Presented by:
Susan K. LaFollett, CPA
Managing Partner
 Objectives
of Audit
 Scope of Audit
 Annual Financial Report
 Financial Highlights
 Overview of Audit Results
 Required Governance Communications
 Management Recommendations
 Objectives
 Conduct our audit in accordance with
Government Auditing Standards
 Plan and perform the audit to obtain
reasonable assurance about whether
the financial statements are free of
material misstatement
 Full
Scope Audit
 Governmental activities
 Business type activities – water, sewer and
sanitation
 Component units – Economic Development
Corporation (EDC) and Community
Development Corporation (CDC)
 Each major fund – general, debt service,
capital projects
 Financial
Section
 Independent Auditor’s Report (pages 1-2)
 Management’s Discussion and Analysis
(pages 3-7)
 Government Wide Statements (pages 8-9)
 Fund Statements (pages 10-16)
 Notes to Financial Statements (pages 17-37)
 Required
Supplementary Information
 General Fund Budgetary Comparison (page
38)
 TMRS Schedule of Funding Progress (pages
39-41)
 Compliance and Internal Controls Section
 Report on Compliance and on Internal
Controls – Government Auditing Standards
(pages 42-43)
 Statement
of Net Assets (page 8)
 Statement of Activities (page 9)
 Includes primary government and
discretely presented component units –
EDC and CDC
 Prepared on a full accrual basis
 Statement
of Net Assets (page 8):
• Total assets are $15,881,650 (page 8) primarily
capital assets of $12,776,885
• Total liabilities are $9,785,215 (page 8) including
long-term debt of $8,567,440
• Assets exceeded liabilities by $6,096,435 (net
assets, page 8)
• Unrestricted net assets are $1,007,199 (page 8)
and may be used to meet the City’s ongoing
obligations to citizens and creditors
 Statement
of Activities (page 9):
• Program revenues are $3,424,787 and general
revenues are $1,827,399 with a total of
$5,252,186
• Total expenses are $5,126,338 (page 9)
• Total net assets increased by $125,848 (page 9),
or 2.1%.
• FY11 had a decrease in net assets of $271,076.

General Fund - fund balances (page 10):
• $655,708 at September 30, 2012
• $734,614 at September 30, 2011 (restated)
• $507,840 is unassigned and may be used to meet the
City’s ongoing obligations

Total General Fund expenditures (page 12):
• $3,300,059 during fiscal year 2012
• $3,708,679 during fiscal year 2011

City of Van Alstyne’ s General Fund has 1.85
months reserves
• (Unassigned general fund balance / Total general fund
expenditures) x 12 months
 Overall, General
Fund revenue was down from
$3,323,255 in 2011 to $3,125,833 (page 12)
largely due to decreased revenues from
ambulance services and court fines.
 Sales tax revenue was up from $492,706 in 2011
to $565,072 (page 12), which is a 13% increase.
 Fund balance of General Fund decreased by
$78,906 (page 12) due to capital outlays and
decreased revenues.
 Water
& Sewer unrestricted net assets
(page 14):
• $137,781 at September 30, 2012
• $59,652 at September 30, 2011 (restated)
 Water
& Sewer operating revenues (page
15):
• $1,533,836 during fiscal year 2012
• $1,397,780 during fiscal year 2011
• Rate increases in fiscal year 2012
 Water
& Sewer operating expenses (page 15):
• $1,387,586 during fiscal year 2012
• $1,250,221 during fiscal year 2011
• Increased repair and maintenance costs
 Water
& Sewer net assets (page 15):
• $4,749,456 at September 30, 2012
• $4,822,896 at September 30, 2011
• Overall decrease in net assets of $73,440
• Without non-cash depreciation net assets would
increase $207,366
 Unqualified
Audit Opinion (page 1-2)
• “Clean” opinion
 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 (pages 42-43)
• We did not identify any deficiencies in internal
controls over financial reporting that we
consider to be material weaknesses, as defined
in the report.
 Per
our letter, significant audit findings:
• Qualitative aspects of accounting practices – no
issues
• Difficulties encountered in performing the audit
– none
• Corrected and uncorrected misstatements – all
recommended adjustments were accepted by the
City. Refer to attached list of adjustments.
• Disagreements with management - none
 Per
our letter, we became aware of matters that
are opportunities to strengthen internal
controls and operating efficiency. We
recommend the City:
• Continue to work closely with their consultant to
refine year-end closing procedures to ensure all
routine closing adjustments are posted before the
audit begins.
• Consider reinstating fund 98 – General Fixed Asset
Account Group and fund 99 – Long Term Debt
Account Group, as required by GAAP.
• Reconcile revenue per the court system to the
general ledger system on a monthly basis.
• Print details for court receivables, utility receivables,
ambulance receivables, and accounts payable on the
last day of the year and reconcile to the general
ledger as part of the closing process.
• Appoint a staff member to oversee the ambulance
collection process and perform an analysis of the
outstanding receivable balance of approx.
$4,798,000 to determine collectability. Consider
writing off old uncollectible amounts.
• Continue to follow check disbursement policies.
• Review depreciation schedules and remove assets
no longer in service.
• EDC/CDC should consider engaging a consultant to
refine year-end closing procedures to ensure all
routine closing adjustments are posted before the
audit begins.
• EDC - follow GAAP and not record depreciation on
land.
• EDC – implement internal controls to ensure that 941
reports are filed on time.
 Thank
you
• LaFollett & Company PLLC would like to thank:
 Frank Baker, City Manager
 Jennifer Gould, City Clerk
 Joe Madden CPA, City Consultant, and
 Kanita Larkins, EDC/CDC
• These individuals were very responsive to all of
our audit requests and a pleasure to work with
on this engagement.