WIXLIB

Reset FormMichigan Department of Treasury496 (02/06)Auditing Procedures ReportIssued under P.A. 2 of 1968, as amended and P.A. 71 of 1919, as amended.Local Unit of Government TypeCountyCityLocal Unit NameTwpFiscal Year EndVillageOtherCountySWAN CRK,JAMES,ST.CHAR.WATER AUT SAGINAWOpinion Date03/31/07Date Audit Report Submitted to State05/25/0707-02-07We affirm that:We are certified public accountants licensed to practice in Michigan.NOYESWe further affirm the following material, “no” responses have been disclosed in the financial statements, including the notes, or in theManagement Letter (report of comments and recommendations).Check each applicable box below. (See instructions for further detail.)1.All required component units/funds/agencies of the local unit are included in the financial statements and/or disclosed in thereporting entity notes to the financial statements as necessary.2.There are no accumulated deficits in one or more of this unit’s unreserved fund balances/unrestricted net assets(P.A. 275 of 1980) or the local unit has not exceeded its budget for expenditures.3.The local unit is in compliance with the Uniform Chart of Accounts issued by the Department of Treasury.4.The local unit has adopted a budget for all required funds.5.A public hearing on the budget was held in accordance with State statute.6.The local unit has not violated the Municipal Finance Act, an order issued under the Emergency Municipal Loan Act, orother guidance as issued by the Local Audit and Finance Division.7.The local unit has not been delinquent in distributing tax revenues that were collected for another taxing unit.8.The local unit only holds deposits/investments that comply with statutory requirements.9.The local unit has no illegal or unauthorized expenditures that came to our attention as defined in the Bulletin forAudits of Local Units of Government in Michigan, as revised (see Appendix H of Bulletin).10.There are no indications of defalcation, fraud or embezzlement, which came to our attention during the course of our auditthat have not been previously communicated to the Local Audit and Finance Division (LAFD). If there is such activity that hasnot been communicated, please submit a separate report under separate cover.11.The local unit is free of repeated comments from previous years.12.The audit opinion is UNQUALIFIED.13.The local unit has complied with GASB 34 or GASB 34 as modified by MCGAA Statement #7 and other generallyaccepted accounting principles (GAAP).14.The board or council approves all invoices prior to payment as required by charter or statute.15.To our knowledge, bank reconciliations that were reviewed were performed timely.If a local unit of government (authorities and commissions included) is operating within the boundaries of the audited entity and is notincluded in this or any other audit report, nor do they obtain a stand-alone audit, please enclose the name(s), address(es), and adescription(s) of the authority and/or commission.I, the undersigned, certify that this statement is complete and accurate in all respects.We have enclosed the following:EnclosedNot Required (enter a brief justification)Financial StatementsThe letter of Comments and Recommendationsno commentsOther (Describe)Certified Public Accountant (Firm Name)Telephone NumberBERTHIAUME & COMPANY, CPA'S989-791-1555Street AddressCity60 HARROW LANEAuthorizing CPA SignatureSAGINAWPrinted NameKENNETH A BERTHIAUMEStateMIZip48638License Number8339

SWAN CREEK TOWNSHIP, JAMES TOWNSHIP,AND VILLAGE OF ST. CHARLESWATER AUTHORITYSaginaw County, MichiganFINANCIAL STATEMENTSMarch 31, 2007

SWAN CREEK TOWNSHIP, JAMES TOWNSHIP, ANDVILLAGE OF ST. CHARLES WATER AUTHORITYTABLE OF CONTENTSPAGEIndependent Auditors' Report .1Basic Financial Statements:Business-Type Activity:Proprietary Fund:Statement of Net Assets . . Statement of Revenues, Expenses, and Changes in Net Assets .Statement of Cash Flows .345Notes to Financial Statements .6

INDEPENDENT AUDITORS' REPORTTo the Members of the BoardSwan Creek Township, James Township, andVillage of St. Charles Water AuthoritySaginaw County, MichiganWe have audited the accompanying basic financial statements of the Swan Creek Township, JamesTownship, and Village of St. Charles Water Authority, as of and for the year ended March 31, 2007 aslisted in the table of contents. These financial statements are the responsibility of Swan Creek Township,James Township, and Village of St. Charles Water Authority’s management. Our responsibility is toexpress an opinion on these financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free of material misstatement. An audit includes examining, ona test basis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made by management, as wellas evaluating the overall financial statement presentation. We believe that our audit providesa reasonable basis for our opinion.In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of the Swan Creek Township, James Township, and Village of St. Charles WaterAuthority, as of March 31, 2007, and the changes in its financial position and cash flows for the year thenended in conformity with accounting principles generally accepted in the United States of America.The Board has not presented a Management’s Discussion and Analysis that the Governmental AccountingStandards Board has determined is necessary to supplement, although not a required part of, the financialstatements.May 25, 2007-1-

BASIC FINANCIAL STATEMENTS

SWAN CREEK TOWNSHIP, JAMES TOWNSHIP, ANDVILLAGE OF ST. CHARLES WATER AUTHORITYSTATEMENT OF NET ASSETSMarch 31, 2007Business-TypeActivityProprietary FundAssets:Current assets:Cash and cash equivalentsDue from other governmental units 171,85722,936Total current assets194,793Liabilities:Current liabilities:Accounts payable23,732Total current liabilities23,732Net assets:Unrestricted171,061Total net assets 171,061The accompanying notes are an integral part of these financial statements.-3-

SWAN CREEK TOWNSHIP, JAMES TOWNSHIP, ANDVILLAGE OF ST. CHARLES WATER AUTHORITYSTATEMENT OF REVENUES, EXPENSES,AND CHANGES IN NET ASSETSYear Ended March 31, 2007Business-TypeActivityProprietary FundOperating revenues:Charges for services 291,493Annual fees18,000Total operating revenues309,493Operating expenses:SuppliesContracted servicesPurchase of waterTelephoneInsuranceUtilitiesRepairs and maintenance203,783291,4932,2953,9861,7412,710Total operating expenses306,028Operating income (loss)3,465Non-operating revenues (expenses):Interest income5,931Net income (loss)9,396Net assets, beginning of year161,665Net assets, end of year 171,061The accompanying notes are an integral part of these financial statements.-4-

SWAN CREEK TOWNSHIP, JAMES TOWNSHIP, ANDVILLAGE OF ST. CHARLES WATER AUTHORITYSTATEMENT OF CASH FLOWSYear Ended March 31, 2007Business-TypeActivityProprietary FundCash flow from operating activities:Cash received for servicesCash payments to suppliers for goods and services 309,493(305,408)Net cash provided (used) by operating activities4,085Cash flows from investing activities:Interest received5,931Net cash provided by investing activities5,931Net increase (decrease) in cash and cash equivalents10,016Cash and cash equivalents, beginning of year161,841Cash and cash equivalents, end of year 171,857Reconciliation of operating income (loss) tonet cash provided (used) by operatingactivities:Operating income (loss)Change in assets and liabilities:Due from other governmental unitsAccounts payable and accrued expenses 3,465318302Net cash provided (used) byoperating activities The accompanying notes are an integral part of these financial statements.-5-4,085

NOTES TO FINANCIAL STATEMENTS

SWAN CREEK TOWNSHIP, JAMES TOWNSHIP, ANDVILLAGE OF ST. CHARLES WATER AUTHORITYNOTES TO FINANCIAL STATEMENTSMarch 31, 2007NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe accounting policies of the Swan Creek Township, James Township, and Village of St. Charles WaterAuthority conform to accounting principles generally accepted in the United States of America asapplicable to governmental units. The following is a summary of the significant accounting policies:Reporting Entity:The Swan Creek Township, James Township, and Village of St. Charles Water Authority was created inDecember, 2001 by the three constituent municipalities under the provisions of Act 233, Public Acts ofMichigan, 1955 as amended. The Water Authority was created to administer and operate the water mainsupply system which provides the water supply for the three municipalities. The Water Authoritysuperseded the James Township, Swan Creek Township, and St. Charles Village Water Supply Districtwhich was established by the Saginaw County Board of Commissioners by a resolution adopted June 10,1969. The Water Authority took over operations from the Water District as of January 1, 2002. Thegoverning body of the Water Authority is a Board of Commissioners which is made up of two votingrepresentatives from each municipality for a total of six board members.In accordance with generally accepted accounting principles and Governmental Accounting StandardsBoard (GASB) Statement No. 14 these financial statements of the Water Authority include all activitiesfor which the Authority has oversight responsibility. The criteria established by the GASB fordetermining the reporting entity includes oversight responsibility, fiscal dependency, and whetherthe statements would be misleading if data were not included. The Authority has determined that nooutside agency meets the above criteria and, therefore, no other agency has been included as a blended ordiscretely-presented component unit in the Authority’s financial statements.Measurement Focus, Basis of Accounting, and Financial Statement Presentation:The Authority engages in only a business type activity.The accounts of the Authority are organized on the basis of a proprietary fund type, specifically anEnterprise Fund. The operations of this fund are accounted for with a separate set of self-balancingaccounts that comprise its assets, liabilities, net assets, revenues, and expenses.The financial operations of the Authority are reported using the economic resources measurement focusand the accrual basis of accounting. Under this method, all assets and liabilities associated with itsoperations are included on the statement of net assets. Revenues are recorded when earned and expensesare recorded when a liability is incurred, regardless of the timing of related cash flows.Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generallyare followed to the extent that those standards do no conflict with or contradict guidance of theGovernmental Accounting Standards Board. Governments also have the option of following subsequentprivate-sector guidance for their business-type activities and enterprise funds, subject to this samelimitation. The Authority has elected not to follow subsequent private-sector guidance.-7-