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REPORT OF OZARK RIVERS SOLID WASTE

MANAGEMENT DISTRICT JUNE 30, 2007 AND 2006

VERKAMP & MALONE, L.L.C. CERTIFIED PUBLIC ACCOUNTANTS

401 W. FIFTH STREET ROLLA, MISSOURI 65401

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TABLE OF CONTENTS

Independent Auditor's Report

FINANCIAL STATEMENTS

Balance Sheet

Statements of Revenues, Expenditures, and Changes in Fund Balances

Notes to Financial Statements

SUPPLEMENTARY INFORMATION

Statements of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual

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

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5-7

8

9-10

11-12

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Certified Public Accountants

Accounting ·Auditing

DAVE VERKAMP, CPA, CFP MOLLY MALONE, CPA Tax Services

Management Services

INDEPENDENT AUDITOR'S REPORT

Board of Commissioners Ozark Rivers Solid Waste Management District St. James, MO 65559

~VI 6 ZOOi

We have audited the accompanying financial statements of the governmental activities of the Ozark Rivers Solid Waste Management District as of and for the years ended June 30, 2007 and 2006, which comprise the District's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Ozark Rivers Solid Waste Management District's management. Our responsibility is to -express opinions on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions.

In our opinion, the financial statements refen-ed to above present fairly, in all material respects, the respective financial position of the governmental activities of the Ozark Rivers Solid Waste Management District of June 30, 2007 and 2006, thereof for the years then ended in conformity with accounting principles generally accepted in the United States of America.

The budgetary comparison information on pages 9 through 10, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. The Ozark Rivers Solid Waste Management District has not presented a management's discussion and analysis that accounting principles generally accepted in the United States has determined is necessary to supplement, although not required to be part of, the basic financial statements.

P.O. Box 32 • 401 W. 5th St ( l ) 7.olla, Missouri 65402 rsni ~64-2246 • FAX (573) ~-· A ~~46 • vmcoa@fidnet.com

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In accordance with Government Auditing Standards, we have also issued our report dated August 30, 2007, on our consideration of the · Ozark Rivers Solid Waste Management District's internal control over financial reporting and on our 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 th~ scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in conjunction with this report in considering the results of our audit.

v~~ Verkamp and Malone, L.L.C. Certified Public Accountants Rolla, MO . August 30, 2007

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OZARK RIVERS SOLID WASTE MANAGEMENT DISTRICT BALANCE SHEET

JUNE 30, 2007 AND 2006

ASSETS Current Assets

Cash Unrestricted Restricted

Prepaid grant expenses Total Current Assets

Total Assets

LIABILITIES AND FUND BALANCE Current Liabilities

Due to MRPC Deferred revenue Grants payable retention Other current liabilities

Total Current Liabilities

Fund Balances · Unrestricted Restricted

Total Fund Balances

Total Liabilities and Fund Balances

Governmental Funds General Fund ----

2007 2006

$ 6,458 195,874

202,332

$ 202,332

$ 20,760 123,520

1,163 440

145,883

6,177 50,272 56,449

$ 202,332

d NOV 1 6 2007

$

$

$

8,342 151,242

468 160,052

160,052

14,758 122,967

2,501

140,226

6,129 13,697 19,826

$ 160,052

The accompanying notes are in integral part of these financial statements.

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OZARK RIVERS SOLID WASTE MANAGEMENT DISTRICT STATEMENTS OF REVENUES, EXPENDITURES

AND CHANGES IN FUND BALANCES FOR THE YEARS ENDED JUNE 30, 2007 AND 2006

Governmental Funds General Fund

UNRESTRICTED FUND BALANCE Unrestricted revenues and gains

Interest income Other income

TOTAL UNRESTRICTED REVENUES AND GAINS

INCREASE IN UNRESTRICTED FUND BALANCE

TEMPORARILY RESTRICTED FUND BALANCE Grant revenue - State of Missouri Interest income Fund balance released from restrictions

Annual dinner Audit Contract services Contracted administration Grants Insurance Supplies Travel Other

INCREASE (DECREASE) IN TEMPORARILY RESTRICTED FUND BALANCE

INCREASE (DECREASE) IN FUND BALANCE

FUND BALANCE AT BEGINNING OF YEAR

----2007 2006

$ 48 $

48

48

214,263 5,888

(242) (1,000)

(10,568) (85,035) (74,455)

(1,471) (9,146)

(888) (771)

36,575

36,623

19,826

315

315

315

161,137 3,999

(565) (1,000) (3,305)

(31,704) (117,421)

(1,371) (34)

(441)

9,295

9,610

10,216

FUND BALANCE AT END OF YEAR $ 56,449 $ 19,826

NOV 1 6 2007

The accompanying notes are in integral part of these financial statements.

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OZARK RIVERS SOLID WASTE MANAGEMENT DISTRICT NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2007 AND 2006

Note 1 - Description and Purpose of the District

The Ozark Rivers Solid Waste Management District (the District) was formed pursuant to Section 260.305 of the Revised Statutes of Missouri on November 19, 1991. The District consists of Crawford, Gasconade, Maries, Phelps, Dent, Washington, and Pulaski Counties.

The District' s purpose is to plan and provide for the safe and sanitary management of solid waste within all of the territory of the District. The District strives to fulfill this purpose by:

• Preparing and implementing a solid waste management plant that complies with the provision of Sections 260.220 and 260.325 of the Revised Statutes of the State of Missouri for the citizens of the participating cities and all of the incorporated and unincorporated territory of the District's counties.

• Establishing an educational program to inform the public.

• Establishing procedures to minimize the introduction of hazardous waste, including household hazardous waste, into the solid waste stream.

• Assuring adequate capacity to manage waste which is not otherwise removed from the solid waste stream.

• Promoting and assisting with resource recovery and recycling.

Note 2 - Summary of Significant Accounting Policies

The District's accounting policies conform to generally accepted accounting principles, . which are appropriate to local government units of this type.

A. Principles used to determine scope of entity

The District has developed criteria to determine whether related organizations with activities which benefit the District should be included within its financial reporting entity. The criteria includes, but is not limited to, whether the District exercised oversight responsibility (which includes financial interdependence, selection of governing authority, designation of management, ability to significantly influence operations, and accountability for fiscal matters), scope of service, and special financing relationships .

B. Basis of accounting

Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements.

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OZARK RIVERS SOLID WASTE MANAGEMENT DISTRICT NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2007 AND 2006

The financial statements are presented on the modified accrual basis of accounting, under which revenues are recorded when susceptible to accrual i.e., both measurable and available. Available means collectible within the current period or soon enough · thereafter to pay current liabilities. Expenditures are recorded when the liability is incurred.

C. Budget and budgetary accounting

The District follows these procedures in establishing the budgetary data reflected in the financial statements:

1. In accordance with Article X of the by-laws, an annual budget is prepared under the direction of the Executive Board, which submits this budget to the county commissioners and city governments within the District for review and comment.

2. The budget is approved by the full Council in June of each year. 3. If and when significant financial differences become apparent between the

budget as adopted and the probable outcome of the year, the District's management submits to the Executive Board a revised budget. The Executive Board reviews such budget and, upon acceptance, submits it to the full Council for action.

4. The approved budget for 2007 is for the fiscal year beginning July 1, 2006 and the approved budget for 2006 is for the fiscal year beginning July 1, 2005.

D. Investments

The District may purchase any investment allowed by the state Treasurer of Missouri.

E. Cash

All deposits with financial institutions were fully insured by the Federal Deposit Insurance Corporation as of June 30, 2007.

F. Deferred Revenue

Deferred revenues arise when assets are recognized before revenue recognition criteria have been satisfied. Grants received before the eligibility requirements are met are reported as deferred revenue.

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OZARK RIVERS SOLID WASTE MANAGEMENT DISTRICT NOTES TO FINANCIAL STATEMENTS

JUNE 30, 2007 AND 2006

G. Related organization

The District contracts with Meramec Regional Planning Commission (MPRC) to provide for the District' s administration. These contracted services amounted to $85,035 and $31,704 for the years ended June 30, 2007 and 2006, respectively. Grants payable in the accompanying statements of financial position does include amounts payable to MPRC in the amount of $26,655 for 2007 and $17,102 for 2006.

H. Restricted cash and fund balance

As of June 30, 2007 and 2006, the District has restricted cash balances in the amount of $195,874 and $151,242, respectively. The amount of restricted cash and fund balance represents the amount of grant revenue that has been received but not yet expended or accrued.

I. Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates.

Note 3 - Reclassification

Certain reclassifications have been made to the pnor year's financial statements to conform to the current year presentation. These reclassifications had no effect on previously reported results of operations or fund balance.

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SUPPLEMENTARY INFORMATION

• Statement of Revenues, Expenditures and Changes in Fund Balance-Budget and Actual

• 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

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OZARK RIVERS SOLID WASTE MANAGEMENT DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCE-BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2007

Revenues Grants-State of Missouri

Interest income

Total Revenues

Expenditures Annual dinner

Audit Contract service Contracted administration

Grants

Travel Insurance Supplies Other

Total Expenditures

Excess of Revenues Over Expenditures

Beginning Fund Balance

Ending Fund Balance

Governmental Fund Type-General Fund Favorable

(Unfavorable) Budget

$ 337,783 4,400

342,183

650 1,200

10,700 67,766

252,946

250 1,371

1;150 1,750

337,783

$ 4,400

( 9 )

Actual

$ 214,263

5,936 220,199

243 1,000

10,568 85,035

74,455

887 1,471

9,146

771 183,576

36,623

19,826

$ 56,449

Variance

$ (123,520)

1,536 (121,984)

407 200 132

(17,269) 178,491

(637) (100)

(7,996)

979 (154,207)

$ 32,223

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OZARK RIVERS SOLID WASTE MANAGEMENT DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCE-BUDGET AND ACTUAL FOR THE YEAR ENDED JUNE 30, 2006

Governmental Fund Type-General Fund Favorable

(Unfavorable)

Revenues Grants-State of Missouri Interest income Other income

Total Revenues

Expenditures Annual dinner Audit Contract service Contracted administration Grants Travel Insurance Other

Total Expenditures

Excess of Revenues Over Expenditures

Beginning Fund Balance

Ending Fund Balance

Budget

$ 323,316 2,600

325,916

565 1,000 8,539

53,182 251,974

200 1,371 6,650

323,481

$ 2,435

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Actual

$ 161,137 3,999

315 165,451

565 1,000 3,305

31,704 117,421

1,371 475

155,841

9,610

10,216

$ 19,826

NOV 1 6 2007

Variance

$ (162,179) 1,399

315 (160,465)

5,234 21,478

134,553 200

6,175 (167,640)

$ 7,175

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Certified Public Accountants

Accounting Auditing

DAVE VERKAMP, CPA, CFP MOLLY MALONE, CPA Tax Services

Management Services 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 Board of Commissioners Ozark Rivers Solid Waste Management District St. James, Missouri

We have audited the financial statements of the governmental activities of the Ozark Rivers Solid Waste Management District as of and for the years ended June 30, 2007 and 2006, which comprise the District's basic financial statements and have issued our report thereon dated August 30, 2007. We conducted our audit in a~cordance 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.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the Ozark Rivers Solid Waste Management District' s internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinions on the financial statements and not to provide an opinion on the internal control over financial reporting. Our consideration of the internal control over financial repmiing would not necessarily disclose all matters in the internal control that might be material weaknesses. A material weakness is a repo1iable condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements caused by en-or or fraud in amounts that would be material in relation to the financial statements bei11g audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial rep01iing and its operation that we consider to be material wealmesses.

Compliance and Other Matters

As paii of obtaining reasonable assurance about whether the Ozark Rivers Solid Waste Management District's financial statements are free of material misstatement, we 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

P.O. Box 32 • 401 W. 5th ~. · ~ Ila, Missouri 65402 (573) 364-2246 • FAX (57:.., (_ ; _ ~ ) > • vmcpa@fidnet.com

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compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

This report is intended solely for the information and use of the audit committee, management, Board of Commissioners, and federal awarding agencies and pass-through entities and is not intended to be and should npt be used by anyone other than these

~r:i:~ Verkamp & Malone, L.L.C. Certified Public Accountants Rolla, Missouri

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Accounting Auditing

DAVE VERKAMP, CPA, CFP MOLLY MALONE, CPA

Tax Services Management Services

August 30, 2007

Ozark Rivers Solid Waste Management District #4 Industrial Drive St. James, MO 65559

In planning and performing our audit of the financial statements of Ozark Rivers Solid Waste Management District (the District) as of and for the year ended June 30, 2007, in accordance with auditing standards generally accepted in the United States of America, we considered the District's internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we do not express an opinion on the effectiveness of the Organization's internal control.

Our consideration of internal control was for the limited purpose described in the preceding paragraph and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. However, during our audit, we noted certain matters involving the internal control and other operational matters that are presented for your consideration. This letter does not affect our report dated August 30, 2007, on the financial statements of Ozark Rivers Solid Waste Management District. We will review the status of these comments during our next audit engagement. Our comments and recommendations, all of which have been discussed with appropriate members of management, are intended to improve the internal control or result in other operating efficiencies. We will be pleased to discuss these comments in further detail at your convenience, perform any additional study of these matters, or assist you 111

implementing the recommendations. Our comments are summarized as follows :

CORPORATE MINUTES: MISSING SIGNATURES

Minutes for all Board meetings were prepared and available for our examination upon arrival. However, minutes were missing signatures. Minutes should be signed by the Board President and Board Secretary to serve as an authentication of them.

We believe that the implementation of these recommendations will provide the District with a stronger system of internal control while also making its operations more efficient. We will be happy to discuss the details of these recommendations with you and assist in any way possible with their implementation.

P.O. Box 32 • 401 W. 5th Street • Rolla, Missouri 65402 . (573) 364-2246 • FAX (573) 341-3546 • vmcpa@ fidnet.com

· This communication is intended solely for the information and use of management, the Board of Directors, and others within the organization and is not intended to be and v:~e: t;::" these specified pames

Verkamp & Malone