FY2014 Audit Report Airport
Blair Airport Authority
FINANCIAL STATEMENTS
AND INDEPENDENT AUDITOR’S REPORTS
For the year ended September 30, 2014
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITORS’ REPORT 3 - 5
MANAGEMENT’S DISCUSSION AND ANALYSIS 6 - 13
BASIC FINANCIAL STATEMENTS
Statement of net position 14
Statement of activities 15
Balance sheet - governmental funds 16
Reconciliation of the balance sheet of governmental
funds to the statement of net position 17
Statement of revenues, expenditures, and changes in
fund balance - governmental funds 18
Reconciliation of the statement of revenues, expenditures
and changes in fund balances of governmental funds
to the statement of activities 19
NOTES TO FINANCIAL STATEMENTS 20 - 32
REQUIRED SUPPLEMENTAL INFORMATION
Budgetary comparison schedule - general fund 34
SUPPLEMENTAL INFORMATION
Schedule of expenditures of federal awards 36
Notes to schedule of expenditures of federal awards 37
OTHER INFORMATION
Fund balances for the last five years 39
TABLE OF CONTENTS - CONTINUED
PAGE
INDEPENDENT AUDITOR’S 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 AUDITING
STANDARDS 40 - 41
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH
MAJOR PROGRAM AND ON INTERNAL CONTROL OVER
COMPLIANCE REQUIRED BY OMB CIRCULAR A-133 42 - 43
SCHEDULE OF FINDINGS AND QUESTIONED COST 44 - 45
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS 46
INDEPENDENT AUDITOR’S REPORT
Honorable Chairman and Board Members
Blair Airport Authority
Blair, Nebraska
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, and each major
fund of Blair Airport Authority (the Airport), as of and for the year ended September 30, 2014, and the
related notes to the financial statements, which collectively comprise the Airport’s basic financial
statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material misstatement, whether due to fraud or
error.
Auditor’s Responsibility
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 from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
Westroads Pointe |1015 N. 98th St. |Suite 200 |Omaha, NE 68114 |T 402.390.2480 |F402.390.0885 www.hayes-cpa.com
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
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 each major fund of the Blair Airport
Authority as of September 30, 2014, and the respective changes in financial position thereof for the year
then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s
discussion and analysis and budgetary comparison information on pages 6 - 12 and 33 be presented to
supplement the basic financial statements. Such information, although not a part of the basic financial
statements, is required by the Governmental Accounting Standards Board, who considers it to be an
essential part of financial reporting for placing the basic financial statements in an appropriate
operational, economic, or historical context. We have applied certain limited procedures to the required
supplementary information in accordance with auditing standards generally accepted in the United
States of America, which consisted of inquiries of management about the methods of preparing the
information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic
financial statements. We do not express an opinion or provide any assurance on the information because
the limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the Blair Airport Authority’s basic financial statements. The fund balances for the
last five years is presented for purposes of additional analysis and is not a required part of the basic
financial statements. The schedule of expenditures of federal awards is presented for purposes of
additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic
financial statements.
The schedule of expenditures of federal awards is the responsibility of management and was derived
from and relate directly to the underlying accounting and other records used to prepare the basic
financial statements. Such information has been subjected to the auditing procedures applied in the audit
of the basic financial statements and certain additional procedures, including comparing and reconciling
such information directly to the underlying accounting and other records used to prepare the basic
financial statements or to the basic financial statements themselves, and other additional procedures in
accordance with auditing standards generally accepted in the United States of America. In our opinion,
the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the
basic financial statements as a whole.
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The fund balances for the last five years has not been subjected to the auditing procedures applied in the
audit of the basic financial statements and, accordingly, we do not express an opinion or provide any
assurance on it.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 31,
2014, 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 internal control over financial reporting or on compliance. That report is an integral part
of an audit performed in accordance with Government Auditing Standards in considering Blair Airport
Authority’s internal control over financial reporting and compliance.
Hayes & Associates
Omaha, Nebraska
December 31, 2014
Hayes & Associates, LLC
Blair Airport Authority
MANAGEMENT’S DISCUSSION AND ANALYSIS
For the year ended September 30, 2014
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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, 2014.
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 basic 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 r e a d e r s w i t h a b r o a d
overview of the Airport’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the Airport’s assets, deferred
outflows, liabilities, and deferred inflows with the difference between the remainder reported as
net position. Over time, increases or decreases in net position 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 position
changed during the most recent fiscal year. All changes in net position 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
For the year ended September 30, 2014
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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 reconciliation between governmental activities
(reported in the statement of net position 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 over 98% 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, less than 2% of the governmental assets are cash and equivalents. The
following chart shows the Airport’s net position for 2014:
SEE TABLE 1
2014 2013 Change
Current and other assets 190,029$ 176,815$ 13,214$
Capital assets 16,090,611 15,785,340 305,271
Total assets 16,280,640$ 15,962,155$ 318,485$
Other liabilities 1,689,894$ 2,637,331$ (947,437)$
Long-term debt outstanding 1,569,349 1,678,961 (109,612)
Total liabilities 3,259,243$ 4,316,292$ (1,057,049)$
NET POSITION
Net investment in capital assets 12,898,923$ 11,520,315$ 1,378,608$
Restricted 45,205 67,298 (22,093)
Unrestricted 77,269 58,250 19,019
Total net position 13,021,397$ 11,645,863$ 1,375,534$
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
Blair Airport Authority
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TABLE 1
ASSETS
LIABILITIES
September 30, 2014
SUMMARY OF NET POSITION
Blair Airport Authority
MANAGEMENT’S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended September 30, 2014
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OVERVIEW OF FINANCIAL STATEMENTS - CONTINUED
At the end of the current fiscal year, the Airport reported a positive balance in both net position
invested in capital assets and in unrestricted net position.
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 Airport’s net position by
$1,375,534.
Key elements of the increase are as follows:
The increase is the result of grant funds received for the reimbursement on the acquisition
& relocation of tract S in the previous fiscal year and the receipt of additional property
taxes from the previous year.
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 Airport 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, unassigned 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
ending fund balances of ($1,491,982), an increase of $955,125 from the prior year. The
Airport’s fund balances for the past five years are presented in a table format on page 39.
2014 2013 Change
Program revenues
Charges for services 189,713$ 194,291$ (4,578)$
Capital grants and contributions 1,543,663 328,830 1,214,833
General revenues
Property taxes 170,491 165,368 5,123
Other taxes 9,228 8,703 525
Interest and other revenue 41,331 1,319 40,012
Total revenues 1,954,426 698,511 1,255,915
EXPENSES
General government 452,228 409,262 42,966
Interest on debt 126,664 159,228 (32,564)
Total expenses 578,892 568,490 10,402
CHANGE IN NET POSITION 1,375,534 130,021 1,245,513
NET POSITION, BEGINNING OF YEAR 11,645,863 11,515,842 130,021
NET POSITION, END OF YEAR 13,021,397$ 11,645,863$ 1,375,534$
September 30, 2014
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TABLE 2
REVENUES
Blair Airport Authority
MANAGEMENT'S DISCUSSION AND ANALYSIS - CONTINUED
CHANGES IN NET POSITION
Blair Airport Authority
MANAGEMENT’S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended September 30, 2014
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OVERVIEW OF FINANCIAL STATEMENTS - CONTINUED
Budget variances in the General Fund: The Airport General Fund expenditures did not exceed
budget. Significant budget variances are detailed as follow:
Variance
P o s i t i v e
Account ( N e g a t i v e ) R e a s o n
Rent income $4,276 Income was higher than expected due
increased hanger occupancy in 2014.
Miscellaneous income $190,929 The primary difference was the receipt
of insurance funds to pay for the hail
damage from the summer of 2014.
Grant Income $352,153 Grant income was greater than
projected in the FY 14 budget as the
grant funds received were for grants
that had been budgeted for in the
previous year. These grant funds
were not received prior to the end of
the FY 13 budget year as anticipated
for the reimbursement of the
acquisition of property from the
Petersen’s land purchase and the
purchase of the snow removal
equipment.
Debt principle expense $1,114,394 The principle on the short term note
that had to be renewed was not as
high as anticipated due to delay in
condemnation appeals.
Interest expense ($457) Interest costs were slightly higher
due in part to increased borrowing to
pay for the settlement agreement
approved on the Petersen land
purchase.
Capital Out Lay $421,431 Capital expenses weren’t as high due
to no agreement being reached on the
settlement of the tree inventory
relocation with the Petersen’s.
Debt proceeds ($1,836,701) The total new borrowing was less
than projected due to the airport not
being able to reach an agreement
with Petersen’s on the final
relocation of the nursery inventory.
Blair Airport Authority
MANAGEMENT’S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended September 30, 2014
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OVERVIEW OF FINANCIAL STATEMENTS - CONTINUED
Capital assets: The Airport’s government-wide capital assets, net of accumulated depreciation,
increased due to the continued acquisition of property and the construction of an additional
hangar. Additional information as well as a detailed classification of the Airport’s net capital
assets can be found in the notes to the Financial Statements.
Long-term debt: The Airport continues to move forward with capital projects that extend from
one fiscal year to another that will be financed with short term Bond Anticipation Notes that will
be turned into long-term debt in two to three years. These projects will provide greater airport
safety and expand the necessary facilities to make the airport more viable to business category
aircraft, thus increasing the opportunity to increase income and profitability.
Next year’s budget and rates: The property tax levy request for the City of Blair for the fiscal
year beginning October 1, 2013, was set at $0.354788 per one hundred dollars of valuation. The
property tax levy request for the Airport Authority for the fiscal year beginning October 1, 2013,
was set at $0.034988 per one hundred dollars of valuation, or a total City and Airport levy of
$0.389776. The budget for fiscal year 2015 began October 1, 2014, required a levy for City
operations of $0.357902 and Airport levy of $0.034165 or a combined levy of $0.392085. The
Airport levy continues to solely support long term debt and the Airport would anticipate reaching
the statutory levy limit of $0.035 per hundred dollars of actual valuation before all capital
improvements are completed. Per Airport statues the Airport could levy up to $0.07 per $100
dollars of valuation with concurrence of the City Council.
Additional Notes: As of the end of Fiscal Year 2014 on September 30, 2014 the Airport had not
reached agreement with Mr. and Mrs. Gary Petersen on the final relocation costs for the nursery
inventory. Subsequently the Airport signed a relocation agreemen t w i t h t h e P e t e r s e n ’ s i n
December for $1,320,000 with concludes all legal action relative to the acquisition of Tract B.
The Airport hopes to secure FAA funding in the May/August 2015 grant cycle to get reimbursed
for all relocation costs. Grant funds would be 90% of eligible costs. It is estimated that the
eligible costs would be in the area of $1,700,000. The grant funds when received will be used to
pay down the short term notes, with the balance of the notes being refunded through the issuance
of long term bonds.
The Airport continues to see an increase in traffic since Skywerx Aviation, LLC has located their
FBO business at the Airport. Skywerx provides maintenance, fuel sales, and charter flights
operating from the airport. Skywerx has started construction on an additional new hangar to be
owned by Skywerx and for rent to the Corporate market. They are also considering the
construction of a third hangar in the spring of 2015. Hangar shortage remains to be a high
priority for the Airport Authority, with a number of individuals and/or companies on the waiting
list for hangar rental.
Blair Airport Authority
MANAGEMENT’S DISCUSSION AND ANALYSIS - CONTINUED
For the year ended September 30, 2014
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OVERVIEW OF FINANCIAL STATEMENTS - CONTINUED
The Airport continues to negotiate with the individuals and/or businesses on land leases to build
additional hangars.
Request for information: The financial report is designed to provide a general overview of the
Airport’s finances for all those with an interest in the government’s finances. Questions
concerning any of the information provided in this report or requests for additional information
should be addressed to the Blair Airport Authority, 218 S. 16th Street, Blair, NE 68008.
Cash and cash equivalents 163,483$
Due from County Treasurer 14,154
Other receivables 7,139
Prepaid expenses 5,253
Capital assets
Land 6,708,400
Construction in Progress -
Buildings and runways 10,713,962
Equipment 926,117
Accumulated depreciation (2,257,868)
Total assets 16,280,640$
LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND NET POSITION
Accounts payable 19,173$
Accrued interest 25,570
Prepaid leases 17,043
Deposits 5,769
Short term notes payable 1,622,339
Long-term debt
Due within one year 114,612
Due in more than a year 1,454,737
Total liabilities 3,259,243
NET POSITION
Net investment in capital assets 12,898,923
Restricted 45,205
Unrestricted 77,269
Total net position 13,021,397
Total liabilities, deferred inflow, and net position 16,280,640$
Blair Airport Authority
STATEMENT OF NET POSITION
September 30, 2014
ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
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See accompanying notes and independent auditor's report.
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Fund Fund Total
Cash and cash equivalents 119,998$ 43,485$ 163,483$
Due from County Treasurer - 14,154 14,154
Other receivables 7,139 - 7,139
Total assets 127,137$ 57,639$ 184,776$
LIABILITIES
Accounts payable 19,173$ -$ 19,173$
Prepaid leases 17,043 - 17,043
Deposits 5,769 - 5,769
Short term notes payable 1,622,339 - 1,622,339
Total liabilities 1,664,324 - 1,664,324
DEFERRED INFLOW OF RESOURCES
Unavailable revenue - 12,434 12,434
FUND BALANCE
Restricted - 45,205 45,205
Unassigned (1,537,187) - (1,537,187)
Total fund balance (1,537,187) 45,205 (1,491,982)
Total liabilities, deferred inflows,
and fund balance 127,137$ 57,639$ 184,776$
September 30, 2014
See accompanying notes and independent auditor's report.
- 16 -
ASSETS
Blair Airport Authority
BALANCE SHEET
GOVERNMENTAL FUNDS
Fund balance of governmental funds (1,491,982)$
Amounts reported for governmental activities in the statement of
net assets are different because:
Capital assets, net of depreciation, are not current financial
resources and are not included in the governmental funds 16,090,611
Deferred revenues that are not current financial resources but
that are recognized in the government wide statements 12,434
Notes and bonds payable are not current financial liabilities.
Therefore, they are not included in the governmental funds (1,569,349)
Prepaid expenses are counted as assets on the statement of net
assets and are reported as expenses in governmental funds 5,253
Interest accrued on long-term debt (25,570)
Net position of governmental activities 13,021,397$
Blair Airport Authority
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
For the year ended September 30, 2014
TO THE STATEMENT OF NET POSITION
- 17 -
See accompanying notes and independent auditor's report.
General Debt
Fund Fund Total
REVENUES
Taxes -$ 174,150$ 174,150$
Charges for services 189,713 - 189,713
Grants 1,543,663 - 1,543,663
Interest income 15 - 15
Other revenues 237,603 - 237,603
Total revenues 1,970,994 174,150 2,145,144
EXPENDITURES
Administration 136,233 3,229 139,462
Capital outlay 807,874 - 807,874
Debt service
Principal 39,612 70,000 109,612
Interest 60,457 66,401 126,858
Interest - 6,213 6,213
Total expenditures 1,044,176 145,843 1,190,019
REVENUES OVER (UNDER) EXPENDITURES 926,818 28,307 955,125
OTHER FINANCING SOURCES
Operating transfers-in 50,400 - 50,400
Operating transfers-out - (50,400) (50,400)
Total other financing sources 50,400 (50,400) -
NET CHANGE IN FUND BALANCES 977,218 (22,093) 955,125
FUND BALANCE, BEGINNING OF YEAR (2,514,405) 67,298 (2,447,107)
FUND BALANCE, END OF YEAR (1,537,187)$ 45,205$ (1,491,982)$
See accompanying notes and independent auditor's report.
- 18 -
For the year ended September 30, 2014
Blair Airport Authority
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN
FUND BALANCE - GOVERNMENTAL FUNDS
Net changes in fund balance - total governmental funds 955,125$
Amounts reported for governmental activities in the statement of
activities are different because:
Governmental funds report capital outlays as expenditures.
However, in the statement of activities, the cost of those
assets is allocated over their estimated useful lives as a
functional expense when the cost is above the capitalization
threshold. The activity is reconciled as follows:
Cost of assets capitalized 611,587
Depreciation expense (306,316)
Revenue reported in the statement of activities that do not
provide current financial resources are not reported as
revenue in the governmental funds 5,569
Bonds are reported as expenditures when paid and as
revenue when received 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 debt 109,612
Prepaid expenses are counted as assets on the statement of net
assets and are reported as expenses in governmental funds (237)
Interest accrued on long-term debt does not require the
use of current financial resources and is not reported as an
expenditure in govermental funds 194
Change in net assets of governmental activities 1,375,534$
Blair Airport Authority
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
For the year ended September 30, 2014
- 19 -
See accompanying notes and independent auditor's report.
TO THE STATEMENT OF ACTIVITIES
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 20 -
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, which is the “primary government.”
The Airport operates under a Board of Trustees form of government and provides
airport services.
The Airport is a body corporate and politic, constituting a public corporation and
an agency of the City. The Board has full and exclusive jurisdiction and control.
The Board and its corporate existence shall continue only for a period of twenty
years and therein after until all its liabilities have been met and its bonds paid in
full. All administrative duties are handled by the City Administration until such
time as the Airport can hire its own staff. As per Nebraska Statues, the Airport
Board has appointed the City Treasurer, as treasurer for the Airport.
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
position and a statement of activities (including changes in net position). These
statements are prepared using the standards of the Governmental Accounting
Standards Board (GASB), General Accepted Accounting Principles (GAAP). The
Governmental Accounting Standards Board (GASB) is responsible for
establishing GAAP for state and local governments through its pronouncements
(Statements and Interpretations).
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 21 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
2. Basis of Accounting/Measurement Focus - Continued
Government-Wide Financial Statements - Continued
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 position. The statement of
activities presents changes in net position. 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.
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 included among program revenues are reported
instead as general revenues.
All internal balances in the statement of net position and internal transactions in
the statement of activities have been eliminated.
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 position as presented in these statements to the net
position presented in the government-wide financial statements. The Airport has
presented all major funds that met the qualifications of GASB Statement No. 34.
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 22 -
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,
investment income, and grant revenues.
Expenditures are generally recognized under the modified accrual basis of
accounting when the related fund liability 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 is a
governmental fund that is used to account for all financial resources
except those required to be accounted for in another fund.
The debt service fund is a governmental fund that is used to account for
funds needed to make principal and interest payments on outstanding debt
issues.
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 23 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
3. Budgetary Policy and Control
Budgetary Basis of Accounting
The Airport’s 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. Differences between
the budgeted basis of accounting and the generally accepted basis are reconciled
in the budget to actual schedule in the required supplementary information. The
Board sets the property tax levy needed to support the coming year’s budget in
August of each year and submit its budget as required by State statute.
Budgetary Control
Each fund’s 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. Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect certain reported amounts and disclosures. Accordingly, actual results
could differ from those estimates.
5. 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.
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 24 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
6. Capital Assets
Capital assets, which include land, buildings, machinery and equipment
(furniture, vehicles, computers, etc.) and infrastructure assets (runways), 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 recorded at estimated market value at the date of donation or
annexation.
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 not retroactively apply the
capitalization requirements of general infrastructure assets. The requirement 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
Buildings and runways 40
Road overlays and concrete 15-25
Machinery and equipment 10
Vehicles 5
7. Property Taxes
Property tax revenue is recognized when collected by the County as the Airport’s
agent when measurable and available. There are no property taxes due which are
not delinquent and all delinquent taxes are considered collectible.
The Airport’s December 31, 2013, valuation was included with the City of Blair’s
valuation of $482,920,495. The levy for the Airport for the year ending
September 30, 2014 was $0.034988 per $100 of value. The total tax levy was
$168,965. 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.
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 25 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
8. 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 Position. 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.
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.
10. Transfers
Transfers are used to move revenues from the fund that statute or budget requires
to collect them to the fund that statute or budget requires to expend them and to
move unrestricted revenue collected in the general fund to finance various
programs accounted for in other funds in accordance with budgetary
authorizations.
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 26 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
11. Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual
funds that may result in amounts owed between funds. Those related to goods and
services type transactions are classified as “due to and from other funds.” Short-
term interfund loans are reported as “interfund receivables and payables.” Long-
term interfund loans (noncurrent portion) are reported as “advances from and to
other funds.” Interfund receivables and payables between funds are eliminated in
the statement of net position.
12. Allowance for Doubtful Accounts
The Airport uses the direct write-off for uncollectable accounts. While the direct
write-off method is not GAAP, management has determined that there is no
material difference between the direct write-off method and the allowance
method. There were no significant doubtful accounts at September 30, 2014.
NOTE B. DEPOSITS
Deposits consist of demand deposits 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.
Custodial credit risk is the risk that in the event of a bank failure, the Airport’s deposits
may not be returned. The statutes of the State of Nebraska require that local
governmental units follow the “prudent man” rule with deposits, and that deposits be
secured by collateral valued at market or par whichever is lower less the amount insured
by the Federal Deposit Insurance Corporation. The Airport has no investment policy that
would further limit its deposits. The carrying amount of bank balances at September 30,
2014, was $163,487.
NOTE C. RELATED PARTIES
The Airport’s operating, administrative, and accounting functions are performed by the
administrative offices of the City of Blair. The Airport incurs no cost for the resources
used by the City of Blair in performing these functions.
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 27 -
NOTE D. CAPITAL ASSETS
Beginning Ending
Balance Increases Decreases Balance
Capital assets not depreciated
Land $ 6,304,797 $ 403,603 $ - $ 6,708,400
Construction in Progress 15,795 - (15,795) -
Total capital assets not depreciated 6,320,592 403,603 (15,795) 6,708,400
Other capital assets
Buildings and runways 10,691,347 218,902 (196,287) 10,713,962
Equipment 724,953 201,164 - 926,117
Less accumulated depreciation -
Buildings and runways (1,849,665) (269,231) - (2,118,896)
Equipment (101,887) (37,085) - (138,972)
Other capital assets, net 9,464,748 113,750 (196,287) 9,382,211
Governmental activities capital assets, net $ 15,785,340 $ 517,353 $ - $ 16,090,611
Depreciation expense of $306,316 was charged to general government expenses on the
statement of activities.
NOTE E. RISK MANAGEMENT
The Airport 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.
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 28 -
NOTE F. NET POSITION CATEGORIES
In the government-wide financial statements, net positions are classified in the following
categories:
Invested in Capital Assets
This category groups all capital assets, including infrastructure, into one component of
net position. Accumulated depreciation on these assets reduces this category.
Restricted Net Position
This category presents external restrictions imposed by creditors, grantors, contributors or
laws or regulations of other governments and restrictions imposed by law through
constitutional provisions or enabling legislation.
Unrestricted Net Position
This category represents the net position of the Airport that is not restricted for any
project or other purpose.
In the governmental 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.
NOTE G. SHORT-TERM DEBT
On January 19, 2012, a bond anticipation note was issued in the amount of $3,500,000.
Two additional bond anticipation notes were issued on January 18, 2013. The 2013
Series A bond anticipation note was issued for $1,741,700 and the 2013 Series B bond
anticipation note was issued for $1,758,300 for a total amount of $3,500,000. Proceeds
from the 2013 Series A bond anticipation note were used to pay off the 2012 anticipation
note. Proceeds from the 2013 Series B bond anticipation note were used to manage the
temporary cash flow deficits that occur due to the timing of expenditures related to
federal funds applied for which do not coincide with the timing of reimbursement on
these projects. Two additional bond anticipation notes (Series C and D) were issued on
October 23, 2013 with the proceeds used to pay off the 2013 Series A and B bond
anticipation notes. When the Airport received the federal grant funds for the completed
projects, the 2013 Series C bond anticipation note was paid down with the proceeds. The
remaining bond anticipation notes are due within one year of issuance.
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 29 -
NOTE G. SHORT-TERM DEBT - CONTINUED
Short term debt activity for the year ended September 30, 2014, was as follows:
Interest Beginning Ending
Dated Description Rate Balance Additions Reductions Balance
1/18/2013 Note 2013 A 3.35% 1,741,700$ -$ (1,741,700)$ -$
1/18/2013 Note 2013 B 3.35% 844,364 - (844,364) -
10/23/2013 Note 2013 C 3.30% - 1,741,700 (1,371,915) 369,785
10/23/2013 Note 2013 D 3.30% - 1,252,554 - 1,252,554
Total 2,586,064$ 2,994,254$ (3,957,979)$ 1,622,339$
The 2013 note is secured by a pledge of the revenues and all monies derived from the
operation of the Airport’s facility, including the authorized levy of taxes.
NOTE H. LONG TERM DEBT
Long term debt at September 30, 2014 consisted of the following:
Interest Beginning Ending
Dated Description Rate Balance Additions Reductions Balance
4/23/2003 Refunding Bonds 1.40-4.35% $ 145,000 ` $ - $ (35,000) 110,000$
11/6/2006 Refunding Bonds 4.00-5.25% 1,220,000 - (35,000) 1,185,000
8/23/2006 Project F-29 Note 0% 35,875 - (10,500) 25,375
8/23/2006 Project H-01 Note 0% 125,430 - (13,320) 112,110
6/20/2013 Project H-02 Note 0% 152,656.00 - (15,792) 136,864
1,678,961$ -$ (109,612)$ 1,569,349$
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 30 -
NOTE H. LONG TERM DEBT - CONTINUED
The 2003 and 2006 bonds are secured by a pledge of the revenues, income, receipts, profits and other monies derived by the Airport for the operation, management, and ownership of its airport facility, including monies derived from the authorized levy of taxes. As of September 30, 2014, annual debt service requirements of governmental activities to maturity are as follows:
Year ending
September 30,
Principal
Requirements
Interest
Requirements Total
2015 114,612$ 63,295$ 177,907$
2016 114,612 59,994 174,606
2017 113,487 56,500 169,987
2018 114,112 52,619 166,731
2019 119,112 48,353 167,465
2020-2024 613,414 168,535 781,949
2025-2027 380,000 30,713 410,713
1,569,349$ 480,009$ 2,049,358$
NOTE I. 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.
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 31 -
NOTE J. FUND BALANCES
Fund balances for each of the Airport’s governmental funds (general fund, and debt
service fund) are displayed in the following classifications depicting the relative strength
of the spending constraints placed on the purposes for which resources can be used:
Non-spendable fund balance - amounts that cannot be spent because they are either not in
a spendable form (such as inventories and prepaid amounts) or ar e l e g a l l y o r
contractually required to be maintained intact.
Restricted fund balance - amounts that can be spent only for specific purposes because of
constraints imposed by external providers (such as grantors, bondholders, and higher
levels of government), or imposed by constitutional provisions or enabling legislation.
Committed fund balance - amounts that can be spent only for specific purposes
determined by a formal action of the government’s highest level of decision-making
authority.
Assigned fund balance - amounts the government intends to use for specific purposes that
do not meet the criteria to be classified as restricted or committed.
Unassigned fund balance - amounts that are available for any purpose; these amounts can
be reported only in the Airport’s General Fund.
NOTE K. CONTINGENCIES
The Airport participates in federal programs which are subject t o f i n a n c i a l a n d
compliance audits by the granting agencies. The amount of expenses, if any, which may
be disallowed by the granting agencies are not determinable at this time; however,
management does not believe that such amount, if any, would be significant.
The Airport is currently involved in a condemnation action to acquire land necessary to
complete a plan for expansion of the airport. The condemnation is currently in active
litigation and management intends to pursue the case vigorously. At this point,
management believes that any estimate of a potential loss would be highly speculative; as
such, no estimate for any future potential loss as a result of the condemnation has been
made.
Blair Airport Authority
NOTES TO FINANCIAL STATEMENTS
For the year ended September 30, 2014
- 32 -
NOTE L. SUBSEQUENT EVENTS
Subsequent to year end, the Airport settled a condemnation action to acquire land
necessary to complete a plan for expansion of the airport. The condemnation was settled
for $1.32 million with $1 million dollars payable upon execution and $320,000 payable
on or before February 1, 2015. This agreement dismisses the pending litigation against
the Airport as of December 5, 2014.
NOTE M. INSURANCE RECOVERY & IMPAIRMENTS
The Airport was involved in a hail storm on June 4, 2013 and June 3, 2014. As a result,
insurance claims were submitted and the Airport received $232,671 of insurance
proceeds, which were used to repair rental hangar and house roofs. The repairs for the
hangar roof totaled $181,537 and the house roofs totaled $37,365. As these repairs
improved the life of the hangar and houses, the improvements were capitalized as
building improvements at the life of the building. However, the repairs were completed
prior to the June 3, 2014 storm causing the hangar roof and one of the house roofs to
require repairs. Therefore, the roofs were impaired at replacement costs; the hangar roof
was impaired at a cost of $181,537 and one of the house roofs was impaired at a cost of
$14,750 with a total impairment loss of $196,287. The net result of the insurance
recovery and the impairment loss is $36,384. This is reported on the financial statements
in other income.
NOTE N. NEW GASB STANDARDS
In the fiscal year ending September 30, 2014, the Airport implemented GASB Statements
No. 66, Technical Corrections—2012—an amendment of GASB Statements No. 10 and
No. 62, No. 67, Financial Reporting for Pension Plans—an amendment of GASB
Statement No. 25, and No. 70, Accounting and Financial Reporting for Nonexchange
Financial Guarantees. GASB Statements No. 66 and No. 67 establish amended
accounting and financial reporting requirements for risk financing and related insurance
issues, operating leases with scheduled rent increases, and pension plans. In addition,
GASB Statement No. 67 addresses the financial reporting of governmental defined
benefit and defined contribution pension plans administered through trusts. GASB No.
70 establishes the recognition and measurement attributes of a nonexchange financial
obligation, but does not apply to guarantees related to special assessment debt.
Implementation of GASB Statements No. 66, No. 67, and No. 70 had no material effect
on the October 1, 2013 beginning balance of net position for the government-wide
financial statements and fund financial statements.
REQUIRED SUPPLEMENTAL INFORMATION
Variance
Original/Final Positive
Budget Actual (Negative)
REVENUES
Rent income 182,628$ 186,904$ 4,276$
Interest 50 15 (35)
Grants 1,191,510 1,543,663 352,153
Miscellaneous income 15,600 206,529 190,929
Total revenues 1,389,788 1,937,111 547,323
EXPENDITURES
General government 176,650 392,938 (216,288)
Capital outlay 930,000 508,569 421,431
Debt principal 2,525,920 1,411,526 1,114,394
Interest expense 60,000 60,457 (457)
Total expenditures 3,692,570 2,373,490 1,319,080
REVENUES OVER (UNDER) EXPENDITURES (2,302,782) (436,379) 1,866,403
OTHER FINANCING SOURCES (USES)
Transfer from debt fund 50,400 50,400 -
Debt proceeds 2,244,890 408,189 (1,836,701)
REVENUES AND OTHER SOURCES OVER (UNDER)
EXPENDITURES AND OTHER USES (7,492) 22,210 29,702$
FUND BALANCE, BEGINNING OF YEAR 84,505 84,505
FUND BALANCE, END OF YEAR 77,013$ 106,715$
(2,598,910)
955,008
(1,537,187)$
Accrual adjustments made because the Authority budgets for revenues and
expenditures on the cash basis, rather than on the modified accrual basis.
- 34 -
See independent auditor's report.
Blair Airport Authority
BUDGETARY COMPARISON SCHEDULE - GENERAL FUND
For the year ended September 30, 2014
An explanation of the differences between budgetary inflows and outflows and
revenues and expenditures determined in accordance with generally accepted
accounting principles follows:
The budget fund balance at the beginning of the year is a based on cash
reserves rather than fund balance.
SUPPLEMENTAL INFORMATION
Federal Agency or
CFDA Pass-through Federal
Number Number Expenditures
U.S. Department of Transportation
Federal Aviation Administration
Passed through State of Nebraska
Land relocation grant to expand airport 20.106
Department of
Transportation 363,243$
Snow removal equipment grant 20.106
Department of
Transportation 163,513
Total expenditures of federal awards 526,756$
-36-
Blair Airport Authority
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended September 30, 2014
Federal grantor/passed-through grantor program title
See notes to the schedule of expenditures of federal awards and independent auditor's report.
Blair Airport Authority
NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the year ended September 30, 2014
- 37 -
NOTE A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
1. General
The accompanying schedule of expenditures of federal awards (the Schedule)
presents the activity of all federal financial assistance programs of Blair Airport
Authority (the Airport). The Airport’s reporting entity is defined in note A to the
Airport’s financial statements. Federal financial assistance received directly from
federal agencies, as well as passed through other governmental agencies, is
included on the Schedule.
The Schedule presents total expenditures for each federal financial award program
in accordance with U.S. Office of Management and Budget (OMB) Circular A-
133. Federal program titles are reported as presented in the Catalog of Federal
Domestic Assistance (CFDA) whenever possible.
2. Basis of Accounting
The Schedule is prepared on the accrual basis of accounting.
NOTE B. CONTINGENCIES
The Airport receives funds under various federal grant programs, and such awards are to
be expended in accordance with the provisions of the various grants. Compliance with
the grants is subject to audit by various government agencies, which may impose
sanctions in the event of noncompliance. Management believes that is has complied with
all aspects of the various grant provisions and the results of adjustments, if any, relating
to such audits would not have any material financial impact.
NOTE C. LAND RELOCATION GRANT
The federal grant for the Land Acquisition has not yet been awarded by the pass-through
entity, Nebraska Department of Aeronautics, but management estimates there will be
federal awards in the range of $1,260,000 to $1,567,487.
OTHER INFORMATION
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INDEPENDENT AUDITOR’S 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 AUDITING
STANDARDS
Honorable Chairman and Board Members
Blair Airport Authority
Blair, Nebraska
We have audited, in accordance with the 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, the financial statements of the governmental
activities, and each major fund of Blair Airport Authority, as of and for the year ended September 30,
2014, and the related notes to the financial statements, which collectively comprise Blair Airport
Authority’s basic financial statements, and have issued our report thereon dated December 31, 2014.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered Blair Airport
Authority’s internal control over financial reporting to determine the audit procedures that are
appropriate in the circumstances for the purpose of expressing our opinions on the financial statements,
but not for the purpose of expressing an opinion on the effectiveness of Blair Airport Authority’s
internal control. Accordingly, we do not express an opinion on the effectiveness of Blair Airport
Authority’s internal control.
A deficiency in internal control over financial reporting 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 and correct, misstatements on a timely basis. A material weakness is a deficiency,
or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a
material misstatement of the entity’s financial statements will not be prevented, or detected and
corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in
internal control that is less severe than a material weakness, yet important enough to merit attention by
those charged with governance.
Our consideration of internal controls over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control that
might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we
did not identify any deficiencies in internal control that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
Westroads Pointe |1015 N. 98th St. |Suite 200 |Omaha, NE 68114 |T 402.390.2480 |F402.390.0885 www.hayes-cpa.com
- 41 -
Compliance and Other Matters
As part of obtaining reasonable assurance about whether Blair Airport Authority’s financial statements
are free from 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.
Purpose of this Report
The purpose of this report is solely 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
effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity’s internal
control and compliance. Accordingly, this communication is not suitable for any other purpose.
Hayes & Associates
Omaha, Nebraska
December 31, 2014
Hayes & Associates, LLC
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM
AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY OMB CIRCULAR A-133
Honorable Chairman and Board Members
Blair Airport Authority
Blair, Nebraska
Report on Compliance for the Major Federal Program
We have audited Blair Airport Authority’s compliance with the types of compliance requirements
described in the OMB Circular A-133 Compliance Supplement that could have a direct and material
effect on the Blair Airport Authority’s major federal program for the year ended September 30, 2014.
Blair Airport Authority’s major federal program is identified in the summary of auditor’s results section
of the accompanying schedule of findings and questioned costs.
Management’s Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts, and
grants applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of Blair Airport Authority’s major
federal program based on our audit of the types of compliance requirements referred to above. We
conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of
States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133
require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance
with the types of compliance requirements referred to above that could have a direct and material effect
on a major federal program occurred. An audit includes examining, on a test basis, evidence about Blair
Airport Authority’s compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for the major
federal program. However, our audit does not provide a legal determination of Blair Airport Authority’s
compliance.
Westroads Pointe |1015 N. 98th St. |Suite 200 |Omaha, NE 68114 |T 402.390.2480 |F402.390.0885 www.hayes-cpa.com
- 43 -
Opinion on Each Major Federal Program
In our opinion, Blair Airport Authority, complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on each of
its major federal program for the year ended September 30, 2014.
Report on Internal Control Over Compliance
Management of Blair Airport Authority, is responsible for establishing and maintaining effective
internal control over compliance with the types of compliance requirements referred to above. In
planning and performing our audit of compliance, we considered Blair Airport Authority’s
internal control over compliance with the types of requirements that could have a direct and
material effect on each major federal program to determine the auditing procedures that are
appropriate in the circumstances for the purpose of expressing an opinion on compliance for each
major federal program and to test and report on internal control over compliance in accordance
with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness
of internal control over compliance. Accordingly, we do not express an opinion on the
effectiveness of Blair Airport Authority’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material weakness in internal
control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on
a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal
control over compliance that might be material weaknesses or significant deficiencies. We did
not identify any deficiencies in internal control over compliance that we consider to be material
weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of internal control over compliance and the results of that testing based on the
requirements of OMB Circular A-133. Accordingly, this report is not suitable for any other
purpose.
Hayes & Associates
Omaha, Nebraska
December 31, 2014
Hayes & Associates, LLC
Blair Airport Authority
SCHEDULE OF FINDINGS AND QUESTIONS COST
For the year ended September 30, 2014
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I. SUMMARY OF AUDIT RESULTS
Financial Statements
Type of auditor’s report issued: Unmodified
Internal controls over financial reporting:
Material weaknesses identified: No
Significant deficiencies identified: No
Noncompliance material to financial statements noted: No
Federal Awards
Internal control over major programs:
Material weaknesses identified: No
Significant deficiencies identified: No
Type of auditor’s report issued on
Compliance for major programs: Unmodified
Any audit findings disclosed that are required to
be reported in accordance with Section 510(a) of
OMB Circular A-133: No
Identification of major programs:
CFDA Numbers Name of Federal Program or Cluster
20.106 Airport Improvement Grant
Dollar threshold used to distinguish between
Type A and Type B programs: $300,000
Audit qualified as low-risk auditee: No
Blair Airport Authority
SCHEDULE OF FINDINGS AND QUESTIONED COSTS – CONTINUED
For the year ended September 30, 2014
- 45 -
II. FINDINGS—FINANCIAL STATEMENTS
None reported.
III. FINDINGS AND QUESTIONED COSTS—MAJOR FEDERAL AWARD PROGRAMS
None reported.
Blair Airport Authority
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
For the year ended September 30, 2013
- 46 -
II. FINDINGS—FINANCIAL STATEMENTS
None reported.
III. FINDINGS AND QUESTIONED COSTS—MAJOR FEDERAL AWARD PROGRAMS
None reported.