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HomeMy WebLinkAbout1978 03 31 Single Audit Report - Harris County water control and improvement district No.108 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 f., P TABLE OF CONTENTS March 31, 1978 Auditors ' Report Balance sheets, all funds EXHIBIT A Statement of revenues , expenses and fund balance, all funds EXHIBIT B Statement of changes in cash, all funds EXHIBIT C Analysis of changes in general long-term debt EXHIBIT D General long-term debt service requirements, by years EXHIBIT E Notes to financial statements EXHIBIT F Auditors ' Report on Supplemental Statements Schedule of temporary investments Schedule 1 Analysis of changes in taxes receivable Schedule 2 Analysis of changes in general fixed assets Schedule 3 Analysis of changes in district organizational costs Schedule 4 Insurance coverage Schedule 5 Other Supplemental Information: Questionnaire To Be Completed By Auditors Schedule A Questionnaire To Be Completed By Board of Directors Schedule B Board Members, Key Personnel, and Legal Counsel Schedule C Certificate of Board of Directors Schedule D LAFRANCE, WALKER, tJACKLEY & SAVILLE CERTIFIED PUBLIC ACCOUNTANTS 1110 NASA RD- ONE • HOUSTON, TEXAS 77058 OFFICES IN PRINCIPAL CITIES-FOREIGN AFFILIATES 713/488-8324 May 30, 1978 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, 1978, 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 fairly the financial position of Harris County Water Control and Improvement District No. 108 at March 31, 1978 , 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 , as appli- cable to governmental units, applied on a basis consistent with that of the preceding year. HARRIS COUNTY WATER CONTF BALANCE SHEETS, ASSETS AND OTHER DEE Current assets - .1 Unrestricted cash Restricted cash Total cash Unrestricted temporary investir Restricted temporary investmen Reserve account - Series 1971 Total temporary investments Total cash and temporary inv Accounts receivable and accrue Prepaid insurance Total current assets Taxes receivable - Schedule 2 General fixed assets (at cost) - Intangible and other assets - District organizational costs fl Bond discount, less amortizati Total intangible and o Provision for bonded debt Total assets and other LIABILITIES AND FUND BA. Current liabilities - Accounts payable and accrued e: Refundable deposits Total current liabilit Bonds payable, EXHIBIT D Fund balances - Unallocated fund balances Investment in uncollected taxes Allocated from net system reve] Allocated from sale of bonds 01 Unamortized discount on sale o. Reserve account reserve - Seril Total fund balances Total liabilities and HARRIS COUNTY WATER CONTROL AND IMPR( STATEMENT OF REVENUES, EXPENSES AND 1 For The Fiscal Year Ended Operating revenues - 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) - Assessments Tap connection fees Interest earned Miscellaneous revenue and expense - (net) Tap connection expense Bond principal paid Bond interest paid Amortization of bond discount Total non-operating revenues/ (expenses) Net revenues/ (expenses) Additions to fund balances - Transferred from Tax Fund Transferred from General Operating Fund Taps capitalized Increase in uncollected taxes Total additions to fund balances Deductions from fund balances - Transferred to Debt Service Fund Transferred to General Fixed Assets Fund Total deductions from fund balances ,"► Net change in fund balances for the year Fund balances, March 31, 1977 Fund balances , March 31 , 1978 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, 1978 General Debt Memorandum Operating Tax Service Totals Fund Fund Fund Sources of cash - Cash receipts from operations $423 , 177 $153 , 874 $269 , 303 Cash disbursements for operations 132, 655 127 ,257 5, 398 Net cash from operations 290, 522 26, 617 263, 905 Cash received from non- operating revenues 21, 801 14 , 935 $ 6, 866 Cash transfers from other funds 274 , 000 - 274 , 000 Cash received from customer deposits 1,019 1, 019 Total cash provided 587 , 342 42 , 571 263, 905 280,866 Application of cash - Non-operating expenses 251, 514 3, 269 248, 245 Cash transfers to other funds 274 , 000 - 274 , 000 Fixed asset expenditures 19, 521 19, 521 Total cash applied 545, 035 22 ,790 274 , 000 248, 245 Increase/ (decrease) in cash and temporary investments 42, 307 19,781 (10, 095) 32 , 621 Cash and temporary investment balances , at March 31, 1977 167 , 645 51, 494 12,310 103, 841 Cash and temporary investment balances, at March 31, 1978 $209, 952 $71, 275 $ 2, 215 $136 , 462 See notes to financial statements • EXHIBIT D HARRIS COUNTY WATER CONTRO: ANALYSIS OF CHANGES For The Fiscal Yes Bonds Outstanding March 31, 1978 Paying Agents Harris County Water Control and Ii Allied Bank of Texas ment District No. 108 Waterwork; Houston, Texas Sewer System Combination Tax an( First National Bank Revenue Bonds, Series 1970A $ 360,000 Denver, Colorado Harris County Water Control and Ii Allied Bank of Texas ment District No-. 108 Waterwork; Houston, Texas Sewer System Combination Tax and First National Bank Revenue Refunding Bonds, Series 585,000 Denver, Colorado Harris County Water Control and L ment District No. 108 Waterwork; Sewer System Combination Tax ani Allied Bank of Texas Revenue Bonds, Series 1971A 1,240, 000 Houston, Texas OP Harris County Water Control- and D Allied Bank of Texas- ment District No. 108 Waterwork: Houston, Texas Sewer System Combination Tax an( First National Bank Revenue Bonds, Series 1972 515,000 Denver, Colorado Totals $2,700,000 Bonds voted $3 ,00a1 statements Bonds approved for sale $2, 801 Bonds sold $2, 801 EXHIBIT E • HARRIS COUNTY WATER CONTROL 2 Vilk GENERAL LONG-TERM DEBT SERVI( March Series 1970-A Series 1972 Interest Interest Principal Due Due Total Fiscal Due April 1, April 1, Annual Years October 1 October 1 Tota: October 1 Total Requirements 1979 $10,000 $15, 047 $25,0' $17 , 381 $17,381 $111, 091 1980 10,000 29,245 39,2, 34 , 594 39, 594 245,065 1981 10,000 28,395 38,3! 34 , 087 44,087 251,313 1982 10,000 27,445 37,4, 33 ,412 43,412 247,100 1983 10,000 25,845 35,8, 32,738 42,738 247 , 058 1984 15,000 24,995 39,9' 32 ,062 42, 062 247,582 1985 15,000 23 ,720 38 ,7: 31,387 41,387 252, 307 1986 15,000 22,445 37,4, 30,713 40,713 246,658 1987 15,000 21,170 36,1' 29, 869 44,869 250,658 1988 15,000 19,970 34 , 9' 28, 856 43, 856 249,188 1989 15,000 18 ,770 33,7' 27 , 844 42,844 247,345 1990 15, 000 17 , 570 32 , 5' 26, 831 41,831 249, 883 Alb 1991 . 15, 000 16, 370 31, 3' 25, 650 45, 650 246, 813 1992 15, 000 15,110 30, 1. 24 , 300 44, 300 248 ,135 1993 15, 000 13 , 850 28 , 8' 22, 950 42, 950 243, 888 1994 20, 000 12,590 32 ,5' 21, 600 41, 600 248, 990 1995 20,000 10, 910 30,9. 20, 081 45,081 247 ,847 1996 20,000 9,230 29,2: 18 ,394 43, 394 245,955 1997 20, 000 7 , 550 27 ,5' 16,200 56,200 252, 975 1998 20,000 5,870 25,8' 13, 331 58,331 253,739 1999 20,000 4,190 24,1' 10,125 60,125 258,196 2000 20,000 2, 510 22,5. 6,412 66,412 265,985 2001 20,000 830 20,8. 2,194 67,194 258 ,455 Totals $360,000 $373,627 $733, 6. $541, 011 $1, 056, 011 $5, 616,226 • See notes to financial statements Cash and Temporary Investment Balanc, Debt Service Fund $136 , 4 Ok Tax Fund 2,2 $138, 6 1 EXHIBIT F Page 1 of 4 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 NOTES TO FINANCIAL STATEMENTS March 31, 1978 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 Accounting 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 expense and tax revenues are reported on the cash basis , but the net change in taxes receivable is included in the fund balance of the Tax Fund. Note 3 : Debt service payments - Bond interest of $108,816 due on April 1, 1978 was paid prior to the fiscal year end and is included in Debt Service Fund expenses; this amount was not included in debt service requirements schedules for the 1979 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 expense 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 are not being amortized as recommended by the Manual. 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 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. Schedule 2 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 ANALYSIS OF CHANGES IN TAXES RECEIVABLE For The Fiscal Year Ended March 31, 1978 4111 Taxes receivable - March 31, 1977 $ 4,454 1976 Original tax roll 270, 926 Total to be accounted for 275,380 Tax collections - Current year 265,718 • Prior years 2, 545 268 ,263 Taxes receivable - March 31, 1978 $ 7,117 Taxes receivable by fiscal years - 1972 $ 195 1973 71 1974 167 1975 - 1976 1, 476 1977 5,208 $ 7 ,117 Property Valuations Tax rate Personal per $100 Land Improvements Property Total Valuation 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 90 1975 4, 287 ,000 19,128, 450 318, 470 23 ,733, 920 90 1974 4 , 292, 700 15,189,780 209, 040 19, 691, 520 90 1973 4 , 357,850 9,769, 390 150,550 14 ,277 ,790 90 Tax collection year - From October 1, 1977 to September 30, 1978 Percent of assessed valuation to fair market value 100.0% Percent of current taxes collected to current taxes levied 96.5% Percent of current and delinquent taxes collected to 40 current and delinquent taxes outstanding at the beginning of the tax year 97.4% See notes to financial statements 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, 1978 10 Balances March 31, 1978 and 1977 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 r See notes to financial statements Schedule 5 HARRIS COUNTY WATER CONTROL AND I1 INSURANCE COV March 31, 1 f Type of From Company Co-insurance Employee honesty, etc. : Tax Assessor and Collector 1/01/78 Public official 4/02/77 Stock None Fire, lightning, extended coverage, vandalism and malicious mischief: Water plants and sewage treatment plants 11/22/76 Stock 80% General liability: Bodily injury, aggregate 11/22/77 Property damage, aggregate Stock None Auto liability, non-owned cars: 11/22/77 Bodily injury Property damage o financial statements OTHER SUPPLEMENTAL INFORMATION (Not Subjected to Audit Procedures) fw Schedule A Page 1 of 5 HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 QUESTIONNAIRE TO BE COMPLETED BY AUDITOR March 31, 1978 1. At the time that your firm was engaged by the Board of Directors of the above-named water district to perform 11/1 this audit, was a copy of the Water District Accounting { Manual made available to you? X Yes No 2 . The Water District Accounting Manual prescribes 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 Yes No 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 Yes No • c. Maintain the double entry system of accounting? X Yes No d. Keep a general ledger in accordance with the uniform classification of general ledger accounts prescribed in the Water District Accounting Manual? X Yes No e . Adhere to other provisions of the Water District Accounting Manual? X Yes No 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 Yes No 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 Yes No If Yes is checked for question 4, have these topics been cited in a mangement letter to the water district' s Board of Directors? X Yes No 5. Did you obtain representation from the Board of Directors of the water district that all records of the water district were made available to you Tor your examination? X Yes No Schedule A Page 2 of 5 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 Yes No 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 N/A prescribed by the Texas Water Rights Commission? Yes No c. Do business only with firms or corporations in which members of the Board of Directors had no pecuniary interest? Yes No * The answer to this question does not fall within the scope of a normal audit engagement and has been answered by the Board of Directors in 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? Yes No AO * The answer to this question does not fall within the scope of normal audit engagement and has been answered by the Board of Directors in schedule B. e. Have a contract for Social Security coverage for its employees with the Texas Department of Public Welfare, N/A Social Security Division? Yes No 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 N/A Department of Public Welfare? Yes No g. Deposit receipts to the proper funds kept by the approved depository bank? X Yes No h. Draw checks only on funds approved by the Board of Directors and signed by authorized personnel? X 40 Yes No 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 procedures? X Yes No Schedule A Page 3 of 5 If Yes is checked for question 7 : • a. Were your recommendations explained to and discussed with administrative officials of the water district? X Yes No b. The date of your most recent management letter was May 31, 1978 . c. Is there evidence indicating that your previous year (s) recommendations have been or are being implemented? X Yes No d. Has a copy of the management letter been filed with the Texas Water Rights Commission? Yes No The answer to this question does not fall within the scope of a normal audit engagement and has been answered by the Board of Directors in Schedule B. 8. The Texas Water Code makes specific provisions relating to security provided by depository banks. After consideration of the applicable laws pertaining to the specific water district, did the depository bank or savings association provide adequate security of the correct type? Yes No This question answered on the statement that follows : Schedule A Page 5 of 5 9. The water district' s taxes were collected by an independent tax assessor-collector. 10 . Was the tax assessor-collector bonded as required by law? X Yes No el 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? $78, 606 This question has been interpreted to mean the largest deposit for the year by the tax assessor-collector. 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% This information was furnished by the District without audit. 14 12. We actually examined the records of the tax assessor- collector. X Yes No 13. As a result, were local tax revenues (including delin- quent taxes and interest and penalties on taxes) properly separated for debt service? X Yes No 14 . Was the water district in compliance with applicable bond resolutions, with the general or special legisla- tion 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 Yes No Significant exceptions noted during the course of our audit of the financial statements are described in the management letter and notes to the financial statements. This question has also been answered by the Board of Directors in schedule B. 15 . Other Comments of the Auditor: None Schedule B HARRIS COUNTY WATER CONTROL AND IMPROVEMENT DISTRICT NO. 108 QUESTIONNAIRE TO BE COMPLETED BY BOARD OF DIRECTORS • March 31, 1978 114 1. Did the district: a. Do business only with firms or corporations in which members of the Board of Directors had no pecuniary interest? X Yes No b. Observe the conditions for obtaining grants, gifts, etc. , or observe agreements with governmental agencies for the purpose of securing funds or services? X Yes No 2. Has a copy of the management letter been filed with the Texas Water Rights Commission? X Yes No 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 Yes No -• All significant exceptions known to the Board of Directors have been described in the Notes to Financial Statements, EXHIBIT F. k 44.44, Ak