Pima County Department of Wastewater Management June 30, 2003 Financial Audit
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Pima County Department of Wastewater Management June 30, 2003 Financial Audit


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A REPORTTO THEARIZONA LEGISLATUREFinancial Audit DivisionFinancial Statement AuditPima CountyDepartment of WastewaterManagementJune 30, 2003Debra K. DavenportAuditor GeneralThe Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee composed of fivesenators and five representatives. Her mission is to provide independent and impartial information and specificrecommendations to improve the operations of state and local government entities. To this end, she provides financialaudits and accounting services to the State and political subdivisions, investigates possible misuse of public monies, andconducts performance audits of school districts, state agencies, and the programs they administer.Copies of the Auditor General’s reports are free.You may request them by contacting us at:Office of the Auditor General2910 N. 44th Street, Suite 410 • Phoenix, AZ 85018 • (602) 553-0333Additionally, many of our reports can be found in electronic format at:www.auditorgen.state.az.usPima County Department of Wastewater Management Report on Audit of Financial Statements June 30, 2003 Table of Contents Page Independent Auditors' Report 1 Statement of Net Assets—Enterprise Fund 2 Statement of Revenues, Expenses, and Changes in Fund Net Assets—Enterprise Fund 4 Statement of Cash Flows—Enterprise Fund 5 Notes to Financial Statements 7 Supplementary Schedules Combining Statement of Net Assets ...



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Financial Audit Division
Financial Statement Audit
Pima County Department of Wastewater Management June 30, 2003
Debra K. Davenport Auditor General
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Copies of the Auditor General’s reports are free. You may request them by contacting us at: Office of the Auditor General 2910 N. 44th Street, Suite 410 • Phoenix, AZ 85018 • (602) 553-0333 Additionally, many of our reports can be found in electronic format at: www.auditorgen.state.az.us
Pima County Department oWf astewater Management Report on Audit of Financial Statements June 30, 2030 
 Table of Contents  Independent Auditors' Report  Statement of Net Ass—etEsnterprise Fund  Statement of Revenues, Expenses,C ahnadn gesi n Fund  Net Asset—s Enterprise Fund  Statement of Cash Flo—wEsnterprise Fund  Notes to Financial Statements  Supplementary Schedules   CombiningStatement of Net Ass ets   Combining Statement of Revenues, Expense s, and   Changes inFundNet Asset s   Combining Statement of Cash Flows 
Page  1 2  4 5  7   22   24  25 
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     STATE OF ARIZONA  OFFICE OF THE DEBRA K. DAVENPORT, CPAAUDITOR GENERAL WDEIPLULTIYAAUMD ITTOHROGEMNESROALN  AUDITOR GENERAL  Independent Auditors' Report    Members of the Arizona State Legislature  The Board of Supervisors of Pima County, Arizona   We have audited the accompanying financial statements of the Pyi mDae pCaorutnmtent of Wastewater Managemenat s of and for the year ended June 30,3 ,2 0a0s listed in the table of con.t eTnhtesse financial statements are the responsibiflitny  otnemtrapeD ehOu. ntmegenamas ilytisibpsno rerss axpreto e is opinion on these afincial statements based on our audit.  We conducted our audit in accordance with U.S. generally accepted auditin.g T shtoasned satradnsdards require that we plan and perform the audit to obtain reasonable assurance about whether the fin statements ea rfree of material misstate. mAentid t uasis, evidence clinesudxa enimi ,gna noset ab t supporting the amounts and disclosures in the financial st. aAten maeundtits also includes assessing the accounting principles used and significant estimates madnea gbey mmeant, as well as evaluating the overall financial statement presen. taWtieo nbelieve that our audit provides a reasonable basis for our opinion.  As discussed in Note 1,  tPhiema County Department of eWwaastenem tsl iaatsttenemagncnafis naM re are inetnded top resent thfei nancial positi,o annd the changes in financial position and cash,  flofo wosnly that portion of the busin-teyspse activities and major fundPsi mofa  County that is attributable toP itmhea County Department of Wastewater Manag Feumned.n tThey do not purport to, and do not, present fairly the financial positiouJ f3 en ytno samaPiou Cnf ind aontsaicnanifitisop lnges chaits  in 00,3,02 t eha dn cash flowsf or the year then endine dc onformity with U.S. generally accepted accouint .selpicrp gni  In our opinion, the financial statements referarbeodv et op resent fairly, in all material respects, the financial position of the Pima County rtDmeepant of Wastewater Manage mase notf Jun e30, 2003, and the changes inits financial positioannd its cash flows for the year then ended in conformity with U.S. generally accepted accounting principles.  Our audit was conducted for the purpose of forming an opinion on the financial statements of the County Department of Wastewater Manag. eTmheformation listedni gifancnai lnit aomccnypa sa n supplementary schedules in the table of contents is presented for purposes of additional analysis a not a required part of the financial stat.e Smuecnht sinformation has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated, i material respects, in relation to the financial statements taken as a whole.    Debbie Davenport Auditor General November 7, 20 03  2910 NORTH 44thSTREET • SUITE 410 • PHOENIX, ARIZONA • (602) 553 -0333 • FAX (602) 553-0051 85018  
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 Pima County Departmenotf Wastewater Management Statement of Net Ass—etEsnterprise Fun d June 30, 2030   Asset  Current assets:  Cash and cash equivalents $ 966,267  Interest receivable 7,021  Accounts receivab, lneet 6,859,763  Due from other Pima County funds 1,675  Due from other governments 287,517  Inventory of materials and supplies 2,610,951  Prepaid expenses 128,877  Total current assets 10,862,071   Noncurrent sasets:   Restricted assets:  Cash and cash equivalents:  Restrictde for debt service 1,245,429  Restricted for operation and maintenance 3,669,003  Held in escrow as construction contract retentions 2,987,679  Interest receivable 19,952  Total restricted assets 7,922,063    Capital sasets, net of accumulated depreciation where app licable:  Land and other improvements 11,958,225   Solid waste transfer stat,i onnes t1,595,76 4   Conveyance syste,m nse t264,664,98 3  Treatment facilit,ienset 130,640,733  Equipmen,tnet 6,952,999  Construction in progress 136,170,9 9 7     Total capital asse,t sne t  551,983,68 3    Deferred financing costs 848,259    Total noncurrent assets 560,754,005    Total assets $571,616,076   (Continued) See accompanying notes to financial statements. 2
Pima County Department of Wastetewra Manageme nt Statement of Net Ass—etEsnterprise Fu nd June 30, 2030 (Continued)   Liabiliti  Current liabilities:  Accounts payable  Accrued payroll and employee benefits  Due to other Pima County funds  Interest payable  Current portion of sewer revenue bonds payable  Current portion of wastewlaotaenr s payabl e  Deferred sewer connection revenue  Deferred sludge hauling revenue    Total current lbiialitie s  Noncurrent liabilities:  Construction contract retentions payable  Landfill closure and postclosure care costs payable  Sewer revenue bonds payable, less current portion  Wastewatero alns paayble, less current port ion  Deferred interest expense and bond discount  Total noncurrent liabilities   Total liabilities  Net Asse  Invested in capital assets, net of related debt Restricted for:  Debt service  Capital projects  Wastewater management Unrestricted deficit   Totalnet assets See accompanying notesi tnoa fncial statemen ts. 3
   $  8,371,812 3,146,908 10,967,672 11,714 4,965,000 4,269,721 1,346,678             500  33,080,005   6,848,853 15,644,952 63,275,000 59,609,308  (5,469,82)9  139,908,284   172,988,289    426,182,74 1  1,245,429 3,007,631 3,669,003  (35,477,01)7  $398,627,78 7