FYE 6.30.02

Annual General-Purpose Financial Statements

TOWN OF EXETER, RHODE ISLAND

Fiscal Year Ended June 30, 2002

Table of Contents

Page

INDEPENDENT AUDITORS= REPORT..................................................................................................................................... 1

GENERAL-PURPOSE FINANCIAL STATEMENTS

Combined Balance Sheet ‑ All Fund Types, Account Groups and Component Unit.................................................... 3

Combined Statements of Revenues, Expenditures and Changes in Fund Balances ‑

All Governmental Fund Types, Expendable Trust Funds, and Component Unit.................................................. 4

Statement of Revenues and Expenditures - Budget (GAAP Basis) and Actual - General Fund................................. 5

Combined Statements of Revenues, Expenditures and Changes in Fund Balances ‑

Nonexpendable Trust Funds.......................................................................................................................................... 6

Combined Statement of Cash Flows - Nonexpendable Trust Funds............................................................................... 7

Notes to Financial Statements................................................................................................................................................ 8

COMBINING STATEMENTS, ACCOUNT GROUPS, AND SUPPLEMENTAL SCHEDULES

Special Revenue Funds

Combining Balance Sheet...................................................................................................................................................... 21

Combining Statements of Revenues, Expenditures, and Changes in Fund Balances.................................................. 22

Capital Projects Fund

Combining Balance Sheet...................................................................................................................................................... 23

Combining Statements of Revenues, Expenditures and Changes in Fund Balances................................................... 24

Fiduciary Trust Funds

Combining Balance Sheet...................................................................................................................................................... 25

Combining Statements of Revenues, Expenditures, and Changes

in Fund Balances - Expendable Trust Funds.............................................................................................................. 26

Combining Statements of Revenues, Expenditures and Changes

in Fund Balances - Nonexpendable Trust Funds..................................................................................................... 27

Schedule of Cash Receipts and Disbursements - Agency Funds................................................................................. 28

Account Group

Statement of General Long-Term Debt - Primary Government......................................................................................... 29

Schedule of Changes in General Long-Term Debt - Primary Government..................................................................... 30

Supplemental Schedules

Schedule of Revenues and Expenditures - Budget to Actual - General Fund............................................................... 31

Schedule of Property Taxes Receivable.............................................................................................................................. 34

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON INTERNAL CONTROL

OVER FINANCIAL REPORTING BASED ON AN AUDIT OF GENERAL-PURPOSE

FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

GOVERNMENT AUDITING STANDARDS.................................................................................................................... 35

INDEPENDENT AUDITORS' REPORT

The Honorable Members of the Town Council

Exeter, Rhode Island

We have audited the accompanying general-purpose financial statements of the Town of Exeter, Rhode Island as of and for the year ended June 30, 2002 as listed in the table of contents. These general-purpose financial statements are the responsibility of the Town=s management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We did not audit the financial statements of the Exeter-West Greenwich, Regional School District, which represents the component unit column. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion on the general-purpose financial statements, insofar as it relates to the amounts included for the component unit column, is based on the report of the other auditors.

We conducted our audit in accordance with 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general-purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general-purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general-purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

The general-purpose financial statements referred to above do not include financial data of the Exeter Fire Company No. 1, Exeter Fire Company No. 2, Exeter Emergency Dispatch, nor the Exeter Rescue Corps, which should be included as additional component units in order to conform with accounting principles generally accepted in the United States of America. The amounts that should be reported for these component units have not been determined by management.

Additionally, the general-purpose financial statements referred to above do not include a general fixed asset account group for the primary government which should be included in order to conform with accounting principles generally accepted in the United States of America. The amount that should be recorded in the general fixed assets account group is not known.

TOWN OF EXETER, RHODE ISLAND

COMBINED BALANCE SHEET - ALL FUND TYPES, ACCOUNT GROUPS AND COMPONENT UNIT

June 30, 2002

Fiduciary Account Totals Component Totals Governmental Fund Types Fund Groups (Memorandum Unit (Memorandum

General Only) Only)

Special Capital Trust Long-term Primary School Reporting

General Revenue Projects and Agency Debt Government District Entity

ASSETS

Cash and cash equivalents $ 1,186,303 $ 70,422 $ C $ 107,803 $ C $ 1,364,528 $ 540,034 $ 1,904,562

Accounts receivable:

Property taxes 456,619 C C C C 456,619 C 456,619

Tax title property 12,515 C C C C 12,515 C 12,515

Other 39,061 C C C C 39,061 15,487 54,548

Investments C C C 1,018,518 C 1,018,518 1,456,038 2,474,556

Due from state and other town governments C C C C C C 978,332 978,332

Due from other funds 5,000 396,760 362,137 45,825 C 809,722 352,313 1,162,035

Amount available in the debt service fund C C C C C C 165,287 165,287

Property and equipment C C C C C C 24,846,428 24,846,428

Amount to be provided for the payment of

long-term debt C C C C 1,118,264 1,118,264 12,095,622 13,213,886

TOTAL ASSETS $ 1,699,498 $ 467,182 $ 362,137 $ 1,172,146 $ 1,118,264 $ 4,819,227 $ 40,449,541 $ 45,268,768

LIABILITIES AND FUND BALANCES

LIABILITIES

Accounts payable $ 30,157 $ C $ C $ C $ C $ 30,157 $ 2,135,941 $ 2,166,098

Cash overdraft C C C C C C 15,338 15,338

Due to other funds 804,397 5,000 C 325 C 809,722 352,313 1,162,035

Deposits held in custody for others C C C 138,010 C 138,010 83,820 221,830

Accrued compensated absences 46,514 C C C 18,264 64,778 349,185 413,963

Deferred revenue 736,983 C C C C 736,983 C 736,983

Bonds payable C C C C C C 11,940,000 11,940,000

Landfill postclosure care costs C C C C 900,000 900,000 C 900,000

Land acquisition costs C C C C 200,000 200,000 C 200,000

Unamortized bond premium C C C C C C 67,214 67,214

TOTAL LIABILITIES 1,618,051 5,000 C 138,335 1,118,264 2,879,650 14,943,811 17,823,461

FUND BALANCES

Investment in general fixed assets C C C C C C 24,846,428 24,846,428

Reserved C C C 1,033,811 C 1,033,811 C 1,033,811

Unreserved

Designated 81,447 C 362,137 C C 443,584 C 443,584

Undesignated C 462,182 C C C 462,182 659,302 1,121,484

TOTAL FUND BALANCES 81,447 462,182 362,137 1,033,811 C 1,939,577 25,505,730 27,445,307

TOTAL LIABILITIES AND

FUND BALANCES $ 1,699,498 $ 467,182 $ 362,137 $ 1,172,146 $ 1,118,264 $ 4,819,227 $ 40,449,541 $ 45,268,768

TOWN OF EXETER, RHODE ISLAND

COMBINED STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES B

ALL GOVERNMENTAL FUND TYPES, EXPENDABLE TRUST FUNDS, AND COMPONENT UNIT

Year Ended June 30, 2002

Fiduciary Totals Component Totals Governmental Fund Types Fund (Memorandum Unit (Memorandum

Expendable Only) Only)

Special Capital Trust Primary School Reporting

General Revenue Projects Funds Government District Entity

REVENUES

Property taxes $ 7,469,622 $ C $ C $ C $ 7,469,622 $ C $ 7,469,622

Assessment to member towns:

Exeter C C C C C 6,550,695 6,550,695

West Greenwich C C C C C 5,809,107 5,809,107

State and federal aid and grants 589,982 271,476 C C 861,458 8,570,831 9,432,289

Departmental revenues 127,135 C C C 127,135 C 127,135

License and permits 134,561 C C C 134,561 C 134,561

Fines and interest on late payments 75,118 C C C 75,118 C 75,118

Interest and other investment income 29,613 C C 27,030 56,643 43,369 100,012

State contribution to pension plan C C C C C 402,040 402,040

Other revenues 35,004 57,442 11,272 2,017 105,735 885,581 991,316

TOTAL REVENUES 8,461,035 328,918 11,272 29,047 8,830,272 22,261,623 31,091,895

EXPENDITURES

Salaries and wages 637,820 C C C 637,820 C 637,820

Public works 386,074 C C C 386,074 C 386,074

Public safety 578,265 C C C 578,265 C 578,265

Public health and welfare 13,166 C C C 13,166 C 13,166

Community services 34,928 20,010 C C 54,938 C 54,938

General government 482,450 C C C 482,450 C 482,450

Education 6,550,695 C C C 6,550,695 20,477,690 27,028,385

Debt services C C C C C 1,961,369 1,961,369

Other 26,660 395,420 363,676 142,729 928,485 C 928,485

TOTAL EXPENDITURES 8,710,058 415,430 363,676 142,729 9,631,893 22,439,059 32,070,952

EXCESS OF REVENUES

OVER (UNDER) EXPENDITURES (249,023) (86,512) (352,404) (113,682) (801,621) (177,436) (979,057)

OTHER FINANCING SOURCES (USES)

Operating transfers in C 35,000 331,351 C 366,351 42,000 408,351

Operating transfers out (366,351) C C C (366,351) (42,000) (408,351)

EXCESS OF REVENUES AND OTHER

FINANCING SOURCES OVER (UNDER)

EXPENDITURES AND OTHER USES (615,374) (51,512) (21,053) (113,682) (801,621) (177,436) (979,057)

Transfers from reserved fund balance C C C C C 18,659 18,659

Fund balances - July 1, 2001 696,821 513,694 383,190 1,004,539 2,598,244 818,079 3,416,323

FUND BALANCES - JUNE 30, 2002 $ 81,447 $ 462,182 $ 362,137 $ 890,857 $ 1,796,623 $ 659,302 $ 2,455,925

See accompanying notes.

TOWN OF EXETER, RHODE ISLAND

STATEMENT OF REVENUES AND EXPENDITURES B

BUDGET (GAAP BASIS) AND ACTUAL - GENERAL FUND

Year Ended June 30, 2002

Favorable

Budget Actual (Unfavorable)

REVENUES

Property taxes current year $ 7,466,130 $ 7,245,828 $ (220,302)

Property taxes prior years C 223,794 223,794

State aid 637,354 589,982 (47,372)

Departmental revenues 93,500 127,135 33,635

Transfer station fees 23,350 31,521 8,171

License and permits 78,000 103,040 25,040

Fines and interest on late payments 55,000 75,118 20,118

Interest and other investment income 80,000 29,613 (50,387)

Nonbudgeted revenue C 35,004 35,004

TOTAL REVENUES 8,433,334 8,461,035 27,701

EXPENDITURES

Salaries and wages 626,946 637,820 (10,874)

Public works 395,514 386,074 9,440

Public safety 578,265 578,265 C

Public health and welfare 22,809 13,166 9,643

Community services 35,950 34,928 1,022

General government 523,155 482,450 40,705

Education 6,550,695 6,550,695 C

Nonbudgeted expenditures C 26,660 (26,660)

TOTAL EXPENDITURES 8,733,334 8,710,058 23,276

EXCESS OF REVENUES

OVER (UNDER) EXPENDITURES (300,000) (249,023) 50,977

Other financing sources (uses)

Transfers to other funds C (366,351) (366,351)

EXCESS OF REVENUES OVER (UNDER)

EXPENDITURES AND OTHER USES (300,000) (615,374) (315,374)

Transfer from prior year fund balance 300,000 C (300,000)

EXCESS OF REVENUES

OVER (UNDER) EXPENDITURES,

OTHER USES, AND TRANSFER $ C $ (615,374) $ (615,374)

See accompanying notes.

TOWN OF EXETER, RHODE ISLAND

COMBINED STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES

IN FUND BALANCES ‑ NONEXPENDABLE TRUST FUNDS

Year Ended June 30, 2002

REVENUES

Interest income $ 106

Other investment income 3,009

TOTAL REVENUES 3,115

EXPENDITURES

Investment expenses 11,989

Contributions and expenses 1,924

TOTAL EXPENDITURES 13,913

NET LOSS (10,798)

Fund balances at July 1, 2001 153,752

FUND BALANCES - JUNE 30, 2002 $ 142,954

See accompanying notes.

TOWN OF EXETER, RHODE ISLAND

COMBINED STATEMENT OF CASH FLOWS ‑ NONEXPENDABLE TRUST FUNDS

Year Ended June 30, 2002

OPERATING ACTIVITIES

Investment income $ 3,115

Cash payments for goods and services (13,913)

NET CASH USED IN

OPERATING ACTIVITIES (10,798)

INVESTING ACTIVITIES

Proceeds on sale of investments 11,596

NET INCREASE IN CASH

AND CASH EQUIVALENTS 798

CASH AND CASH EQUIVALENTS AT JULY 1, 2001 10,299

CASH AND CASH EQUIVALENTS

AT JUNE 30, 2002 $ 11,097

OTHER INFORMATION

Net loss equals net cash used in operating activities $ (10,798)

See accompanying notes.

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

NOTE A‑‑SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Town of Exeter, Rhode Island (Town) was founded in 1742. The Town is governed largely under the 1742 Legislative Charter. In some matters, including the issuance of short and long-term debt, the Town is governed by the general laws of the State of Rhode Island. The Town operates under a Town Council form of government. The Town provides various services including education, libraries, public fire and rescue service, public works, social services, and general administrative services.

The financial statements of the Town have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applicable to governmental units. The accounting methods and procedures adopted by the Town conform to GAAP as applied to governmental entities except for the omission of the primary government=s General Fixed Assets Account Group and certain component unit=s financial statements. The more significant of the Town=s accounting policies are described below.

Financial Reporting Entity: The accompanying financial statements present the Town=s primary government and certain component units which are financially dependent on the Town. The Town=s component units are as follows:

Blended component units: The Manton Library is governed by a board of trustees appointed by the Town Council. The library=s trustees govern the library in accordance with applicable state laws. For financial statement purposes, the Manton Library is reported as if it were part of the Town=s operations because its purpose is to provide library services to the citizens of the Town and is dependent upon the Town for its financial resources.

Discrete component units: Component units (entities) which are legally separate from the Town, but are financially dependent on the Town and their exclusion could cause the Town=s financial statements to be misleading or incomplete include:

Exeter-West Greenwich School District: Three members of the six member governing Board of the Exeter-West Greenwich School District (School District) are elected by the voters of each of the Towns of Exeter and West Greenwich. However, the School District is fiscally dependent upon each town because the School District=s operational and capital budgets are approved annually by town voters at a joint School District meeting, and apportioned to the respective towns based on student enrollment. The Town of Exeter is legally obligated to fund their share of the School District=s budgets as voted. The Town of Exeter is also obligated for their proportional share of the School District=s bonded debt approved at a joint School District meeting. The School District is presented as a governmental fund type. A complete financial statement of the School District may be obtained through the Superintendent=s office.

The following discrete component units were not included as part of the financial reporting entity:

$ Exeter Volunteer Fire Department No. 1

$ Exeter Volunteer Fire Department No. 2

$ Exeter Emergency Dispatch

$ Exeter Rescue Corps

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

Basis of Presentation ‑ Fund Accounting: The accounts of the Town are organized on the basis of funds or account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self‑balancing accounts that comprise its assets, liabilities, fund balance, revenues and expenditures. Government resources are allocated to and for individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled

Amounts in the ATotals (Memorandum Only)@ columns in the preceding financial statements represent a summation of the combined financial statement line items of the fund types and are presented for analytical purposes only. The summation includes fund types that use different methods of accounting and include interfund transactions that have not been eliminated. Consequently, amounts shown in the ATotals (Memorandum Only)@ columns are not comparable to a consolidation and do not represent the total resources available or total revenues and expenditures/expenses of the Town.

The following fund types are used by the Town:

[COMMENT1]

Governmental Fund Types: Governmental Funds are those through which most governmental functions of the Town are financed. The acquisition, use, and balances of the Town's expendable financial resources and the related liabilities are accounted for through governmental funds. The measurement focus is upon determination of changes in financial position, rather than upon net income determination. The following are the Town's governmental fund types.

General Fund - is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. This is a budgeted fund, and any fund balances are considered resources available for general Town use.

Special Revenue Funds - are used to account for revenues that are legally restricted to expenditures for specific purposes.

Capital Projects Fund - These funds are established to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by trust funds).

Fiduciary Fund Types: Fiduciary Funds are used to account for assets held by the Town in a trustee capacity or as an agent for individuals, private organization, other governmental units, and/or other funds. They include expendable, non-expendable trust funds, and agency funds.

Expendable trust funds - are accounted for in the same manner as the Governmental Funds.

Non-expendable trust funds - are reported in a manner similar to entities found in the private sector. The measurement focus is upon the determination of net income and capital maintenance.

Agency funds - are accounted for using the modified accrual basis of accounting.

Account Groups: General fixed assets and long‑term liabilities expected to be financed from governmental funds are accounted for in this group of accounts. This group is concerned only with the measurement of financial position; it is not involved with measurement of results of operations. Because of their spending measurement focus, expenditure recognition for governmental fund types is limited to exclude amounts represented by accounting for general fixed assets and noncurrent liabilities, such as long‑term liabilities relating to bond issuance. Since they do not affect net current assets, such long‑term amounts are not recognized as governmental fund type expenditures or fund liabilities. They are instead reported as in the following account groups:

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

General Long-Term Debt Account Group - This account group is used to record the principle balances of general obligation bonds, deferred compensatory costs, unfunded pension liabilities, and other long-term debt obligations not reported elsewhere.

General Fixed Assets Account Group - This account group is used to maintain control and cost information for all fixed assets.

Basis of Accounting: All governmental and expendable trust funds use the flow of current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recorded when susceptible to accrual, i.e., both measurable and available. Available means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period (see Note D for property tax revenue policy). Expenditures, other than interest on long‑term debt, are recorded when the liability is incurred. Interest on long-term debt is recorded when the liability is paid. Under this basis, revenues other than property taxes are recorded as revenues when received in cash because they are generally not measurable until actually received.

The accrual basis of accounting is utilized by the non-expendable trust funds. Under this method, revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.

Encumbrances: Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of funds are recorded in order to reserve that portion of the applicable appropriation, is employed in the governmental funds. Open encumbrances are reported as reservations of fund balances since the commitments will be honored through subsequent year=s expenditures. Encumbrances do not constitute expenditures or liabilities. (See Note B for budgetary reporting of encumbrances.)

Risk Management: The Town is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Town maintains insurance covering each of those risks of loss.

The Town is insured under a statewide municipal risk management pool. Rhode Island Inter-Local Risk Management Trust, Inc. (the Trust) requires annual premiums based on the pool's experience. The Trust offers to Rhode Island cities and towns general liability and workers compensation insurance which is self-sustaining through member premiums and is reinsured through commercial companies to reduce its exposure to large losses. The agreement with the Trust states that for premiums paid by members, the Trust will assume financial responsibility for members losses up to the maximum amount of insurance purchased, less deductible amounts. If a single loss is above the Trust's retention and reinsurance coverage the excess liability reverts to the member organization against which the claim was originally made

Management believes such coverage is sufficient to preclude any significant uninsured losses to the Town. Settled claims have not exceeded insurance coverage in any of the past three fiscal years.

Cash and Cash Equivalents: For the purposes of cash flows, the nonexpendable trust funds consider all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Town has included a statement of cash flows with its nonexpendable trust funds. Cash and cash equivalents includes $1,279,000 invested in highly liquid interest bearing accounts at June 30, 2002.

Investments: Investments are carried at fair value, except for investments meeting the requirements of the Aone year option@ and nonparticipating interest earning investment contracts (i.e. certificates of deposit) which are recorded at amortized cost. Under the Aone year option@, certain investments (i.e. U.S. Treasury and agency obligations) that have a remaining maturity at the time of purchase of one year or less may be recorded at amortized cost.

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

Property and Equipment: All primary government funds treat the acquisition of property and equipment as current expenditures. The primary government does not report property and equipment in a General Fixed Assets Account Group or keep detailed fixed asset records, as required by GAAP. However, as of July 1, 2000 and as part of its complete financial statements, the School District records property and equipment at cost in its General Fixed Asset Account Group.

Long-term debt: Long-term debt obligations of the Town=s primary government are reported in the General Long-Term Debt Account Group, which, represent landfill postclosure care costs, land acquisition costs, and certain deferred compensatory costs,

Fund balances: The unreserved fund balances for governmental funds represent the amount available for budgeting future operations. The reserved fund balances for governmental funds represent the amount that has been legally restricted for specific purposes.

Vacation and Sick leave: Costs of accumulated vacation and personal leave are recorded as expenditures when incurred. The liability arising from unused sick leave benefits and accrued vacation has been recognized in the General Fund and General Long-Term Debt Account groups.

Interfund transactions: All transactions between the primary government and certain funds (discrete component units) are considered quasi-external transactions and are accounted for as fund revenues, expenditures or expenses (as appropriate). Transactions between the general fund and other funds which constitute reimbursements of a fund for expenditures or expenses initially made from it which are properly applicable to another fund are recorded as expenditures or expenses (as appropriate) in the reimbursing fund and as reductions of the expenditure or expense in the fund that is reimbursed.

All interfund transactions except advances, quasi-external transactions and reimbursements are accounted for as transfers. Nonrecurring or non-routine transfers of equity between funds are considered equity transfers. All other interfund transactions are treated as operating transfers.

Amounts to be Provided: Amounts to be provided represent monies to be raised from future tax levies to retire general long-term obligations and the liability for compensated absences.

NOTE BBBUDGETARY PROCESS

Budgetary adoption: It is the responsibility of the Town Council to advertise a proposed budget for the primary government for the following fiscal year no later than 10 days prior to the Financial Town Meeting held to adopt such budget. Public hearings are conducted on the recommended budget and the final recommended budget is legally enacted through an ordinance at the Financial Town Meeting. All budget appropriations, except an appropriation for capital expenditures, lapse at the end of the fiscal year. An appropriation for a capital expenditure shall continue in force until the purpose for which it was made has been accomplished or abandoned; an appropriation is considered abandoned if two fiscal years following the date of appropriation pass without any disbursement from or encumbrance of the appropriation.

Budgetary control: The level of budgetary control for the General Fund (that is, the level at which expenditures cannot legally exceed appropriations) is fixed by resolution of the Annual Financial Town Meeting. The resolution authorized the Town Council to spend within the total sum appropriated for municipal purposes. While this restriction prohibits spending in excess of the authorized budget, the policy enables the Town Council to use the Fund Balance within the overall appropriations budget to offset over expenditures that may arise within a specific budget account.

Salary departmental expenditures exceeded appropriation by $10,874 due primarily to the building, electrical and plumbing inspectors= salaries not originally appropriated.

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

NOTE C--CASH DEPOSITS AND INVESTMENTS

Cash: Cash deposits are in various Rhode Island financial institutions and are carried at cost.

The composition of the cash deposits and investments fluctuates depending primarily on the timing of state and local receipts and operating outlays throughout the year.

Carrying Bank

Amount Balance

Primary government:

Insured (FDIC) $ 231,513 $ 339,012

Uninsured or uncollateralized 1,132,515 2,385,443

1,364,028 2,724,455

Component unit:

Insured (FDIC) 243,671 298,237

Uninsured or uncollateralized 281,025 636,370

524,696 934,607

Total Deposits $ 1,888,724 $ 3,659,062

Investments: Investments consist primarily of common stocks, mutual funds, repurchase agreements, and U.S. Government Securities.

Certain investments are categorized to give an indication of the level of risk assumed at year-end.

Category 1 includes insured or registered, or securities held by the government or its agent in the government=s name.

Category 2 includes uninsured and unregistered, with securities held by the counterparty=s trust department or agent in the government=s name.

Category 3 includes uninsured and unregistered with securities held by the counterparty or by its trust department or agent, but not in the government=s name.

The mutual funds and the municipal plus trust are not subject to risk categorization.

Carrying

Category 1 Category 2 Category 3 Value

Primary government:

U.S. Government Obligations $ C $ C $ 232,774 $ 232,774

Common stocks C C 267,951 267,951

Mutual funds C C C 517,793

C C 500,725 1,018,518

Component unit:

Repurchase agreements 1,245,000 C C 1,245,000

U.S. Treasury bond 149,235 C C 149,235

Municipal Plus Trust C C C 61,803

1,394,235 C C 1,456,038

$ 1,394,235 $ C $ 500,725 $ 2,474,556

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

NOTE DBPROPERTY TAXES

The Town=s property tax is levied each June 30, for its next fiscal year on the assessed valued listed as of the prior December 31, for all real property, tangible property, and motor vehicles located in the Town. Assessed values of real property and tangible personal property were established by the Town Assessor=s office at 60% of appraised market value as of December 31, 1992. The Town completed a revaluation of real property and tangible personal property as of December 31, 1992. The assessed values were effective for the property tax levy beginning with fiscal year 1993-1994. The assessed value of motor vehicles is determined annually at 100% of retail market value.

The Town entered into a contractual relationship with a law firm to act as a collection agency to pursue delinquent tangible and personal property accounts. The Town has forwarded past due accounts for collection. At June 30, 2002, no reserve has been established for the property taxes considered delinquent. The property tax revenue associated with the delinquent taxes has been deferred.

An automatic lien is placed on the taxpayer=s property if payment has not been received by the due date. Interest is charged on past due accounts at a rate of 12% per annum calculated on the unpaid portion of the total tax.

The Town recognizes property tax revenues in accordance with Codification of Governmental Accounting and Financial Reporting Standards. Unpaid property taxes at year end are recorded as property taxes receivable and those property taxes receivable which were not collected within 60 days immediately following year end are recorded as deferred revenue. Deferred revenue at June 30, 2002 consists of $401,198 of property taxes not collected within 60 days following year end and $335,785 of fiscal year 2003 reimbursements from the State of Rhode Island for the phase out of the motor vehicle excise tax.

Net property taxes levied for the fiscal year 2002 were based on an assessed value of approximately $241,912,625 at December 31, 2000 and amount to $7,480,365 plus addendum billings of $54,019. Total property tax recognized for the fiscal year, including $55,421 collected within 60 days following year end, amounted to $7,469,622 which represents 99% of the total 2002 tax levy.

Taxes are due in equal quarterly installments on September 1-15, December 1-15, March 1-15, and June 1-15 during the fiscal year.

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

NOTE EBINTERFUND RECEIVABLES AND PAYABLES

Individual fund interfund receivable and payable balances at June 30, 2002 are as follows:

Interfund Interfund

Receivable Payables

General fund $ 5,000 $ 804,397

Special revenue fund:

CDBG C 5,000

Wolf Rock Road project 293,210 C

Revaluation 103,550 C

Fiduciary trust funds:

Cemetery fund 325 C

Reynolds fund C 325

Agency funds 45,500 C

Capital projects fund:

Old Town hall renovation 25,949 C

Vehicle replacement 8,772 C

New library 213,923 C

Public works/roads 112,188 C

Computerized upgrade 1,305 C

809,722 809,722

Component unit:

School district 352,313 352,313

$ 1,162,035 $ 1,162,035

NOTE FBREGIONAL SCHOOL DISTRICT AGREEMENT

The Exeter-West Greenwich Regional School District was formed by the Towns of Exeter and West Greenwich through an agreement dated July 1, 1965. In accordance with the agreement, the Towns of Exeter and West Greenwich are annually assessed an apportionment of operating and capital expenses. The assessment to the Town of Exeter for fiscal year 2002 was $6,550,695.

The School District consists of grades Kindergarten through grade 12. The junior/senior high school and all other school buildings are owned by the School District.

The Town is contingently liable for a portion of the debt of the School District based upon its share of student enrollment.

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

NOTE GBSCHOOL DISTRICT LONG-TERM DEBT

Long-term indebtedness of the Exeter-West Greenwich Regional School District is accounted for in the School District=s General Long-term Debt Account Group as part of its complete financial statements. The following schedule reflects the changes in the School District=s General Long-Term Debt Account Group during fiscal 2002:

July 1, 2001 Additions Retirements June 30, 2002

General obligation bonds $ 13,270,000 $ C $ 1,330,000 $ 11,940,000

Certain accrued compensated absences 61,155 266,412 6,658 320,909

Total General and Long-Term Debt $ 13,331,155 $ 266,412 $ 1,336,658 $ 12,260,909

The debt service through maturity for the above bonds is as follows:

Fiscal year ending

June 30, Principal Interest

2003 $ 1,305,000 $ 569,041

2004 1,285,000 508,834

2005 1,265,000 448,850

2006 1,245,000 388,649

2007 1,230,000 267,499

2008-2019 5,610,000 1,037,801

$ 11,940,000 $ 3,220,674

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

School District Long-Term Debt

Date of Interest Date of Authorized Outstanding Outstanding

Issue Rate Maturity and Issued June 30, 2001 Additions Retirements June 30, 2002

General obligation

bonds payable:

Refunding bonds 3/15/97 3.6-5.4% 11/15/10 $ 14,595,000 $ 10,120,000 $ C $ 1,155,000 $ 8,965,000

School bonds 1/15/98 4.1-6.5% 09/15/18 3,500,000 3,150,000 C 175,000 2,975,000

Total general obligation

bonds payable $ 18,095,000 13,270,000 C 1,330,000 11,940,000

Certain accrued compensated absences 61,155 266,412 6,658 320,909

Total general long term

debt payable $ 13,331,155 $ 266,412 $ 1,336,658 $ 12,260,909

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

NOTE HBPRIMARY GOVERNMENT LONG-TERM DEBT

The following schedule reflects the changes in primary government=s long-term debt as shown in the general long-term debt account group during fiscal 2002:

July 1, 2001 Additions Retirements June 30, 2002

Landfill postclosure care costs (Note J) $ 800,000 $ 100,000 $ C $ 900,000

Land acquisition costs 225,000 C 25,000 200,000

Compensated absences 14,828 3,436 C 18,264

Total general and long-term debt $ 1,039,828 $ 103,436 $ 25,000 $ 1,118,264

On March 12, 2001, the Town purchased land for $250,000 through a noninterest bearing note due in annual installments of $25,000 through 2010.

On April 1, 2002 the Town Council approved the resolution authorizing the Town to finance the construction of the

Town library by the issuance of not more than $500,000 in bonds. To date no bonds have been issued.

NOTE IBSCHOOL DISTRICT PROPERTY AND EQUIPMENT

The following schedule reflects the changes in the School District=s property and equipment during fiscal 2002:

July 1, 2001 Additions Retirements June 30, 2002

Land $ 655,844 $ C $ C $ 655,844

Buildings and improvements 22,943,769 83,124 C 23,026,893

Motor vehicles 51,370 C C 51,370

Machinery and equipment 1,093,246 55,475 (36,400) 1,112,321

$ 24,744,229 $ 138,599 $ (36,400) $ 24,846,428

NOTE JBLANDFILL POSTCLOSURE CARE COSTS

GASB 18, Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Costs. requires the recognition of closure and postclosure costs of landfills as long-term liabilities. State and federal laws and regulations require that the Town perform certain maintenance and monitoring functions for 30 years after its landfill has been closed. The Town is designing a landfill closure plan estimated at $900,000, which liability is reported in the primary government=s financial statements as a long-term debt of $900,000. The estimated liability for landfill postclosure care costs as of June 30, 2002 which is based on a total cost of $90,000 per acre. Additional costs that might arise from changes in postclosure requirements (due to changes in technology or more rigorous environmental regulations, for example) may need to be covered by additional charges to taxpayer in future years.

NOTE KBCOMMITMENTS AND CONTINGENCIES

At June 30, 2002, the Town had several lawsuits pending and had been placed on written notice of potential claims. The Town intends to vigorously pursue its claims and/or defend its position with respect to each matter. In the opinion of the Town=s legal counsel, the Town=s liability with respect to these cases, if any, was not determinable. It is the opinion of Town management, based in part on the advice of legal counsel, that settlement on the above lawsuits will not materially affect the Town=s financial position.

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

NOTE LBSTEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY

Compliance: The Town has no material violations of finance-related legal and contractual provisions.

Deposits with financial institutions: RIGL 35-10.1, the ARhode Island Collateralization of Public Deposits Act@ requires that time deposits with maturities exceeding 60 days held in institutions holding public deposits be 100% collateralized by insurance or eligible collateral. During the year, there were no violations of the law noted.

NOTE MBRESTRICTED FUND BALANCE

On May 21, 2002, at the Town=s financial meeting, the fiscal year 2003 operating budget was approved. Voters directed that $400,000 of the accumulated general fund unreserved and undesignated fund balance from fiscal year 2003 be designated for certain future uses.

NOTE NBPENSION PLANS

Primary Government Pension Plan

Plan Description and Funding: The Town maintains a defined contribution plan, the Town of Exeter Money Purchase Pension Plan, for retirement benefits for all eligible full-time employees. The plan was established by the Town Council effective January 1, 1985. The plan provides for employer only contributions with benefits beginning at normal retirement age. The plan is administered by Thomas B. Fecteau Associates, Inc. Contributions were at the rate of 5% of base compensation. Eligibility requirements call for employees to be 21 years of age and have completed 1 year (12 month period and 1,000 hours) of service. Contributions made by the Town on behalf of eligible employees vest in accordance with a vesting schedule documented within the retirement plan. The Town expense for to the plan for the year was $21,899. The unpaid balance due was $16,213 at June 30, 2002.

School District Pension Plan

Employees= Retirement System of The State of Rhode Island

Plan Description: For certified personnel, the School District contributes to the Employees Retirement System (ERS), a cost-sharing multiple-employer defined benefit plan administered by the Employees Retirement System of Rhode Island (System). ERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Chapter 2334 of the Rhode Island Public Laws of 1936 establish the provisions of ERS. The System issues a publicly available financial report that includes financial statements and required supplementary information for ERS. That report may be obtained by writing to the State of Rhode Island Retirement Board, 40 Fountain Street, Providence, RI, 02903.

Funding Policy: Plan members are required to contribute 9.5% of their annual covered salary and the School District is required to contribute at an actuarially determined rate. The current rate is 5.73% of annual covered payroll. The contribution requirements of plan members and the School District are established and may be amended by the State of Rhode Island. The School District=s contributions to ERS for the years ending June 30, 2002, 2001, and 2000 were $566,116, $638,782 and $718,806, respectively, equal to 100% of the required contributions for each year

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

Municipal Employees Retirement System of the State of Rhode Island

Plan Description: The School District=s defined benefit plan (the Plan) for the noncertified general employees provides retirement and disability benefits, and death benefits to plan members and beneficiaries. The Plan is affiliated with the Municipal Employees Retirement System (MERS), an agent multiple-employer pension plan administered by the Employees Retirement System of Rhode Island. Chapter 2784 of the Rhode Island Public Laws of 1951 assigns the authority to establish and amend the benefit provisions of the plans that participate in MERS to the State of Rhode Island. The Employees Retirement System of Rhode Island issues a publicly available financial report that includes financial statements and required supplementary information for the Plan. The report may be obtained by writing to Employees Retirement System of Rhode Island, 40 Fountain Street, Providence, RI 02903-1854.

Funding Policy: The School District=s eligible employees are required to contribute 6% (additional 1% for a cost of living adjustment benefit) of their annual covered salary. The School District is required to contribute at an actuarially determined rate; the current rate is 4.78%. The contribution requirements are determined by state statue.

Annual Pension Cost: For 2002, the School District=s contribution to the Plan was $75,565. The required contribution was determined as part of the June 30, 2000 actuarial valuation using the entry age normal cost method. The actuarial assumptions included a) a net investment return of 8.25%, compounded annually, b) projected salary increases, a service component, plus a 3.5% inflation component plus a general increase, and c) 3% per year cost of living adjustments. The Plan=s actuarial accrued liability is divided into two pieces: the unamortized initial base, and the balance. The unamortized initial base is amortized as level payments over the 25-year period from June 30, 1988. The balance is amortized as a level percentage of pay for the current group of active participants. The actuarial value of the plan=s assets was determined using techniques that smooth the effects of short-term volatility in the market value of investments.

Trend Information: Trend information for the Plan is presented below:

Annual Pension Cost

Annual Percentage

Fiscal Pension of APC Net Pension

Year Cost (APC) Contributed Obligation

2000 $ C N/A C

2001 $ 63,896 100% C

2002 $ 75,565 100% C

Schedule of Funding Progress (Unaudited)

Funding Excess

Actuarial Actuarial Accrued Funding (Deficiency)

Valuation Actuarial Value Liability (AAL) Excess Funded Covered as a Percentage

Date of Assets -Entry Age (Deficiency) Ratio Payroll of Covered Payroll

6/30/98 3,159,153 2,430,984 728,169 130.0 1,263,670 57.6

6/30/99 3,560,029 3,494,652 65,377 101.9 1,481,117 4.4

6/30/00 3,954,906 4,322,374 (367,468) 91.5 1,853,869 (19.8)

TOWN OF EXETER, RHODE ISLAND

NOTES TO FINANCIAL STATEMENTS

June 30, 2002

Other Pension Information

Valuation date 6/30/00

Actuarial cost method Entry Age Normal Cost

Amortization method Level percent of payroll - open

Level dollar - closed

Average amortization period 9 years

Asset valuation method Three year smoothing of the market value of assets

Actuarial assumptions:

Investment rate of return 8.25%, compounded annually

Projected salary increases An annual service related component, plus 3.50%

inflation component, plus a general increase

TOWN OF EXETER, RHODE ISLAND

COMBINING BALANCE SHEET - SPECIAL REVENUE FUNDS

June 30, 2002

Wolf Rock Library

Road Project CDBG Revaluation Funds Total

ASSETS

Cash and cash equivalents $ C $ 12,980 $ C $ 57,442 $ 70,422

Due from other funds 293,210 C 103,550 C 396,760

TOTAL ASSETS $ 293,210 $ 12,980 $ 103,550 $ 57,442 $ 467,182

LIABILITIES AND FUND BALANCE

LIABILITIES

Due to other funds $ C $ 5,000 $ C $ C $ 5,000

TOTAL LIABILITIES C 5,000 C C 5,000

FUND BALANCE

Unreserved 293,210 7,980 103,550 57,442 462,182

TOTAL FUND BALANCE 293,210 7,980 103,550 57,442 462,182

TOTAL LIABILITIES AND

FUND BALANCE $ 293,210 $ 12,980 $ 103,550 $ 57,442 $ 467,182

TOWN OF EXETER, RHODE ISLAND

COMBINING STATEMENTS OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES - SPECIAL REVENUE FUNDS

Year Ended June 30, 2002

Wolf Rock Library

Road Project CDBG Revaluation Funds Total

REVENUES

Grant revenues $ 243,176 $ 28,300 $ C $ C $ 271,476 Other revenues C C C 57,442 57,442

TOTAL REVENUES 243,176 28,300 C 57,442 328,918

EXPENDITURES

Program expense 378,970 20,010 16,450 C 415,430

TOTAL EXPENDITURES 378,970 20,010 16,450 C 415,430

EXCESS OF REVENUES

OVER (UNDER) EXPENDITURES

BEFORE OTHER FINANCING SOURCES (135,794) 8,290 (16,450) 57,442 (86,512)

Transfers from other financing sources C C 35,000 C 35,000

EXCESS OF REVENUES AND

OTHER FINANCING SOURCES

OVER (UNDER) EXPENDITURES (135,794) 8,290 18,550 57,442 (51,512)

FUND BALANCE (DEFICIT) -

UNRESERVED JULY 1, 2001 429,004 (310) 85,000 C 513,694

FUND BALANCE -

UNRESERVED JUNE 30, 2002 $ 293,210 $ 7,980 $ 103,550 $ 57,442 $ 462,182

TOWN OF EXETER, RHODE ISLAND

COMBINING BALANCE SHEET - CAPITAL PROJECTS FUND

June 30, 2002

Old Vehicle Public

Town Hall Replacement New Works/ Computerized

Renovation Fund Library Roads Upgrade Total

ASSETS

Due from other funds $ 25,949 $ 8,772 $ 213,923 $ 112,188 $ 1,305 $ 362,137

TOTAL ASSETS $ 25,949 $ 8,772 $ 213,923 $ 112,188 $ 1,305 $ 362,137

FUND BALANCE

Designated for future capital

project requirements $ 25,949 $ 8,772 $ 213,923 $ 112,188 $ 1,305 $ 362,137

TOTAL FUND BALANCE $ 25,949 $ 8,772 $ 213,923 $ 112,188 $ 1,305 $ 362,137

TOWN OF EXETER, RHODE ISLAND

COMBINING STATEMENTS OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - CAPITAL PROJECTS FUND

Year Ended June 30, 2002

Old Vehicle EWG APT

Town Hall Replacement Town Hall Animal Landfill Basketball New Land Public Computerized New

Renovation Fund Renovation Shelter Closure Court Library Acquisition Works/roads Upgrade Truck Total

REVENUES $ C $ 7,772 $ C $ C $ C $ C $ C $ C $ C $ 3,500 $ C $ 11,272

TOTAL REVENUES C 7,772 C C C C C C C 3,500 C 11,272

EXPENDITURES C C C C C 12,951 32,938 25,000 242,574 12,195 38,018 363,676

TOTAL EXPENDITURES C C C C C 12,951 32,938 25,000 242,574 12,195 38,018 363,676

EXCESS OF REVENUES OVER

(UNDER) EXPENDITURES C 7,772 C C C (12,951) (32,938) (25,000) (242,574) (8,695) (38,018) (352,404)

OTHER FINANCING SOURCES (USES)

Transfers from (to) other funds C 1,000 (14,622) (5,866) (100,000) C 200,000 24,984 178,000 9,837 38,018 331,351

EXCESS OF REVENUES AND

OTHER SOURCES OVER (UNDER)

EXPENDITURES AND OTHER USES C 1,000 (14,622) (5,866) (100,000) C 167,002 (16) (64,574) 9,837 38,018 331,351

Fund balance - unreserved for

capital projects July 1, 2001 25,949 C 14,622 5,866 100,000 12,951 46,861 16 176,792 163 C 383,190

FUND BALANCE - UNRESERVED

FOR CAPITAL PROJECTS

JUNE 30, 2002 $ 25,949 $ 8,772 $ C $ C $ C $ C $ 213,923 $ C $ 112,188 $ 1,305 $ C $ 362,137

TOWN OF EXETER, RHODE ISLAND

COMBINING BALANCE SHEET - FIDUCIARY TRUST FUNDS

June 30, 2002

Expendable Trust Funds Nonexpendable Trust Funds

Manton Emily J.

Reynolds= Free Historical Cemetery Arnold Anthony Agency

Fund Library Records Fund Fund Fund Funds Total

ASSETS

Cash $ C $ C $ 4,196 $ 1,078 $ 3,832 $ 6,187 $ 92,510 $ 107,803

Investments 882,588 4,398 C 29,217 C 102,315 C 1,018,518

Due from other funds C C C 325 C C 45,500 45,825

TOTAL ASSETS $ 882,588 $ 4,398 $ 4,196 $ 30,620 $ 3,832 $ 108,502 $ 138,010 $ 1,172,146

LIABILITIES AND

FUND BALANCES

LIABILITIES

Amounts held for others $ C $ C $ C $ C $ C $ C $ 138,010 $ 138,010

Due to other funds 325 C C C C C C 325 325 C C C C C 138,010 138,335

FUND BALANCES

Fund balances - reserved 882,263 4,398 4,196 30,620 3,832 108,502 C 1,033,811

TOTAL LIABILITIES

AND FUND BALANCES $ 882,588 $ 4,398 $ 4,196 $ 30,620 $ 3,832 $ 108,502 $ 138,010 $ 1,172,146

TOWN OF EXETER, RHODE ISLAND

COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES -

EXPENDABLE TRUST FUNDS

Year Ended June 30, 2002

Reynolds= Historic Manton Free

Fund Records Library Total

REVENUES

Interest income $ 11,381 $ 95 $ 711 $ 12,187

Other investment income 14,843 C C 14,843

Other revenues C 2,017 C 2,017

TOTAL REVENUES 26,224 2,112 711 29,047

EXPENDITURES

Investment expenses 92,871 4,000 C 96,871

Contributions and expenses C C 45,858 45,858

TOTAL EXPENDITURES 92,871 4,000 45,858 142,729

EXCESS OF REVENUES

OVER (UNDER) EXPENDITURES (66,647) (1,888) (45,147) (113,682)

Fund balance - July 1, 2001 948,910 6,084 49,545 1,004,539

FUND BALANCE JUNE 30, 2002 $ 882,263 $ 4,196 $ 4,398 $ 890,857

TOWN OF EXETER, RHODE ISLAND

COMBINING STATEMENTS OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES

NONEXPENDABLE TRUST FUNDS

Year Ended June 30, 2002

Emily J.

Cemetery Arnold Anthony

Fund Fund Fund Total

REVENUES

Interest income $ 12 $ 30 $ 64 $ 106

Other investment income 328 C 2,681 3,009

TOTAL REVENUES 340 30 2,745 3,115

EXPENDITURES

Investment expenses 3,448 C 8,541 11,989

Contributions and expenses 1,024 C 900 1,924

TOTAL EXPENDITURES 4,472 C 9,441 13,913

NET INCOME (LOSS) (4,132) 30 (6,696) (10,798)

Fund balance at July 1, 2001 34,752 3,802 115,198 153,752

FUND BALANCE JUNE 30, 2002 $ 30,620 $ 3,832 $ 108,502 $142,954

TOWN OF EXETER, RHODE ISLAND

SCHEDULE OF CHANGES IN GENERAL LONG-TERM DEBT B PRIMARY GOVERNMENT

Year Ended June 30, 2002

Balance Balance

July 1, 2001 Additions Retirements June 30, 2002

AMOUNT TO BE PROVIDED

Retirement of general long-term debt $ 1,039,828 $ 103,436 $ 25,000 $ 1,118,264

TOTAL AMOUNT TO BE PROVIDED $ 1.039.828 $ 103.436 $ 25.000 $ 1.118.264

GENERAL LONG-TERM DEBT

OBLIGATIONS

Landfill postclosure care costs $ 800,000 $ 100,000 $ C $ 900,000

Accrued compensated absences 14,828 3,436 C 18,264

Land acquisition costs 225,000 C 25,000 200,000

TOTAL GENERAL

LONG-TERM DEBT OBLIGATION $ 1,039,828 $ 103,436 $ 25,000 $ 1,118,264

TOWN OF EXETER, RHODE ISLAND

SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET TO ACTUALBGENERAL FUND

Year Ended June 30, 2002

Favorable

Budget Actual (Unfavorable)

REVENUES

Property taxes current year $ 7,466,130 $ 7,245,828 $ (220,302)

Property taxes prior years C 223,794 223,794

State MV tax phase out program 453,745 383,163 (70,582)

Tax interest collected 55,000 75,118 20,118

Tax certification fees C 4,740 4,740

Town clerk collections 80,000 103,673 23,673

Transfer station fees 23,350 31,521 8,171

Dump sticker fees 24,000 25,917 1,917

Permits 45,000 71,494 26,494 Telephone tax collected 74,000 97,060 23,060

General state aid 109,609 109,759 150

Savings interest earned 80,000 29,613 (50,387)

Probate court fees C 8,129 8,129

Miscellaneous receipts 2,000 10,903 8,903

Dog fines & licenses 9,000 5,629 (3,371)

Animal shelter fees C 22,135 22,135

Zoning & planning fees 11,500 12,559 1,059

Transfer from surplus 300,000 300,000 C

TOTAL REVENUES $ 8,733,334 8,761,035 $ 27,701

Adjustment required under U.S. generally

accepted accounting principles:

Transfer from prior year fund balance (300,000)

TOTAL REVENUES

PER FINANCIAL STATEMENTS $ 8,461,035

EXPENDITURES

Salaries and Wages

Town Council 15,768 15,769 (1)

Council Assistant 36,000 36,000 C

Town Clerk 30,422 30,422 C

Deputy Town Clerk 23,756 23,847 (91)

Clerical assistant - Town Clerk 18,548 18,548 C

Town Treasurer 15,455 15,455 C

Tax Collector 28,027 28,027 C

Board of Assessors 26,353 26,353 C

Assessors= Clerk 20,000 16,538 3,462

Welfare Director 4,007 4,007 C

Town Moderator 342 342 C

Town Sergeant 6,000 6,000 C

Town Constable 2,000 2,000 C

Zoning Inspector 8,524 8,524 C

Board of Canvassers 6,582 6,582 C

Planning board 10,591 9,592 999

Zoning board 10,591 11,804 (1,213)

Animal control 23,700 24,477 (777)

Planner 25,000 25,000 C

Canvassers clerk 6,963 7,793 (830)

Planning clerk 9,620 7,062 2,558

911 Coordinator 5,000 5,000 C

TOWN OF EXETER, RHODE ISLAND

SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET TO ACTUALBGENERAL FUND

Year Ended June 30, 2002

Favorable

Budget Actual (Unfavorable)

EXPENDITURESBContinued

Tax Collector=s clerk 14,157 11,026 3,131

Zoning board clerk 4,160 5,712 (1,552)

Zoning Inspector clerk 962 37 925

Librarian 2,974 2,974 C

Highway Workers 196,009 174,249 21,760

Highway Supervisor 38,931 38,931 C

Transfer station 36,504 35,356 1,148

Building Inspector C 16,157 (16,157)

Electrical Inspector C 12,118 (12,118)

Plumbing Inspector C 12,118 (12,118)

Total Salaries and Wages 626,946 637,820 (10,874)

Public Works

Highway department 276,040 273,824 2,216

Transfer station 119,474 112,250 7,224

Total Public Works 395,514 386,074 9,440

Public Safety

Exeter Fire Co. No. 1 97,085 97,085 C

Exeter Fire Co. No. 2 110,000 110,000 C

Exeter Emergency Dispatch 181,752 181,752 C

Exeter Rescue Corps 189,428 189,428 C

Total Public Safety 578,265 578,265 C

Public Health & Welfare 22,809 13,166 9,643

Community services 35,950 34,928 1,022

General Government

RI League of Cities 2,090 2,313 (223)

Town Council expense 2,000 633 1,367

Town Council Assistant expense 2,000 1,672 328

Town Clerk expense 67,635 97,751 (30,116)

Treasurer=s expense 5,700 4,622 1,078

Tax Collector=s expense 6,520 4,718 1,802

Tax Assessor 17,382 11,691 5,691

Town Sergeant expense 4,200 3,783 417

Building department expense 2,500 3,234 (734)

Board of Canvassers 6,390 4,737 1,653

Planning board expense 3,500 2,729 771

Board of Assessment 500 C 500

Zoning board expense 6,000 4,241 1,759

Postage 10,700 10,848 (148)

Animal control expense 12,000 21,344 (9,344)

Library expense 6,000 3,052 2,948

Advertising expense 13,500 14,284 (784)

Conservation Commission 500 392 108

TOWN OF EXETER, RHODE ISLAND

SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET TO ACTUAL - GENERAL FUND

Year Ended June 30, 2002

Favorable

Budget Actual (Unfavorable)

General GovernmentBContinued

Legal fees 50,000 56,821 (6,821)

FICA expense 50,644 50,311 333

Blue Cross expense 82,628 68,312 14,316

Town retirement expense 15,686 21,899 (6,213)

Insurance expense 39,200 37,436 1,764

Audit Town=s books 10,000 17,400 (7,400)

Economic Development Commission 500 C 500

Central R.I. Development 5,000 5,000 C

Defense Civil Preparedness Agency 1,000 C 1,000

Contingency fund 30,000 13,000 17,000

Planning office expense 500 304 196

Exeter Free Library 55,500 C 55,500

Computer support 8,880 9,633 (753)

Website 2,000 459 1,541

Basketball court 2,500 9,831 (7,331)

Total General Government 523,155 482,450 40,705

Education - Regional School 6,550,695 6,550,695 C

Nonbudgeted Expenditures

Probate court/clerk expenses C 8,129 (8,129)

Personnel costs C 1,031 (1,031)

Growth management C 17,500 (17,500)

Total Nonbudgeted Expenditures C 26,660 (26,660)

TOTAL EXPENDITURES $ 8,733,334 $ 8,710,058 $ 23,276

TOWN OF EXETER, RHODE ISLAND

SCHEDULE OF PROPERTY TAXES RECEIVABLE

Year Ended June 30, 2002

Assessment

Year

2001 $ 210,791

2000 48,322

1999 30,541

1998 19,810

1997 22,773

1996 23,958

1995 25,505

1994 30,978

1993 16,256

1992 26,635

1991 313

1990 148

1989 359

1988 230

Total Property Taxes Receivable $ 456,619

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON INTERNAL CONTROL

OVER FINANCIAL REPORTING BASED ON AN AUDIT OF

GENERAL-PURPOSE FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

The Honorable Members of the Town Council

Town of Exeter, Rhode Island

We have audited the general-purpose financial statements of the Town of Exeter, Rhode Island, as of and for the year ended June 30, 2002, and have issued our report thereon dated December 3, 2002, which was qualified because of the omission of financial data on certain component units and certain general fixed asset account group. We conducted our audit in accordance with 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.

Compliance

As part of obtaining reasonable assurance about whether the Town of Exeter's general-purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, 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 our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.

The Independent Auditors= Report on Compliance and on Internal Controls Over Financial Reporting for the Exeter-West Greenwich School District is included in the School District=s complete financial statements, which were audited by other auditors. That report may be obtained through the Superintendent=s office.

Internal Control Over Financial Reporting

In planning and performing our audit, we considered the Town of Exeter's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the general-purpose financial statements and not to provide assurance on the internal control over financial reporting. However, we did note a matter involving the internal control over financial reporting and its operations that we consider to be reportable conditions. Reportable conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over financial reporting that, in our judgment, could adversely affect the Town of Exeter, Rhode Island=s ability to record, process, summarize and report financial data consistent with the assertion of management in the general-purpose financial statements.

The reportable condition we noted is the Town of Exeter, Rhode Island does not maintain comprehensive accounting records in the primary government for recording property, plant and equipment which would include a detail listing of each asset.