Pineville City Court Audit

PINEVILLE CITY COURT
Pineville, Louisiana
ANNUAL
FINANCIAL
REPORT
For the Year Ended December 31,2014

ANNUAL FINANCIAL REPORT
For the Year Ended December 31, 2014
TABLE OF CONTENTS
PAGE NO.
FINANCIAL SECTION
Independent Auditor's Report
GOVERNMENT WIDE FINANCIAL STATEMENTS
Statement of Net Position
Statement of Activities
FliND FINANCIAL STATEMENTS
Balance Sheet -Governmental funds
Reconciliation of the Balance Sheet-Governmental fund
to the Statement of Net Position
Statement of Governmental Fund Revenues, Expenditures and
Changes in Fund Balances
Reconciliation of the Statement of Revenues, Expenditures
and Changes In Fund Balances-Governmental Funds
to the Statement of Activities
10
Combining Statement of Fiduciary Net Position - Agency Funds
11
Notes to Financial Statements
12

December 31, 2014
TABLE OF CONTENTS (CONT'D)
PAGE NO.
Required Supplemental Information
Statement of Revenues, Expenditures, and
changes in Fund BalanceBudget and Actual - General Fund
27
Other Reports Required by Government

Auditing Standards
30
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
31
Schedule of Findings and Questioned costs for the

Year Ended December 31, 2014
34
Summary Schedule of Prior Audit Findings for

the Year Ended December 31, 2013
48
Corrective Action Plan for Current Year Audit

Finding for the Year Ended December 31, 2014
49
Other Supplemental Information

Schedule of Compensation, Benefits and other payments
to agency heads or chief executive officer
for the Year Ended December 31, 2014
58
MEMBER
AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
MEMBER
SOCIETY OF LOUISIANA
CERTIFIED PUBUC ACCOUNTANTS
DEBEVEC
CERTIFIED PUBLIC ACCOUNTANT
INDEPENDENT AUDITOR'S REPORT

The Honorable Gary Hays
Pineville City Court Judge
i was engaged to audit the accompanying financial statements of the governmental activities, each major fund
and the aggregate remaining fund information of Pineville City Court, as of and for the year ended December
31. 2014, and the related notes to the financial statements, which collectively comprise the Court's basic
financial statements as listed in the table of contents.
Management's Responsibility for the Financiai Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally 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 financial statements based on conducting the audit in
accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General
of the United States. Because of the matters described In the basis for disclaimer of opinion paragraph,
however, I am not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion
Basis for Disclaimer of Opinion
Detailed accounts payable records or a formal written agreement on the amounts due to the City of Pineville
for the expenses paid on behalf of the Pineville City Court have not been maintained and certain prior-year
records and supporting data were not available for our audit. Also, the court has over paid the wages and
benefits of the Judge and detailed accounts receivable records have not been maintained for current and prior
year amounts. Therefore, we were not able to obtain sufficient appropriate audit evidence about the amounts
of accounts payable and accounts receivable that are recorded in the accompanying Balance Sheet and
Statement of Net Assets at December 31, 2014 (stated at $ (-0-) and $10,988 respectively), as well as the
amount of expenses for over paid wages and benefits and expenses paid by the City of Pineville that may
have to be reimbursed by the Pineville City Court for the year then ended December 31, 2014 (stated at
$19,989).
1220 WINDSOR PLACE* ALEXANDRIA, IXIUISIANA 71303*(318)443-397 7
Disclaimer of Opinion
Because of the significance of the matter described In the Basis for Disclaimer of Opinion paragraph, I have
not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.
Accordingly, I do not express an opinion on the financial statements referred to in the first paragraph.
Other Matters
Required Supplementary Information
Management has omitted the management's discussion and analysis that accounting principles generally
accepted In the United States of America require to be presented to supplement the basic financial statements.
Such missing 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. My disclaimer of opinion on
the basic financial statements is not affected by this missing information.
Accounting principles generally accepted in the United States of America require that the budgetary comparison
information on pages 27-26 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 forconsistency with management's responses to my inquiries, the basic financial
statements, and other knowledge I obtained during my audit of the basic financial statements. I do not express
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
The Schedule of Compensation, Benefits and Other Payments to Agency Head or Chief Executive Officer
Is supplemental other information presented for purposes of additional analysis and is not a required part
of the basic financial statements.
This supplemental information has been subjected to the auditing procedures applied in the audit ofthe basic
financial statements and certain additional procedures, including comparing and reconciling such information
directly to the underlying accounting and other records used to prepare the basic 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. Because ofthe matter discussed in the basis
for disclaimer of opinion section above, it is inappropriate to , and I do not express an opinion on the
Schedule of Compensation, Benefits and Other Payments to Agency Head 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 my report dated January 31, 2016,
on my consideration of the Pineville City Court'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 over financial
reporting and compliance and the results of that testing, and not to provide an opinion on internal control over
financial reporting or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards In considering Pineville City Court's internal control over financial reporting
and compliance.
Billy De
pevec, CPA
Dej^vec,
Alexandria, Louisiana
January 31, 2016

Pineviile, Louisiana
STATEMENT OF NET POSITION
Governmental Activities
December 31,2014
ASSETS
ASSETS:
CASH AND CASH EQUIVALENTS
ACCOUNTS RECEIVABLE
DUE FROM OTHER FUNDS
DUE FROM EMPLOYEE
CAPITAL ASSETS,
NET OF ACCUMULATED DEPRECIATION
TOTAL ASSETS
6L894
$201.804
LIABILITIES
LIABILITIES:
ACCOUNTS PAYABLE
$ 12.211
TOTAL LIABILITIES
93,045
5,335
30,542
10,988
12.211
NET POSITION:
INVESTMENT IN CAPITAL ASSETS
RESTRICTED FOR BUILDING MAINTENANCEMMPROVEMENTS
UNRESTRICTED
TOTAL NET POSITION
The accompanying notes are an integral part of this financial statement.
61,894
79,076
48.623
$ 189.593

STATEMENT OF ACTIVITIES
Governmental Activities
EXPENSES
General Government:
Salaries and Fringe benefits
On-behalf salaries and benefits paid
Legal & Professional
Dues and Subscriptions
Computer Fees
Lease & Maintenance Costs
Office Supplies
Travel & Seminars
Miscellaneous
Depreciation
Total expenses
184,481
19,989
58,220
1,440
21,443
14,332
4,389
12,442
9,732
14.863
341.331
PROGRAM REVENUES
Charges for Services
Operating Grants and Contributions
Total program revenues
Net program revenues
365,405
19.989
385.394
44,063
GENERAL REVENUES
Interest earned
Miscellaneous
Total General Revenue
Change in Net Position
NET POSITION BEGINNING OF YEAR
NET POSITION END OF YEAR
The accompanying notes are an integral part of this financial stalenienl.
12
6.909
6.921
50,984
138.609
$ 189.593

BALANCE SHEET - GOVERNMENTAL FUNDS
December 31, 2014
General
Fund
ASSETS
Cash in bank
Accounts Receivable
Due from employee
Due from Agency funds
Total assets
Building
Capital
Projects
Fund
Total
Governmental
Funds
$ 18,122
5,335
10,988
26.389
$ 74,923
4.153
$93,045
5,335
10,988
30.542
S 60.834
$ 79.076
$ 139.910
LIABILITIES AND FUND BALANCES

Liabilities:
Accounts Payable
$ 12.21
Total liabilities
$ 12.211
12.211
Fund Balances:
Restricted for Building Maint.
And Improvements
Unassigned
48.623
Total Fund Balances

TOTAL LIABILITIES AND FUND BALANCES
12.211
79,076
79,076
48.623
48.623
79.076
127.699
$ 60.834
$ 79.076
$ 139.910
The accompanying notes are an integral part of these financial slalemcnls.

RECONCILIATION OF THE BALANCE SHEET-GOVERNMENTAL FUND

TO THE STATEMENT OF NET POSITION
December 31, 2014
Total fund balances-governmental funds (fund financial statement)
127,699
Amounts reported for governmental activities in the statement of net position

(government-wide financial statements) are different because;
Capital assets used in governmental activities are not
financial resources and therefore are not reported in
governmental funds.
Cost of assets
Accumulated depreciation
289,706
(227,812 )
61,894
Total net position of governmental activities

(government-wide financial statements)
The accompanying notes are an integral part of this reconciliation.
S 189.593

STATEMENT OF GOVERNMENTAL FUND REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES
For the year ended December 31,2014
General
Fund
REVENUES
Court fees, fines, and costs
Court costs
Civil fees-discretionary
Charges for services
Probation fees
On-behaif salaries and benefits received
Interest Income
Miscellaneous
Total Revenues
EXPENDITURES
CURRENT-Geiieral Government:
Salaries and Fringe Benefits
Contract Services
Dues and Subscriptions
Computer fees
Lease & Maintenance Costs
Office Supplies
Travel & Seminars
Miscellaneous
Total Current Expenditures
CAPITAL OUTLAY
Total Expenditures
$122,682
102,861
78,683
19,989
2
6.909
331.126
Building
Capital
Projects
Fund
$61,179
10
61.189
Total
183,861
102,861
78,683
19,989
12
6.909
392.315
184,481
19,989
184,481
19,989
58,220
1,440
4,389
12,442
9.732
290,693
35,775
58,220
1,440
21,443
14,332
4,389
12,442
9.732
326,468
290.693
3.983
39.758
3.983
330.451
21,443
14,332
(Continued)

STATEMENT OF GOVERNMENTAL FUND REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES
For the year ended December 31, 2014
(CONTINUED)
Building
Capital
Projects
Fund
Total
40,433
21,431
61,864
40,433
21,431
61,864
8.190
57.645
65.835
$ 48.623
$ 79.076
$ 127.699
General
Fund
EXCESS OF REVENUE OVER

(UNDER)EXPENDITURES
OTHER FINANCING SOURCES
Total other financing Sources
NET CHANGE IN FUND BALANCES

FUND BALANCE, BEGINNING
FUND BALANCE, ENDING
The accompanying notes are an integral pan of this financial statement.

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF ACTIVITIES
Net change in fund balances-total governmental funds

(fund financial statements)
61,864
Amounts reported for governmental activities in the statement of activities

(government-wide financial statements) are different because:
Governmental funds report capital outlays as expenditures in the
individual fund. Government activities report depreciation expense
to allocate the cost of those capital assets over the estimated useful
Capital outlay
Depreciation expense
3,983
(14,863)
(10,880)
Change in net position of governmental activities

(government-wide financial statements)
$ 50.984
The accompanying notes are an integral part of this reconciliation.
10

COMBINING STATEMENT OF FIDUCIARY NET POSITION-AGENCY FUNDS

December 31,2014
ASSETS
Assets:
Cash
Due from Others
Total Assets
CRIMINAL
BONDS
FUND
527,687
1,061
$30,358
184
527.687
1.061
$ 30.542
LIABILITIES AND NET ASSETS

Liabilities:
Advanced court costs
Due to judge
Due to General Fund
Due to building Capital Projects fund
Due to others
Total Liabilities
FINES AND
COURT
COSTS
FUND
CIVIL
FEES
FUND
APPEAL
BONDS
FUND
TOTAL
53,570
$612,676
184
$ 53.570
$ 612.860
459,227
68,460
$
$
527.687
1.061
1.061
$ 53.570
459,227
68,460
26,389
4,153
54.631
$ 53.570
$ 612.860
26,389
4,153
30.542
Net Position
Total Net Position
11

PINEVILLE, LOUISIANA
NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2014
INTRODUCTION
The financial statements of the PINEVILLE CITY COURT have been prepared in conformity with
generally accepted accounting principles (GAAP) as applied to governmental units. The
Govermnental Accounting Standards Board (GASB) is the accepted standard-setting body for
establishing governmental accounting and financial reporting principles. The more significant of
the Court's accounting policies are described below.
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.
Reporting Entity
Pineville City Court (the Court), a component unit of the City of Pineville, Louisiana,
was established under the authority of Louisiana Revised Statuses 13;1871-2512. Its
territorial jurisdiction extends throughout Wards 9, 10, and 11 of Rapides Parish in
which the city of Pineville is located. The Court is composed of a City Judge (elected)
and a clerk of court (appointed by the City Judge).
Funds flowing through the Court consist mainly of court costs and penalties in criminal
cases, probation fees, and deposits in civil cases. In all criminal matters, the judge
assesses court costs in accordance with state statutes. The judge uses these revenues
to defray the operating expenses of the court or for the payment of clerical fees and
similar expenditures as approved by the judge.
The financial statements of the Court have been prepared in conformity with
accounting principles generally accepted in the United States of America (GAAP) as
applied to governmental units. The Governmental Accounting Standards Board
(GASB) is the accepted standard setting body for establishing governmental accounting
and financial reporting principles. The GASB periodically updates its codification of
the existing Governmental Accounting and Financial Reporting Standards, which along
with subsequent GASB pronouncements (Statements and interpretations), constitutes
GAAP for governmental units.
In evaluating how to define the entity for financial purposes, management has
considered ail potential component units. The decision to include a potential
component unit in the reporting entity was made by applying the criteria set forth in
GAAP. Generally, component units are legally separate organizations for which the
elected officials or appointed board members of the primary government are financially
accountable.
12


(CONTINUED)
Some of the criteria considered under "legally separate organization" are: (1) the
capacity for the organization to have its own name; (2) the right for the organization
to sue and be sued in its own name without recourse to the primary government; and
(3) the right to buy, sell, lease, and mortgage property in its own name. Some of the
criteria used to be considered "financially accountable" include: (1) appointment of a
voting majority of the organization's governing body; (2) ability for the primary
government to impose its will on the organization; (3) potential to provide specific
financial benefits to or improve specific financial burdens on the primary government;
and (4) fiscal dependence of the organization.
The judge is an independently elected official that has the ability to exercise
accountability for fiscal matters. The Court is fiscally dependent on the City of
Pineville for office space, courtrooms, and related utility costs, as well as partial
funding or salary costs. Because the Court is fiscally dependent on the City of
Pineville, the Court was determined to be a component unit of the City of Pineville, the
financial reporting entity. However, the Court is a separate reportable entity from the
City of Pineville because it is essentially an autonomous unit.
The accompanying financial statements present information only on the funds
maintained by the Court and do not present information on the City of Pineville, the
general government services provided by that governmental unit, or the other
governmental units that comprise the financial reporting entity.
B.
Basis of Presentation
The Court's basic financial statements consist of Government-Wide Financial
Statements which include a Statement of Net Position and a Statement of Activities,
and Fund Financial Statements, which provide a more detailed level of financial
information.
Government-Wide Financial Statements - The Government-Wide Financial
Statements, '"Statement of Net Position'' and "Statement of Fiduciary Net Positions'"
at the Fund Financial Statement level. Individual funds are not displayed but the
statements distinguish governmental activities, generally supported by court costs,
probation fees, and on-behalf payments. The Statement of Net Position presents the
financial position of the governmental activities at year-end.
13


(CONTINUED)
B.
Presentation
(contd.)
Government - Wide Financial Statements

The Statement of Activities presents a comparison between direct expenses and
program revenues for each function of the Court's governmental activities. Direct
expenses are those that are specifically associated with a function and therefore clearly
identifiable to that particular function. The Court does not allocate indirect expenses
to functions in the Statement of Activities. The Statement of Activities reports the
expenses to function offset by program revenues directly connected with the functional
program. A function is an assembly of similar activities and may include portions of
a fund or summarize more than one fund to capture the expenses and program revenues
associated with a distinct functional activity. Program revenues include: (1) charges
for services which report court costs and probation fees; (2) operating grants and
contributions which finance amiual operating activities including restricted investment
income, if any; and (3) capital grants and contributions which fund the acquisition,
construction, or rehabilitation of capital assets, if any. These revenues are subject to
externally imposed restrictions to these program uses. For identifying to which
function program revenue pertains, the determining factor for charges for services is
which function generates the revenue. For grants and contributions, the determining
factor is to which functions the revenues are restricted. Revenues not classified as
program revenues are presented as general revenues, which include interest and other
unrestricted revenues. The comparison of program revenues and expenses identifies
the extent to which each program is self-financing or draws from the general revenues
of the Court.
C.
Fund Financial Statements

The Court uses the funds and account groups to report on its financial position and the
results of its operations. Fund accounting is designed to demonstrate legal compliance
and to aid financial management by segregating transactions relating to certain
government functions or activities. A fund is a separate accounting entity with a selfbalancing set of accounts.
14

(CONTINUED)
Governmental Funds
Governmental funds account for all or most of the Court' activities. These funds focus
on the sources, uses, and balances of current financial resources. Expendable assets are
assigned to the various governmental funds according to the purposes for which they
may be used. Current liabilities are assigned to the fund from which they will be paid.
The difference between a governmental fund's assets and liabilities is reported as fund
balance. In general, fund balance represents the accumulated expendable resources that
may be used to finance future period programs or operations of the Court. The fund
balances are classified into five possible categories which focus on the constraints of
spending. The categories are non spendable, restricted, committed, assigned and
unassigned. The following are the Court's governmental fhnds:
General Fund
The General Fund, as provided by state law, is the principal fund of the Court and
accounts for the operations for the Court's office. The various fees and charges due to
the Court's office are accounted for in this fund. General operating expenditures are
paid from this fund.
Building Capital Projects Fund
The Building Capital Projects Fund accounts for court fees assessed under Revised
Statute 13:1910. All monies collected under this statute are dedicated exclusively to
the acquisition, leasing, construction, equipping, and maintenance of new and existing
city courts and for the maintenance and payment of any bond indebtedness on any such
existing facilities. Management plans to use these fees for acquisition of equipment
and building renovations and improvements.
Fiduciary Funds
Fiduciary funds account for assets held on behalf of outside parties, and focuses on Net
Position and changes in Net Position.
15

(CONTINUED)
The fiduciary fund includes the following:

Agency Funds
All agency funds are custodial in nature (assets equal liabilities) and do not involve
measurement of results of operations, but use the modified accrual basis of accounting.
The agency funds the court maintains are the following: civil fees, criminal bonds,
fines and court costs and appeal bonds.
D.
Measurement Focus/Basis of Accounting

Fund Financial Statements(FFS)
The accounting and financial reporting treatment applied to a fund is determined by
its measurement focus. All governmental funds are accounted for using a cuiTent
financial resources measurement focus. With this measurement focus, only current
assets and cuiTent liabilities are generally included on the balance sheet. The statement
of revenues, expenditures, and changes in fund balance reports on the sources and uses
of current financial resources. The modified accrual basis of accounting is used by the
fund financial statements (FFS). Under the modified accrual basis of accounting,
revenues are recognized when susceptible to accrual (i.e., when they become both
measurable and available). "Measurable" means collectible within the current period
or soon enough thereafter to be used to pay liabilities of the current period.
D.
Measurement Focus/Basis of Accounting (contd.)

The governmental funds use the following practices in recording revenues and
expenditures:
Revenues
The hotel motel taxes are recorded in the year in which they are earned.
Interest earnings on time deposits are recorded when the time deposits have
matured and the interest is available.
Substantially all other revenues are recorded when received.
16

(CONTINUED
D.

Expenditures
Purchases of various operating supplies are recorded as expenditures in the
accounting period they are purchased. Compensated absences are recognized
as expenditures when leave is actually taken or the employees (or heirs) are
paid for accrued leave upon retirement or death.
Salaries are recorded as expenditures when earned.
Principal and interest on general long-term debt are recognized when due.
Substantially all other expenditures are recognized when the related
fund liability has been incurred.
Other Financins Sources (Uses)
Transfers between funds that are not expected to be repaid, sales of assets and
capitalized leases are accounted for as other financing sources (uses). These
other financing sources (uses) are recognized at the time the underlying
events occur.
D.

Government - Wide Financial Statements (GWFS)
The Statement of Net Position and the Statement of Activities display information
about the Court as a whole. These statements include all the financial activities of the
Alexandria/Pineville Area Convention and Visitors Court. It doesn't include the
fiduciary funds. Information contained in these statements reflect the economic
resources measurement focus and the accrual basis of accounting. Revenues, expenses,
gains, losses, assets, deferred outflows of resources, liabilities and inflows of resources
from exchange or exchange like transactions are recognized when the exchange occurs
(regardless of when cash is received or disbursed). Revenues, expenses, gains, losses,
assets, deferred outflows of resources, liabilities and deferred inflows of resources
resulting from non-exchange transactions are recognized in accordance with the
requirements of Section N50.
17

(CONTINUED
D.

Government - Wide Financial Statements (GWFS)
Prosram Revenues
Program revenues included in the Statement of Activities are derived directly from
users as a fee for services and intergovernmental revenues for providing tourism
services; program revenues reduce the cost of the function to be financed from general
revenues.
E.
Budgetary Practice
Budgets are adopted on the cash basis of accounting for the General Fund. On-behalf
payments for salaries, related benefits, and insurance paid by the City of Pineville ai-e
not included in the reported budget. Actual amounts are adjusted for changes in routine
accruals for receivables and payables because theses changes are immaterial to the
financial statements. All annual appropriations lapse at the end of the fiscal year.
Budgets are prepared by the clerk of court and submitted to the judge for approval prior
to the begimiing of the Court's fiscal year. All budgets are controlled at the fund level.
As conditions warrant, budgetary amendments are prepared by the clerk if court and
submitted to the judge for his approval. Budgeted amounts shown in the
accompanying budgetary comparison schedules reflect all amendments, if any.
F.
Cash and Cash Equivalents

Under state law, the Court mat deposit funds with a fiscal agent bank organized under
the laws of the State of Louisiana, the laws of any other state in the Union, or the laws
of the United States. Cash consisted of amounts in demand deposit accounts.
In the governmental fund and agency funds, cash and cash equivalents include amounts
in all demand deposits, interest bearing demand deposits and time deposits with
original maturities of three months or less from the date of acquisition.
G.
Accounts Receivable
Receivables are charged against income as they become uncollectible. In the opinion
of management, all accounts receivable were collectible and an allowance for doubtful
accounts was not considered necessary.
18

(CONTINUED
H.
Short-term Interfund Receivablcs/Payables

Duiing the course of operations, numerous transactions occur between individual flinds
for goods provided or services rendered. These receivables and payables are classified
as due from/to other funds in the fund financial statements. These interfund
receivables/payables are eliminated for reporting in the Statement of Net Position.
1.
Prepaid Expenses
In the Government-Wide Financial Statements, expenses paid for the following fiscal
year, if any, are reported as prepaid expenses since the expense benefits the next fiscal
year. In the Fund Financial Statements, these prepaid items are recorded as
expenditures when paid.
H.
Capital Assets
In the Government-Wide Financial Statements, capital assets are capitalized and
depreciated on a straight-line method over their estimated useful lives. The Court has
adopted a capitalization threshold of $250 for reporting purposes. All purchased
capital assets are valued at cost where historical records are available and at an
estimated historical cost where no historical records exist. Donated capital assets, if
any, are valued at their estimated fair market value on the date received. Expenditures
that extend the useful lives of capital assets beyond their initial estimated useful lives
or improve their efficiency or capacity are capitalized, whereas expenditures for repairs
and maintenance are expensed.
All capital assets are depreciated using the straight-line method over th following
useful lives:
Description
Furniture & Equipment
Office Equipment
Records Storage Building
Leasehold Improvements
19
Estimated
Lives
7-10 years
3-7 years
15 years
39 years

(CONTINUED
H.
Capital Assets (contd.)

in the Fund Financial Statements, capital assets are not capitalized in the funds used
to acquire or construct them. Instead, capital acquisition and construction are
reflected as expenditures in governmental funds. No provision is made for
deprecation on capital assets in the Fund Financial Statements since the full cost is
recorded as expenditures at the time of purchase.
1.
Advanced Court Costs

Advanced court costs presented in the Statement of Fiduciary Net Positions represent
money received in connection with civil suits. The plaintiff of each civil suit is
required to make an advance payment to cover the cost incurred by the court in
processing the suit. These cash advances remain in the advanced court cost account
until they are earned, at which time they are disbursed to the proper entities, or until
the case has been dismissed and the remaining amount refunded.
J.
Restricted Net Position

For government-wide Statement of Net Position, Net Position are reported as
restricted when constraints placed on net asset use are either:
1.
2.
K.
externally imposed by creditors (such as debt covenants), grantors,

contributors, or laws or regulations of other governments; and
imposed by law through constitutional provisions or enabling
legislation.
Eund Equity
In the fund financial statements, govermnental funds report reservations of fund
balance for amounts that are not available for appropriation or are legally restricted
by outside parties for use for a specific purpose. Any designations of fund balance
represent tentative management plans that are subject to change. The designations are
as follows:
20

(CONTINUED
L.
M.
Fund Equity (contd.)

1
Non-spendable: Amounts that are not in spendable form or are legally or
contractually required to be maintained intact. The court does not have any
non-spendable funds at year end.
2
Restricted: Amounts that are legally restricted by outside parties,

constitutional provisions, or enabling legislation requiring a special purpose.
Committed: Amounts that have been formally set aside by a government for
use for specific purposes, commitments are made and can be rescinded only
via resolution of the govermnent board or authority.
Assigned: The organization intends to spend resources on specific purposes

expressed by the judge. The court does not have any assigned funds at year
end.
Unassigned: Fund balance that has not been assigned to other funds and that
has not been restricted, committed or assigned to specific purposes.
Interfund Transactions
In the governmental funds, transactions that constitute reimbursements to a fund for
expenditures initially made from it that are properly applicable to another fund are
recorded as expenditures in the reimbursing fund and as reductions of expenditures
in the fund that is reimbursed. All other interfund transactions are reported as
transfers.
N.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of assets and
liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those
estimates.
21

(CONTINUED
O.
Clerk's Salary Supplement and on-behalf Payments

The salaries of the judge, clerk of court, and deputy clerks are paid directly by the City
of Pineville. The Court pays an agreed-upon amount to the City of Pineville to
supplement the salary of the clerk and deputy clerks. The on-behalf payments
included in the financial statements represent the amount paid by the City of Pineville
that is not reimbursed by the court.
2.
CASH
At December 31, 2014, the Court has cash and cash equivalents (book balances) totaling
$705,721, as follows:
Governmental
Agency
Activities Fund
Funds
Demand Deposits Including
Interest bearing demand deposits
$ 93.045
$ 612.676
Total
$ 93.045
$612.676
These deposits are stated at cost, which approximates market. Under state law, these
deposits (or the resulting bank balances) must be secured by the federal deposit insurance or
the pledge of securities owned by the fiscal agent bank. The market value of the pledged
securities plus the federal deposit insurance must at all times equal the amount on deposit
with the fiscal agent bank. These securities are held in the name of the pledging fiscal agent
bank in a holding or custodial bank that is mutually acceptable to both parties.
At December 31, 2014, the Court's governmental activities fund has $126,216 in deposits
(collected bank balances). These deposits are secured from risk by $126,216 of federal
deposit insurance and no pledged securities held by the 3'^'^ party custodial bank in the name
of the Court (GASB Category 1). The agency funds had deposits(collected bank balances)
of $621,810 and were insured by the federal deposit insurance for $123,784 and $498,026
in pledged securities, (Category 2).
22

FOR THE YEAR ENDED DECEMBER 31,2014
(CONTINUED)
2.
CASH (contd.)
Custodial Credit Risk: For deposits, custodial credit risk is the risk that in event of the bank
failure, the court's funds aren't returned. At year end the Court's deposits were entirely
covered by FDIC insurance or by collateral held by the Court or its agent in the Court's
name.
Even though the pledged securities are considered un-collateralized (Category 3) under the
provisions of GASB Statement 3, R.S. 39:1229 imposes a statutory requirement on the
custodial bank to advertise and sell the pledged securities within 10 days of being notified
by the Court that the fiscal agent has failed to pay deposited funds upon demand. (This
disclosure should acknowledge any violations of state law relating to adequate pledged
securities.)
4.
BAD DEBTS
Uncollectible amounts due for tax payer fees receivables are recognized as bad debts through
the establishment of an allowance account at the time information becomes available which
would indicate the uncollectibility of the particular receivable. All amounts are considered
collectible and the allowance account has not been established.
5.
ON-BEHALF PAYMENTS
On-behalf payments made by the City of Pineville
Less: Amounts paid to the City of Pineville
Net amount of on-behalf payments
23
$117,596
("97.607 )
$ 19.989

FOR THE YEAR ENDED DECEMBER 31,2014
(CONTINUED)
5.
CAPITAL ASSETS
A summary of property and equipment and accumulated depreciation at December 31,2014
follows:
Property and Equipment
Balance
Balance
12/31/13
Additions
Deletions
12/31/14
Furniture & equipment
$ 246,724
$ 250,707
3,983
Leasehold improvements
39,000
39,000
Total
$ 285.724
$ 3.983
$ 289.707
Accumulated Depreciation
Furniture & equipment

Leasehold Improvements
Total
6.
Balance
12/31/13
$209,117
3.833
$212.950
Additions
$ 13,863
1.000
$ 14.863
Deletions
Balance
12/31/14
$ 222,980
4.833
$227.813
INTERFUND RECEIVABLES AND PAYABLES(due to/due from)

The interfund balances are primarily the result of the general fund loaning money to agency
funds to temporarily cover expenses until funds are received. The following is a summary
of amounts due from and due to other funds:
Receivable Fund
General fund
Capital Project fund
Pavable Fund
Agency fund
Agency fund
Amount
$
$
24
26,389
4,153

(CONTINUED)
7.
PENSION PLAN
The Court contributes to the Louisiana State Employees' Retirement System (LASERS), a
cost sharing multiple-employer, public employee retirement system, controlled and
administered by a separate board of trustees. All state employees, except certain classes
excluded by statute, become members of LASERS as a condition of employment unless they
elect to continue as a contributing member in any other retirement system for which they are
eligible for membership. Elected officials and officials appointed by the Governor may, at
their option, become members of LASERS.
LASERS provides retirement, death, and disability benefits to plan members and
beneficiaries. Benefits are established by state statute. The Louisiana State Employees'
Retirement System issurs a publicly available financial report that includes finanacial
statements and required supplementary information. That report may be obtained by writing
to Louisiana State Employees' Retirment System, P.O. Box 44213, Baton Rouge, LA 708044213, by calling (800) 256-3000, or be visiting www.laseronline.ora.
Covered employees are required by state statute to contribute 11.5% of their salary to the plan.
The court contributes an actuarially determined rate, which at year end was set at 36.3% of
the member's annual salary. Contributions to LASERS for the years ended December 31,
2013, 2012 and 2014 were $38,879, $42,335 and $10,414 respectively, which exceeds the
required contributions for the year 2014.
8.
OPERATING LEASES
The court is committed under various operating leases for office equipment. Lease expenditures for
office equipment for the year ended December 312014, amounted to $5,964. Future minimum lease
payments for these leases are as follows:
Office equipment
$3.312
Total
$3.312
2015
25

(CONTINUED)
9.
LITIGATION AND CLAIMS

The court has no outstanding Lawsuits.
10.
RISK MANAGEMENT
The court is exposed to various risks of loss related to torts; damage to, theft of or destruction
of assets, errors and omissions, injuries to employees and the public; and natural disasters. The
City of Pineville cairies commercial insurance including workers' compensation and employee
health and accident insurance. In addition, the Court carries fidelity bonds on the clerks. No
claims from these risks have exceeded commercial insurance coverage in any of the past three
years.
26

Pinevilie, Louisiana
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL - GENERAL FUND
VARIANCE
BUDGETED AMOUNTS
ORIGINAL
REVENUE
Courl fees, fines, and costs
Court costs
Civil fees-discretionary
Charges for services
Probation fees
On-behalf salaries and benefits received
Interest Income
Miscellaneous
Total Revenues
EXPENDITURES
CURRENT-Gcneral Government
Salaries & Fringe Benefits
Contract Services
Dues & Subscriptions
Conpuler fees
Lease & Maint,,
Office Supplies
Travel & Seminars
Miscellaneous
Total Current Expenditures
CAPITAL OUTLAY:
Total Expenditures'
$288,300
FINAL
$288,300
288,300
288,300
264,500
264,500
ACTUAL
FAVORABLE
fSKE NO-I-E "A"l
(UNFAVORABLEt
$122,682
102,861
78,683
19,989
2
6,909
331,126
78,683
19,989
2
6,909
42,826
184,481
19,989
80,019
(19,989)
0
(58,220)
(1,440)
7,500
2,000
4,611
(12,442)
(4,432)
(2,393)
0
(2,393)
58,220
1,440
7,500
2,000
9,000
7,500
2,000
9,000
($165,618)
102,861
5,300
5,300
288,366
"288,366
4,389
12,442
9,732
296,693"
288,300
288,300
290,693
(Continued)
The accompanying notes are an integral part of this financial statement
27


BUDGET AND ACTUAL - GENERAL FUND
(CONTINUED)
VARIANCE
BUDGETED AMOUNTS
ORIGINAI.
FINAL
ACTUAL
FAVORABLE
ISEE NOTE "A")
(UNFAVORABLE!
EXCESS (DEF) OF REVENUES

OVER EXPENDITRUES
40,433
OTHER FINANCING SOURCES (USES):

Operating Transfers Out
Total Other Financing
sources (uses)
40,433
0
D
Excess Of Revenues and Other

Financing Sources over
(Under) Expenditures and Other
Financing Uses
40,433
40,433
FUND BALANCE, BEGINNING

FUND BALANCE, ENDING
8,190
$8,190
8,190
$8,190
8,190
$48,623
0
$40^433
The accompanying noles are an integral part of tliis financial statement
28

BUDGET AND ACTUAL GENERAL FUND
(CONTINUED)
Note A
Explanation of differences between Revenues, Expenditures

and Other Financing Sources for the General Fund on a
Budgetary Basis and General Fund on a GAAP Basis.
Revenues
Actual revenues (budgetary basis)
$288,300
Adjustnicnls:
The Court docs not budget on-bchalf support
received front the City of Pineville
19,989
Total revenues on the Statement of Revenues,

Expenditures, and Changes in Fund Balances
$308,289
Expenditures
Actual expenditures (budgetaiy basis)
$288,300
Adjustments
The Court does not budget on-behalf expenditures
paid by the City of Pineville
19,989
Total expenditures on the Statement of Revenues,

Expenditures, and Changes in Fund Balances
$308,289
The accompanying notes are an integral part of this financial statement
29

OTHER REPORTS REQUIRED BY

GOVERNMENT AUDITING STANDARDS
The following pages contain the report on internal control structure and compliance with laws and
regulations required by Government Auditing Standards issued by the Comptroller General of the
United States. The paragraph on internal control structure is based solely on the audit of the general
purpose financial statements and includes where appropriate, any deficiencies and/or material
weaknesses. The paragraph on compliance with laws and regulations is, likewise, based solely on
the audit of the general purpose financial statements and presents, where applicable, compliance
matters that would be material to the general purpose financial statements.
30
MEMBER
AMERICAN INSTITUTE OF
CERTIFIED PUBLIC ACCOUNTANTS
MEMBER
SOCIETY OF LOUISIANA
CERTIFIED PUBUC ACCOUNTANTS
DEBEVEC
CERTIFIED PUBUC ACCOUNTANT
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
Honorable Gary Hays

Pineville City Court Judge
1 was engaged to audit, 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, each major fund and the aggregate remaining fund information of the
Pineville City Court, as of and for the year ended December 31, 2014, and the related notes to the
financial statements, which collectively comprise the Pineville City Court 's basic financial
statements and have issued my report thereon dated January 31, 2016.
Internal Control over Financial Reporting
In planning and performing my audit of the financial statements, I considered the Pineville City
Court's internal control over financial reporting (internal control) to determine the audit 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 the Pineville City
Court's internal control. Accordingly, I do not express an opinion on the effectiveness of The
Pineville City Court's internal control.
My consideration of internal control was for the limited purpose described in the preceding
paragraph 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. However, as described in the accompanying schedule of findings
and questioned costs, I identified certain deficiencies in internal control that I consider to be material
weaknesses.
1220 WINDSOR PLACE'ALEXANDRIA, LOUISIANA 71303'(J18)443-3977
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 on a timely basis. I consider the deficiencies described in the accompanying schedule of
findings and questioned costs to be material weaknesses; 2014-1,2014-2,2014-3,2014-4, 2014-5,
2014-6, 2014-7, 2014-8, 2014-9, 2014-10, 2014-11, 2014-12, 2014-13, 2014-14, 2014-15 and
2014-16, 2014-17 AND 2014-18.
Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Pineville City Court's financial
statements are free from 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 instances of
noncompliance or other matters that are required to be reported under Government Auditing
Standards and which are described in the accompanying schedule of findings and questioned costs
as items 2014-1,2014-2,2014-3,2014-4, 2014-5,2014-6,2014-7,2014-8,2014-9,2014-10,201411, 2014-12, 2014-13, 2014-14, 2014-15, 2014-16. 2014-17, 2014-18.
Pineville City Court's Response to Findings

The Pineville City Court's response to the findings identified in my audit are described in the
accompanying Correction Action Plan. The Pineville City Court's response was not subjected to the
auditing procedures applied in the audit of the financial statements and, accordingly, 1 express no
opinion on it.
32
Purpose of this Report

The purpose of this report is solely to describe the scope of my testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of the
entity's internal 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 internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
Billy Debevec, CPA

Alexandria, Louisiana
January 31, 2016
33

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
I have audited the financial statements of the Pineville City Court as of December 31,2014 and have issued
my report thereon dated Januaiy 31, 2016. I conducted my audit in accordance with United States generally
accepted auditing standards and the standards applicable to financial audits contained in Governmenl Auditing
Standards, issued by the Comptroller General of the United States. My audit of the financial statements as
of and for the year ended December 31,2014 resulted in a disclaimer of opinion on the governmental activities,
each major fund, and the aggregate remaining fund information (agency fund).
Section 1-Summary of Auditor's Reports
a.
Report on Internal Control and Compliance Material to the Financial Statements

Internal control
Material Weaknesses
V" Yes
^No
Significant Deficiencies
Yes
No
Compliance
Non Compliance Material to Financial Statements
V
/
Yes
No
Section II-Financial Statement Findings:

14-1
Financial Statement Preparation

Criteria:
An appropriate and effective system of internal control over financial

reporting includes controls over transactions and the preparation of
the financial statements which would prevent or detect errors or
irregularities in the financial statements.
Condition:
Pineville City Court was notified in the 2012 & 2013 audit report
that they do not have personnel with the technical accounting
expertise to prepare Generally Accepted Accounting Principles
(GAAP) financial statements including footnote disclosures.
34

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
(continued)
14-1
14-2
Financial Statement Preparation (com)

Condition (cent)
A deficiency in operation exists when the person performing the
control does not possess the necessary authority or competence to
perform the control effectively. Additionally, 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 Pineville City Court's financial statements will not be
prevented, or detected and corrected in a timely basis.
Effect:
As a result of Judge Terrell not adopting and implementing a better

accounting system with increased controls over the accounting
transactions and financial statement preparation, errors or
iiTegularities were not detected in a timely manner.
Recommendation:
The Pineville City Court should contract for outside monthly

accounting assistance from a CPA who is on the Legislative Auditor's
website of approved Governmental Certified Public Accountants. By
contracting for outside accounting assistance, the court will continue
to have expertly trained assistance at a reduced and reasonable cost
compared to hiring in house.
Response:
See the Corrective Action Plan.
Segregation of Duties
Criteria:
Segregation of duties is required to have an appropriate and effective
system of internal control over financial data.
Condition
One employee has control over checks, prepares checks, signs the
checks and prepares the bank reconciliation
Effect:
Due to the limited number of people working for the court, many of
the critical duties are combined and assigned to available employees.
Presently, a single individual preforms the majority of the accounting
functions.
35
14-2
Segregation of Duties (com.)

Recommendation:
Duties should be segregated to serve as a check and balance in order
to maintain an effective internal control. The accounting functions of
check preparation, check signing and bank reconciliation should be
separated.
Response:
14-3
14-4
Louisiana Unclaimed Property

Criteria:
Funds held by the court which have not been claimed one year after the
checks have been disbursed, should be transmitted to the State of Louisiana
according to the unclaimed property laws.
Condition:
The Civil Agency Fund has checks which are unclaimed and older than one
year. These funds should have been sent back to the State of Louisiana.
Effect:
The court is violation of the Louisiana unclaimed property laws.
Recommendation:
The unclaimed property should be reported on the correct form and sent to
the State of Louisiana.
Response:
IRS form 1099 Miscellaneous Income

Criteria:
Form 1099s should be completed for all non employees who were paid more
than $600 for services they performed.
Condition
Some of the 1099s were completed incorrectly and mailed out.
Effect:
The non employees could have reporting and tax problems on their
personal returns. Also, the error could cause the non-employee to
report their income incorrectly or could have a information match
problem with the Internal Revenue Service. The result could be
penalties for the court.
36
14-4

Recommendation:
The 1099s should be checked for clerical accuracy and mailed only
after the amounts have been verified. Then, they should be filed on
hand with the courts supporting documents.
Response:
14-5
14-6
IRS form W-2

Criteria:
Revenue Ruling 2006-18 cites Internal Revenue Code section 3401(a) in

defining wages to include all remuneration for seivices performed by an
employee for his employer. Code section 3401 defines employees as
elected officials of state or local government.
Condition
As an elected official, all of Phillip Terrell's remuneration should have been

included on the employee form W-2. Consequently, $20,005 in payments
to him were reported on form 1099 and was excluded from the form W-2.
Effect:
As a result of the mishandling of his pay, his personal taxes could be

miscalculated. If he off set his business expenses against his
employee earnings, instead of itemizing the appropriate un
reimbursed employee business expenses on Schedule-A, the personal
taxes could be understated. Also, the result could be penalties for the
court.
Recommendation:
All remuneration for services rendered by employees should be

reported on form W-2.
Response:
Lack of Written Policies Regarding Food Purchases

Criteria:
Food purchases from court funds should be made only for the benefit
of the court. Those purchases should be made in accordance with the
court's written policies governing those purchases. Also, the policies
should require food purchased with court funds to be included on the
W-2 of the employees who benefitted if the amounts are more than a
de minimis amount.
37
14-6
14-7
Lack of Written Policies Regarding Food Purchases {com.)

Condition
Food purchases were made at the local restaurants without written

policies governing how the money is to be spent or reported.
Effect
There could be unallowed disbursements that the court could lose or

not get back. Also, there could be tax form reporting penalties.
Recommendation:
The court should establish clear written policies governing all food
purchases made with court funds.
Response:
LASERS Retirement Contributions

Criteria:
For the year ended June 30, 2014, LASERS retirement requires
Judges & Judicial Employees Hired before 1/01/11 to contribute the
employer's portion of the retirement expense at 36.3%. and the
employees' portion at a rate of 11.5%. These percentages should be
applied to the approved salary of the pay period.
Condition
The Pineville City Court incorrectly contributed the employee's

retirement share without withholding the amount from Judge Phillip
Terrell's payroll.
Effect:
As a result of not withholding the 11.5% from Judge Phillip Terrell's

salary, the court will have to operate the court activities without
those funds.
Recommendation:
The amount paid for retirement expense should be checked to ensure

that the percentages used agrees with the LASERS retirement system.
Additionally, the court should seek to recover the unauthorized
disbursement of retirement funds.
Response:
38
14-8
14-9
Retirement Contribution Report

Criteria:
The Pineville City Court is required to file a retirement contribution

report of the actual salary paid directly by them to Judge Phillip
Terrell.
Condition
During the year 2014, the Pineville City Court reported to LASERS
that Judge Phillip Terrell's salary was $21,787. The actual amount
which was reported on 1099 Miscellaneous income was $20,005
Effect:
As a result of filing the false information. Judge Phillip Terrell's

overstated income should increase his retirement income. Also, the
court will have to operate without those retirement funds.
Recommendation:
The retirement reports should be checked to ensure that the employee

income reported is correct. Additionally, the court should seek to
recover the unauthorized disbursement of retirement funds.
Response:
FALSIFICATION OF RECORDS
Criteria:
Condition
The LASERS Laws and regulations state that whoever knowingly

makes any false statement or falsifies or permits to be falsified any
record or records of this system in an attempt to defraud the system
shall be fined no more than five hundred dollars or imprisoned for not
more than six months, or both.
As a result of filing false Retirement reports, the inflation of Judge

Phillip Terrell's salary on the reports could be a violation of the
LASERS Laws and regulations above.
39
14-9
FALSIFICATION OF RECORDS (com)

Effect:
As a result of not having adequately trained accounting personnel and

Judge Terrell electing in last year's audit to go without that
assistance, the retirement earnings records for Judge Terrell were
inflated. Consequently, this would increase his retirement income
above the amount authorized by law and force the Pineville City
Court to operate without all their funds.
Recommendation:
The audit should be referred to the Louisiana State Supreme Court for
investigation. Additionally, the Pineville City Court should contract
with outside assistance to determine if false reports were filed in prior
years.
Response:
14-10 CODE OF GOVERNMENTAL ETHICS

Criteria:
It is essential to the proper operation of democratic government that

elected officials and public employees be independent and impartial;
that governmental decisions and policy be made in the proper channel
of the governmental structure; that public office and employment not
be used for private gain other than the remuneration provided by law;
and that there be public confidence in the integrity of government.
The attainment of one or more of these ends is impaired when a
conflict exists between the private interests of an elected official or
a public employee and his duties as such. The public interest,
therefore, requires that the law protect against such conflicts of
interest and that it establish appropriate ethical standards with respect
to the conduct of elected officials and public employees without
creating unnecessary barriers to public service.
40
14-10 CODE OF GOVERNMENTAL ETHICS (cont)

Condition:
The Louisiana State Supreme Court notifies the Pineville City Court
on an annual basis of the wage amount that can be paid to District
Judges. In accordance with state law, the salary of city court judges
shall in no case exceed the salary of the District Court Judges in the
judicial district in which the city court is located. Judge Phillip
Terrell was employed by the Pineville City Court during 2014 from
the period January 1, 2014 through March 14, 2014 or for a total of
73 days. The District Court Judges are authorized to be paid $143,
253 fortheyearending June30,2014. That calculates to $392.47 per
day. Accordingly, Judge Phillip Terrell's salaiy should not exceed
$28,650. The amount of his private gain that exceeds the amount
provided by law is as follows:
City of Pineville wages
La Supreme Court wages
Pineville City Court
Contract payments
Effect:
$4,059
9,273
20.005
$33,337
Unrecovered employee
Retirement payments(2014)
2,506
Retirement payments
Paid in 2014 for the year (2013)
3.795
Total salaries and unauthorized benefits

Less the amount authorized
39,638
(28.6501
EXCESS SALARIES AND BENEFITS

OR PRIVATE GAIN AMOUNT
$10.988
As a result of not adopting and implementing a better accounting

system with increased controls over the accounting transactions and
financial statement preparation, errors or irregularities were not
detected in a timely manner. The Pineville City Court will be
financially limited as a result of Judge Phillip Terrell's inaction to
41
14-10 CODE OF GOVERNMENTAL ETHICS (com )

Effect (com.):
con-ect the internal control weakness caused by a deficiency in the

operations that were reported to him in the 2012 & 2013 audit report.
The Pineville City Court Clerk or Clerks who performed those acts
should also be looked at to determine if further actions against them
is required.
Recommendation:
The Pineville City Court should send these findings to the Louisiana
State Supreme Court so that they can investigate. Also, the Pineville
City Court should contract with an outside Certified Public
Accounting firm to look at prior years for over payments, advance
payments, false retirement reports and ethics violations.
Response:
14-11 MALFEASANCE IN OFFICE

Criteria:
A. Malfeasance in office is committed when any public officer or

public employee shall:
(1) Intentionally refuse or fail to perform any duty lawfully required
of him, as such officer or employee; or
(2) Intentionally perform any such duty in an unlawful manner; or
(3) Knowingly permit any other public officer or public employee,
under his authority, to intentionally refuse or fail to perform any duty
lawfully required of him, or to perform any such duty in an unlawful
manner.
B. Any duty lawfully required of a public officer or public employee
when delegated by him to a public officer or public employee shall be
deemed to be a lawful duty of such public officer or employee. The
delegation of such lawful duty shall not relieve the public officer or
employee of his lawful duty.
42
14-11 MALFEASANCE IN OFFICE (cont.)

Criteria (cont.):
C.(l) Whoever commits the crime of malfeasance in office shall be

imprisoned for not more than five years with or without hard labor or
shall be fined not more than five thousand dollars, or both.
(2) In addition to the penalty provided for in Paragraph (1) of this
Subsection, a person convicted of the provisions of this Section may be
ordered to pay restitution to the state if the state suffered a loss as a result of
the offense. Restitution shall include the payment of legal interest at the rate
provided in R.S. 13:4202.
Condition:
The Louisiana State Supreme Court notified the Pineville City Court
that Judge Phillip Terrell's wages could not exceed the amounts for
the following years:
Annualized Monthly
Amount Amount
Period of Time
July I, 2010 thm June 30, 2011
July 1,2011 thru December 31, 2011
January 1, 2012 thru June 30, 2012
July 1,2012 thru June 30, 2013
$136,543
$136,543
$137,743
$137,743
$143,253
$11,379
$11,379
$11,479
$11,479
$11,938
Final-36
Months
Worked
4
6
6
12
8
Based on the earnings above, Judge Phillip Terrell's average high three years that
his retirement will be based on should not exceed is as follows:
(45,516+68274+68,874+137,743+95,504) - 3= $138,637
As a part of The Lasers retirement system's internal control
procedures, they send a letter out to the potential retiree of the
preliminary calculation of the monthly amounts to be received until
the final calculation is done and approved. At that point, the member
will receive another letter containing the details of the figures used in
that calculation. As a result, the member is notified of their average
high three years so that they can verify the calculation on their own.
43
14-11 MALFEASANCE IN OFFICE (com.)

Due to privacy laws, I was unable to obtain the final letter to Judge
Terrell. The final letter would have allowed me to determine if his
retirement was higher than the law permits and if so, that he knew it
was incorrect and collected retirement money with the knowledge
that he was not entitled to those additional funds. As a result of the
Louisiana State Supreme Court notifying Judge Terrell of the
maximum wages he could be paid, he should also have known that
his receipt ofremuneration above the amount authorized would have
created an inflated retirement amount for him.
Effect:
There could be possible civil or criminal action against him or both.
Recommendation:
The Louisiana State Supreme Court should be notified of these

findings so that they can use their authority to obtain a copy of the
final letter from LASERS to Judge Terrell. The letter will help them
to determine if further action is warranted.
Response:
14-12 INADEQUATE COMPUTER CONTROLS

Criteria:
The computer controls should be established that allows the court to

operate if one or more of the employees are not at work.
Condition:
The passwords or login credentials to the operating accounting

software were not shared. Consequently, the Pineville City Court had
to hire outside computer assistance in order to gain access to
accounting files.
Effect:
As a result of not setting up controls and sharing the computer

passwords, the accounting operation could not operate efficiently.
Recommendation:
Controls should be established to allow the appropriate personnel to

have access to the accounting files if key personnel are not in the
office.
Response:

44
14-13 LACK OF PROPERTY AND EQUIPMENT RECORDS ON HAND

Criteria:
The property records should be maintained on hand at all times in

order to properly safe guard the assets.
Condition:
Although the property records are located outside the organization,

there are non on hand to assist in managing the assets.
Effect:
Without the asset list on hand, assets could go missing.
Recommendation:
The asset list should be maintained in the files of the court.
Response:
14-14 INACCURATE BANK RECONCILIATIONS

Criteria:
Bank Reconciliations should be balanced to the books on a monthly

basis.
Condition:
Some of the court's bank reconciliations did not agree back to the
books.
Effect:
Without proper bank reconciliations, there could be irregularities

associated with the cash.
Recommendation:
Timely and accurate bank reconciliations should be done on a

monthly basis.
Response:
See the Con-ective Action Plan.
45
14-15 DEBIT/CREDIT CARD POLICIES AND PROCEDURES

Criteria:
There were no written policies on hand controlling who has access to

the cards or how they may be used.
Condition:
Purchases were made with the debit/credit cards without written

controls over their use.
Effect:
Without the written control policies, purchases could be made for

items that are unapproved.
Recommendation:
The court should establish written policies over the use of the cards
or cancel them.
Response:
14-16 LATE AUDIT REPORT

Criteria:
The financial audit is due to the Louisiana Legislative Auditor's

office within six months of the close of the year.
Condition:
As a result of missing or incomplete information, the audit was not

completed and filed on time.
Effect:
The court will not be able to correct controls or compliance findings

in a timely manner.
Recommendation:
All requested information should be sent to the auditor as early as

possible to ensure a timely filing of the report.
Response:
46
14-17 UNREASONABLE COSTS EXPENDED FOR TRAVEL AND EDUCATION

Criteria:
All reasonable travel and education expenses which benefit the court
should be approved ahead of time by the judge.
Condition:
During the time that Judge Ronald Lewelyan was in charge of the
Pineville City Court, three of the clerks booked three reservations at
two Florida resorts that sleep up to a total of 20 people per night. The
unreasonable cost for the three night stay was in excess of $5,000.
After attempting unsuccessfully to contact Judge Lewelyan, I was
unable to determine if authorization had been given ahead of time.
Effect:
As a result of the clerks actions, the Pineville City Court will not be
able to benefit from the excess costs which were spent at the Florida
resorts. Also, the court will have less cash to operate from.
Recommendation:
All travel should be approved ahead of time by the Judge.
Response:
14-18 WRITTEN AGREEMENT WITH THE CITY OF PINEVILLE

Criteria:
In order to ensure that the actions of all parties to contracts and

agreements are upheld, they should be put in writing.
Condition:
The Pineville City Court has part of their operations paid by the City
of Pineville. It is unknown how much if any of the costs should be
repaid by the Pineville City Court to the City Of Pineville.
Effect:
Due to the incomplete records, the amount owed can not be verified.
Consequently, the accounting records are incomplete.
Recommendation:
The Pineville City Court and the City of Pineville should establish a
written agreement for the past and future costs.
Response:
47

Summary Schedule of Prior Audit Findings

Fiscal Year
Finding
RefNo-
Initially
Occurred
2013-1
2013-2
2013-3
2012
2012
2012
Planned Corrective
DescriDtion of Findine
Financial Statements preparation
Segregation of duties
La. Unclaimed property
48
Corrective
Action Taken
not resolved
not resolved
not resolved
Current
Findine
2014-1
2014-2
2014-3

CORRECTIVE ACTION PLAN

YEAR ENDED DECEMBER 31, 2014
Auditor Ref. Number
14-1
14-2
FINANCIAL STATEMENT PREPARATION

Pineville City Court was notified in the 2012 & 2013 audit report
Condition:
that they do not have personnel with the technical accounting
expertise to prepare Generally Accepted Accounting Principles
(GAAP) financial statements including footnote disclosures. A
deficiency in operation exists when the person performing the
control does not possess the necessary authority or competence to
perform the control effectively. Additionally, 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 Pineville City Court's financial statements will
not be prevented, or detected and corrected in a timely basis.
Recommendation:
The Pineville City Court should contract for outside monthly

accounting assistance from a CPA who is on the Legislative
Auditor's website of approved Governmental Certified Public
Accountants. By contracting for outside accounting assistance , the
court will continue to have expertly trained assistance at a reduced
and reasonable cost compared to hiring in house.
RESPONSE
The Pineville City Court has contracted with an approved CPA to

perform monthly accounting on all accounts as of January 1,2015.
SEGREGATION OF DUTIES
Condition
One employee has control over checks, prepares checks, signs the
checks and prepares the bank reconciliation.
Recommendation:
Duties should be segregated to serve as a check and balance in

order to maintain an effective internal control. The accounting
functions of check preparation, check signing and bank
reconciliation should be separated.
49
14-2
SEGREGATION OF DUTIES (conf)

Response:
The Pineville City Court has implemented proper segregation of
duties as it relates to accounting functions in order to maintain an
effective internal control.
14-3
Louisiana Unclaimed Property

Condition:
The Civil Agency Fund has checks which are unclaimed and older than
one year. These funds should have been sent back to the State of
Louisiana.
14-4
14-5
Recommendation:
The unclaimed property should be reported on the correct form and sent
to the State of Louisiana.
Response:
The Pineville City Court is now in compliance with the unclaimed

propeity laws and has reported all unclaimed property to the State of
Louisiana.

Condition
Some of the 1099s were completed incorrectly and mailed out.
Recommendation:
The 1099s should be checked for clerical accuracy and mailed only
after the amounts have been verified. Then, they should be filed on
hand with the court's supporting documents.
Response:
The Pineville City Court is now verifying all the payments to the
non-employees of the Court.
IRS form W-2

Condition
Recommendation:
As an elected official, all of Phillip Terrell's remuneration should

have been included on the employee form W-2. Consequently,
$20,005 in payments to him were reported on form 1099 and was
excluded from the form W-2.
All remuneration for services rendered by employees should be

reported on form W-2.
50
14-5
IRS form W-2 (cont)

Response:
All remuneration for services rendered by all employees of the
Pineville City Court are now being reported on form
W-2.
14-6
Lack of Written Policies Regarding Food Purchases

Condition
Food purchases were made at the local restaurants without written
policies governing how the money is to be spent or reported.
14-7
Recommendation:
The court should establish clear written policies governing all food
purchases made with court funds.
Response:
The Pineville City Court purchases food from court funds for the
benefit of the court when employees conduct court proceedings
during lunch and also purchases are made for employees when
court lunch meetings are held. The court shall establish clear
written policies governing all food purchases made with court
funds.
LASERS Retirement Contributions

Condition
The Pineville City Court incorrectly contributed the employee's
retirement share without witliholding the amount from Judge
Phillip Terrell's payroll.
Recommendation:
The amount paid for retirement expense should be checked to

ensure that the percentages used agrees with the LASERS
retirement system. Additionally, the court should seek to recover
the unauthorized disbursement of retirement funds.
Response:
The Pineville City Court has implemented procedures to have the

City of Pineville's payroll department process all payments made
to LASERS retirement system and will seek to recover any
unauthorized disbursements made to LASERS.
51
14-8
14-9
Retirement Contribution Report

Condition
During the year 2014, the Pineville City Court reported to
LASERS that Judge Phillip Terrell's salary was $21,787. The
actual amount which was reported on 1099 Miscellaneous income
was $20,005.
Recommendation:
The retirement reports should be checked to ensure that the

employee income reported is correct. Additionally, the court
should seek to recover the unauthorized disbursement of retirement
funds.
Response:
Retirement contribution reports are now being reviewed by

multiple persons to ensure that the employee income reported is
correct. The court will also seek to recover the unauthorized
disbursements made to LASERS.
FALSIFICATION OF RECORDS
Condition:
As a result of filing false Retirement reports, the inflation of Judge
Phillip Terrell's salary on the reports could be a violation of the
LASERS Laws and regulations.
Recommendation:
The audit should be referred to the Louisiana State Supreme Court

for investigation. Additionally, the Pineville City Court should
contract with outside assistance to determine if false reports were
filed in prior years.
Response:
The Pineville City Court will provide the audit to the Louisiana
State Supreme Court.
14-10 CODE OF GOVERNMENTAL ETHICS

Condition:
The Louisiana State Supreme Court notifies the Pineville City
Court on an annual basis of the wage amount that can be paid to
District Judges. In accordance with state law, the salary of city
court judges shall in no case exceed the salary of the District Court
Judges in the judicial district in which the city court is located.
52
14 10 CODE OF GOVERNMENTAL ETHICS (cont)

Judge Phillip Terrell was employed by the Pineville City
Court during 2014 from the period January 1, 2014 through
March 14, 2014 or for a total of 73 days. The District
Court Judges are authorized to be paid $143, 253 for the
year ending June 30, 2014. That calculates to $392.47 per
day. Accordingly, Judge Phillip Terrell's salary and
benefits should be based on $28,650. The amount of his
private gain that exceeds the amount provided by law is as
follows:
City of Pineville wages
La Supreme Court wages
Pineville City Court
Contract payments
$4,059
9,273
20.005
$33,337
Retirement payments(2014)
2,506
Retirement payments
Paid in 2014 for the year (2013)
Total salaries and unauthorized benefits
Less the amount authorized
3.795
39,638
(28.6501
EXCESS SALARIES AND BENEFITS

OR PRIVATE GAIN AMOUNT
$10.988
Recommendation:
The Pineville City Court should send these findings to the

Louisiana State Supreme Court so that they can investigate. Also,
the Pineville City Court should contract with an outside Certified
Public Accounting firm to look at prior years for over payments,
advance payments, false retirement reports and ethics violations.
Response:
The Pineville City Court will provide the audit to the Louisiana
State Supreme Court.
53
14-11 MALFEASANCE IN OFFICE

Condition:
The Louisiana State Supreme Court notified the Pineville City Court that
Judge Phillip Terrell's wages could not exceed the amounts for the
following years:
Annualized
Amount
$136,543
$136,543
$137,743
$137,743
$143,253
Period of Time
July 1, 2010 thru June 30, 2011
July 1,2011 thru December 31, 2011
Januaiy 1, 2012 thru June 30, 2012
Monthly
Amount
$11,379
$11,379
$11,479
$11,479
$11,938
Final-36
Months
Worked
4
6
6
12
8
Based on the earnings above, Judge Phillip Terrell's average high three years
that his retirement will be based on should not exceed the following:
(45,516+68274+68,874+137,743+95,504) - 3- $138,637
As a part of The Lasers retirement system's internal control procedures, they
send a letter out to the potential retiree of the preliminary calculation of the
monthly amounts to be received until the final calculation is done and approved.
At that point, the member will receive another letter containing the details of the
figures used in that calculation. As a result, the member is notified of their
average high three years so that they can verify the calculation on their own.
Due to privacy laws, I was unable to obtain the final letter to Judge
Terrell. The final letter would have allowed me to determine if his retirement
was higher than the law permits and if so, that he knew it was incorrect and
collected retirement money with the knowledge that he was not entitled to those
additional funds. As a result of the Louisiana State Supreme Court notifying
Judge Terrell of the maximum wages he could be paid, he should also have
known that his receipt of remuneration above the amount authorized would
have created an inflated retirement amount for him.
Recommendation:
The Louisiana State Supreme Court should be notified of these

findings so that they can use their authority to obtain a copy of the
final letter from LASERS to Judge Ten-ell. The letter will help
them to determine if further action is warranted.
Response:
54
14-12 INADEQUATE COMPUTER CONTROLS

Condition:
The passwords or login credentials to the operating accounting
software were not shared. Consequently, the Pineville City Court
had to hire outside computer assistance in order to gain access to
accounting files.
Recommendation:
Controls should be established to allow the appropriate personnel

to have access to the accounting files if key personnel are not in the
office.
Response:
The Pineville City Court has implemented a cross training program

where multiple employees are properly trained on all court
accounting software.
14-13 LACK OF PROPERTY AND EQUIPMENT RECORDS ON HAND

Condition:
Although the property records ai-e located outside the organization,

there are none on hand to assist in managing the assets.
Recommendation:
The asset list should be maintained in the files of the court.
Response:
The Pineville City Court has implemented procedures to prepare

and maintain a property asset list of the court.
14-14 INACCURATE BANK RECONCILIATIONS

Condition:
Some of the court's bank reconciliations did not agree back to the
books.
Recommendation:
Timely and accurate bank reconciliations should be done on a

monthly basis.
Response:
All bank reconciliations are done on a monthly basis and provided

to an outside CPA to ensure accuracy.
55
14-15 DEBIT/CREDIT CAI^) POLICIES AND PROCEDURES

Condition:
Purchases were made with the debit/credit cards without written
controls over their use.
Recommendation:
The court should establish written policies over the use of the cards
or cancel them.
Response:
The Pineville City Court no longer has debit/credit cards. All prior
debit/credit cards have been cancelled.
14-16 LATE AUDIT REPORT

As a result of missing or incomplete information, the audit was not
Condition:
completed and filed on time.
Recommendation:
All requested information should be sent to the auditor as early as

possible to ensure a timely filing of the report.
Response:
The Pineville City Court shall provide all requested information by

the auditor to ensure a timely filing of the report.
14-17 UNREASONABLE COSTS EXPENDED FOR TRAVEL AND EDUCATION

Condition:
During the time that Judge Ronald Lewelyan was in charge of the
Pineville City Court, three of the clerks booked three reservations
at two Florida resorts that sleep up to a total of 20 people per night.
The unreasonable cost for the three night stay was in excess of
$5,000.
After attempting unsuccessfully to contact Judge Lewelyan, I was
unable to determine if authorization had been given ahead of time.
Recommendation:
All travel should be approved ahead of time by the Judge.
Response:
The Pineville City Court has adopted the City of Pineville's

policies and procedures as it relates to travel and prior written
approval by the judge is required.
56
14-18 WRITTEN AGREEMENT WITH THE CITY OF PINEVILLE

Condition:
The Pineville City Court has part of their operations paid by the
City of Pineville. It is unknown how much if any of the costs
should be repaid by the Pineville City Court to the City Of
Pineville.
Recommendation:
The Pineville City Court and the City of Pineville should establish
a written agreement for the past and future costs.
Response:
The Pineville City Court and the City of Pineville are working
together to establish a written agreement as it relates to the
necessary and reasonable costs for the operation of the court.
Name of Contact Person:
Judge Gary Hays

(318) 449-5656
Date: January 31, 2016
57

Pinevllle, Louisiana
SCHEDULE OF COMPENSATION, BENEFITS AND OTHER PAYMENTS

TO AGENCY HEADS OR CHIEF EXECUTIVE OFFICER
AGENCY HEAD NAME:

POSITION:
RONALD LEWELLYAN
PINEVILLE CITY JUDGE
SALARY
BENEFITS- CONTRACT LABOR PAYMENTS RECEIVED
BENEFITS - HEALTH INSURANCE
DEFERRED COMPENSATION (contributions made by the agency)
BENEFITS
LIFE INS
BENEFITS
LONG TERM CARE/DISAB INS
BENEFITS
RETIREMENT
CAR ALLOWANCE
VEHICLE PROVIDED BY GOVERNMENT (REPORTED W-2 AMOUNT)
CELLPHONE
DUES
VEHICLE RENTAL
PER DIEM
REIMBURSEMENTS
TRAVEL
REGISTRATION FEES
CONFERENCE TRAVEL
HOUSING
TRAVEL ADVANCES
SPECIAL MEALS
$20,000
TOTAL
SEE INDEPENDENT AUDITOR'S REPORT
58
$20,000
PlNEViLLE CITY COURT


AGENCY HEAD NAME:

POSITION:
FLORENCE SWENT
SALARY
BENEFITS
LIFE INS
BENEFITS
BENEFITS
RETIREMENT
CAR ALLOWANCE
CELL PHONE
DUES
VEHICLE RENTAL
PER DIEM
REIMBURSEMENTS
TRAVEL
REGISTRATION FEES
CONFERENCE TRAVEL
HOUSING
TRAVEL ADVANCES
SPECIAL MEALS
$3,464
TOTAL
59
$3,464

Pinevilie, Louisiana

AGENCY HEAD NAME:

POSITION:
MICHAEL JOHNSON
SALARY
BENEFITS
LIFE INS
BENEFITS
BENEFITS
RETIREMENT
CAR ALLOWANCE
CELL PHONE
DUES
VEHICLE RENTAL
PER DIEM
REIMBURSEMENTS
TRAVEL
REGISTRATION FEES
CONFERENCE TRAVEL
HOUSING
TRAVEL ADVANCES
SPECIAL MEALS
$38,298
TOTAL
60
$38,298


AGENCY HEAD NAME:

POSITION:
PHILLIP TERRELL
SALARY - CITY OF PINEVILLE PAYMENTS

SALARY - SUPREME COURT PAYMENTS
BENEFITS
INSURANCE-SUPREME COURT
BENEFITS
BENEFITS
RETIREMENT- (SUPREME COURT)
BENEFITS
RETIREMENT-(PINEVILLE CITY COURT)
BENEFITS
RETIREMENT-(CITY OF PINEVILLE)
BENEFITS- RETIREE PPO ER SHARE(SUPREME COURT)
CAR ALLOWANCE
CELL PHONE
DUES
VEHICLE RENTAL
PER DIEM
REIMBURSEMENTS
TRAVEL
REGISTRATION FEES
CONFERENCE TRAVEL
HOUSING
TRAVEL ADVANCES
SPECIAL MEALS
$4,059
9,273
20,005
1,550
3,366
10,415
1,473
1,387
TOTAL
61
$51,528

Pineville City Court Audit

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PINEVILLE CITY COURT