ATC-Westside Transit Lines - LLA Default Homepage

WESTSIDE TRANSIT LINES(A Division of ATC/Vancom Management Services

Limited Partnership)

BASIC FINANCIAL STATEMENTSAND

SUPPLEMENTAL INFORMATION

Years Ended December 31,2005 and 2004

Under provisions of state law, this report is a publicdocument. A copy of the report has been submitted tothe entity and other appropriate public officials. Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.

Release Date £" lb~ Q

TABLE OF CONTENTS

INDEPENDENT AUDITOR'S REPORT 1

MANAGEMENTS DISCUSSION AND ANALYSIS 3

BASIC FINANCIAL STATEMENTS

Statements of Net Assets 6

Statements of Revenues, Expenses, and Changes in Fund Net Assets 7

Statements of Cash Flows 8

Notes to the Financial Statements 9


Schedules of Operating Revenues and Expenses 13

SINGLE AUDIT SECTION

Independent Auditor's Report on Internal ControlOver Financial Reporting and on Compliance andOther Matters Based on an Audit of the FinancialStatements Performed in Accordance withGovernment Auditing Standards 14

Independent Auditor's Report on Compliance withRequirements Applicable to each Major Programand on Internal Control Over Compliance in Accordancewith OMB Circular A-133 16

Schedule of Findings and Questioned Costs 18

Summary Schedule of Prior Audit Findings 20

Management's Corrective Action Plan 21

Schedule of Expenditures of Federal Awards 22

REBOWE & COMPANYCERTIFIED PUBLIC ACCOUNTANTS

CONSULTANTS

A PROFESSIONAL CORPORATION

3501 N. Causeway Blvd. • Suite 810 • P.O. Box 6952 • Metairie, LA 70009Phone (504) 837-9116 • Fax (504) 837-0123 • E-mai! [email protected]

INDEPENDENT AUDITOR'S REPORT

Westside Transit Lines(A Division of ATC/Vancom Management Services Limited Partnership)

We have audited the accompanying basic financial statements of Westside Transit Lines (ADivision of ATC/Vancom Management Services Limited Partnership) as of and for the years endedDecember 31,2005 and 2004, as listed in the table of contents. These basic financial statements arethe responsibility of Westside Transit Lines* management. Our responsibility is to express anopinion on these basic financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Those standards require that weplan and perform the audit to obtain reasonable assurance about whether the basic financialstatements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the basic financial statements. An audit also includesassessing the accounting principles used and significant estimates made by management, as well asevaluating the overall basic financial statement presentation. We believe that our audits provide areasonable basis for our opinion.

In our opinion, the basic financial statements referred to above present fairly, in all materialrespects, the financial position of Westside Transit Lines as of December 31, 2005 and 2004, andthe results of its operations and its cash flows for the years then ended in conformity withaccounting principles generally accepted in the United States of America.

The Management's Discussion and Analysis on pages 3 through 5 is not a required part of the basicfinancial statements but is supplementary information required by accounting principles generallyaccepted in the United States of America. We have applied certain limited procedures, whichconsisted principally of inquiries of management regarding the methods of measurement andpresentation of the required supplementary information. However, we did not audit the informationand express no opinion on it.

In accordance with Government Auditing Standards, we have also issued our report dated March24, 2006, on our consideration of Westside Transit Lines' internal control over financial reportingand on our tests of its compliance with certain provisions of laws, regulations, contracts,

and grant agreements and other matters. The purpose of that report is to describe the scope of ourtesting of internal control over financial reporting and compliance and the results of that testingand not to provide an opinion on the internal control over financial reporting or on compliance.That report is an integral part of an audit performed in accordance with Government AuditingStandards and should be considered in assessing the result of our audit.

Our audits were conducted for the purposes of forming opinions on the financial statements thatcollectively comprised Westside Transit's basic financial statements. The accompanyingsupplemental information listed in the table of contents is presented for purposes of additionalanalysis and is not a required part of the basic financial statements. The additional information hasbeen subjected to the auditing procedures applied by us in the audit of the basic financial statementsand, in our opinion, based on our audit, is fairly stated, in all material respects, in relation to thebasic financial statements taken as a whole. The accompanying Schedule of Expenditures ofFederal Awards is presented for purposes of additional analysis as required by U.S. Office ofManagement and Budget Circular A-133, Audits of States, Local Governments, and Non-ProfitOrganizations, and is not a required part of the basic financial statements of Westside Transit.Such information has been subjected to the auditing procedures applied by us in the audit of thebasic financial statements and, in our opinion, based on our audit, is fairly stated, in all materialrespects, in relation to the basic financial statements taken as a whole.

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March 24,2006

WESTSIDE TRANSIT LINES(A Division of ATC/Vancom Management Services Limited Partnership)

MANAGEMENT'S DISCUSSION AND ANALYSISDecember 31, 2005

The Management's Discussion and Analysis (MD&A) of Westside Transit Lines' basic financialstatements provides an overall review and an objective, easily readable analysis of WestsideTransit Lines' financial activities for the year ended December 31, 2005. The intent of theMD&A is to examine Westside Transit Lines' overall financial performance and to assist readersin assessing its financial position as of December 31, 2005. Therefore, readers should read theMD&A in conjunction with the Basic Financial Statements, including the notes to the financialstatements...

The MD&A is an element of the Required Supplementary Information specified in theGovernmental Accounting Standards Board's (GASB) Statement Number 34 - Basic FinancialStatements - and Management's Discussion and Analysis - for State and Local Governments.Certain comparative information between the current year (2005) and the prior year (2004) isrequired to be presented in the MD&A to provide a more meaningful comparative analysis of thefinancial data.

FINANCIAL HIGHLIGHTS

Total assets are as follows:

2005 2004

Cash and cash equivalents $ 61,401 $ 78,208A/R - Due from Jefferson Parish 2,181,251 861,298Prepaid expenses 212,224 291.348

Total Assets $2.454.876 $1.230.854

Accounts receivable represents operating subsidies due from Jefferson Parish. There was asignificant increase in accounts receivable primarily as the result of delayed operating subsidypayments by Jefferson Parish.

Total liabilities are as follows:

2005 2004

Accounts payable and due to ATC/Vancom $2,011,526 $ 635,874Accrued expenses 443,350 582,015Due to Jefferson Parish • 12.965

Total Liabilities

Accounts payable represents normal payables which accumulated as a result of the delayedreceipt of federal grant subsidy which delayed several reimbursement payments from Jefferson

WESTSIDE TRANSIT LINES(A Division of ATC/Vancom Management Services Limited Partnership)MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

December 31, 2005

Parish to ATC/Vancom. Due to Jefferson Parish represents subsidy payments received from theParish exceeding actual expenses.

There were no fare increases during 2005. Operating subsidies increased to cover the increase inoperating expenses.

2005 2004

Passenger revenue

Total revenues

Operating subsidies

There were increases in costs in the following areas:

$1.582,606

$1.582.606

$4.947.304

1. There was an annual increase in wages of 4% agreed upon in the labor contract.2. There were significant increases in both liability and health insurance.3. The level of service hours decreased due to Hurricane Katrina, which made the overall

increase in subsidy minimal despite the significant increase in insurance cost.4. The increases in fuel cost were offset by the service difficulties caused by Hurricane

Katrina.

The following table gives the percentages of increases and decreases for the areas previouslydiscussed.

Labor CostMaintenance and OperationsPass Through CostsManagement and Incentive Fee

Total expenses

2005

$3,202,791285,773

2,688,342353.004

2004

$3,682,703364,241

2,581,497348,000

Increase(Decrease)

(13.03%)(21.54%)(29.33%)

1.43%

(62.47%)

SUBSEQUENT EVENT

Effective April 1, 2006, Westside Transit will be combined with the former Louisiana TransitEast bank service and will operate as one entity, ATC/Vancom, Inc., now doing business asVeolia Transportation. The contract changes from a management contract where all expenses

WESTSIDE TRANSIT LINES(A Division of ATC/Vancom Management Services Limited Partnership)MANAGEMENT'S DISCUSSION AND ANALYSIS (CONTINUED)

December 31, 2005

are passed through to Jefferson Parish to a full service contract in which Veolia Transportation isreimbursed on a hourly rate.

REQUESTS FOR INFORMATION

While this report is designed to provide a general overview of the financial condition andoperations of Westside Transit Lines, citizens groups, taxpayers, other Parish officials, andcreditors may need further details. To obtain such details, please contact Derrick Breun atWestside Transit Lines at (504) 818-1077.

BASIC FINANCIAL STATEMENTS


STATEMENTS OF NET ASSETSDecember 31, 2005 and 2004

2005 2004

ASSETSCURRENT ASSETS

Cash and cash equivalents $ 61,401 $ 78,208Due from Jefferson Parish 2,181,251 861,298Prepaid expenses 212,224 291,348

TOTAL CURRENT ASSETS 2,454,876 1,230,854

The notes to the financial statements are an integral part of this statement.

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TOTAL ASSETS 2,454,876 1,230,854

LIABILITIESCURRENT LIABILITIES

Accounts payable 2,011,526 635,874Accrued expenses 443,350 582,015Due to Jefferson Parish - 12,965

TOTAL CURRENT LIABILITIES 2,454,876 1,230,854

TOTAL LIABILITIES 2,454,876 1,230,854

NET ASSETS

TOTAL NET ASSETS $ $

WESTSIDE TRANSIT LINES

(A Division of ATC/Vancom Management Services Limited Partnership)

STATEMENTS OF REVENUES, EXPENSES,

AND CHANGES IN FUND NET ASSETS

FOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

2005 2004

OPERATING REVENUESPassenger revenue

Total Operating Revenues

OPERATING EXPENSESManagement feeLabor costsMaintenance and operations costsPass-through costs

Total Operating Expenses

$ 1,582,606

1,582,606

353,0043,202,791

285,7732,688,342

6,529,910

$ 2,170,091

2,170,091

348,0003,682,703

364,2412,581,497

6,976,441

OPERATING LOSS

OPERATING SUBSIDIES

CHANGE IN NET ASSETS

NET ASSETSBeginning

Ending

(4,947,304)

4,947,304

(4,806,350)

4,806,350


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STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2005 AND 2004

CASH FLOWS FROM OPERATING ACTIVITIES:Cash received from operationsCash paid to employees and for related expensesCash paid to suppliers

Net cash used in operating activities

CASH FLOWS FROM NONCAPITAL FINANCINGACTIVITIES:

Operating subsidy received from other governments

Net Decrease in Cash and Cash Equivalents

Cash and Cash Equivalents - Beginning

Cash and Cash Equivalents - Ending

RECONCILIATION OF OPERATING LOSS TO NETCASH USED BY OPERATIONS:

Operating LossAdjustments to reconcile operating loss

net cash used in operating activities:Increase in due from Jefferson Parish(Increase) decrease in prepaid expensesIncrease in accounts payableDecrease in accrued expensesDecrease in due to Jefferson ParishDecrease in due to ATC/Vancom

Management Services Limited Partnership

Total Adjustments

Net Cash Used by Operating Activities

2005

1,582,606(3,318,263)(3,228,454)

(4,964,111)

4,947,304

(16,807)

78,208

$ 61,401

$ (4,847,304)

(116,807)

2004

2,170,091(3,798,175)(3,293,738)

(4,921,822)

4,806,350

(115,472)

193,680

$ 78,208

$ (4,806,350)

(478,649)79,124434,348(138,665)(12,965)

-

(587,253)(72,470)579,601(34,700)

-

(650)

$ (4,964,111)

(115,472)

$ (4,921,822)



NOTES TO THE FINANCIAL STATEMENTSFor the Years Ended December 31,2005 and 2004

NOTE 1 - OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Westside Transit Lines is a division of ATC/Vancom Management Services Limited Partnership.ATC/Vancom Management Services Limited Partnership is 99% owned by Van Der Aa Holdings,Inc., and 1% owned by ATC/Vancom, Inc. which was purchased by a stock purchase by NexusInvestment General Partnership on December 30, 1999. As a division of ATC/Vancom, WestsideTransit Lines operates a public bus transportation system in Jefferson Parish, Louisiana. Thesystem is currently operated under a management agreement between ATC/Vancom and JeffersonParish.

As part of that agreement, Jefferson Parish subsidizes the operation of the bus system, in amountsnecessary for the system to operate at break-even on an annual basis, using a combination of localand federal funds.

Measurement Focus, Basis of Accounting, and Financial Statement Presentation

The accounting policies of Westside Transit Lines conform to accounting principles generallyaccepted in the United States of America as applicable to governments. The proprietary fundfinancial statements are reported using the economic resources measurement focus and the accrualbasis of accounting. Revenues are recorded when earned and expenses are recorded when a liabilityis incurred, regardless of the timing of related cash flows. Westside Transit Lines has nogovernmental or fiduciary funds. Westside Transit Lines' accounts are organized into a singleenterprise fond. The enterprise fund (a proprietary fund) is used to account for operations that areoperated in a manner similar to private business where the intent of the governing body is that thecost (expense) of providing goods and services to the general public is financed or recoveredprimarily through user charges or where the governing body had decided that the periodicdetermination of revenues earned, expenses incurred and/or changes in net assets is appropriate forcapital maintenance.

Westside Transit Lines' principal operating revenues are the fares charged to passengers for service.

Cash Equivalents

Cash equivalents represent highly liquid investments with maturities of three months or less at thedate of purchase.


NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)For the Years Ended December 31,2005 and 2004

NOTE 1 - OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTINGPOLICIES (CONTINUED)

Receivables

Westside Transit Lines uses the allowance method to account for uncollectible receivables. Allreceivables were fully collectible at year end; therefore, no allowance for uncollectible accounts hasbeen provided.

Property and Equipment

All property and equipment used in the operation of Westside Transit Lines is the property ofJefferson Parish. Accordingly, those assets are included in the basic financial statements of theParish.

Income Taxes

Westside Transit Lines' parent company, ATC/Vancom Management Services LimitedPartnership, is not a taxpaying entity for purposes of federal and state income taxes, but is a pass-through entity, with each partner responsible for income taxes on its proportionate share of thepartnership's income. As a division of ATC/Vancom, Westside Transit Lines is not a separatelegal entity and, therefore, is not a taxpaying entity. Accordingly, these statements contain noprovision for federal or state income taxes.

Concentrations of Credit Risk

Financial instruments that potentially subject Westside Transit Lines to concentrations of credit riskconsist principally of cash deposits. Westside Transit Lines at times has cash on deposit at financialinstitutions that is in excess of federally insured limits.

Estimates

The preparation of basic financial statements in conformity with generally accepted accountingprinciples requires management to make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingent assets and liabilities at the date ofthe basic financial statements and the reported amounts of revenues and expenses during theperiod. Actual results could differ from those estimates.

NOTE 2 - MANAGEMENT AGREEMENT

ATC/Vancom Management Services Limited Partnership has an agreement with the Parish ofJefferson under which it will manage the operation of the public transit system on the West Bank ofJefferson Parish from January 1, 2002 through December 31, 2005. This agreement requirespayment of management fees from Jefferson Parish to ATC/Vancom Management Services Limited

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NOTE 2 - MANAGEMENT AGREEMENT (CONTINUED)

Partnership of $338,000 in the first year, and increasing each year to $353,000 in 2005 plus actualaccounting service fees. As compensation for the management of the transit system, ATC/VancomManagement Services Limited Partnership received the following fees from Westside Transit Linesfor the years ended December 31,2005 and 2004.

2005 2004

Management Fee S 353.004 $ 348.000

Accounting Services S 39.600 S 30.000

NOTE 3 - SUBSIDIES

Jefferson Parish subsidizes Westside Transit Lines in amounts necessary to operate the system atbreak-even. For the years ended December 31, 2005 and 2004, the Parish provided operatingsubsidies of $4,947,304 and $4,806,350, respectively.

NOTE 4 - RELATED PARTY TRANSACTIONS

Incentives are paid directly to Westside Transit Lines who in turn remit them to ATC/Vancom.There were no incentive fees earned by Westside Transit lines and payable to ATC/Vancom for theyears ended December 31,2005 and 2004.

NOTE 5 - PENSION PLAN

Westside Transit Lines has a defined contribution pension plan covering substantially all employeeswho have completed one year of service. Employee contributions to the plan are based on apercentage of earnings. Westside Transit Lines contributes 150% of each participant's mandatoryemployee contributions to the Plan. The Plan is administered by Gulf Coast Bank and Trust.

Although it has expressed no intent to do so, Westside Transit Lines has the right to terminate thePlan, subject to certain limitations established in its collective bargaining agreement with theAmalgamated Transit Union. Upon termination, the rights of each participant to the amounts in hisemployer contribution account would become fully vested.

The total pension cost charged to operations approximated $278,000 and $294,000 in 2005 and2004, respectively.

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NOTE 6 - UNION AGREEMENT

Westside Transit Lines entered into an agreement with the Amalgamated Transit Union, DivisionNo. 1400, which represents its operators, mechanics, and support personnel, effective from June 1,2001 through May 31,2005. This agreement was extended to March 31,2006.

NOTE 7 - COMMITMENTS AND CONTINGENCIES

Westside Transit Lines carries commercial insurance for all types of risk of loss, including, auto,workers' compensation, employee health and general liability. During the year ended December 31,2002, the auto insurance policy changed from a dollar for dollar coverage to a $500,000 deductibleper occurrence. This change in insurance policy was approved by Jefferson Parish. Settled claimsresulting from these risks have not exceeded insurance coverage in any of the past three years. Theclaims liability at December 31, 2005 and 2004 totaled $(43,476) and $42,000, respectively, and isincluded in accrued expenses.

NOTE 8 - OTHER POST-EMPLOYMENT BENEFITS

Westside Transit Lines provides certain continuing health care and life insurance benefits for itsemployees. Substantially all of Westside Transit Lines' employees become eligible for thesebenefits if they reach normal retirement age while working for Westside Transit Lines. Life andhealth insurance benefits for retirees and similar benefits for active employees are provided throughan insurance company whose monthly premiums are paid by Westside Transit Lines. Any increasein medical insurance is paid by Westside Transit Lines and the employee. Westside Transit Linespays 80% of the increase and the employee pays 20% of the increase. Westside Transit Lines paysbenefits for retirees in full. Westside Transit Lines recognizes the cost of providing these benefits asan expenditure when paid during the year. At December 31, 2005 and 2004, 17 and 16 retirees,respectively were eligible and receiving such health care benefits. Total premiums paid byWestside Transit Lines on behalf of retirees amounted to $101,828 and $101,241 for the yearsended December 31,2005 and 2004, respectively.

NOTE 9 - SUBSEQUENT EVENT

Effective April 1, 2006, Westside Transit will be combined with the former Louisiana TransitEast bank service and will operate as one entity, ATC/Vancom, Inc., now doing business asVeolia Transportation. The contract changes from a management contract where all expensesare passed through to Jefferson Parish to a full service contract in which Veolia Transportation isreimbursed on a hourly rate.

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SCHEDULES OF OPERATING REVENUES AND EXPENSESFor the Years Ended December 31, 2005 and 2004

Operating Revenues

Passenger revenueAdvertising revenue

Total Operating Revenues

Operating Expenses

Management fee

Labor costs:Employee benefitsEmployee pension costSalaries and wagesTaxes - payroll

Maintenance and operations costs:Dues and subscriptionsEducationLegal and professional feesMiscellaneousOffice expensesShop expensesTravel and entertainmentUniformsUtilities and telephone

Pass-through costs:Automobile and truck expenseInsurance - group health and lifeInsurance - otherMaintenance and repairsMiscellaneous

Incentive fee

Total Operating Expenses

See independent auditor's report.

2005

$ 1,582,606

S 1.582.606

360,535277,508

2,334,199230.549

3,202/791

285.773

675,645597,158

1,295,90374,62845.008

2,688.342

2004

$ 2,169,917174

$ 2.170.Q91

$ 353.004 $ 348.000

383,272294,031

2,745,680259.720

3.682.703

3948,98361,00560,75565,51020,55713,17822,88232,509

2,30613,530139,86934,54160,92532,92310,00936,44733,691

364.241

610,679642,397

1,252,22226,75349,446

2.581,497

S 6.529.910 $ 6.976.441

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SINGLE AUDIT SECTION


CONSULTANTS


3501 N. Causeway Blvd. • Suite 810 • P.O. Box 6952 • Metallic, LA 70009Phone (504) 837-9116 • Fax (504) 837-0123 • [email protected]

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING AND ON COMPLIANCE AND OTHER

MATTERS BASED ON AN AUDIT OF THE FINANCIAL STATEMENTSPERFORMED IN ACCORDANCE WITHGOVERNMENT AUDITING STANDARDS


We have audited the basic financial statements of Westside Transit Lines (A Division ofATC/Vancom Management Services Limited Partnership) as of and for the year ended December31, 2005, as listed in the table of content, and have issued our report thereon dated March 24,2006. We conducted our audit in accordance with auditing standards generally accepted in theUnited States of America and the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered Westside Transit Lines' internal control overfinancial reporting in order to determine our auditing procedures for the purpose of expressing ouropinion on the financial statements and not to provide assurance on the internal control overfinancial reporting. Our consideration of the internal control over financial reporting would notnecessarily disclose all matters in the internal control that might be material weaknesses. Amaterial weakness is a reportable condition in which the design or operation of one or more of theinternal control components does not reduce to a relatively low level the risk that misstatementscaused by error or fraud in amounts that would be material in relation to the financial statementsbeing audited may occur and not be detected within a timely period by employees in the normalcourse of performing their assigned functions. We noted no matters involving the internal controlover financial reporting and its operation that we consider to be material weaknesses.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Westside Transit Lines' basic financialstatements are free of material misstatement, we performed tests of its compliance with certainprovisions of laws, regulations, contracts and grant agreements, noncompliance with which couldhave 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 our audit, and

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accordingly, we do not express such an opinion. The results of our tests disclosed no instances ofnoncompliance that are required to be reported under Government Auditing Standards.

This report is intended solely for the information and use of management, Jefferson Parish,Louisiana, the Legislative Auditor of the State of Louisiana, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than thesespecified parties. Under Louisiana Revised Statue 24:513, this report is distributed by theLegislative Auditor as a public document.

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March 24, 2006

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CONSULTANTS


3501 N. Causeway Blvd. • Suite 810 • P.O. Box 6952 • Metairie, LA 70009Phone (504) 837-9116 • Fax (504) 837-0123 • [email protected]

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITHREQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ONINTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH

OMB CIRCULAR A-133


Compliance

We have audited the compliance of Westside Transit Lines with the types of compliancerequirements described in the t/.S. Office of Management and Budget (OMB) Circular A-133Compliance Supplement that are applicable to each of its major federal programs for the yearended December 31, 2005. Westside Transit Lines* major federal programs are identified in theSummary of Auditor's Results section of the accompanying Schedule of Findings and QuestionedCosts. Compliance with the requirements of laws, regulations, contracts and grants applicable toeach of its major federal programs is the responsibility of Westside Transit Lines' management.Our responsibility is to express an opinion on Westside Transit Lines' compliance based on ouraudit.

We conducted our audit of compliance in accordance with auditing standards generally acceptedin the United States of America; the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States; andOMB Circular A-133, Audits of States, Local Governments, and 'Non-Profit Organizations.Those standards and OMB Circular A-133 require that we plan and perform the audit to obtainreasonable assurance about whether noncompliance with the types of compliance requirementsreferred to above that could have a direct and material effect on a major federal program occurred.An audit includes examining, on a test basis, evidence about Westside Transit Lines* compliancewith those requirements and performing such other procedures as we considered necessary in thecircumstances. We believe that our audit provides a reasonable basis for our opinion. Our auditdoes not provide a legal determination on Westside Transit Lines' compliance with thoserequirements.

In our opinion, Westside Transit Lines complied, in all material respects, with the requirementsreferred to above that are applicable to each of its major federal programs for the year endedDecember 31,2005.

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Internal Control Over Compliance

The management of Westside Transit Lines is responsible for establishing and maintainingeffective internal control over compliance with the requirements of laws, regulations, contractsand grants applicable to federal programs. In planning and performing our audit, we consideredWestside Transit Lines' internal control over compliance with requirements that could have adirect and material effect on a major federal program in order to determine our auditingprocedures for the purpose of expressing our opinion on compliance and to test and report on theinternal control over compliance in accordance with OMB Circular A- 133.

Our consideration of the internal control over compliance would not necessarily disclose allmatters in the internal control that might be material weaknesses. A material weakness is areportable condition in which the design or operation of one or more of the internal controlcomponents does not reduce to a relatively low level the risk that noncompliance with applicablerequirements of laws, regulations, contracts and grants caused by error or fraud that would bematerial in relation to a major federal program being audited may occur and not be detectedwithin a timely period by employees in the normal course of performing their assigned functions.We noted no matters involving the internal control over compliance and its operation that weconsider to be material weaknesses.

This report is intended solely for the information and use of management, Jefferson Parish,Louisiana, the Legislative Auditor of the State of Louisiana, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than thosespecified parties. Under Louisiana Revised Statute 24:513, this report is distributed by theLegislative Auditor as a public document.

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March 24, 2006

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SCHEDULE OF FINDINGS AND QUESTIONED COSTSFor the Year Ended December 31,2005

A. SUMMARY OF AUDITOR'S RESULTS

1. The auditor's report expresses an unqualified opinion on the financial statements ofWestside Transit Lines.

2. No reportable conditions in internal control over financial reporting are reported in theIndependent Auditor's Report on Internal Control Over Financial Reporting and onCompliance and Other Matters Based on an Audit of the Financial StatementsPerformed in Accordance with Government Auditing Standards. .

3. No instances of noncompliance material to the financial statements of Westside TransitLines, which would be required to be reported in accordance with Government AuditingStandards, were disclosed during the audit.

4. No reportable conditions relating to the audit of major federal award programs arereported in the Independent Auditor's Report on Compliance with RequirementsApplicable to Each Major Program and on Internal Control Over Compliance inAccordance with OMB Circular A-l33.

5. The auditor's report on compliance for the major federal award programs for WestsideTransit Lines expresses an unqualified opinion on all major federal programs.

6. There were no findings that are required to be reported under Section 510(a) of OMBCircular A-133.

7. The following program was identified as a major program:

U.S. Department of Transportation, Federal Transit Formula Grants - CFDA 20.507

8. The threshold for distinguishing Type A and Type B programs was $300,000.

9. Westside Transit Lines did not qualify as a low-risk auditee.

10. A Management Letter was not issued for the year ended December 31,2005.

(continued)

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SCHEDULE OF FINDINGS AND QUESTIONED COSTS (CONTINUED)For the Year Ended December 31,2005

B. FINDINGS - FINANCIAL STATEMENT AUDIT

There were no findings related to the financial statement audit for the year ended December 31,2005.

C. FINDINGS AND QUESTIONED COSTS -MAJOR FEDERAL AWARD PROGRAMAUDIT

There were no findings related to federal awards for the year ended December 31,2005.

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SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGSFor the Year Ended December 31, 2005

A. FINDINGS - FINANCIAL STATEMENT AUDIT

04-1 Fare Revenue Adjustment

Condition:

We observed adjustments related to fare revenue, which represented differences between thecash counts and the amounts reported on the GFI Genfare revenue reports. The adjustmentsamounted to a shortage of $45,669 in cash when compared to amounts reported by the GFIGenfare system as of December 31, 2004. This cash shortage represents approximately 2%of the total fare revenue for the year.

Recommendation:

Westside Transit Lines should investigate any discrepancies between daily physical cashcounts and data reported by the fare box system immediately.

Current Status:

Management has implemented a policy to perform an investigation on any discrepanciesbetween physical cash counts and data reported by the fare box system in a timelymanner. This finding has been resolved.

B. MANAGEMENT LETTER

A management letter was not issued for the year ended December 31,2004.

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MANAGEMENT'S CORRECTIVE ACTION PLANFor the Year Ended December 31, 2005

There were no findings for the year ended December 31, 2005; therefore, a corrective action planis not required.

21


SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSFor the Year Ended December 31, 2005

Federal Grantor/Pass-Through Grantors/Program Title

U.S. Department ofTransportation, Federal TransitAdministration

Passed through the JeffersonParish Council, Jefferson Parish,Louisiana

Federal Transit FormulaGrants*

Total federal awards

FederalCFDA

NumberGrant

NumberGrant Year

EndedRevenue

Recognized Expenses

20.507 LA-90-X278 12/31/05 $ 1,534,357 $1,534,357

S 1,534,357 $ 1,534,357

* _ major program.

Reconciliation of JeffersonParish subsidy to federal awards

Local share of subsidyFederal subsidy

Total subsidy from Jefferson Parish

$2,156,3981,534,357

$ 4,947,304

NOTE A - BASIS OF ACCOUNTING

The accompanying Schedule of Expenditures of Federal Awards has been prepared using theaccrual basis of accounting in accordance with generally accepted accounting principles. Theaccrual basis of accounting has also been used in presenting the basic financial statements, asdisclosed in Note 1.

NOTE B - PASS-THROUGH AWARDS

Westside Transit Lines did not pass-through any if its federal awards to a sub recipient during theyear ended December 31,2005.

NOTE C - NON-CASH ASSISTANCE

No federal awards were expended in the form of non-cash assistance during the year endedDecember 31,2005.

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ATC-Westside Transit Lines - LLA Default Homepage

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