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HomeMy WebLinkAbout1980 03 31 Single Audit Report - Harris county water control and improvement district No.108 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 011►. TABLE OF CONTENTS March 31, 1980 Page No. Auditors' Report Balance Sheets, All Funds EXHIBIT A 1 Statement of Revenues, Expenses and Fund Balances, All Funds EXHIBIT B 2 Statement of Changes in Cash, All Funds EXHIBIT C 3 Analysis of Changes in General Long-Term Debt EXHIBIT D 4 General Long-Term Debt Service Requirements, By Years EXHIBIT E 5 Notes to Financial Statements EXHIBIT F 6 Auditors' Report on Supplemental Statements 10 irk Schedule of Temporary Investments Schedule 1 11 P Y r Analysis of Changes in Taxes Receivable Schedule 2 12 Analysis of Changes in General Fixed Assets Schedule 3 13 Analysis of Changes in District Organizational Costs Schedule 4 14 Insurance Coverage Schedule 5 15 Other Supplemental Information: Questionnaire To Be Completed By Auditors Schedule A 17 Questionnaire To Be Completed By Board of Directors Schedule B 22 Board Members, Key Administrative Personnel, and Legal Counsel Schedule C 23 Certificate of Board of Directors Schedule D 24 LAFRANCE, WALKER, tJACKLEY & SAVILLE CERTIFIED PUBLIC ACCOUNTANTS 112 O NASA RD- ONE • HOUSTON, TEXAS 77058 OFFICES IN PRINCIPAL CITIES-FOREIGN AFFILIATES 713/488-B324 May 23 , 1980 To the Board of Directors of Harris County Water Control and Improvement District No. 108 We have examined the balance sheet, all funds, of Harris County Water Control and Improvement District No. 108 (a political subdivision of the State of Texas) as of March 31, 1980 , and the related statements of revenues, expenses and fund balances, all funds, and changes in cash, all funds , for the year then ended. The analysis of changes in general long-term debt and general long-term debt service requirements by years were also included in this examination. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances. In our opinion, the statements referred to above present P , fairly the financial position of Harris County Water Control and Improvement District No. 108 at March 31, 1980 , and the results of its operations and the changes in its cash position for the year then ended , in conformity with generally accepted accounting principles applied on a basis consistent with that of the preceding year. HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DIE BALANCE SHEETS, ALL FUNDS - March 31, Memor Tot ASSETS AND OTHER DEBITS Current assets - • Unrestricted cash $ 2 Restricted cash Total cash 2 Unrestricted temporary investments - Schedule 1 1C Reserve account - Series 1971 and 1971A Bonds - Cash 2 Temporary investments - Schedule 1 1] Accrued interest Due from General Operating Fund Total reserve account (Note 6) 2: Total cash, temporary investments and reserve account 3( Accounts receivable and accrued interest Unexpired insurance Total current assets 3S Taxes receivable - Schedule 3 General fixed assets (at cost) - Schedule 3 1,9S (001. Intangible and other assets - District organizational costs - Schedule 4 2; Bond discount, less amortization of $31,271 Total intangible and other assets 3] Provision for bonded debt 2,6( Total assets and other debits $5,3: LIABILITIES AND FUND BALANCES Current liabilities - Accounts payable and accrued expenses $ Refundable deposits Due to Debt Service Fund - Reserve Account Total current liabilities 1: Bonds payable, EXHIBIT D 2,6( Fund balances - Unallocated fund balances Investment in uncollected taxes Allocated from net system revenues 1: Allocated from sale of bonds 2,1_ Unamortized discount on sale of bonds Reserve account reserve - Series 1971 and 4111 1971A Bonds 2: Total fund balances 2,6: Total liabilities and fund balances S5,3: - 1 - HARRIS COUNTY WATER CONTROL AND IMPROV STATEMENT OF REVENUES, EXPENSES AND FU For The Fiscal Year Ended M Operating revenues - 41 Water and sewer service Taxes collected Penalty and interest Total operating revenues Operating expenses - Purchased sewer services Contracted services Professional fees Utilities • Repairs and maintenance Recurring operating expenses Total operating expenses • Net revenues from operations Non-operating revenues/(expenses) - Tap connection fees Interest earned Texas disaster assistance grant Miscellaneous revenue and expenses - (net Tap connection expenses Bond principal paid Bond interest paid Amortization of bond discount Total non-operating revenues/ (expensE Net revenues/ (expenses) Additions to fund balances - Transferred from Tax Fund Transferred from General Operating Fund Increase in uncollected taxes Due from General Operating Fund Total additions to fund balances Deductions from fund balances - Transferred to Debt Service Fund Transferred to General Fixed Assets Fund Due to Debt Service Fund - Reserve Accoui Total deductions from fund balances Net change in fund balances for the year Fund balances , March 31 , 1979 Fund balances , March 31, 1980 - 2 - EXHIBIT C HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 STATEMENT OF CHANGES IN CASH, ALL FUNDS For The Fiscal Year Ended March 31, 1980 fik General Debt Memorandum Operating Tax Service Totals Fund Fund Fund Sources of cash - Cash receipts from operations $450 ,732 $205 ,873 $244 ,859 Cash disbursements for operations 201,251 195 ,799 5 ,452 Net cash from operations 249 ,481 10 ,074 239 ,407 Cash received from non- operating revenues 35 ,304 18 ,840 $ 16 ,464 Cash transfers from other funds 237 ,500 237 , 500 Cash received from customer deposits 1,710 1,710 Total cash provided 523 ,995 30 ,624 239 ,407 253 ,964 1001.- Application of cash - Non-operating expenses 254 ,935 1,320 253 ,615 Cash transfers to other funds 237 ,500 237 ,500 Fixed asset expenditures 478 478 Total cash applied 492 ,913 1 ,798 237 ,500 253 ,615 Increase/(decrease) in cash and temporary investments 31,082 28 ,826 1,907 349 Cash and temporary investment balances, at March 31, 1979 238 ,741 96 ,644 2 ,201 139 ,896 Cash and temporary investment balances, at March 31, 1980 $269 ,823 $125 ,470 $ 4 ,108 $140 ,245 See notes to financial statements - 3 - EXHIBIT D HARRIS COUNTY WATER CONTROL AND IMPRO' ANALYSIS OF CHANGES IN GENERAL For The Fiscal Year Ended Ma: fh Interea ding Rate ; 1980 Paying Agents Harris County Water Control and Improvement District No. 108 Allied Bank of Texas Waterworks and Sewer System 8 . 00% Houston, Texas Combination Tax and Revenue to First National Bank Bonds , Series 1970A 8 .50% 4000 Denver , Colorado Harris County Water Control and Improvement District No. 108 Allied Bank of Texas Waterworks and Sewer System Houston, Texas Combination Tax and Revenue First National Bank Refunding Bonds , Series 1971 7 .75% 4000 Denver , Colorado Harris County Water Control and Improvement District No. 108 Waterworks and Sewer System 6. 00% Combination Tax and Revenue to Allied Bank of Texas Bonds , Series 1971A 7 .75% 4000 Houston , Texas 4#1111b4 Harris County Water Control and Improvement District No. 108 Allied Bank of Texas i Waterworks and Sewer System Houston, Texas Combination Tax and Revenue First National Bank i Bonds , Series 1972 8 . 50% 4000 Denver , Colorado Totals 000 Bonds Voted $3 , 000, 000 nts Bonds approved for sale $2 ,800 ,000 Bonds sold $2 ,800 ,000 - 4 - EXHIBIT E HARRIS COUNTY WATER CONTROL AN] GENERAL LONG-TERM DEBT SERVICE March 3: f Series 1970-A Series 1972 Interest Interest Principal Due al Due Total Fiscal Due April 1 , April 1, Annual Years October 1 October 1 Tot.l October 1 Total Requirements 1981 $ 10 , 000 $ 28 , 395 $ 38 ,. $ 16 , 875 $ 16 , 875 $ 121,539 1982 10 , 000 27 ,445 37 , 0 33 ,412 43 , 412 247 ,100 1983 10 , 000 25 ,845 35 ,0 32 ,738 42 ,738 247 ,058 1984 15 ,000 24 ,995 39 ,0 32 ,062 42 , 062 247 ,582 1985 15 , 000 23 ,720 38 ,0 31, 387 41,387 252 , 307 1986 15 ,000 22 ,445 37 , 0 30 ,713 40 ,713 246 ,658 1987 15 , 000 21 ,170 36 , 0 29 , 869 44 ,869 250 ,658 1988 15 , 000 19 ,970 34 ,0 28 , 856 43 ,856 249 ,188 1989 15 ,000 18 ,770 33 , 0 27 , 844 42 ,844 247 ,345 1990 15 ,000 17 ,570 32 , 0 26 ,831 41, 831 249 ,883 1991 15 ,000 16 , 370 31 , 0 25 ,650 45 ,650 246 ,813 1992 15 , 000 15 , 110 30 , 0 24 ,300 44 , 300 248 ,135 1993 15 ,000 13 ,850 28 , 0 22 , 950 42 , 950 243 ,888 1994 20 ,000 12 ,590 32 , 0 21, 600 41, 600 248 ,990 1995 20 ,000 10 ,910 30 , 0 20 ,081 45 , 081 247 ,847 1996 20 ,000 9 ,230 29 , 0 18 , 394 43 , 394 245 ,955 1997 20 ,000 7 ,550 27 , 0 16 ,200 56 , 200 252 ,975 1998 20 ,000 5 ,870 25 ,0 13 , 331 58 , 331 253 ,739 1999 20 ,000 4 ,190 24 ,0 10 , 125 60 ,125 258 ,196 2000 20 ,000 2 ,510 22 ,0 6 , 412 66 ,412 265 ,985 2001 20 ,000 830 20 ,0 2 , 194 67 , 194 258 ,455 Totals $340 ,000 $329 ,335 $669 ,0 $471, 824 $971,824 $5 ,130 ,296 See notes to financial statements Cash and Temporary Investment Balan Debt Service Fund $140 , Tax Fund 4 , $144 , 0 - 5 - EXHIBIT F Page 1 of 4 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 NOTES TO FINANCIAL STATEMENTS March 31, 1980 Note 1 : Creation of the District - Harris County Water Control and Improvement District No. 108 was created by an order of the Texas Water Rights Commission on October 22 , 1968 . The Board of Directors held its first meeting on November 7 , 1968 and the first bonds were sold on August 31, 1970. Summary of accounting policies - Note 2 : Accounting requirements of the Texas Water Rights Commission - The Texas Water Rights Commission adopted a "Water District Account- ing Manual" in 1974 , and the use of the Manual by all water districts was required by the Commission beginning January 1, 1975. The financial statements contained in this report generally conform to the requirements of the Manual. The accrual basis of accounting is followed by the District and all financial statements were prepared on this basis , except for the statement of changes in cash-all funds, which was prepared on the cash basis of accounting. Also bond interest expenses and tax revenues are reported on the cash basis, but the net change in taxes receivable is recorded and included in the fund balances of the Tax Fund. Note 3 : Debt service payments - Bond interest of $98 ,972 and bond principal of $45 ,000 due on April 1, 1980 was paid to the paying agent prior to the fiscal year end and is included in Debt Service Fund expenditures; these amounts were not included in the debt service requirements schedules for the 1981 fiscal year. Note 4 : Accounting for capital items - The District capitalized all costs associated with its creation which included all direct costs of the sale of bonds , except for bond discounts. From the date of the sale of bonds through the date of completion of related improvements, interest expenses and interest income related to these funds, and amortization of bond discount, were also capitalized. These amounts have been shown on the balance sheet as district organiza- tional costs and, as recommended by the Manual, are not being amortized. Bond discounts have been deferred and are being amortized over the life of the applicable bond issue in relation to the principal amount outstanding; the amounts amortized are included in Debt Service Fund expenses. The costs of meters and boxes and residential lines are included in oi the General Fixed Assets Fund. Any reimbursements received to offset such costs are shown as an addition to the General Operating Fund when received. Detailed fixed assets records are not presently maintained and the District has the policy of expensing currently any repair or maintenance item which does not extend the life of the asset or increase the assets' valuation. Depreciation is not provided in accordance with the recommendations of the Manual - 6 - EXHIBIT F Page 2 of 4 Bond Order and legal requirements - Note 5 : Pledge of revenues - All of the District' s bonds are payable from the proceeds of an ad Ilk valorem tax levied upon all taxable property subject to taxation within the District, without limitation as to rate or amount, and are further payable from and secured by a lien on and pledge of the net revenues to be received from the operation of the District' s waterworks and sanitary sewer system after deduction of reasonable cost of administration, effi- cient operation and adequate maintenance of the District' s service faci- lities in the manner provided by Chapter 217 , Acts of the Regular Session of the 52nd Legislature of Texas, 1951. Note 6 : Debt service requirements - Series 1970A - 1972 : The Bond Orders for the above-named series of bonds require that while said bonds or any part of the principal and interest thereof are outstanding and unpaid, there shall be levied an ad valorem tax upon all taxable property within the District sufficient in amount to pay the interest on such bonds, together with an additional amount to be placed in the sinking fund sufficient to redeem such bonds at their maturity. At such time as the net revenues from operation of the system, pledged to the payment of these bonds, together with money derived from taxes , may have accumulated a surplus in the sinking fund equal to the sum to be required in the succeeding year to pay the interest and principal of " the District' s obligations maturing in that year, the District' s annual tax levies may be lowered to produce not less than 25% of the bond matu- -rzties for each succeeding year. Whenever the actual experience of three consecutive years demonstrates that the net revenues are adequate to protect the maturities of the District' s obligations, the District' s tax may be wholly abated, until further experience demonstrates the necessity to again levy taxes to avoid default in the payments of the District' s obligations as they may mature. Series 1971 and 1971A: The Bond Orders for the Series 1971 and 1971A bonds require (1) the establishment of a Reserve Account, (2) setting out from the net revenues of the system an amount equal to 1/6th of the next maturing installment of interest, and (3) commencing not later than one year prior to the first maturity of principal, an amount equal to 1/12th of the next maturing installment of principal , and (4) a sum equal to 20% of the total monthly principal and interest requirements for the next maturity of principal and interest shall be paid into the Bond Fund (i.e. Debt Service Fund) until said fund, including the Reserve Account, shall consist of a sum equal to the total principal and interest requirements for the current year, plus a sum sufficient to pay the principal and interest for the next succeeding year. After such Reserve Account shall °' have been accumulated, as provided above, and so long as it shall be so retained, the amount of net revenues from the operation of the system to be paid into the Bond Fund each month shall equal not less than 1/6th of the interest and 1/12th of the principal payments provided for above. The Board of Directors agrees that the rates to be fixed and the charges to be collected for services, together with taxes levied, shall at all times be sufficient to make the payment into the Bond Fund, including the Reserve Account. - 7 - EXHIBIT F Page 3 of 4 Bond Order and legal requirements - (Continued) Note 7 : Supplemental interest coupons - The Series 1971 refunding bonds have supplemental coupons attached so that the total interest paid on each bond will be equal to 10% per year from October 1, 1973 to April 1, 1978 . The Series 1972 bonds matu- ring in the years 1982 through 2000 , aggregating $490 ,000 , also had supplemental coupons attached so that the total interest paid on each bond was 9% per year from June 1, 1972 to April 1, 1976 . Note 8 : Redemption of bonds - The outstanding bonds of the District are callable for redemption prior to maturity at the option of the District. The bonds may be called in whole or in part, in inverse numerical order, for the purpose of re- tirement or refunding, or both, at par plus accrued interest. Bonds of the Series 1970A, 1971, 1971A and 1972 , may be called on October 1, 1985 , April 1, 1985, April 1, 1986 , and April 1, 1987 , respectively, or any interest payment date thereafter. Note 9 : Engineers ' report - The Bond orders of the Series 1971 bonds require a complete engineer- ing inspection and report of the operations and physical condition of the system to be made each year by an independent qualified engineer. During the fiscal year the District' s independent engineer investigted and re- ported on certain sections of the system for planned rehabilitation and expansion. Note 10 : Water and sewer rates and customers - The following monthly water and sewer service rates are currently in effect. Water Service Residential and commercial : First 5 ,000 gallons of water used (minimum bill) * $6. 00 Each 1,000 gallons of water used thereafter .95 *Master metered townhouses and apartment projects are based on first 5 ,000 gallons of water used times the number of units. Sewer Service Residential and commercial: First 50 ,000 gallons of water used (minimum bill) * $7 .00 Each 1,000 gallons of water used thereafter .25 04_ *Master metered townhouses and apartment projects are charged $7 . 00 for each unit Five year summary of customers at March 31 : 1980 1979 1978 1977 1976 1, 158 1,158 1, 153 1,150 1, 150 - 8 - EXHIBIT F Page 4 of 4 Note 11 : Contract with City of Friendswood - On October 19 , 1971, the District entered into a waste disposal contract with the City of Friendswood, Texas. Under the terms of this contract, the District constructed lines and facilities to transport waste on the sanitary sewer trunk line facilities of the City. Also, on March 30 , 1972 , the District paid the City $239 ,000 for expansion and improvement of the City' s sewage treatment facilities to meet all state and federal regulations. Under this contract the District is entitled to have up to 460 ,000 gallons per day treated by the City and the City is responsible for all maintenance and operation of the plant. On February 26 , 1980, the District agreed to pay the City 85% of the prevailing rate that the City charges its residents, which rate at present is $7 .00 per connection. This agreement increased the District' s sewer treatment cost from $4 . 75 to $5.95 per connection, and the District paid the increased rate retroactive to December 1978 . Note 12 : Insurance coverages - The Bond Orders require that so long as any of the bonds are out- standing, the District agrees to maintain insurance for the benefit of the bondholders, of a kind and in an amount which would usually be carried by private companies engaged in a similar type of business. The insurance agent/consultant of the District has determined that the in- surance provision of the Bond Orders have been complied with in all material respects. Note 13 : Legal matters - The District was one of several defendants in a suit, pending for several years , in which the plaintiff is asking for $600 ,000 for 0111114* damage to land and $800 ,000 for exemplary damages , alleging infractions concerning water control in a stream known as Clear Creek. Counsel for the District has stated that the District was dismissed as a party in the suit. - 9 - May 23 , 1980 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 AUDITORS' REPORT ON SUPPLEMENTAL STATEMENTS The basic financial statements of the Harris County Water Control and Improvement District No. 108 for the year ended March 31, 1980 , and our report thereon, are presented in the preceding section of this report. Our examination was made primarily for the purpose of formulating an overall opinion on those financial statements. The supplemental statements presented hereinafter, although R not considered necessary for a fair presentation of the basic statements, are presented as supplementary information and have been subjected to the audit procedures applied in the examination of the basic financial statements. In our opinion, the supplemental statements are fairly stated in all material respects in relation to the basic financial statements taken as a whole. jall‘'`'`i)---`-idar 7L-44-- i - 10 Schedule 1 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 SCHEDULE OF TEMPORARY INVESTMENTS March 31, 1980 Oh Interest Maturity Face Accrued Rate Date Amount Interest Debit Service Fund - Reserve Account, Series 1971 and 1971A bonds - Time deposits - No. 180419-6 14 .95% 9/22/80 $ 25 ,799 $ 74 No. 89801-5 15 .70% 9/24/80 28 ,433 49 U.S . Treasury Bills 11 .42; 9/16/80 64 ,893 1,387 Total - Debt Service Fund - Reserve Account 119 ,125 1,510 General Operating Fund - Time deposit - No. 1525 16% 4/14/80 $102 ,568 775 Total - all funds $221,693 $2 ,285 See notes to financial statements c41114 ' - 11 - Schedule 2 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 ANALYSIS OF CHANGES IN TAXES RECEIVABLE For The Fiscal Year Ended March 31, 1980 Taxes receivable - March 31, 1979 $ 8 ,484 1979 Original tax roll 257 ,625 Total to be accounted for 266 ,109 Tax Collections - Current year 242 ,478 Prior years 1,972 244 ,450 Taxes receivable - March 31, 1980 $ 21,659 Taxes receivable by fiscal years - 1975 and prior $ 193 1976 326 1977 847 1978 5,146 1979 15,147 $ 21 ,659 Assessed Valuations Summary Tax rate Personal per $100 Land Improvements Property Total Valuation 1979 $4, 257 ,740 $26 ,414 ,180 $745 ,780 $31,417 ,700 82 1978 4 ,257 ,740 26 ,022 ,370 434 ,490 30 ,714 ,600 80' 1977 4,287 , 150 25 ,395 ,590 420,170 30,102,910 90 1976 4 ,287 ,150 23 ,455,580 397 ,780 28,140 ,510 90c 1975 4 ,287 ,000 19 ,128,450 318 ,470 23 ,733 ,920 90 Tax collection year - From October 1, 1979 to September 30 , 1980 Percent of assessed valuation to fair market value 100.0% Percent of current taxes collected to current tax levied 94 .1% Percent of current and delinquent taxes collected to current and delinquent taxes outstanding at the beginning of the tax year 91.9% See notes to financial statements 1 - 12 - Schedule 3 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 ANALYSIS OF CHANGES IN GENERAL FIXED ASSETS For The Fiscal Year Ended March 31, 1980 Balances Balances March 31, Addi- Deduc- March 31, 1979 tions tions 1980 Land $ 1,675 $ 1,675 Water system 525 ,426 525 ,426 Sewage system 733 ,774 $478 734 ,252 Drainage system 562 ,735 562 ,735 Engineering fees 174 ,159 174 ,159 Totals $1,997 ,769 $478 - $1,998 ,247 Amounts provided by - Construction fund bond sales $1,882 ,158 $1,882,158 General operating fund, net system revenues 115 ,611 $478 116 ,089 Total amounts provided $1,997 ,769 $478 - $1,998 ,247 See notes to financial statements t - 13 - Schedule 4 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 ANALYSIS OF CHANGES IN DISTRICT ORGANIZATIONAL COSTS For The Fiscal Year Ended March 31, 1980 Balances March 31, 1979 and 1980 Costs during organization and construction - Legal Fees $109 ,125 Bond interest 169 ,468 Amortized bond discount 3 ,705 Fiscal agent fees 44 ,000 Bond issue expenses 4 ,527 Interest on temporary investments (60 ,013) Total $270 ,812 Amounts provided by - Construction Fund, bond sales $157 ,652 Debt Service Fund, bond sales 113 ,160 Total $270 ,812 See notes to financial statements - 14 - Schedule 5 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DIS INSURANCE COVERAGE March 31 , 1980 pe of From Tanpany Co-insurance Employee honesty, etc. : Tax Assessor and Collector 1/1/80 12/31 Public Official 4/2/79 4/2tock None Fire, Lightning, extended coverage, • vandalism and malicious mischief : Water plants and sewage treatment plants 11/22/79 11/22tock 80% General liability: r: Bodily injury, aggregate 11/22/79 11/22 � Property damage , agreggate tock None Auto liability, non-owned cars : Bodily injury Property damage Flood insurance: Comfort station, control house and contents 9/24/79 9/24 inancial statements Iftoonek - 15 - Pik OTHER SUPPLEMENTAL INFORMATION (Not Subjected to Audit Procedures) Schedule A Page 1 of 5 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 QUESTIONNAIRE TO BE COMPLETED BY AUDITORS March 31, 1980 p YES NO 1. At the time that your firm was engaged by the Board of Directors of the above-named water district to perform this audit, was a copy of the Water District Accounting Manual made available to you? X 2. The Water District Accounting Manual prescribed account- ing principles and policies. After taking these into consideration, did the local water district: a. Maintain a proper classification of expenses and revenues? X b. Record expenses and revenues on the basis of full accrual accounting except for the specific revenue and expense items required to be maintained on the cash basis by the Water District Accounting Manual? X c. Maintain the double entry system of accounting? X d. Keep a general ledger in accordance with the uniform classification of general ledger accounts prescribed in the Water District Accounting Manual? X e. Adhere to other provisions of the Water District Accounting Manual? X 3. Did the Board of Directors of the water district impose on your firm any audit requirements in addition to those minimum audit requirements of the Water District Accounting Manual? X 4. Did you identify, during the course of your examination of the financial statements of the water district, any areas pertaining to accounting matters in which action should be taken by the Board of Directors of the water district? X If Yes is checked for question 4 , have these topics been cited in a management letter to the water district' s Board of Directors? X '' .w► 5. Did you obtain representation from the Board of Directors of the water district that all records of the water dis- trict were made available to you for your examination? X - 17 - Schedule A Page 2 of 5 YES NO 6. Did the water district: a. Use the construction fund , tax fund and debt service fund only for purposes authorized by the Board of Directors of the water district and/or within the provisions of applicable bond resolutions? X b. Properly segregate and maintain the required amount of cash escrowed by the Texas Water Rights Commission or disburse the escrowed cash according to the terms prescribed by the Texas Water Rights Commission N/A c. Do business only with firms or corporations in which members of the Board of Directors had no pecuniary interest? * *Answered by the Board of Directors - Schedule B. d. Observe the conditions for obtaining grants, gifts , etc. , or observe agreements with governmental agencies for the purpose of securing funds or services? *Answered by the Board of Directors - Schedule B. e. Have a contract for Social Security coverage for its employees with the Texas Department of Public Welfare , Social Security Division? X f. Make remittances of Social Security taxes according to the terms of the contract for Social Security cov- erage with the Social Security Division of the Texas Department of Public Welfare? N/A g. Deposit receipts to the proper funds kept by the approved depository bank? X h. Draw checks only on funds approved by the Board of Directors and signed by authorized personnel? X 7. Do you issue a management letter to administrative officials of the water district at least annually which sets forth your comments (based on matters which came to your atten- tion during your examination) for strengthening internal accounting controls and improving administrative efficiency and prodecures? X - 18 - Schedule A Page 3 of 5 YES NO If Yes is checked for question 7 : a. Were your recommendations explained to and discussed with administrative officials of the water district? X b. The date of your most recent management letter was May 23 , 1980. c. Is there evidence indicating that your previous year (s) recommendations have been or are being implemented? X d. Has a copy of the management letter been filed with the Texas Water Rights Commission. *Answered by the Board of Directors - Schedule B. 8. The Texas Water Code makes specific provisions relating to security provided by depository banks . After consideration (Ok of the applicable laws pertaining to the specific water district, did the depository bank or savings association provide adequate security of the correct type. *This question answered on the statement that follows . - 19 - HARRIS COUNTY WATER COV STATEMENT RE V a. Name of depository bank or b. Amount of FDIC or FSLIC cc demand deposits time deposit or savings c. Cash balance at year end - demand deposits time or savings deposit: d. Amount of bond or par valL pledged as of year end (not including FDIC or e. Was security adequate at 1 according to criteria er f. Largest cash balance amour demand deposits time deposits or saving: g. Date of largest cash balar h. Amount of bond or par vale pledged at time of largE i. Was security adequate at c balance according to cri Note : By adoption of the bonds issued by the Distr] the bondholders the net rE system and the taxes leviE par. (b) of the FDIC Rules Public Bond Issues . employee of a public funds which by law 01 are required to be pz issued by the public funds in an insured 1 deposit by a trustee bondholders are pro such beneficial inter insured for $40 ,000 . Schedule A Page 5 of 5 YES NO 9 . The District' s taxes were collected by an independent tax assessor-collector. X 10 . Was the tax-assessor bonded as required by law? X 11. What was: a. The tax assessor-collector bonded for $5 ,000 b. The greatest amount of the district' s taxes in the tax assessor-collector' s possession at any one time? This questions has been interpreted to mean the largest deposit for the year by the tax assessor-collector. $84 ,343 c. The frequency of tax receipts deposits with the bonded depository? (check one) (1) Daily X* (2) Weekly (3) Monthly *Deposited monthly after substantially all current taxes are collected. d. The percent of the assessed valuation to fair market value? 100% (114 This information was furnished by the District without audit. 12. We actually examined the records of the tax assessor- collector. X 13 . As a result, were local tax revenues (including delinquent taxes and interest and penalties on taxes) properly sep- arated for debt service . X 14 . Was the water district in compliance with applicable bond resolutions, with the general or special legislation under which the district was created and with the specific statutes excerpted and included in the Legal Compliance Guidelines in Section 70-30-1 of the Water District Accounting Manual? X Exceptions noted during the course of our audit of the financial statements are described in the management letter. This question has also been answered by the Board of Plik'' Directors in Schedule B. 4.5 . Other comments of the Auditor : NONE - 21 - Schedule B HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 QUESTIONNAIRE TO BE COMPLETED BY BOARD OF DIRECTORS March 31, 1980 410* YES NO 1. Did the district: a. Do business only with firms or corporation in which members of the Board of Directors had no pecuniary interest? X b. Observe the conditions for obtaining grants , gifts, etc. , or observe agreements with governmental agencies for the purpose of securing funds or services? X 2. Has a copy of the management letter been filed with the Texas Water Rights Commission? X 3. Was the water district in compliance with applicable bond resolutions, with the general or special legislation under which the district was created and with the specific statutes excerpted and included in the Legal Compliance Guidelines in Section 70-03-1 of the Water District Accounting Manual? X 0.11/4 - 22 - Schedule C HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 BOARD MEMBERS, KEY ADMINISTRATIVE PERSONNEL AND LEGAL COUNSEL March 31, 1980 Board Members 401 Term Annual District Name and Address Expires Salary Title Resident Tom Nicodemus 17007 Barcelona Per Friendswood, Texas 4/1/81 Diem President Yes Dallas Martin 16906 Townes Road Per Vice Friendswood, Texas 4/1/81 Diem President Yes Margaret George 3960 Laura Leigh Per Friendswood, Texas 4/1/82 Diem Secretary Yes Gina Runnels 16731 David Glen Per Friendswood, Texas 4/1/81 Diem Member Yes David T. Nolan 3832 Laura Leigh Per Friendswood, Texas 4/1/82 Diem Member Yes Date Hired Fees Paid Key Administrative Personnel - District Tax Assessor-Collector Alta Carbone Friendswood, Texas 1/19/70 $4 ,800 No Legal Counsel Smith, Bacon & Murdaugh 1200 Travis Street Houston, Texas 1/19/70 $10 ,601 No Note : None of the directors listed above had any relationship with major land owners , engineers , attorneys or tax assessor/collector of the District. r . - 23 - Schedule D HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 HARRIS COUNTY, TEXAS CERTIFICATE OF THE BOARD OF DIRECTORS Irh We, the undersigned, do hereby certify that the audit report of the above- named Water District for the fiscal year ended March 31, 1980 and the other supplemental statements and other supplemental information included 3 herein was received by the Board of Directors on ( (op and was reviewed and approved* * at a meeting of the Bo rd of Directors of the Water District on IL ri de), .1 J,1? • irk . - _ , , co.tii-d14,‘„,,,,j,, Signature of Boa President 44 ///; //,,7',. -,-71 /7:-(/ Signature of Board Secretary *Strike out the word which does not apply. . - 24 -