FY2015 Audit Findings AirportR&—
►
&ASSOCIATES, L.L.C.
Certified Public Accountants I Consultants
January 12, 2016
To the Council Members
City of Blair, Nebraska
We have audited the financial statements of the governmental activities, the business -type
activities, each major fund, and the aggregate remaining fund information of City of Blair,
Nebraska (the City) for the year ended September 30, 2015. Professional standards require that
we provide you with information about our responsibilities under generally accepted auditing
standards and, Go>>ernment Auditing Standards and OMB Circular A-133, as well as certain
information related to the planned scope and timing of our audit. We have communicated such
information in our letter to you dated August 31, 2015.
Professional standards also require that we communicate to you the following information
related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The
significant accounting policies used by the City of Blair, Nebraska are described in Note A to the
financial statements. GASB Statement No. 68, Accounting and financial Reporting for Pensions
— an Amendment to GASB 27, was implemented on October 1, 2014, and had no effect on the
Airport's financials. In addition, GASB Statement No. 72, Fair Value Measurement and
Application, GASB Statement No. 73, Accounting for Financial Reporting for Pensions and
Related Assets that are not within the scope of GASB 68, GASB Statement No. 76, Tlie
Hierarchy of Generally Accepted Accotmting Principles for State and Local Governments, were
reviewed and determined to have no material effect on the Airport's financial statements. See
footnote M related to these comments. We noted no transactions entered into by the
governmental unit during the year for which there is a lack of authoritative guidance or
consensus. All significant transactions have been recognized in the financial statements in the
proper period.
Westroads Pointe 1 1015 N. 98th St., Suite 200 1 Omaha, NE 68114_1 T 402-390-2480
Omni Center 1 300 West Broadway, Suite 224 1 Council Bluffs, IA 51503 1 T 712-322-5503
City of Blair, Nebraska
RE: Communication with Governance — Conclusion
Page 2
Accounting estimates are an integral part of the financial statements prepared by management
and are based on management's knowledge and experience about past and current events and
assumptions about future events. Certain accounting estimates are particularly sensitive because
of their significance to the financial statements and because of the possibility that future events
affecting them may differ significantly from those expected.
The most sensitive estimates affecting the City's financial statements were:
Management's estimate of the depreciation expense is based on a straight-line
basis over the useful life of the capital assets. Management's estimate of accrued
compensated absences is based upon September 30, 2015, pay rates.
Management's estimate of the collectability of receivables is based upon known
client facts and historical collection trends.
We evaluated the key factors and assumptions used to develop the estimates in
determining that it is reasonable in relation to the financial statements taken as a
whole.
Certain financial statement disclosures are particularly sensitive because of their significance to
financial statement users. The most sensitive disclosures affecting the financial statements were:
The Disclosure of the insurance recovery and impairment loss in Note K describes
the insurance proceeds and impairment losses incurred by the City related to the
2015 hail storm.
The disclosure of the implementation of new GASB accounting standard in Note
L describes the new accounting standards implemented by the City as of October
1, 2014, and their impact on the financial statements.
The disclosure of a change in accounting principle in Note M to the financial statements
in which management determined it was reasonable to change from accruing deferred
property taxes for 30 days instead of 60 days as was done in the PY. This resulted in
beginning fund balance being reduced by $5,071.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encowitered in Performing the,4udit
We encountered no significant difficulties in dealing with management in performing and
completing our audit.
City of Blair, Nebraska
RE: Communication with Governance — Conclusion
Page 3
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified
during the audit, other than those that are clearly trivial, and communicate them to the
appropriate level of management. The attached schedule summarizes uncorrected misstatements
of the financial statements. Management has determined that their effects are immaterial, both
individually and in the aggregate, to the financial statements taken as a whole. In addition, none
of the misstatements detected as a result of audit procedures and corrected by management were
material, either individually or in the aggregate, to each opinion unit's financial statements taken
as a whole.
Disagreements with Management
For purposes of this letter, professional standards define a disagreement with management as a
financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction,
that could be significant to the financial statements or the auditor's report. We are pleased to
report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the
management representation letter dated January 12, 2016.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and
accounting matters, similar to obtaining a "second opinion" on certain situations. If a
consultation involves application of an accounting principle to the governmental unit's financial
statements or a determination of the type of auditor's opinion that may be expressed on those
statements, our professional standards require the consulting accountant to check with us to
determine that the consultant has all the relevant facts. To our knowledge, there were no such
consultations with other accountants.
Other Attdit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and
auditing standards, with management each year prior to retention as the governmental unit's
auditors. However, these discussions occurred in the normal course of our professional
relationship and our responses were not a condition to our retention.
City of Blair, Nebraska
RE: Communication with Governance — Conclusion
Page 4
Other Inforination in Documents Containing Audited Financial Stateinents
With respect to the supplementary information accompanying the financial statements, we made
certain inquiries of management and evaluated the form, content, and methods of preparing the
information to determine that the information complies with accounting principles generally
accepted in the United States of America, the method of preparing it has not changed from the
prior period, and the information is appropriate and complete in relation to our audit of the
financial statements. We compared and reconciled the supplementary information to the
underlying accounting records used to prepare the financial statements or to the financial
statements themselves.
This information is intended solely for the use of the Council Members and management of City
of Blair, Nebraska and is not intended to be and should not be used by anyone other than these
specified parties.
Very truly yours,
Hayes & Associates, L.L.C.
Omaha, Nebraska