics' salaries were adjusted. Workmen's compensation insurance also increased by $6,213.

• General and administrative costs totaled $114,531 or 10.6 percent of expenditures - electricity was $22,519, groceries and station supplies were $21,866, phones were $20,644, insurance was $19,268, office supplies totaled $8,572, equipment rental (copier and oxygen tanks) was $7,499, bookkeeping mid audit fees totaled $5,750, cable and internet access totaled $2,761, and travel and conventions costs were $1,940. In total, this category decreased $(23,609) or 17.1 percent from last year. Groceries and station supplies were down $(11,398) due to cut backs, electricity was up $4,085 as Station 99 was back online for a full year, phones were down $(9,446) due to cut backs, and insurance was down $(10,672) due to the write off of a prior year double payment on flood insurance.

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• Emergency training and supplies totaled $21,677 or 2,0 percent of expenditures. This category included gas and oil for vehicles of $14,805, training costs of $(100) (a refund on the cancellation of a class fee from last year), uniforms and shirts of $3,288, fire prevention week costs of $1,870, and firefighting supplies of $209. In total, the category was down $(21,387) due to the prior year including travel and conference fees for die hurricane conference Mid a dive rescue class. In 2014, these conferences were not attended.

• Repairs and maintenance totaled $24,763 or 2.3 percent of expenditures. Repairs to the fire trucks came in at $22,880 and repairs to buildings amounted to $1,883. Vehicle repairs were down $(47,770) as 2013 included costs for additional repairs to die trucks and lights and supplies were add^ to the newly purchased brush truck. These costs did not recur in 2014.

• Miscellaneous expenditures were $3,652 or 0.3percent of expenditures (made up mostly of costs incurred out of the private account for donations to local schools and holiday events for the children and citizens).

• Capital outlays totaled $28,642 or 2.7 perc^t. Hiis included the payment of 14 of a Crown Victoria for die Fire Chief, the purchase of a new wavenmner (for beach patrols/rescues) and some office equipment and furniture.

• Debt Service totaled $36,243 or 3.4 percent of expenditures. This represents principal payments of $30,229 and interest payments of $6,014 on the capital leases for a pumper fire truck and a brush truck.

CAPITAL ASSET AND DEBT ADMINISTRATION

Capital Assets. GIVFD's net investment in capital assets for its governmental activities as of December 31, 2014 amounts to $364,476 (net of accumulated depreciation and related debt). This investment in capital assets includes land, buildings, furniture and fixtures, heavy equipment, and vehicles. GIVFD's investment in capital assets decreased by $(26,382) or 6.7 percent this year.

Major capital asset events during the current fiscal year included the following:

> $7,524 was spent the purchase of a used Crown Victoria for the Fire Chief (GIVFD paid Vi and GIVES (the ambulance district) paid V2).

> $14,910 was spent on a new wavenmner for beach patrols/rescues. > $6,113 was spent on furniture & fixtures. > Disposals of $298,954 were posted - $42,887 of furniture and fixtures and $256,067 of vehicles and

heavy equipment. These were offset by the removal of accumulated depreciation on these assets of $292,953. Many of these vehicles were broken and in disrepair and disposed of/scrapped.

> $79,157 was recognized as depreciation expense.

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GRAND ISLE VOLUNTEER FIRE COMPANY NO. 1 CAPITAL ASSETS

(NET OF DEPRECIATION)

Governmental Governmental Activities Activities

Land Building Furniture and fixtures Vehicles and firefighting equipment Total

Capital-related debt

Net Investment

2014 2013 $ 39,800 $ 39,800

147,217 159,547 10,860 18,079

273,369 310,431 471,246 527,857

(106,770) (136,999)

$ 364,476 $ 390,858

Additional information on GIVFD's capital assets can be found in Note D.3 on page 27.

Long-term Debt. At the end of 2014, GIVFD had outstanding debt totaling $106,770. This amount is made up of the balance on two capital leases for fire trucks. The first capital lease was entered into to finance the purchase of a new pumper truck and is payable over a ten (10) year period. The second lease was entered into during 2014 for the purchase of a new F-550 brush truck. The balances on these leases at year end are $73,843 and $32,928, respectively.

Additional information on GIVFD's long-term debt can be found in Note D.5 on page 28.

ECONOMIC FACTORS AND NEXT YEAR'S RATES

> The unemployment rate for the Parish of Jefferson is currently 6.1 percent, which is 1.8 percent higher than a year ago (a reflection of a slowing economy). In the coastal community of Grand Isle, which is heavily dependent on offshore oil and commercial fisheries (primarily shrimping), the rate is typically much hi^er.

> Inflationary trends in the region compare favorably to national indices. > The ad valorem millage was renewed by a popular vote in April 2011 and is now has a maximum

authorized rate of 20.00 mills. For 2014, the Parish levied 19.20 mills, which is the same as 2013. Thus, revenues are expected to remain at or about the same next year.

> The BP Deepwater Horizon oil spill continues to affect the area; either throu^ the continuing clean-up effort whenever a storm washes residual oil mats onto the beaches or the continued slow-down of offshore drilling. It is hoped that the oil spill will not have a long-term or negative effect on ad valorem tax levels or operating revenues.

REQUESTS FOR INFORMATION

This financial report is desired to provide a general overview of GIVFD's finance for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Grand Isle Volunteer Fire Company, No.l, President, PO Box 550, Grand Isle, Louisiana 70358.

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BASIC FINANCIAL STATEMENTS

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GRAND ISLE VOLUNTEER FIRE COMPANY NO. 1 d/b/a FIRE PROTECTION DISTRICT NO. 9 OF JEFFERSON PARISH

STATEMENT OF NET POSITION DECEMBER 31,2014

GOVERNMENTAL ACTIVITIES

ASSETS Cash and cash equivalents Investments Receivables (net of allowance for uncollectibles) Other assets C^tal assets (net of accumulated depreciation)

Land Buildings Furniture and fixtures Heavy equipment Vehicles and firefighting equipment Infrastructure Construction in progress

TOTAL ASSETS

LIABILITIES Accounts payable and odier current liabilities Accrued payroll and deductions Unearned grant re\^mes Noncurrent liabilities:

Due within one year Due in more than one year

TOTAL LIABILITIES

NET POSITION Net investment in capital assets Restricted for:

Debt service Other

Unrestricted

TOTAL NET POSITION

$ 39,800 147,217 10,860

273,369

134,707

15,425 10,520

471,246

631,898

33,961 7,198

51,912

36,243 70,527

199,841

364,476

67,581

432,057

The accompanying notes are an integral part of this statement.

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GRAND ISLE VOLUNTEER FIRE COMPANY NO. I d/b/a FIRE PROTECTION DISTRICT NO. 9 OF JEFFERSON PARISH

STATEMENT OF ACTIVITIM FOR THE YEAR ENDED DECEMBER 31,2914

FUNCTION

Prinuiy Govenunent Oovonmenbd Activities;

Public Safety

Unallocated depreciation expense

Interest on k>ng-tenn debt

Total governmental activities

EXPENSES

S 1,015,025

79,157

6,014

PROGRAM REVENUES

CHARGES FOR SERVICES

OPERATING GRANTSAND

CONTRIBUTIONS

308,162

CAPITAL GRANTSAND

CONTRIBUTIONS

NET (EXPENSE) REVENUE AND CHAN(»SIN NET ASSETS

PRIMARY GOVERNMENT GOVERNMENTAL

ACTIVITIES

(706,863)

(79,157)

(6,014)

208.162 (792,034)

GENERAL REVENUES: Intergovemmental - PHiA AQocatim of Proper^ Taxes bttergovenmieaal- State Foe bKmnce Rotate Unreaticted intasst Gain (feaa) on sale ofetpiqnaeat Unrestricted gifts tmd dcmationa O&a

TRANSFERS IN (OUT)

TOTAL GENERAL REVENUE AND TRANSFERS

CHANGE IN NET POSITION

NETPOSinON Beginning ofVear

End of Year

660,000 9,520

241 (6.001) 10,950 25,065

699,775

(92,259)

524316

432.057


-15-


GOVERNMENTAL FUNDS BALANCE SHEET DECEMBER 31,2014

ASSETS General Fund

Cash and Certificates of Deposit Accounts Receivable Prepaid items

TOTAL ASSETS

134,707 15,425 10,520

160,652

LIABILITIES AND FUND BALANCE

Liabilities: Accoimts payable Salaries mid related taxes payable Unearned grant revenues

Total Liabilities

Fund Balance Ncm-spendable Restricted Committed Assigned Unassigned

Total Fund Balance

TOTAL LIABILITIES AND FUND BALANCES

33,961 7,198

51,912

93,071

67,581

67,581

160,652


-16-


RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE STATEMENT OF NET POSITION FOR THE YEAR ENDED DECEMBER 31,2014

Amounts reported for governmental activities in the Statement of Net Position (page 13) are dififoent bet^use:

Total FtmdBalances atDecemberSl, 2014 - Governmental Funds (page 16) $ 67,581

Capital assets used in governmental activities are not financial resources and, therefcv^ are not reported in die funds. Hie cost of the assets is $1,682,318 and die »xmmula^ dqireciation is $1,154,461. 471,246

Long-term liabilities, including compensated absences, are not due and payable in the current period and therefore are not reported in the funds. Long-term liabilities at year-end consist o£

Notes Payable Capital Lease Payable (106,770)

Total Net Position of Govenunental Activities at December 31,2014 (page 14) $ 432,057


-17-

GRAND ISLE VOLUNTEER FIRE COMPANY NO. 1 d/b/a FIRE PROTECTION DISTRICT NO. 9 OF JEFFERSON PARFSH

GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED DECEMBER 31,2014

OTHER FINANCING SOURCES Capital lease Loan proceeds

EXCESS (DEFICIENCY) OF REVENUES AND OTHER FINANCING SOURCES OVER EXPENDITURES

FUND BALANCE Beginning of year

&idofyear


-18-

General Fund REVENUES

Intergovernmental $ 977,682 Service charges and reimbursements Donations and gifts 10,950 Interest 241 Miscellaneous 25,065

TOTAL REVENUES 1,013,938

EXPENDITURES

Current Public Safety

Personnel and related costs 850,307 General and administrative costs 114,531 Emergency training and supplies 21,677 Repairs and maintenance 24,763 Miscellaneous 3,652 Capital outlay 28,642

Debt Service Principal 30,229 Interest 6,014

TOTAL EXPENDITURES 1,079,815

EXCESS OF REVENUES OVER EXPENDITURES (65,877)

(65,877)

133,458

67,581


RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED DECEMBER 31,2014

Amounts rqjorted for governmental activities in the Statement of Activities (page 14) are different because:

Net change in fund balances - total governmental funds ^age 18) (65,877)

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.

The net effect of v^ous miscellmieous transactions involving capital assets (i.e., sales, trade-ins, and donations) is to increase net assets.

The issuance of long-term debt (e.g., notes payable, leases) privides current financial resources to the governmental funds, while the repayment of the principal on long-term debt consumes the current fin^cial resources of governmental funds. Neither transaction, however, has any effect on net assets. This amount is the net effect of these differences in the treatment of long-term debt and related items.

(50,610)

(6,001)

30,229

Change in net position of governmental activities (page 15) (92,259)


-19-


-20-

GRAND ISLE VOLUNTEER FIRE COMPANY NO. 1 (GIVFD) d/b/a

FBRE PROTECTION DISTRICT NO. 9 OF JEFFERSON PARISH NOTES TO FINANCIAL STATEMENTS

December 31,2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Grand Isle Fire Company No. 1 (GIVFD), a non-profit entity d/b/a Fire Protection District No. 9 of Jefferson Parish, have been prepared in conformity with generally accqjted accounting principles (GAAP) as applied to governmental units under the legal premise that GIVFD is a "quasi-public" corporation. Quasi-public corporations are non-profit or private companies who are created to perform a public service and which receive the majority of their funding from public funds (i.e., taxes, grants, etc.). The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of GIVFD's accounting policies are described below.

1. Reporting Entity

GASB Codification Section 2100 establishes criteria for determining the governmental reporting entity and its component units. Component units are defined as legally separate organizations for which the elected officials of a primary government are financially accountable. The criteria used in determining whether financi^ accountability exists include the ̂ ^intment of a voting majority of an oi^anization's governing board, the ability of the primary government to impose its will on that organization or whether there is a potential for the organization to provide specific financial benefits or burdens to the primary government. Fiscal dependency may also play a part in determining financial accountability. In addition, a component unit can be another organization for which the nature and significance of its relationship with a primary government is such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete.

Fire District No.9 of Jefferson Parish (the "District") was created by Parish Ordinance to provide fire protection services to the citizens of the Town of Grand Isle and the surrounding area. The District is currently funded by a 20 mill ad valorem tax levied by the District via the Parish Council and is governed by the same Council that governs the Parish. As such, the District is reported as a component unit within the Parish's financial statements.

Under a cooperative endeavor agreement, the daily operations of the District are contracted out to Grand Isle Voluntea: Fire Conqiany No. 1 (GIVFD). GIVFD was incorporated on April 25,1969 as a non-profit service corporation under Section 501(c)(3) of the Internal Revenue Code. GIVFD has been classified as an entity that is not a private foundation within the meaning of Section 509(a) and qualifies for deductible contributions as provide in Section 170(b)(l)(A)(vi). GIVFD is governed by a President and a 5 member Board of Directors which are elected by the membership. The accompanying statements report transactions related only to those of GIVFD.

-21-


HRE PROTECTION DISTRICT NO. 9 OF JEFFERSON PARISH NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31,2014

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

2. Gnvemment-wide and Fund Financial Statements

Government-wide Financial Statements

The govenmient-wide financial statements (i.e., the statement of Net Position the Statement of Activities) report information on all of the nonfiduciary activities of GIVFD. For the most part, the effect of interfund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are rqjorted separately fiom business-type activities, which rely to a significant extent on fees and charges for support. Because of the nature of GIVFD's operations, GIVFD reports only governmental activities.

The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular fimction or segment. Taxes and other items not properly included among progimn revenues are reported instead as general revenues.

Fimd Financial Statements

Funds are used by GIVFD to report on its financial p<^tion and the results of ite <^rations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to CCTtain government functions or activities.

A fimd is a sq)arate accounting entity with a self-balancing set of accoimts. The funds of GIVFD are classified into the "governmental" category. The category, in turn, is divided into separate **fund types".

Governmental funds are used to account for all or most of a government's general activities, including the collection and disbursement of emmarked monies (special revenue funds), the acquisition or construction of general fixed assets (capital project funds), and the servicing of general long-term debt (debt service fun(k). The General Fund is i^ed to account for all financial activiti^ of tiie general government not accounted for in some other fund.

-22-

GRAND ISLE VOLUNTEER FIRE COMPANY NO. 1 (GIYFD) d/b/a

FIRE PROTECTION DISTRICT NO. 9 OF JEFFERSON PARISH NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31,2014


GIVFD reports the following major governmental funds:

The General Fund is the general operating fund of GIVFD. It is used to account for all financial resources and expenditures. It includes the activity of the "private" account, as well as the "public funds" (i.e., tax allocation funds) account.

3. Measurement Focus. Basis of Accounting, and Financial Statement Presentation

The government-wide finmicial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues me recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requir^ents in^sed by die provider have been met. As a general rule, the effect of interfund activity has been eliminated fiom the government-wide financial statements.

Governmental fund financial statements are reported using a current financial resources measurement focus and the modified accrual basis of accounting. Revenues me recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. Intergovernmental revenues received fiom the Parish in connection with the cooperative endeavm* agreement aio recognized in the year to be benefitted. All other service charges mid intergovernmental revenues are recognized as received. Expenditures are recorded when the related fund liability is incurred. Principal and interest on general long-term debt are recognized as expenditures only when payment is due.

4. Budgets

As a quasi-public corporation, GIVFD is not required to adopt a budget; therefore, a budget to actual statement is not presented in the accompanying financial statements. An informal budget is adopted for internal purposes for the General Fund.

5. Assets. Liabilities, and Net Position or Eauitv

A. Cash and Investments

For reporting purposes, cash and cash equivalents includes amounts in demand dqiosits, time deposits, and certificates of deposit. This includes the balances in the "private" account, as well as die "public fimds" account.

Investments, if any, are stated at fair value, except for investments in government securities with maturities less than 1 year, which are stated at cost or amortized cost.

-23-



December 31,2014


B. Inventories

The cost of materials and supplies acquired by GIVFD are recorded as expenditures at the time of purchase. It is management's opinion that the inventory of such materials and supplies at December 31,2014 would not be material to the financial statements.

C. Capital Assets

Capital assets, which include property, plant, equipm^t, and in&astructure assets, are reported in the applicable govmunental activities column in the government-wide financial statements. Capital e^sets are defined by GIVFD as assets with an initial, individual cost of more than $ 100 and an estimated useful life in excess of two years. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of donation.

The costs of normal maintraiance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed and are included in construction in progress.

Property, plant, equipment, and infrastructure are depreciated using the straight-line method (with a mid-year convention) over the following estimated useful lives:

Asset Categoiy Useful Life in Years

RntlHinga 20

Furniture and fixtures 3 to 5 Vehicles and firefi^ting equipinent 5 to 10 Infi-astructure (if any) 40

D. Fund Equity

GIVFD follows the requirements of Government Accounting Standards Board (GASB) Statement No. 54 -Fund Balance Reporting and Governmental Fund Type Definitions. In accordance with this statement, in the fund fmancial statements, fund balances of the gov^nmental fund types are categorized into cme of five categories - Non-spendable, Restricted, Committed, Assigned, or Unassigned.

-24-



December 31, 2014

NOTE B - RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS

1. Explanation of Certain Differences Between the GnvemmRntal Fund Statement of Revenues. Expenditures, and Changes in Fund Balances and the Govemment-wide Statement of Activities

The governmental fimd statement of revenues, expenditures, and changes in fund balances includes a reconciliation between net changes in fimd balances - total governmentalfimds and changes in net position ofgovernmental activities as reported in the go>^mment-wide statement of activities. One element of that reconciliation explains that "Governmental fimds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense." The details of this $(50,610) difference are as follows:

Capital Outlay $ 28,547

Depreciation Expense (79,157)

Net adjustment to increase net changes in fiind balances - total governmentalfitnds to arrive at changes in net position - governmental activities

NOTE C - STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITy

1. Compliance with Cooperative Endeavor Agreement

As a quasi-public corporation, GIVFD is not subject to all of the general statutes governing political subdivisions and other governments within the State of Louisiana. Instead, GIVFD must comply with the terms and conditions of the cooperative endeavor agreement it has with the Parish of Jefferson. As of December 31,2014, GIVFD was in compliance with all of the significant conditions of the agreement,

NOTE D - DETAILED NOTES ON ALL ACTIVITIES AND FUNDS

1. Deposits and hivestments

The carrying amoimt of GIVFD's deposits at December 31,2014 was $134,507 and the bank balance was $142,182. This book balance on the balance sheet also includes $200 of petty cash. All of the bank balances were covered by FDIC.

-25-



December 31,2014

NOTE D - DETAILED NOTES ON ALL ACTmilES AND FUNDS (CONTINUED)

2. Receivables

As discussed in Notes G.2 and G.3, GIVFD has open claims with FEMA for disaster assistance related to Hurricanes Katrina, Rita, Gustav, Ike, and Isaac. At December 31,2014, $15,425 is reflected as receivable on these claims.

A recap of the receivables due at year end is as follows:

Description Receivable

JP - Millage Allocation $ FEMA Public Assistance Grants - Rita 6,003 FEMA - Public Assistance Grante - Ike 9,422 GIVES - Mondily Remittance

T otal Receivable $ 15,425

GIVFD considers all of its r^dvables as collectible, thus, no allowance for doubtful accounts has been established. The Governor's Office of Homelaid Security (GOSEP) is responsible for processing these disaster claims. GIVFD is working with GOHSEP on closing these claims out and collecting whatever funds will ultimately be allowed.

-26-



December 31,2014

NOTE D - DETAILED NOTES ON ALL ACTIVmES AND FUNDS (CONTINUED)

3. Capital Assets

The following is a summary of changes in the general fixed assets account group during the fiscal year:

Balance December 31,

2013 Additions Deletions

Balance De^iilwr31,

2014 Governmental Activities: Capital assets, not being depreciated

Land

Total capital assets, not being dqnociated

C^tal assets, being dqsreciated Buildings & iniprovements Fumiturte & fixtures Vehicles & firefighting equipment

Total capital assets, being depreciated

Less accumulated depreciation fon Building & in^novements Fumiturte & fixtures Vdiicles & firefighting equipment

Total accumulated depreciation

Capital assets being dqK:eciated,

Net governmental activities capi^ass^

$ 39,800 $ 39,800

$ 39,800 $ - $ - $ 39,800

$ 256,596 $ $ $ 256,596 164,366 6,113 (42,887) 127,592

1,221,556 22,434 (256,067) 987,923

1,642,518 28,547 (298,954) 1,372,111

(97,049) (12,330) (109,379) (146,287) (11,910) 41,465 (116,732) (911,125) (54,917) 251,488 (714,554)

(1,154,461) (79,157) 292,953 (940,665)

$ 488,057 $ (50.610) $ (6,001) $ 431,446

$ 527,857 $ (50,610) $ (6,OOiL $ 471,246

Fire District No. 9's two stations were damaged or destroyed by Hurricanes Katrina and Gustav. The Parish of Jefferson was awarded a claim through FEMA to provide funds to replace the main station (Station 97-see Note G.2). Station 97 opened in April 2011 and is now carried on the books of the Parish of Jefferson. The East Substation (Station 99) has been rebuilt and claimed with FEMA by GIVFD and is included in the assets above.

Current year disposals include various used vehicles and heavy equipment which were declared surplus by the board and scrapped and/or otherwise disposed of.

-27-



December 31,2013

NOTE D - DETAILED NOTES ON ALL ACTIVrilES AND FUNDS (CONTINUED)

4. Intergovenmiental Contracted Services

During 2007, GIVFD entered into a cooperative agreement with the Grand Isle Volunteer Emergency Services Department (GIVES), whereby GIVFD would provide accounting and administrative services and GIVES would reimburse it for the costs incurred. In addition, in an effort to save money and to consolidate operations, the employees of GIVES were transferred to GIVFD. Now, GIVFD employees are cross-trained and are responsible for responding to both fires and emergencies. Again, GIVES is required to reimburse GIVFD for costs incurred. During 2014, this agreement was renewed and calls for GIVES to remit up to 85 percent of its millage allocation to GIVFD. During 2014, GIVES made payments totaling $308,162 to GIVFD under this arrangement. This base amounted to 85.0 percent of GIVES' millage receipts for the current year.

Additionally, the Grand Isle Volunteer Fire Department (GIVFD) provides GIVES with the use of office space and some equipment at no cost. GIVES also now relies upon GIVFD for labor (see above).

5. Long-term Debt

Capital Leases

Pumper Truck In 2007, GIVFD entered into lease agreements as lessee for financing the acquisition of a new pumper truck. This lease agreement qualifies as capital leases for accounting purposes (bargain purch^e options and/or preset value of lease payments is greater than 90 percent of asset cost) and, therefore, has been recorded at die present value of the future minimum lease payments as of the date of its inception. The lease bears an interest rate of 5.11 percent and is being j^d over a ten (10) year periM. Ehiring 2(K)7, GIVFD missed a payment on this lease of $25,(KM). This payment has been accrued as accounts payable. During 2014, GIVFD made a payment of $27,172 on this lease principal of $22,261 and interest of $4,911). The balance of $73,843 is included in the noncurrent liabilities on the Statement of Net Position.

Brush Truck In 2013, GIVFD entered into lease agreements as lessee for financing the acquisition of a new brush truck. This lease agreement qualifies as capital leases for accounting purposes (bargain purchase options mid/or present value of lease payments is greater than 90 pCTcent of asset cost) and, therefore, has been recorded at the present value of the future minimum lease payments as of the date of its inception. GIVFD made a down-payment on the tiuck of $45,000 and financed the balance through the lease. The lease bears an average interest rate of 3.65 percent and is being paid over a five (5) year period. During 2014, GIVFD made a payment of $9,071 on this lease (principal of $7,967 and interest of $1,104). The balance of $32,928 is included in the noncuirent liabilities on the Statement of Net Position.

-28-



December 31, 2013

NOTE D - DETAILED NOTES ON ALL ACilVlllES AND FUNDS (CONTINUED)

Debt Service to Maturity

The following is a schedule of the future minimum lease payments under these agreements at December 31,2014.

YearEkided Pamper Track Lease Brush Ik-ock Lease Tbtal December 31, Principal Interest Principal Interest Principal Interest

2015 $23,398 $ 3,774 $ 7,755 $ 1,316 $ 31,153 $ 5,090 2016 24,594 2,578 8,064 1,006 32,658 3,584 2017 25,851 1,321 8,387 684 34,238 2,005 2018 - • 8,722 349 8,722 349

T otal Minimum Lease Payments $73,843 $ 7,673 $ 32.928 $ 3355 $ 106,771 $ 11,028 Per Lease and in Total $ 81,516 $ 36,283 S 117,799

Changes in Long-Term Debt

The following is a summary of the changes in long-term debt related to governmental activities for the fiscal year ended December 31,2014:

Balance Balance December 31, December 31, Due Within

Type of Debt 2013 Additions Reductions 2014 One Year

Capital Leases $ 136,999 $ - $ (30,228) $ 106,771 $ 31,153

"$ 136,999 $ - $ (30,228) $ 106,771 $ 31,153

The amount shown on the Statement of Net Position as due within one year is $36,243 (principai of $31,153 per the above table plus interest of $5,090).

NOTE E - ECONOMIC DEPENDENCE

The Parish Council is the official governing body of Fire District No. 9 of Jefferson Parish. To fund the operations of the district, the Parish levies an ad valorem tax each year. The Parish and GIVFD have entered into a coopoative endeavor agreement whereby GIVFD would be responsible for the day-to-day operations of the District. In return, the Parish would remit to GIVFD, on a monthly basis, l/12th of the currently budgeted ad valorem tax revenues expected to be collected fix)m taxes levied by the Parish. The original contract was for the period January 23,1985 to January 23,1995. The Parish and GIVFD have not yet renewed this contract but are operating on a month-to-month basis with many of the same operating terms and conditions of the old agreement.

-29-



December 31,2013

NOTE E - ECONOMIC DEPENDENCE (CONTINUED)

In January 2011, the public approved a renewal of the 20 tnitl ad valorem tax for the Fire District No. 9 (which placed it back to its original maximum amount); however, the rate was rolled back by the Parish in 2013. As such, only 19.20 mills were levied on the 2013 tax rolls. The remittance of these taxes during 2014 totaled $660,000. This amount includes a base allocation remitted by the Parish of $55,000 per month. The revenues fix)m this contract account for a substantial portion (65.1 percent) of GIVFD's total revenues.

NOTE F - COMMITMENTS AND CONTINGENCIES

1. Risk Management

GIVFD is exposed to various risks of loss resulting from peisonal injury; dieft of^ damage to, and destruction of assets; errors and omissions; injuries to employees; medical malpractice; and natural disast^. To protect against these risks of loss, the District purchases various types of insurance from commercial carriers.

Under these policies, general liability and medical malpractice coverage is provided for up to a maximum of $1,000,000 per occurrence ($2,000,000 in the aggregate); automobile liability coverage is provided for up to $1,000,000; and worker's compensation is provided at the statutory limits of $100,000/500,000/100,000. In each policy, GIVFD is responsible for the deductible.

2. Litigation

There is no litigation pending against GIVFD at December 31,2014.

NOTE G - OTHER INFORMATION

1. Retirement

GIVFD's OTiployees are members of the Social Security System. In addition to the anployee contribution withheld at 7.65 per cent, GIVFD contributes 7.65 percent to the System. Aggregate pulsion costs for the year totaled $53,277. GIVFD does not guarantee the benefits granted by the Social Security System.

In 1998, GIVFD began allowing certain employees to contribute to an IRA plan. GIVFD contributes 3 percent of the employee's gross salary as a match against that contributed by the employee. During 2014, the contribution to this plan totaled $3,973, of which $1,473 was paid for by GIVFD. The participating employee paid the $2,500 balance due.

-30-



December 31,2013

NOTE G - OTHER INFORMATION (CONTINUED)

2. Hurricanes Katrina and Rita

On August 29,2005, Hurricane Katrina struck the area and Hurricane Rita struck on September 11,2005. The Grand Isle area saw severe flooding and wind damage. GIVFD's main station was destroyed and the two substations received damage. In addition, emergency protective measures were performed by GIVFD personnel. Claims totaling $366,875 have been filed wi^FEMA. Aft^ the local share and administiative fees are added in, FEMA's share is $374,164. Hirou^ December 31,2014, payments totaling $399,139 have been received, including $-0- in 2014. The balance of $(24,975) has been deferred and is shown as unearned grant revenues on the books at year end. This overpayment and deferral resulted from FEMA reclassifying some of the costs claimed under Katrina to Hurricane Rita. Claims imder Rita totaling $60,034 have been filed for labor and equipment. After the local share and administrative fees are added in, FEMA's share is $61,655. To date, payments totaling $55,652 has been received and the balance of $6,003 is included in accounts receivable at year end.

In addition to the public assistance received from FEMA via the State's Office of Military Affairs, GIVFD benefited from FEMA in rebuilding the district's Main Fire Station, which was destroyed by Hurricane Katrina. Because the Fire District is governed by the Parish of Jefferson, the reconstruction of the Main Station was funded by FEMA through the Pari^ of Jefferson. To date, $256,393 has be^ paid in architectural fees related to the reconstruction project. This amount has been claimed by the Parish to FEMA and has been reimbursed under Project Worksheet (PW) JP-17676. The project was completed in April 2011 and GIVFD moved into the new station in August 2011.

3. Hurricanes Gustav and Dee

On August 29,2008, Hurricane Gustav threatened the area and caused the evacuation of the Metropolitan New Orleans area, including Grand Isle. The Grand Isle area saw severe flooding and some wind damage. The Isle was evacuated for several weeks until utility service could be reestablished. Some damage was incurred and some emergency work was performed by GIVFD. Claims totaling $270,780 have been filed with FEMA and $1,254 have been disallowed and returned. After the local share and administrative fees are accounting for, FEMA's share is $227,202. Through Decanber 31,2014, payments totaling $254,139 have been received, net ofarefimdto FEMA of $(1,254) in 2011. The balance due of $(26,937) is shown as unearned grant revenues at year end as these funds will be used in the future on several projects that FEMA has advanced funds on.

On September 12,2008, Hurricane Ike passed just off of the coastline of the State of Louisiana and hit Texas. While the Grand Isle area was spared a direct hit, the storm surge from ibe hurricane did cause some tidal flooding. Some damage was incurred and some emergency work was performed by GIVFD. Claims totaling $106,621 have been filed with FEMA. After the local share and administrative fees are accounting for, FEMA's share is $94,221. Through December 31,2014, payments totaling $84,799 have been received, including $-0- in 2014. The balance due of $9,422 has been accrued and is shown as a receivable on the books at year end.

-31-



December 31,2013

NOTE G - OTHER INFORMATION (CONTINUED)

4. Hxinicane Isaac

On September 1,2012, Hurricane Isaac struckjust west of the New Orleans Metropolitan Area and caused damage and storm/tidal flooding to the Grand Isle area. GIVFD performed some emergency work and filed clmms with FEMA. To date, these clainM have not yet been determined to be eligible and have not been approved. Claims totaling $61,988 have been filed with FEMA for labor and equipment. After the local share and administrative fees are accounting for, FEMA's share maybe $46,491. Through December 31,2014, none of these claims have been accrued due to the question of eligibility. Once approved, the revenues will be accrued and recognized..

5. BP Deenwater Horizon Oil Spill

On April 20,2010, the BP Deepwater Horizon oil drilling platform exploded and sank off the southeastern coast of Louisiana. Oil spewed into the GulfofMexico for the next three months. A good amount of this oil spill affected the Louisiana coastline and interior waterways and bayous, including the southern portion of Jefferson Parish (i.e.. Grand Isle). During 2010 and 2012, the Grand Isle Fire (GIVFD) and Ambulance (GIVES) Districts played a part in the subsequent disaster response effort. All costs incurred to date have been reimbursed by BP.

The federal r^iK)nse to this disaster also included provisions for citizens, businesses, and govonment agencies to recoup "economic losses" resulting from die oil spill. The loss of the use of commercial fishing grounds for most of the summer and the continuing offshore drilling moratorium may have an effect on the local economy, especially if long-term damage is done to the fisheries and estuaries. Both the seafood industry and the offshore drilling industry play vital roles in the local economy. The Parish of Jefferson has filed a consolidated claim against BP for economic losses, of which both the Town mid GIVFD are participating in. As the true long-term impact of the oU ^ill is determined, additional claims may be made in die future.

-32-

INDIVIDUAL FUND STATEMENTS AND SCHEDULES

-33-


GOVERNMENTAL FUNDS - GENERAL FUND DETAILED SCHEDULE OF REVENUES FOR THE YEAR ENDED DECEMBER 31,2014

Intergovernmental Federal

FEMA - Disaster Assistance State

Fire Insurance Rebate Local

Jefferson Parish contract: Direct payments - ad valorem taxes

Grand Isle Volunteer Emeigency Services Cooperative agreement

Service charges and reimbursements Reimbursement - BP Oil Spill - Fire Watch

Donations and gifts Fund raising - net Other donations

Interest

Miscellaneous Sales of equipment Other

General Fund

9,520

660,000

308,162 977,682

10,950 10,950

241

25,065 25,065

TOTAL REVENUES 1,013,938

-34-

GRAND ISLE VOLUNTEER FIRE COMPANY NO. 1 a/bfu FIRE PROTECTION DISTRICT NO. 9 OF JEFFERSON PARISH

GOVERNMENTAL FUNDS - GENERAL FUND SCHEDULE OF EXPENDITURES FOR THE YEAR ENDED DECEMBER 31,2914

General Fnod

Cuneni Penonnel and related costs

Salaries - Regular S 451,380 Salaries - Medics 127,537 Salaries - Overtime 84.904 Payroll taxes 53,277 Payroll taxes - penalties & interest 165 Retirement M72 Health insurance 92/172 Unen^ktyinent insurance 137 Worloiiens' compensation 38.763

850,307 General and administrative costs

Alarm manitaring 975 Bank charges 137 Billing services 220

ami Jiiulilmg 5,750 Dues and subseriptiMs 1,190 Office and cosiipnte supplies 8,572 Postage 107 PhnnAC 20.644 Utilities - electricity and water 22,519 Utilities - cable and intemet 2,761 Leases/rentals • equ^Hneat 7,499 Licenses and certificates Insurance • auto/geiteral 19,268 Sanitation 313 Storage Fees 770 Travel - hotels and meals 1,940 Arson investigation Groceries and supplies - station 21.866

114.531 Emergency costs and supplies

Firefigbting siqrplies 209 Fire Preventitti Weeksnigslia 1,870 Gaiandoil 14305 Hurricane/eoK^Bii^ coda lifegusd aitd SRT costs 1,174 Medical and cmRgn^ sofqilies 431 TruMiing OIMI (100) I tniOwme «iwt diirtc 3388

21.677 Repairs and

RAM- buildings 1383 RAM- eququnent and radios RAM- vehicles and boats 22380

24,763 Miscellaneous

Functions/events 2,265 Gifia, flowers, and donations 1,100 Other 287

3.652 CH>ital outlay

Vehicles and rescue equipment 22,434 Equipment 1,083 Furniture and fixtures 5.125

28.642

TOTAL CURRENT 1.043372

Service Prtee^ 30329 Interest 6.014

TOTAL D^T SKIVICE 36343

TOTAL EXPENDITURES S 1.079.815

-35-


-36-

SUPPLEMENTARY INFORMATION

-37-

GRAND ISLE VOLUNTCBR FIRE COMPANY VO. 1 d/b/a FIRE PROTECTION DimiCT NO. 9 OF JEFFERSON PARISH

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For The Year Ended December 31,2014

FEDERAL Ai^tECY/ FROGRUMHTLS

CFDA NUMBER

GRANT/ PROJECT NtlMKR

GRANT PEMOD FRCHM TO

TOTAL CatANT AWARD

ACCRUED (DBFERRQl)

REVENUE raCEMBER31.3D13

CASH/ ASSISTANCE RECEIVED

DURING YEAR

ACCRUED (DEFERRED)

REVENUE DECjOffiERaiiZOU

TOTAL REVENUE

RBCOGNiifce.u

TOTAL flSBlAL

EXPENDITDHES

PASS-THROUGH AWARDS

DEPARTMENT OP HOMELAND SECURITV Passed ttinni^ State Depaiiment ofMiKtaiy Afibs;

Emergen^ Disaster - Public AggisMnce Oianls (KsBrina) BeMfeoKy DisMtcs - PMic AnsliDce GnA (REa) Bmetgeacy Dhmter - PnbBc Asgislince Oranls (On>ta>^ Bmetgeocy Dtsaste - Pobfic Asastafloe Grants (Dee) Sm«genc}' Disaster - Public Assistance Giants (laiae)

TOTAL FEDERAL ASSISTANCE

97.036 FEMA-1603-DR-LA Prcgect Compledoa S 379,561 S (34,975) 1 s (24,975) S s 97.036 FEMA-i607>DR-LA PwjectCempfciioa 6(M>34 63)03 63M3 97.036 FEMA-1786-DR-LA Prcject Completkin 340,341 (26,937) (26,937) 97.036 PEMA-1792*DR-LA Prptect Completion 130,S12 9,422 9A22 97.036 FBMA-4080'DIl-LA Rqicct Conqdedoa . . Rqicct Conqdedoa

(36AS7) . 06A87) . Rqicct Conqdedoa Rqicct Conqdedoa

s (36.487) 5 s (36.487) S s -

NOTES TO SCHEDULE:

Dds Schedule of ExpeDdttiites of Pedsal Awatda includes the fbdo&l grant activity of the Gtaod Isle Votntts Foe Dicirict •tdtspnacmedonSteacavalbs^ofKooutfiiU' The iaCmnadon in this sdieduk is presented in accordance with Dw requirements of QMB CirGalnr A-133, Audits qfSiata, Local Governments, and Non-Profit Ch-gontzat/ons.

I OIVPDAdiailniedDetem^6irhsviDga8B^Aattpeiiinnedfbr2014.


SCHEDULE OF COMPENSATION AND OTHER PAYMENTS TO AGENCY HEAD OR CHIEF EXECUTIVE OFFICER FOR THE YEAR ENDED DECEMBER 31,2014

Agency Head Name/Tide: Aubrey Chaisson, Fire Chief

Purpose Amoant

Salary $ 54,995 State Supplemental Pay 2,500 (1) Benefits - Insurance (Group Health) 13,379 (2) Beneifts - Retirement 4,398 (3) Benefits - Other 2,300 (4) Car Allowance - (5) Vehicle Provided by Agency - (5) Per Diem Reimbinsements Travel (meal per diesns) 100 Registration Fees Confeence Travel Continuing Professional Etfai^on Fees Housing * Unvouchered Expenses Special Meals —

Notes to Schedule;

(1) State Supplemental Pay is paid directly to die employee by the State of Louisiana. It is included in taxable w^es to die onployee 1^ QIVFD so that federal and state payroll taxes can be paid on diese wages.

(2) GIVFD provides a group health plan to all anployen. This amount represaits the total premium of S14,909 paid by GIVFD, less the amount paid hy the employee of$l,530.

(3) GIVFD employees do not participate in any qualified state pension plans, histead, they pay social security end medicare taxes. This amount rqiresents the amount of taxes paid by the employer (GIVFD) on this employee's taxable wages.

(4) GIVFD provided die Fire Chiefwidi a cell-idtonedortng die year. This amnmt represents die costs incatred 1^ GIVFD during die year fir this idiooe.

(5) GIVFD provides the Fire Chief with a tali^home vehicle; however, no amount is considered taxable under the IRS rules for vehicles provided to firefighters. The use of the vdiicle is considered to be a "workup condition benefit". The vehicle meets die definition of "qualified non-personal use vehicle". Use of the vdiicle is limited to in-parish travel (in gmeral) and personal use is typcially onh' made iq> of commuting. The car is primarily used for public safi^/business purposes. The vehicle is also painted red and is clearly marked widi GIVFD insignia.

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-40-

COMPLIANCE SECTION

Paul C. Rivera, CPA 2612 Crestway Road Marrero, LA 70072

<504) 371-4390

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS

PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the President and Board of Directors Grand Isle Volunteer Fire Company No. 1 (GIVFD) Grand Isle, Louisiana

I have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund (i.e., the General Fund) of the Grand Isle Volunteer Fire Company No. 1 (GIVFD), a non-profit entity d/b/a Fire Protection District No. 9 of Jefferson Parish, as of and for the year ended December 31,2014, and the related notes to the financial statements, which collectively comprise GIVFD's basic financial statements, and have issued my report thereon dated June 20, 2015.

INTERNAL CONTROL OVER FINANCIAL REPORTING

In planning and performing my audit, I considered GIVFD's internal control over financial reporting (internal control) to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing my opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of GIVFD's internal control. Accordingly, I do not express an opinion on the effectiveness of GIVFD's internal control

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected in a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Member: American Institute of Certified Public Accountants Louisiana Society of Certified Public Accountants -41-

My consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. Given these limitations, during my audit I did not identify any deficiencies in internal control that 1 consider to be a material weakness. However, material weaknesses may exist that have not been identified. I did identify certain deficiencies in intemal control, as described in the accompanying schedule of findings and responses that I consider to be significant deficiencies in intemal control over financial reporting (See Findings SD14-01, SD14-02, and SD14-03).

COMPLIANCE AND OTHER MATTERS

As part of obtaining reasonable assurance about whether GIVFD's financial statements are firee of material misstatement, I performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of my audit, and accordingly, I do not express such an opinion. The results of my tests disclosed no instances of noncompliance and other matters that are required to be reported under Government Auditing Standard,

I did note certain immaterial deficiencies and other matters that I have reported to management of GIVFD in a separate letter entitled "Memorandum of Advisory Comments", dated June 20,2015.

GIVFD's RESPONSES TO FINDINGS

GIVFD's responses to the findings identified in my audit are described in the accompanying schedule of findings and responses and/or the memorandum of advisory comments. GIVFD's responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, I express no opinion on th^.

PURPOSE OF THIS REPORT

The purpose of this report is solely to describe the scope of my testing of intemal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of GIVFD's intemal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's intemal control and compliance. Accordingly, this communication is not suitable for any ofiier purpose.

/ZJ June 20, 2015

-42-

GRAND ISLE VOLUNTEER FIRE COMPANY NO. 1 (GIVFD) D/B/A


SCHEDULE OF FINDINGS AND RESPONSES For the Year Ended December 31,2014

I have audited the financial statements of the Grand Isle Volunteer Fire Company No. 1 (GIVFD) as of and for the year ended December 31,2014, and have issued my report thereon dated June 20,2015. I conducted my audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. My audit of the financial statements as of December 31,2014 resulted in an unqualified opinion.

SECTION I - SUMMARY OF AUDITOR'S RESULTS

A. The auditor's report expresses an unmodified opinion on the financial statements of GIVFD.

B. Report on Internal Control and Compliance Material to the Financial Statements Internal Control:

Significant Deficiencies were noted (see below). No N^tmal Weakness^ were noted.

Compliance: No instances of noncompliance material to the financi^ statement w^ noted.

C. Federal Awards - not applicable

D. Identification of Major Programs - not applicable

E. Immaterial Deficiencies, Instances of Noncompliance and Other Matters: See Memorandum of Advisory Comments (separately issued report).

SECTION H - FINANCIAL STATEMENT FINDINGS

SIGNIFICANT DEFICIENCIES

SD Comment # 14-01 - Inadequate Segregation of Duties

Condition and Criteria -1 noted that the size of GIVFD's operations is too small to provide for an adequate segregation of duties. The GIVFD's Office Manager/bookkeeper is charged with most of the responsibilities relating to the cash receipts, cash disbursement, and financial reporting cycles. GIVFD does, however, have various controls in place which taid to miti^e this problem, including (1) having another [^rson review and initial all bank reconciliations, (2) requiring dual signatures on all checks, and (3) requiring the presentation of actual versus budget reports on a monthly basis to the Board.

Cause - GIVFD does not have the funds to provide enou^ personnel to adequately segregate the duties.

Recnmmendatinti - Employing additional controls may not be cost beneficial, however, the Board should remain cognizant of the lack of segregation of duties.

^3-



SCHEDULE OF FINDINGS AND RESPONSES (CONTINUED) For the Year Ended December 31,2014

SECTION II - FINANCIAL STATEMENT FINDINGS (CONTINUED)

Response - We are aware of the condition, however, at this point we are not in the financial position of addressing the problem. The Board is aware of the condition and will continue to monitor the financial activity of GIVFD in a timely manner.

SD Comment # 14-02 - Preparation of Financial Statements by Auditor

Condition and Criteria - GIVFD does not have controls in place for proper oversight of its financial reporting and for the preparation of financial statements in accordance with generally accepted accounting principles. As is common in small organizations, GIVFD has chosen to engage the auditor to prepare its annual financial statements. This condition is intentional by management, along with the cost effectiveness of acquiring the ability to prepare the financial statements in accordance with generally accepted accounting principles.

Cause - Recently issued Statement of Auditing Standards (SAS) 115 requires that I report the above condition as a control deficiency. The SAS does not provide exceptions to reporting deficiencies that are mitigated with non-audit services rendered by the auditor or deficiencies for which the remedy would be cost prohibitive or otherwise impractical.

Recommendation - As mentioned, whether or not it would be cost effective to cure a ccmtrol deficiency is not a factor in applying SAS 115's rqwiting requirements. Because prudent management requires that the potential benefit fiom an internal control must exceed its cost, it may not be practical to correct all the deficiencies noted under SAS 115. In this case, I do not believe that curing the significant deficiency described in this finding would be cost effective or practical and accordingly, I do not believe any corrective action is necessary.

Management's Response • GIVFD's staff is familiar with the day-to-day accounting requirements; however, due to limited staffing and funding, we do not consider it practical to provide sufficient training to our staff in ord^ to eliminate this condition and can only continue to rely on the auditor to prepare the financial statements at this time.

SD Comment # 14-03 - Maintaining Proper Fixed Asset Records

Condition and Criteria - GIVFD does not maintain a formal fixed assets ledger. Instead, it has chosen to rely on the external auditor to maintain a schedule of general fixed assets within an excel spreadsheet, which is adjusted each year during the audit. By not maintaining a general ledger on fixed assets, GIVFD must wait until year end to calculate and post depreciation on fixed assets. Additions and disposals of fixed assets are also not recorded until year-end.

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SCHEDULE OF FINDINGS AND RESPONSES (CONTINUED) For the Year Ended December 31,2014

SECTION II - FINANCIAL STATEMENT FINDINGS (CONTINUED)

Cause - GIVFD's software system (Quickfiooks) was not set up to record and depreciate fixed assets.

Recommendation - GIVFD should work towards entering the records relating to the fixed assets into the QuickBooks software system. This would also allow for tbe timely capitalization ai^ depreciation of all fixed assets.

Management's Response - We will look into doing this for the next fiscal year audit. Since we record our activity on a "cash-basis" of accounting, we do not see this as a must and are satisfied with relying on the year-end audit adjustments to reflect capitalization and dq>reciation activity. We do maintain asset inventory listings for insurance purposes that reconcile back to our accoimting records.

SECTION m - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

Not Applicable

SECTION rv - STATUS OF PRIOR YEAR FINDINGS

The status of findings and questioned costs noted in prior years is noted below:

FINANCIAL STATEMENT FINDINGS

Prior Year Comment No. Description Status

SD# 13-01 Inadequate segregation of duties. See CY SD Comment # 14-01

SD# 13-02 Preparation of Financial Statements by auditor See CY SD Comment # 14-02

SD# 13-03 Not maintaining proper fixed asset records See CY SD Comment # 14-03

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(END OF REPORT)

-46-

MEMORANDUM OF ADVISORY COMMENTS


(GIYTD) d/b/a

FIRE DISTRICT NO. 9 OF JEFFERSON PARISH Year Ended December 31,2014

TABLE OF CONTENTS

Page

INTERNAL CONTROL STRUCTURE AND RELATED MATTERS

Auditor's Letter 2

Current Year Comments and Suggestions

Increasing Cash Balances 3

Accounting for and Managing Fixed Assets * 4

Accounting for and Monitoring Expenditures 5

Compliance and Other Matters 8

STATUS OF PRIOR YEAR COMMENTS AND FINDINGS

Status of Prior Year Findings and Comments 6

INTERNAL CONTROL STRUCTURE AND RELATED MATTERS

-1-

Paul C. Rivera, CPA 2612 Crestway Road Marrero, LA 70072

(504) 371-4390

To the President and Board of Grand Isle Volunteer Fire Company No 1 (GIVFD) Grand Isle, Louisiana

I have audited the financial statements of (jrand Isle Volxmteer Fire Company No. 1 (GIVFD), a nonprofit entity d/b/a Fire District No. 9 of Jefferson Parish, for the year ended December 31, 2014, and have issued my reports thereon dated June 20,2015. As part of my audit, I considered GIVFD's internal control structure in order to determine the nature, timing, and extent of my auditing procedures for the purpose of expressing an opinion on the financial statements, and not to provide assurance on the internal control structure.

Significant deficiencies and material weaknesses which may have been noted during my consideration of the internal control over financial reporting have been reported on in a separately issued report, entitled "Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit Performed in Accordance With Government Auditing Standards".

This memorandum summarizes various other matters which have come to my attention. While not involving significant deficiencies or material weaknesses, these matters do present opportunities for strengthening the internal control and improving the operating efficiency of GIVFD.

I have already discussed these comments and suggestions with GIVFD's administrative personnel and have included their responses. I will be pleased to discuss these comments and suggestions with you in further detail at your convenience, perform and additional study of these matters, or assist you in implementing the recommendations.

June 20,2015

Member: American Institute of Certified Pubttc Accountants Louisiana Society of Certified Public Atxountants

-2-


FIRE DISTRICT NO. 9 OF JEFFERSON PARISH COMMENTS AND SUGGESTIONS

For the Year Ended December 31,2011

INCREASING CASH BALANCES

MLC14-01 COMMENT/CONDITION

GIVFD has several project worksheets (PWs) filed with FEMA/GOHSEP for disaster assistance related to Hurricanes Katrina, Rita, Gustav, Ike, and Isaac. Typically, FEMA/GOHSEP claims are reimbursed to the entity after proof of expenditure is provided to FEMA/GOHSEP. For Hurricanes Katrina and Gustav, FEMA/GOHSEP issued payments to GIVFD prior to the documentation and close out of the claim. These payments, totaling $51,912, are being carried as unearned grant revenues on the balance sheet pending additional guidance from FEMA/GOHSEP on their status. For Hurricanes Rita and Ike, GIVFD has claims outstanding totaling $15,425, which are being carried as accounts receivable. These receivables are awaiting approval by FEMA/GOHSEP.

Given the cash flow problems GIVFD has been experiencing over the past few years, GIVFD's management should be aware that the status of these funds remains in question and they should get with FEMA/GOHSEP to determine what needs to be done to collect and/or close out these obligated claims.

CAUSE

As noted above. Grand Isle has been hit several times by hiirricanes and many claims have been filed. Because many of our records were lost during the 2008 hurricane season, it has been difficult to get these claims from Katrina and Rita moving forward and/or closed. The previous Fire Chief grew weary and fhistrated in dealing with FEMA/GOHSEP and has not done much to pursue the close out of these items.

RECOMMENDATION

GIVFD should contact FEMA to determine what, if anything, is holding up the the closeout of these disaster/project worksheets.

RESPONSE

We will attempt to meet with our FEMA representative to determine what if anything more can be done to bring these items to closure.

-3-


FIRE DISTRICT NO. 9 OF JEFFERSON PARISH COMMENTS AND SUGGESTIONS (CONTINUED)


ACCOUNTING FOR AND MANAGING FIXED ASSETS

MLC 14- 02 COMMENT/CONDITION

As noted in the Schedule of Findings and Responses (Comment SD 14-03), the Grand Isle Fire Department relies on its external auditor to maintain a listing of fixed assets and depreciation. During my testing, I performed a visual inspection of the vehicles and heavy equipment on hand and found several old assets being carried on the books that no longer existed. Letters of disposal or surplus declarations were on-hand for most of the vehicles in question dated in 2011 or 2013, but they had not previously been presented to the auditor and, in some cases, did not specifically identify the assets being disposed of. In total, $298,954 of fixed asset costs were removed along with $292,953 in accumulated depreciation.

Many of these assets were fully depreciated, thus, the net effect on prior audits would have been immaterial; however, the asset listing should be accurate and kept up to date.

CAUSE

Grand Isle Fire has struggled to obtain and maintain equipment and vehicles after the damages caused by Hurricanes Katrina, Rita, Gustav, Dee and Isaac. They obtained several old/used fire trucks with the help of FEMA; however, these trucks soon fell into disrepair being so old. Some of the trucks were scrapped and towed away, while some others were used for parts. At the end of each previous audit, the listing of fixed assets was reviewed and certified by the Fire Chief. Apparently, some of the assets in question had been declared surplus and disposed of and that information was not passed on to the auditor.

RECOMMENDATION

The review and approval of the fixed asset listing at the end of the audit should be taken more seriously. Any declarations of surplus ^sets or disposals should be recommended by the Fire Chiefiadministration and approved by the board. The declarations should specifically identify the asset (by VIN # or serial number) and note the disposal method and date. Any declarations of surplus or disposals should be brought to the attention of the external auditor immediately so that the fixed asset listing and depreciation expenses can be properly reported on.

A-

GRAND ISLE VOLUNTEER FIRE COMPANY NO. 1 (GIVFD) d/fo/a



RESPONSE

This will be done in the future. The current year fixed asset listing has been reviewed and ^ipears to be accurate.

ACCOUNTING FOR AND MONITORING EXPENDITURES


During my testing of expenditures, I noted a payment by Grand Isle Fire of $220 to a vendor for "billing services" related to the operations and collection efforts of the Grand Isle Volunteer Emergency Services (GIVES). GIVES is a separate entity fiom the Grand Isle Fire. This expenditure should have been paid for by GIVES, not GI Fire. Due to its immateriality, the amount was left as an expenditure of Grand Isle Fire.

CAUSE

Grand Isle Fire and GIVES are both managed by the same administration out of the same office. GIVES pays Grand Isle Fire a set amount for administrative costs. As such, payments made to vendors are issued by the same bookkeeper for both entities. This expenditure appears to have been paid for out of the wrong checking account

RECOMMENDATION

The bookkeeper and the check signers should be reminded that the expenditures of each entity must be posted to the proper company.

RESPONSE

This appears to have been an oversight. We typically make sure that the vendors address their bills to the proper agency and we pay them out of their respective checking accounts. We do not look for this to recur.

-5-



For the Year Ended December 31, 2014



During my testing of expenditures, I noted two payments totaling $313 out of the "private" account that did not have invoices or support in the files. One was for a donation to the local school and the other was for supplies needed for the local Mardi Gras parade. The cancelled checks were attached to the bank reconciliation upon the checks clearing the bank and were examined for propriety. The expenditures appear to be proper.

CAUSE

Grand Isle Fire maintains a ̂ 'private" account separate and apart fi-om its "public" accounts to track funds generated or donated to the fire department under its nonprofit status. These checks are issued infi-equently and are typically done at the direction of the Fire Chief and/or board for expenditures that cannot be paid for out of public fimds. The policy is to keep a copy of the check or at least an invoice in the "private checking" file. It appears that these were misplaced or misfiled.

RECOMMENDATION

Although these expenditures came out of private funds, support for them should still be maintained in the files. The bookkeeper should be reminded to ke^ a copy of each check and invoice in the "private checking" file.

RESPONSE

The bookeeper has already been reminded of keeping the required copies in the files. We consider this a non-recurring event.

-6-






During my testing of expenditures, I noted one payment totaling $50 out of the "public" account for a travel per-diem that did not have any support attached to the check stub. Expenditures for per-diem should be supported by an official form or request of some kind.

CAUSE

Grand Isle Fire adopted a per-diem rate after the Legislative Auditor performed a compliance audit back in 2011. Up to that point, GIVFD reimbursed dollar-for-dollar on travel costs and found it very difficult to have the receipts turned in to the bookkeeper, especially for meals. GIVFD established a daily per-diem of $50 maximum and pay employees that per diem when they have to travel off of the island for work-related duties or training.

While GIVFD does not have an official per-diem claim form, the purpose of the travel is either hand-written or typed onto the check stub. Per-diems are only paid after approval from the Fire Chief or the Assistant Fire Chief.

RECOMMENDATION

The check stub examined did have an explanation typed on it documenting what the per-diem was for. We would recommend an official travel/per-diem form be developed and used instead of hand-written or typed notes. The purpose of the travel/per-diem can be documented and approval of the payment can be noted on the form. The form coiild then be attached to the check stub.

RESPONSE

The bookeeper will generate a form and we will use it on all future per-diem reimbursements. We consider this a non-recurring event.

-7-




COMPLIANCE AND OTHER MATTERS

MLC14-06 COMMENT/CONDITION

Prior to the begiimmg of the 2014 audit, the Legislative Auditor's office received some cryptic allegations of fraud and non-compliance by the GIVFD Fire Chief from the Jefferson Parish Attorney's Office. These allegations were presented to the Jefferson Parish Attorney's Office and its Office of Inspector General from "concerned citizens".

As a result of the complaint, the Parish's Office of Inspector General has been auditing the fire department's books for the calendar years 2011,2012, and 2013 over the past several months. No report has yert been issued.

While many of the allegations directed at the GIVFD Fire Chief are of a personal nature, some do involve his duties at the fire station and/or its operations. Many of the allegations involve actions from several years ago involving fixed assets and/or payroll abuse (e.g., the GIVFD Fire Chief was not working wh^ his time sheet said he was).

One of the allegations that I could investigate had to do with the abuse of the Grand Isle Fire Department's fixed assets, specifically, whether or not the assets were disposed of properly. I performed a more thorough observation of the fixed assets on hand and, as noted in Comment MLC 14-02,1 found that several of the vehicles and pieces of equipment in question were being carried on the books but, in fact, they had been disposed of in previous years.

The Grand Isle Fire bookkeeper was able to produce letters declaring some of the vehicles and equipment as surplus and noting their disposal via scrap or a towing company. Some of the assets in question could be traced to the fixed asset listing and have now been removed. Since there was documentation on file noting their surplus status and disposal, it appears that these allegations on these particular assets are not true. Some of the equipment in question could not even be traced to the fixed asset listings, thus, no conclusion can be made on their status or whether the allegation can be proven or not. The current administration denies any improper disposal of fixed assets.

-8-




COMPLIANCE AND OTHER MATTERS (CONTINUED)

On the matter of payroll fraud, it should be noted that the GIVFD Fire Chief is considered an "exempt*' employee for payroll purposes under the Fair Labor Standards Act guidelines. During the above-noted 2011 audit conducted by the Legislative Auditor, the Fire Chiefs overtime pay was questioned. At the time, he was being carried as an hourly employee (working 40 hours per week) and was able to cover open shifts and earn time-and-a-half overtime. In response to the Legislative Auditor's report, the GIVFD Fire Chief was declared an exempt/salaried employee by the board and paid a straight salary of $55,000 per year.

During my payroll testing in the current year, 1 noted 52 weekly payments made to the Fire Chief during 2014 totaling $54,995. When I inspected one of his time sheets, it was noted on the time sheet that he was being paid for 40 hours as a salaried employee. Given his status as a salaried/exempt employee and given his duties as a fire chief, the allegation that he was not on duty when he said he was is impossible for me to prove or disprove. The Fire Chief is constantly meeting with other Town officials, inspecting residents and businesses, p^orming lifeguard duties on the beach, etc.

CAUSE

As noted in MLC 14-02, GIVFD's Fire Chief had previously certified the fixed asset listings presented by the external auditor at the end of each audit. No one in the current administration can answer why the disposal letters and declarations of surplus were made and not presented to the external auditor in a timely fashion.

As to the payroll issue, the GIVFD Fire Chief was an exempt/salaried employee. Given his duties, he was not required to be expected to be at the fire station 8 hours per day. Since he would be seen at different locations during the day, it may have appeared that he was "not at work" when he should have been. Given his status as an exempt/salaried employee, that he was typically available by cell phone, and that all of his checks were supported with a time sheet, it does not appear that the allegation of payroll fraud can be proven or disproven at this time.

-9-




COMPLIANCE AND OTHER MATTERS (CONTINUED)

RECOMMENDATION

Disposals of fixed assets should be disclosed to the external auditor on a more timely basis. In addition, the Grand Isle Fire Department's board and current administration should continue to work with the Parish's Inspector General towards the completion of the audits. Any recommendations for improvements to internal controls or policies and practices should be taken seriously and implemented immediately, if they can.

RESPONSE

We refute most, if not all, of the allegations being made. Some cannot be answered at this time by the current administration since they involve actions from several years ago. While we admit to having some intemal control deficiencies, we do not expect any of the fraud or non-compliance allegations to be upheld.

From now on, we will inform the extemal auditor about asset disposals on a more timely manner. As to the payroll issue, we consider the GIVFD Fire Chief an exempt/salaried employee. Given his duties, he cannot be expected to be at the fire station 8 hours per day. His duties dictate that he be out of the ofhce on many occasions. When he is not at the fire station, he is accessible via his department-issued cell phone and has always answered the call when made. Thus, the allegation that he needs to be at the fire station during the day does not appear to have merit.

We will continue to cooperate fully with the JP Inspector General on these audits and have made all of the records we could find available to them. Upon completion of their audits, we will respond to them and supply our extemal auditor with a copy of their comments and findings and any remedial actions tak^ by us, if any. It should also be noted that Jefferson Parish Shmffs Ofhce did arrest the GIVFD Fire Chief in November 2014 on charges separate and apart fixjm these complaints. The charges against him related to his off-duty activities and were never more than a misdemeanor. His case has not yet been settled/heard by the courts. In response to his arrest, the GIVFD Fire Chief was placed on administrative leave with pay on November 13,2014 and ultimately terminated on May 18,2015.

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FIRE DISTRICT NO. 9 OF JEFFERSON PARISH

STATUS OF PRIOR YEAR COMMENTS AND FINDINGS

Not applicable

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