FY2007 Audit Report AirportBlair Airport Authority
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITOR'S REPORTS
For the year ended September 30, 2007
BLAIR AIRPORT AUTHORITY
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS' REPORT
2 - 3
MANAGEMENT'S DISCUSSION AND ANALYSIS
4 - 9
BASIC FINANCIAL STATEMENTS
28
Statement of net assets
10
Statement of activities
11
Balance sheet - governmental funds
12
Reconciliation of the balance sheet of governmental funds
to the statement of net assets
13
Statement of revenues, expenditures, and changes in
32-34
fund balance - governmental funds
14
Reconciliation of the statement of revenues, expenditures
and changes in fund balances of governmental funds
to the statement of activities 15
NOTES TO FINANCIAL STATEMENTS
16-26
SUPPLEMENTAL INFORMATION
Budgetary comparison schedule - general fund
28
Five year fund balance schedule
29
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED
ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT A UDITING STANDARDS
30-31
SCHEDULE OF FINDINGS AND RESPONSES
32-34
W,
E S
&ASSOCIATES, L.L.C.
Cettified PubRe Accountants and Consultants
INDEPENDENT AUDITOR'S REPORT
Honorable Chairman and Members
of the Blair Airport Authority Board
Blair Airport Authority, Nebraska
We have audited the accompanying financial statements of the governmental activities and the
general fund, as of and for the year ended September 30, 2007, which collectively comprise the
Blair Airport Authority's basic financial statements as listed in the table of contents. These
financial statements are the responsibility of the Blair Airport Authority's management. Our
responsibility is to express opinions on these financial statements based on our audit.
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
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities and the general fund of the Blair
Airport Authority as of September 30, 2007, and respective changes in financial position for the
year then ended in conformity with accounting principles generally accepted in the United States
of America.
In accordance with Government Auditing Standards, we have also issued our report dated July
31, 2008, on our consideration of the Blair Airport Authority's internal control over financial
reporting and 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
our testing of internal control over financial reporting and compliance and the results of that
testing, and not to provide an opinion on the internal control over financial reporting or on
compliance. That report is an integral part of an audit preformed in accordance with Government
Auditing Standards and should be considered in assessing the results of our audit.
Westroads Pointe • 1015 N. 98th St., Suite 200 • Omaha, Nebraska 68114 • 402,390.2480 TEL • 402.390.0885 FAX •.www.hayes-cpa.com
The CPA. Never Underestimate The Value!
The management's discussion and analysis and budgetary comparison information on pages 4
through 10 and 28 through 29 are not a required part of the basic financial statements but are
supplementary information required by accounting principles generally accepted in the United
States of America. We have applied certain limited procedures, which consisted principally of
inquires of management regarding the methods of measurement and presentation of the required
supplementary information. However, we did not audit the information and express no opinion
on it.
Omaha, Nebraska
July 31, 2008
-3-
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS
September 30, 2007
As management of the Blair Airport Authority, ("Airport"), we offer readers of the Airport's
financial statements this narrative overview and analysis of the financial activities of the Airport
for the fiscal year ended September 30, 2007.
OVERVIEW OF FINANCIAL STATEMENTS
The discussion and analysis is intended to serve as an introduction to the Blair Airport
Authority's basic financial statements. The Airport's basic financial statements include three
components: 1) government -wide financial statements; 2) fund financial statements; and 3)
notes to the financial statements. This report also contains other supplementary information in
addition to the basic financial statements.
Government -wide financial statements
The government -wide financial statements are designed to provide readers with a broad
overview of the Airport's finances, in a manner similar to a private -sector business.
The statement of net assets presents information on all of the Airport's assets and liabilities, with
the difference between the two reported as net assets. Over time, increases or decreases in net
assets may serve as a useful indicator of whether the economic position of the Airport is
improving or deteriorating.
The statement of activities presents information showing how the government's net assets
changed during the most recent fiscal year. All changes in net assets are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of related cash flows.
Thus, revenues and expenses are reported in this statement for some items that will only result in
cash flows in future fiscal periods (e.g., uncollected taxes and incurred but unpaid interest).
Both of the government -wide financial statements distinguish functions of the Airport that are
principally supported by taxes and intergovernmental revenues (governmental activities). The
governmental activities are the operations of a municipal airport.
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have
been segregated for specific activities or objectives. The Airport, like other state and local
governments, uses fund accounting to ensure and demonstrate compliance with finance -related
legal requirements. All of the funds of the Airport are governmental funds.
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
September 30, 2007
OVERVIEW OF FINANCIAL STATEMENTS - CONTINUED
Governmental Funds: Governmental funds are used to account for essentially the same functions
reported as governmental activities in the government -wide financial statements. However,
unlike the government -wide financial statements, governmental fund financial statements focus
on near-term inflows and outflows of spendable resources, as well as on balances of spendable
resources available at the end of the fiscal year. Such information may be useful in evaluating a
government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government -wide financial
statements, it is useful to compare the information presented for governmental funds with similar
information presented for governmental activities in the government -wide financial statements.
By doing so, readers may better understand the long-term impact of the government's near-term
financing decisions. Both the expenditures and changes in fund balances provide a reconciliation
to facilitate this comparison between governmental funds and governmental activities. The
majority of the Airport's basic services are reported in governmental funds, which focus on how
money flows into and out of those funds and the balances left at year-end that are available for
spending. These funds are reported using an accounting method identified as the modified
accrual basis of accounting, which measures cash and all other financial assets that can readily be
converted into cash. The governmental fund statements provide a detailed short-term view of the
Airport's general government operations and the basic services it provides. Governmental fund
information helps determine whether there are more or fewer financial resources that can be
spent in the near future to finance the Airport's programs. By comparing information presented
for governmental funds with similar information presented for long-term effect of the
government's near term financing decisions. The relationships of differences between
governmental activities (reported in the statement of net assets and the Statement of Activities)
and governmental funds is detailed in a reconciliation following the fund financial statements.
The Airport adopts an annual appropriated budget for all governmental funds. A budgetary
comparison schedule has been provided for General Funds to demonstrate compliance with the
State budget statutes.
Notes to the financial statements: The notes provide additional information that is essential to
a full understanding of the data provided in the government -wide and fund financial statements.
Government -wide Financial Analysis: Capital assets (i.e. land, buildings, and equipment)
account for 99% of the total assets. The Airport uses these assets to provide services to its
customers. Accordingly, these assets are not an available source for payment of future spending.
Of the remaining assets, 1% of the governmental assets are cash and equivalents. The following
chart shows the Airport's net assets for 2007:
SEE TABLE 1
-5-
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS
SUMMARY OF NET ASSETS
September 30, 2007
ASSETS
Current and other assets
Capital assets
Total assets
LIABILITIES
Other liabilities
Long-term debt outstanding
Total liabilities
NET ASSETS
Invested in capital assets net related debt
Unrestricted (deficit)
Total net assets
TABLE 1
-6-
2007 2006
$ 64,940 $ 128,659
11,986,667 10,422,505
$ 12,051,607 $ 10,551,164
$ 47,871 $ 687,294
2,139,764 335,000
$ 2,187,635 $ 1,022,294
$ 9,846,903 $ 9,448,322
17,069 80,548
$ 9,863,972 $ 9,528,870
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
September 30, 2007
OVERVIEW OF FINANCIAL STATEMENTS - CONTINUED
As the end of the current fiscal year, the Airport reported a positive balance in both net assets
invested in capital assets and in unrestricted net assets.
The following chart is a summary of financial information relating to the Airport's statement of
activities:
SEE TABLE 2
Governmental activities: Governmental activities increased the City's net assets by $335,101.
Key elements of the increase are as follows:
• The increase is in part due to the Airport investing in capital assets at a rate that exceeded
the depreciation on the City's assets. The cost of the equipment and other assets are
depreciated over their estimated useful lives. Depreciation on the City's assets was
$1,564,161 less than the City's capital outlay expenditures for the year.
• The increase is also due to the receipt of capital grants used to purchase capital assets.
• Governmental principal and interest payments were financed in part by tax revenue. The
Airport's charges for services include the resale of fuel and rent.
The prior year comparative financial data is provided in each table to provide additional
information.
Financial Analysis of the Airport's Funds
As mentioned earlier in this analysis, the City uses fund accounting to ensure and demonstrate
compliance with finance -related legal requirements.
Governmental Funds: The focus of the Airport's governmental funds is to provide information
on near-term inflows, outflows, and balances of spendable resources. Such information is useful
in assessing the Airport's financing requirements. In particular, unreserved fund balance may
serve as a useful measure of a government's net resources available for spending at the end of
the fiscal year.
As of the end of the current fiscal year, the Airport's governmental funds reported combined
unreserved ending fund balances of $17,069 a decrease of $63,479 from the prior year. The
Airport's fund balances for the past five years are presented in a table format on page 29.
-7-
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS
MANAGES IN NET ASSETS
September 30, 2007
REVENUES
Program revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues
Property taxes
Other taxes
Interest and other revenue
Total revenues
EXPENSES
General government
Interest on debt
Total expenses
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
TABLE 2
-8-
2007 2006
$ 119,800
$ 94,023
-
6,868
294,581
1,151,525
58,201
44,167
5,741
4,342
362,772
7,606
841,095
1,308,531
400,231
278,138
105,762
40,998
505,993
319,136
335,102
989,395
9,528,870
8,539,475
$ 9,863,972 $ 9,528,870
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
September 30, 2007
Budget variances in the General Fund: The Airport General Fund expenditures did not exceed
budget. Significant budget variances are detailed as follow:
Variance
Positive
Account a ative) Reason
Federal Grant Income
Capital Outlay
Bond Principal payments
Bond Proceeds
($1,433,278) Projects have not moved forward as
fast as projected and FAA grants
have not been received.
( 169,408) Project expansion expenses were less
than projected.
942,086 Airport expansion did not occur as
fast as projected and the Airport had
less internal financing needs than
projected
( 2,191,905) Airport expansion did not occur as
fast as projected. Therefore the
Airport did not need to issue bonds.
Capital assets: The Airport's government -wide capital assets, net of accumulated depreciation,
increased due to land and runway improvements being purchased. Additional information as
well as a detailed classification of the City's net capital assets can be found in the Notes to the
Financial Statements.
Long-term debts: The long-term debt of the Airport was increased by $1,165,581 to support
the Airports share of capital improvements and cash flow.
Next year's budget and rates: The combined property tax request for the City of Blair for the
fiscal year beginning October 1, 2007, was set at $0.356863 per one hundred dollars of valuation
for the City of Blair, Nebraska. Included within the combined levy is the property tax request for
the Airport Authority for the fiscal year beginning October 1, 2007 which is set at $0.026294 per
one hundred dollars of valuation.
Request for information: The financial report is designed to provide a general overview of the
Airport's finances for all those with an interest in the government's finances. Questions
concerning any of the information provided in this report or requests for additional information
should be addressed to the Blair Airport Authority, 218 S 16th Street, Blair, NE 68008.
Blair Airport Authority
STATEMENT OF NET ASSETS
September 30, 2007
ASSETS
Cash and cash equivalents
Due from County Treasurer
Other receivables
Capital assets
Land
Buildings and runways
Accumulated depreciation
Total assets
LIABILITIES
Accounts payable
Accrued interest
Deposits
Long-term debt
Due within one year
Due in more than a year
Total liabilities
NET ASSETS
Investment in capital assets net of related debt
Unrestricted (deficit)
Total net assets
See accompanying notes and independent auditor's report.
-10-
$ 55,734
2,312
6,894
3,877,809
8,576,465
(467,607)
12,051,607
19,959
24,892
3,020
193,249
1,946,515
2,187,635
9,846,903
17,069
$ 9,863,972
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Blair Airport Authority
GOVERNMENTAL FUNDS
BALANCESHEET
September 30, 2007
ASSETS
Cash and cash equivalents
Due from County Treasurer
Other receivables
Total assets
LIABILITIES
Accounts payable
Accrued interest
Deposits payable
Total liabilities
FUND BALANCE - UNRESERVED
Total liabilities and fund balance
See accompanying notes and independent auditor's report.
-12-
General
Fund
$ 55,734
2,312
6,894
64,940
19,959
24,892
3,020
47,871
17,069
$ 64,940
Blair Airport Authority
GOVERNMENTAL FUNDS
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET ASSETS
September 30, 2007
Fund balance of governmental funds
Amounts reported for governmental activities in the statement of
net assets are difference because
Capital assets, net of depreciation, are not current financial
resources and are not included in the governmental funds
Bonds payable are not a current financial resource. Therefore,
they are not included in the governmental funds
Net assets of governmental activities
See accompanying notes and independent auditor's report.
- 13 -
$ 17,069
11,986,667
(2,139,764)
$ 9,863,972
City of Blair, Nebraska
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
GOVERNMENTAL FUNDS
For the year ended September 30, 2007
REVENUES
Taxes
Charges for services
Grants
Interest income
Other revenues
Total revenues
EXPENDITURES
Administration
Capital outlay
Debt service
Principal
Interest
Other fees
Total expenditures
REVENUES OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Bond proceeds
Capital -related debt issued
Total other financing sources (uses)
REVENUES AND OTHER SOURCES OVER
(UNDER) EXPENDITURES AND OTHER
USES
FUND BALANCE, BEGINNING OF YEAR
FUND BALANCE, END OF YEAR
See accompanying notes and independent auditor's report.
-14-
General
$ 63,942
119,800
294,581
21,940
340,832
841,095
193,985
1,749,408
874,129
105,762
21,000
2,944,284
(2,103,189)
1,400,000
639,710
2,039,710
(63,479)
80,548
$ 17,069
Blair Airport Authority
GOVERNMENTAL FUNDS
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
For the year ended September 30, 2007
Net changes in fund balance - total governmental funds
Amounts reported for governmental activities in the statement of
activities differ from the amounts reported in the statement of
revenues, expenditures, and changes in fund balance because
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the costs of those
assets is allocated over their estimated useful lives as
functional expense when the cost is below the capitalization
threshold. This activity is reconciled as follows:
Cost of assets capitalized
Depreciation expense
Bonds payable are reported as expenditures when made and as
revenue when repaid in the governmental funds. However,
there is no impact in the statement of activities when loans are
made or repaid. This amount represents the change in the
long-term loans.
Change in net assets of governmental activities
See accompanying notes and independent auditor's report.
-15-
$ (63,479)
1,749,408
(185,247)
(1,165,580)
$ 335,102
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
September 30, 2007
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of the significant accounting policies of the Blair Airport
Authority (the Airport).
1. Description of the Reporting Entity
This report includes all funds of the Airport (the "primary government"). The
Airport operates under a Board of Trustees form of government and provides
airport services.
2. Basis of Accounting/Measurement Focus
The accounts of the Airport are organized on the basis of funds, 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 equity, revenues, and expenditures. Governmental
resources are allocated to and accounted for in individual funds based upon the
purposes for which they are to be spent and the means by which spending
activities are controlled.
Government -Wide Financial Statements
The Airport government -wide financial statements include a statement of net
assets and a statement of activities (including changes in net assets). These
statements are prepared using the standards of the Governmental Accounting
Standards Board (GASB), General Accepted Accounting Principles (GAAP), as
well as FASB pronouncements issued through November 30, 1989. These
statements present summaries of governmental activities for the Airport.
Fiduciary activities of the Airport are not included in these statements.
These statements are presented on an "economic resources" measurement focus
and the accrual basis of accounting. Accordingly, all of the Airport's assets and
liabilities including capital assets and infrastructure as well as long-term debt, are
included in the accompanying statement of net assets. The statement of activities
presents changes in net assets. Under the accrual basis of accounting, revenues
are recognized in the period in which they are earned while expenses are
recognized in the period in which the liability is incurred.
-16-
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2007
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
2. Basis of Accounting/Measurement Focus - Continued
Government -Wide Financial Statements - Continued
The Statement of Activities demonstrates the degree to which the direct expenses
of a given function are offset by program revenue. Direct expenses are those that
are clearly identifiable with a specific function. The types of transactions
reported as program revenues for the Airport are reported in three categories: 1)
charges for services, 2) operating grants and contributions, and 3) capital grants
and contributions. Charges for services include revenues from customers or
applicants who purchase, use or directly benefit from goods, services, or
privileges provided by a given function. Grant and contributions include revenues
restricted to meeting the operational or capital requirements of a particular
function. Taxes or other items not properly included among program revenues
are reported instead as general revenues.
All internal balances in the statement of net assets have been eliminated.
The Airport applies all applicable Financial Accounting Standards Board (FASB)
pronouncements issued on or before November 30, 1989 in accounting and
reporting for its proprietary operations.
Amounts reported as program revenues include (1) charges to customers or
applicants for goods, services, or privileges provided, (2) operating grants and
contributions, and (3) capital grants and contributions, including special
assessments. Internally dedicated resources are reported as general revenues
rather than as program revenues. Likewise, general revenues include all taxes.
Governmental Fund Financial Statements
Governmental fund financial statements include a balance sheet and a statement
of revenues, expenditures, and changes in fund balances for all major
governmental funds. An accompanying schedule is presented to reconcile and
explain the differences in net assets as presented in these statements to the net
assets presented in the government -wide financial statements. The Airport has
presented all major funds that met the qualifications of GASB Statement No. 34.
-17-
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2007
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
2. Basis of Accounting/Measurement Focus - Continued
Governmental Fund Financial Statements - Continued
All governmental funds are accounted for on a spending or "current financial
resources" measurement focus and the modified accrual basis of accounting.
Accordingly, only current assets and current liabilities are included on the balance
sheet. The statement of revenues, expenditures and changes in fund balances
present increases (revenues and other financing sources) and decreases
(expenditures and other financing uses in net current assets. Under modified
accrual basis of accounting, revenues are recognized in the accounting period in
which they become both measurable and available to finance expenditures of the
current period. Accordingly, revenues are recorded when received in cash, except
that revenues subject to accrual (generally 60 days after year-end) are recognized
when due. The primary sources susceptible to accrual are property tax, sales tax,
transient occupancy tax, franchise fees, motor vehicle in lieu; highways users tax,
investment income, and grant revenues.
Expenditures are generally recognized under the modified accrual basis of
accounting when the related fund ability is incurred. An exception to this general
rule is principal and interest on general long-term debt which is recognized when
due.
The Airport reports the following major governmental funds:
The General Fund is the government's primary operating fund. It accounts for all
financial resources of the Airport.
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2007
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
3. Budgetary Policy and Control
Budizetary Basis of Accountin
The Airports legally adopted budget is not in conformity with accounting
principles generally accepted in the United States of America. The budget is
prepared and adopted using the cash basis of accounting whereby revenues
budgeted are expected to be received rather than earned and expenditures
budgeted are expected to be disbursed rather than incurred. There are no
significant differences between the budgeted basis of accounting and the generally
accepted basis. The Board sets the property tax levy needed to support the
coming year's budget in August of each year and submits its budget as required
by State statute.
Budgetary Control
Each funds appropriated budget is prepared on a detailed line item basis.
Revenues are budgeted by source. Expenditures are budgeted by department.
Expenditures at the fund level constitute the legal level of control. Expenditures
may not exceed appropriations at this level. All budget revisions at this level are
subject to final review by the Board.
4. Deposits and Investments
The Airport's cash and cash equivalents are considered to be cash on hand,
demand deposits and short-term investments with original maturities of three
months or less from the date of acquisition.
Investments are shown at cost. There were no investments at September 30,
2007.
5. Capital Assets
Capital assets, which include land, machinery and equipment (furniture, vehicles,
computers, etc.) and infrastructure assets (street systems, storm drains, traffic
signals, etc), are reported in Governmental Activities column of the Government -
Wide Financial Statement. Capital assets are defined by the Airport as assets with
an initial, individual cost of more than $5,000. Such assets are recorded at
historical cost or estimated historical cost if purchased or constructed. Donated or
annexed capital assets are corded at estimated market value at the date of donation
or annexation.
-19-
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2007
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
5. Capital Assets - Continued
The cost of normal maintenance and repairs that do not add to the value of the
asset or materially extend assets lives are not capitalized. Major outlays for
capital assets and improvements are capitalized as projects are constructed. The
Airport qualifies for the exemption under GASB 34 to go retroactively apply the
capitalization requirements of general infrastructure assets. The requirements to
capitalize and depreciate these assets has been applied as of October 1, 2003.
Depreciation is recorded in the Government -Wide Financial Statements on a
straight-line basis over the useful life of the assets as follows:
Assets Years
Machinery and equipment 10
Vehicles 5
Buildings and runways 40
6. Property Taxes
Property tax revenue is recognized when collected by the County as the Airports
agent within the current period. There are no property taxes due which are not
delinquent and all delinquent taxes are not considered collectible as of September
30, 2007.
The Airport's December 31, 2006 valuation was included with the City of Blair's
valuation of $433,928,223. The levy for the Airport for the year ending
September 30, 2007 was $0.015028 per $100 of value. The total tax levy was
$61,520. Property taxes are collected by the County and are due December 31 of
each year and delinquent in halves at May 1 and September 1 of the following
year.
In -lieu of tax receipts are equivalent in value to payments for services provided.
-20-
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2007
NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
7. Claims and Judgments Payable
The Airport records a liability for litigation, judgments, and claims when it is
probable that an asset has been impaired or a liability has been incurred prior to
year-end and the probable amount of loss (net of any insurance coverage) can be
reasonably estimated. The liability, if any, is reported in the Government -Wide
Statement of Net Assets. The portion of the liability, which will be liquidated
with expendable, available financial resources, if any, is reflected as a liability of
applicable governmental funds.
Compensated Absences
The Airport does not accrue compensated absences because the amount cannot be
reasonably estimated.
9. Restricted Assets
Assets are reported as restricted when limitations on their use change the nature or
normal understanding of the availability of the asset. Such constraints are either
externally imposed by creditors, contributions, grantors, or laws of other
governments, or are imposed by law through constitutional provisions or enabling
legislation. The Airport's policy is to first apply restricted resources to an
expense when incurred for purposes for which both restricted and unrestricted net
assets are available.
NOTE B. DEPOSITS AND INVESTMENTS
The statutes of the State of Nebraska require that local governmental units follow the
"prudent man" rule with deposits. The Airport requires that it have deposits one hundred
and five percent secured by collateral valued at market or par whichever is lower less the
amount of the Federal Deposit Insurance Corporation Insurance. The carrying amount of
bank balances at September 30, 2007, was $90,603.
Custodial credit risk is the risk that in the event of a bank failure, the Airport's deposits
may not be returned. The Airport does not have a deposit policy for custodial credit risk.
Deposits consist of savings accounts and Certificates of Deposit with current maturities.
These deposits have no restrictions. The deposits are entirely insured or collateralized
with securities held by the entity's agent. There were no deposits at September 30, 2007.
-21 -
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Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2007
NOTE D. RISK MANAGEMENT
The Blair Airport Authority is exposed to various risks of loss related to torts; theft,
damage to and destruction of assets; errors and omissions; injuries to employees; and
natural disasters. These risks are covered by the purchase of commercial insurance. The
Airport Assumes liability for any deductibles and claims in excess of coverage
limitations. Settled claims from these risks have not exceeded commercial insurance
coverage in any of the past three fiscal years.
NOTE E. NET ASSET CATEGORIES
In the Government -Wide financial statements net assets are classified in the following
categories:
Invested in Capital Assets
This category groups all capital assets, including infrastructure, into one component of
net assets. Accumulated depreciation on these assets reduces this category.
Restricted Net Assets
This category presents external restrictions imposes by creditors, grantors, contributors or
laws or regulations of other governments and restrictions imposed by law through
constitutional provisions or enabling legislation.
Unrestricted Net Assets
This category represents the net assets of the Airport that are not restricted for any project
or other purpose.
In the Fund financial statements, reserves and designations segregate portions of fund
balance that are either not available or have been earmarked for specific purposes. The
various reserves and designations are established by actions of the Airport Board and
Management and can be increased, reduced, or eliminated by similar actions.
-23-
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Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS - CONTINUED
SCHEDULE OF GENERAL OBLIGATION BONDS AND NOTES PAYABLE
PRINCIPAL AND INTEREST REQUIREMENTS BY YEAR OF MATURITY
September 30, 2007
NOTE F. LONG-TERM DEBT - CONTINUED
-25-
Principal
Interest
Requirements
Requirements
Total
Year ending September 30,
2008
$ 193,249
$ 82,356
$ 275,605
2009
83,820
79,025
162,845
2010
83,820
76,911
160,731
2011
88,820
74,573
163,393
2012
88,820
72,036
160,856
2013
93,820
69,315
163,135
2014
93,820
66,401
160,221
2015
98,820
63,295
162,115
2016
98,820
59,994
158,814
2017
97,695
56,500
154,195
2018
98,320
52,619
150,939
2019
103,320
48,353
151,673
2020
108,320
43,773
152,093
2021
108,300
38,999
147,299
2022
100,000
34,050
134,050
2023
105,000
28,744
133,744
2024
115,000
22,969
137,969
2025
120,000
16,800
136,800
2026
125,000
10,369
135,369
2027
135,000
3,544
138,544
$ 2,139,764
$ 1,000,626
$ 3,140,390
-25-
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS - CONTINUED
September 30, 2007
NOTE G. ALLOWANCE FOR DOUBTFUL ACCOUNTS
The Airport uses the direct write-off for uncollectable accounts. There were no
significant doubtful accounts at September 30, 2007.
NOTE H. CONCENTRATION OF CREDIT RISK
All of the revenue from charges for services of the Airport is from the local Blair area
therefore creating a concentration of credit risk. If the Blair area economy was depressed
this could have an adverse effect on the collection of the revenue.
NOTE I. GRANTS
The Blair Airport Authority did not have new grants; rather it used moneys from grants
approved prior to fiscal year 2007 for Land Acquisition and other airport improvements.
Funds received for costs incurred through September 30, 2007, are $209,733 for land
acquisition, $1,125,059 for Hangars, $279,535 for fuel, and $135,081 for automated
weather system (AWOS).
NOTE J. COMMITMENTS
The Airport is committed to uncompleted construction contracts in the amount of
$37,406 as of September 30, 2007.
NOTE K. ACCOUNTS RECEIVBLE AND PAYABLE COMPONENTS
Accounts receivable are due from property tax and grants and accounts payable are due to
contractors and vendors.
NOTE L. PENDING LITIGATION
The Airport Authority is also a defendant in two lawsuits arising in the normal course of
airport expansion. In the aggregate, these claims seek monetary damages in significant
amounts. To the extent the outcome of such litigation has been determined to result in
probable loss to the Airport Authority; such loss has been accrued in the accompanying
financial statements. Litigation where loss to the Airport Authority is reasonably possible
has not been accrued; however, Airport Authority management and Counsel estimate
such loss to total $14,410 after consideration of FAA grant funds to cover the remaining
reasonably possible loss. The outcome of the remaining claims cannot be determined at
this time.
-26-
SUPPLEMENTAL INFORMATION
Blair Airport Authority
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
For the year ended September 30, 2007
REVENUES
Property taxes
Interest on taxes
Motor vehicle pro -rata
Carline tax
Homestead exemption
Miscellaneous income
In Lieu of tax
Rent income
Donations
Gas sales
Interest
Federal grants
State grants
Total revenues
EXPENDITURES
Audit fees
County commission
Gas/oil/diesel
Insurance
Janitorial
Legal
Maintenance and repair
Engineering
Mowing/snow
Office expense
Grant administration
Printing and publications
Promotion
Travel
Utilities
Capital outlay
Bond principal
Interest expense
Bonding fees
Total expenditures
REVENUES OVER (UNDER) EXPENDITURES
OTHER FINANCING SOURCES (USES)
Bond proceeds
REVENUES AND OTHER SOURCES OVER (UNDER)
EXPENDITURES AND OTHER USES
4,205,000 2,039,710 (2,165,290)
2,967,586 (63,479) $ (3,031,065)
FUND BALANCE, BEGINNING OF YEAR (22,880) 80,548
FUND BALANCE, END OF YEAR $ 2,944,706 $ 17,069
See independent auditor's report.
-28-
i
Variance
Original/Final
Favorable
Budget
Actual
(Unfavorable)
$ 58,843
$ 58,201
$ (642)
200
171
(29)
100
209
109
100
30
(70)
1,500
2,903
1,403
340,000
340,832
832
2,000
2,428
428
93,900
72,679
(21,221)
122,200
47,121
(75,079)
3,000
21,940
18,940
1,700,000
266,722
(1,433,278)
85,700
27,859
(57,841)
2,407,543
841,095
(1,566,448)
3,500
4,705
(1,205)
-
1,186
(1,186)
100,815
52,009
48,806
15,500
13,237
2,263
1,000
513
487
21,500
23,938
(2,438)
21,000
26,760
(5,760)
25,000
40,128
(15,128)
12,000
16,850
(4,850)
7,960
5,931
2,029
500
3,046
(2,546)
3,000
2,053
947
6,000
3,629
2,371
1,580,000
1,749,408
(169,408)
1,789,600
874,129
915,471
32,582
105,762
(73,180)
25,000
21,000
4,000
3,644,957
2,944,284
(700,673)
(1,237,414)
(2,103,189)
(865,775)
4,205,000 2,039,710 (2,165,290)
2,967,586 (63,479) $ (3,031,065)
FUND BALANCE, BEGINNING OF YEAR (22,880) 80,548
FUND BALANCE, END OF YEAR $ 2,944,706 $ 17,069
See independent auditor's report.
-28-
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C
HAYES
&ASSOCIATES, L.L.C.
Certified Public Accountants and Consultants
REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
AND COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENTAUDITINGSTANDARDS
Honorable Chairman and Members
of the Blair Airport Authority Board
Blair Airport Authority, Nebraska
We have audited the financial statements of the governmental activities and the general fund of
the Blair Airport Authority, Nebraska, as of and for the year ended September 30, 2007, which
collectively comprise the Blair Airport Authority's, basic financial statements and have issued
our report thereon dated July 31, 2008. 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.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered the Blair Airport Authority, Nebraska's
internal control over financial reporting as a basis for designing our auditing procedures for the
purpose of expressing our opinions on the financial statements, but not for the purpose of
expressing an opinion on the effectiveness of the Blair Airport Authority, Nebraska's internal
control over financial reporting. Accordingly, we do not express an opinion on the effectiveness
of the Blair Airport Authority, Nebraska's internal control over financial reporting.
Our consideration of internal control over financial reporting was for the limited purpose
described in the preceding paragraph and would not necessarily identify all deficiencies in
internal control over financial reporting that might be significant deficiencies or material
weaknesses. However, as discussed in the schedule of findings and responses, we identified
certain deficiencies in internal control over financial reporting that we consider to be significant
deficiencies.
A control deficiency exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions, to prevent or detect
misstatements on a timely basis.
Westroads Pointe • 1015 N. 98th St., Suite 200 • Omaha, Nebraska 68114 • 402.390.2480 TEL • 402.390.0885 FAX • www.hayes-epa.coni
QD
The CPA. Never Underestimate The Value?
A significant deficiency is a control deficiency, or combination of control deficiencies, that
adversely affects the Blair Airport Authority, Nebraska's ability to initiate, authorize, record,
process, or report financial data reliably in accordance with generally accepted accounting
principles such that there is more than a remote likelihood that a misstatement of the Blair
Airport Authority, Nebraska's financial statements that is more than inconsequential will not be
prevented or detected by the Blair Airport Authority, Nebraska's internal control. We consider
the deficiencies described in the accompanying schedule of findings and responses to be
significant deficiencies.
A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected by the Blair Airport Authority, Nebraska's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all deficiencies
in the internal control that might be significant deficiencies and, accordingly, would not
necessarily disclose all significant deficiencies that are also considered to be material
weaknesses. However, of the significant deficiencies described above, we considered items 1.,
2., and 3., to be material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Blair Airport Authority, Nebraska's
financial statements are free of material misstatement, we performed tests of its compliance with
certain provisions of laws, regulations, contracts, and grant agreements, 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 or other matters that are required to be reported
under Government Auditing Standards.
We noted certain other matters that we reported to management of Blair Airport Authority,
Nebraska, in a separate letter dated July 31, 2008.
Blair Airport Authority, Nebraska's response to the findings identified in our audit is described
in the accompanying schedule of findings and responses. We did not audit Blair Airport
Authority, Nebraska's responses and, accordingly, we express no opinion on it.
This report is intended solely for the information and use of management, City Council, others
within the entity, and federal awarding agencies and pass-through entities and is not intended to
be and should not be used by anyone other than these specified parties.
Omaha, NE
July 31, 2008
-31-
Blair Airport Authority
SCHEDULE OF FINDINGS AND RESPONSES
For the year ended September 30, 2007
I. FINDINGS AND RESPONSES
Item 1. - Segregation of Duties
Criteria - One important aspect of internal control is the segregation of duties among
employees to prevent an individual employee from handling duties, which are
incompatible. (OMB Circular A-133, Subpart C, 300 (b))
Condition - The payroll, depositing, and preparation of reports are done by the same
person.
Context - This condition was observed in the study of the internal control system.
Cause and Effect - The cause is due to the size of the entity and the effect is a weakness
in internal control.
Recommendation - We realize that with a limited number of office employees,
segregation of duties is difficult. However, the City should review its control procedures
to obtain the maximum internal control possible under the circumstances.
Officials Response - The City will segregate duties to the extent possible with existing
personnel and utilize the Board to provide additional control through review of financial
transactions and reports.
Item 2. - Preparation of Supporting Schedules
Criteria - Schedules that agree to the financial statements and the general ledger should
be maintained and on hand for proper supporting documentation of the organization's
financial statements and footnotes.
Condition - Schedules necessary for good bookkeeping and to support the financial
statements not maintained by the client.
Cause - Lack of internal control procedures to require the maintenance of the financial
statement supporting schedules.
-32-
Blair Airport Authority
SCHEDULE OF FINDINGS AND RESPONSES
For the year ended September 30, 2007
II. FINANCIAL STATEMENT FINDINGS AND QUESTIONED COSTS - CONTINUED
Item 3. - Preparation of Basic Financial Statements - Continued
Cause - Lack of the required expertise in preparing the basic set of financial statements.
Effect - Material adjusting entries are required to be made during the audit for the proper
presentation of the City's financial statements.
Recommendation - The City of Blair may consider gathering the necessary expertise to
prepare a required set of financial statements in a format acceptable for GAAP reporting;
including the preparation of the various adjusting entries and schedules.
Officials Response - The City will work to develop the ability to prepare necessary
financial statements. This maybe through the hiring of additional staff or contracting
with an independent entity.
-34-