FY1996 Financial Report KenoCITY OF BLAIR, NEBRASKA
Special Revenue Fund -KENO
SEPTEMBER 30, 1996
1904 SOUTH STREET
BOX 486
BLAIR, NEBRASKA 68008
Honorable Mayor
of the City
City of Blair,
Dear Gentlemen:
EDWARD W. SCHROEDER
CERTIFIED PUBLIC ACCOUNTANT
and Members
Council
Nebraska
RESIDENCE:
(402) 468-5253
OFFICE:
(402) 42.6-4080
December 4, 1996
"INDEPENDENT AUDITOR'S REPORT"
I have audited the accompanying financial statements of the
Special Revenue Fund -Keno of the City of Blair, Nebraska, as of and
for the fourteen months ended September 30, 1996. These financial
statements are the responsibility of management. My responsibility is
to express an opinion on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards, ,and provisions of the Nebraska County and City
Lottery Act. Those standards require that I 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 significant estimates
made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provided a
reasonable basis for my opinion.
As discussed in Note A, the financial statements present only the
Special Revenue Fund -Keno and are not intended to present fairly the
financial position and results of operations of City of Blair,
Nebraska, in conformity with generally accepted accounting principles.
In my opinion, the financial statements referred to in the first
paragraph present fairly, in all material respects, the financial
position of the Special Revenue Fund -Keno of the City of Blair,
Nebraska as of September 30, 1996, and the results of its operations
for the fourteen months then ended in conformity with generally
accepted accounting principles.
Edward W. Schroeder
A Certified Public Accountant
EWS/mr
CITY OF BLAIR
BALANCE SHEET - Special Revenue Fund - KENO
SEPTEMBER 30, 1996
ASSETS
Cash and Savings $77,949
Accounts receivable operator 4,712
Total $82,661
LIABILITIES AND FUND BALANCE
Accounts payable - Taxes $ 2,900
Fund balance - restricted -for
community betterment only 79,761
Total $82,661
See Notes to Financial Statements
-2-
CITY OF BLAIR, NEBRASKA
STATEMENT OF GROSS
PROCEEDS DISTRIBUTION
AND CHANGES IN
FUND BALANCE
SPECIAL REVENUE
FUNDS - KENO FUND
FOR THE FOURTEEN MONTHS
ENDED SEPTEMBER 30 1996
GROSS PROCEEDS
$748,648
PRIZES:
Declared Prizes
558,056
Unclaimed Wins
(2,066)
Net Prizes Paid
555,990
NET HOLD
192,658
ALLOWABLE EXPENSES PAID:
Lottery Operator's Commission
(104,810)
NET KENO PROCEEDS
87,848
EXPENSES PAID BY CITY:
State Taxes
14,973
Other Expenses
2,500
TOTAL EXPENSES PAID
17,473
PROCEEDS AVAILABLE FOR
DISTRIBUTION
70,375
TRANSFERS TO PRIZE RESERVES
(18,403)
COMMUNITY BETTERMENT PROJECTS
(15,785)
NET AFTER TRANSFERS
36,187-
6,187Beginning
BeginningKeno Account
Fund Balance
42,038
Interest income
1,536
KENO ACCOUNT FUND BALANCE
$ 79,761
PRIZE RESERVE FUND RECONCILIATION
FOR THE REPORTING PERIOD
Beginning Fund Balance $ 697
Increase to Fund 18,403
Withdrawals from Fund 0
Ending Fund Balance $19,100
-3-
CITY OF BLAIR, NEBRASKA
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. The City of Blair accounts for its financial position and
results of operations in accordance with generally accepted
accounting principles applicable to governmental units. The
Special Revenue Fund -Keno is a governmental fund of the City of
Blair used to account for the activities of its Keno operations.
The Statements are not intended to present financial position and
results of operation of the financial reporting entity.
B. Basis of Accounting:
The Special Revenue Fund, is accounted for using the
accrual basis of accounting. The revenues are recognized when
earned and expenditures are recognized when incurred.
The City of Blair does not apply encumbrance accounting in any
of its funds.
2. INVESTMENTS
Investments consist of savings accounts with current
maturities. These investments have no restrictions. The
deposits are entirely category 1 which means that the investments
are insured or collateralized with securities held by the banking
institution. The funds of the Keno Fund are restricted by the
State of Nebraska. They can only be spent by the City for
community betterment projects.
3. LICENSED KENO LOTTERY
The City of Blair entered into a five year agreement with
Blair's Big Red Keno LTD., a Nebraska Limited Partnership, as of
September 2, 1994, allowing them to operate a Keno lottery in
Blair, Nebraska. The terms of the agreement in relation to gross
proceeds of the lottery are as follows:
Prizes paid out 65% to 770
Operator's commission 140
Blair funds for betterment and taxes 9%
In addition to the audit procedures mentioned in the independent
auditor's report the State of Nebraska Regulation 35-616 was
followed in the audit of the City of Blair Keno Lottery
operation.
-4-
EDWARD W. SCHROEDER
CERTIFIED PUBLIC ACCOUNTANT
s
1904 SOUTH STREET
BOX 486
BLAIR, NEBRASKA 68008
December 4, 1996
Honorable Mayor and Members
of the City Council
City of Blair, NE 68008
Gentlemen:
RESIDENCE:
(402) 468-5253
OFFICE:
(402) 426-4080
I have audited the accompaying financial statements of the
Special Revenue Fund -Keno of the City of Blair, Nebraska, for
the fourteen months ended September 30, 1996, and have issued
my report thereon dated December 4, 1996.
I have conducted my audit in accordance with generally
accepted auditing standards and provisions of the Nebraska
County and City Lottery Act. Those standards require that I
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement.
Compliance with laws, regulations, contracts, and grants
applicable to the City of Blair Special Revenue Fund -Keno is
the responsibility of the City of Blair management. As part of
obtaining reasonable assurance about whether the financial
statements are free of material misstatement, I performed tests
of the City of Blair Special Revenue Fund -Keno's compliance
with such provisions of laws, regulations, contracts, and
grants. However, it should be noted that our objective was not
to provide an opinion on overall compliance with such
provisions.
The results of my tests indicate that, with respect to the
items tested, the City of Blair Special Revenue Fund -Keno
complied, in all material respects, with the provisions
referred to in the preceding paragraph. With respect to items
not tested, nothing came to my attention that caused me to
believe that the City of Blair Special Revenue Fund -Keno had
not complied, in all material respects, with those provisions.
This report is intended for the information of the Blair
City Council. This restriction is not intended to limit the
distribution of this report, which is a matter of public
record.
Edward W. Schroeder
Certified Public Accountant
EWS/mr
k
ARD W. SCHROEDER
CERTIFIED PUBLIC ACCOUNTANT
1904 SOUTH STREET
BOX 486
BLAIR, NEBRASKA 68008
December 4, 1996
Honorable Mayor and Members
of the City Council
City of Blair, NE 68008
Gentlemen:
RESIDENCE:
(402) 468-52.53
OFFICE:
(402) 426-4080
I have audited the financial statements of the Special
Revenue Fund -Keno of the City of Blair, Nebraska, for the
fourteen months ended September 30, 1996, and have issued my
report thereon dated December 4, 1996.
I have conducted my audit in accordance with generally
accepted auditing standards and provisions of the Nebraska
County and City Lottery Act. Those standards require that I
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement.
In planning and performing my audit of the Special Revenue
Fund -Keno, of the City of Blair as of and for the fourteen
months ended September 30, 1996, I considered its internal
control structure in order to determine our auditing procedures
for the purpose of expressing my opinion on the financial
statements and not to provide assurance on the internal control
structure.
The management of the City of Blair, Nebraska is
responsible for establishing and maintaining an internal
control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess
the expected benefits and related costs of internal control
structure policies and procedures. The objectives of an
internal control structure are to provide management with
reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition,
and that transactions are executed in accordance with
management's authorization and recorded properly to permit the
preparation of financial statements in accordance with
generally accepted accounting principles. Because of inherent
limitations in any internal control structure, errors or
irregularities may nevertheless occur and not be detected.
Also, projection of any evaluation of the structure to future
periods is subject to the risk that procedures may become
inadequate because of changes in conditions or that the
effectiveness of the design and.operations of policies and
procedures may deteriorate.
Mayor and Members of
the City Council
Page 2
For the purpose of this report, I have classified the
significant internal control structure policies and procedures,
in the following categories:
Accounting Controls
Cycles of the Entities' Activity
Treasury or financing
Revenue/receipts
Purchases/disbursements
External financial reporting
Financial Statement Captions
Cash and cash equivalents
Receivables
Inventory
Property and equipment
Payables and accrued liabilities
Debt
Fund balance
Accounting Applications
Billings
Receivables
Cash receipts
Purchasing and receiving
Accounts payable
Cash disbursements
Payroll
Inventory control
Property and equipment
General ledger
Administrative Controls
General Requirements
Political activity
Davis -Bacon Act
Civil Rights
Cash management
Federal financial reports
Specific Requirements
Types of services
Eligibility
Matching level of effort
Reporting
Cost allocation
Special requirements, if any
For all of the control categories listed above, I
obtained an understanding of the design of relevant policies
and procedures and whether they have been placed in
operation, and I assessed control risk.
I noted a certain matter involving the internal control
structure and its operation that I consider to be a
reportable condition under the standards established by the
American Institute of Certified Public Accountants.
Reportable conditions involve matters coming to my attention
relating to significant deficiencies in the design or
operation of the internal control structure that, in my
judgment, could adversely affect the entity's ability to
record, process, summarize, and report financial data
consistent with the assertions of management in the financial
statements.
Mayor and Members of
the City Council
Page 3
A material weakness is a reportable condition in which
the design or operation of one or more of the specific
internal control structure elements does not reduce to a
relatively low level the risk that errors or irregularities
in amounts that would be material in relation to the
financial statements being audited may occur and not be
detected within a timely period by employees in the normal
course of performing their assigned functions.
My consideration of the internal control structure would
not necessarily disclose all matters in the internal control
structure that might be reportable conditions and,
accordingly, would not necessarily disclose all reportable
conditions that are also considered to be material weaknesses
as defined above. However, I noticed the following
reportable condition that we believe to be a material
weakness.
The City of Blair does not have adequate segregation of
duties.
This report is intended solely for the information of
the City of Blair, the cognizant agency and other agencies.
This restriction is not intended to limit the distribution of
this report, which is a matter of public record.
Edward W.
Certified
EWS/mr
Schroeder
Public Accountant