Audit - 20061
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COMMUNITY ACCESS TELEVISION OF SAL INA, INC.
Salina, Kansas
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FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT
December 31,2006 -
CLUBINE AND RETTELE, CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
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SALINA, KANSAS
COMMUNITY ACCESS TELEVISION OF SALINA, INC.
Salina, Kansas
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INDEX
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Pape
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INDEPENDENT AUDITORS' REPORT
1
STATEMENT OF ASSETS, LIABILITIES AND NET ASSETS -
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MODIFIED CASH BASIS - Exhibit 1
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STATEMENT OF REVENUES, EXPENSES AND OTHER CHANGES
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IN NET ASSETS - MODIFIED CASH BASIS - Exhibit II
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STATEMENT OF CASH FLOWS - MODIFIED CASH BASIS - Exhibit III
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NOTES TO THE FINANCIAL STATEMENTS
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CLUBINEISL
RETTELE
Certified Public Acmumt=u
aw
Robert I. Clubine, C.P.A.
David A. Rettele, C.P.A.
Jay D. Langley, C.P.A.
Jon K. Bell, C.P.A.
Leslie M. Corbett, C.P.A.
Stacy J. Sokol, C.P.A.
Marci K. Fox, C.P.A.
John T. Millikin, C.P.A.
' Linda A. Suelter, C.P.A.
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218 South Santa Fe
P.O. Box 2267
Salina, Kansas
67402 -2267
Salina
7851825-5479
Salina Fax
785 / 825 -2446
Ellsworth
785 / 472 -3915
Ellsworth Fax
785 1472-5478
INDEPENDENT AUDITORS' REPORT
To: The Board of Directors
Community Access Television of Salina, Inc.
We have audited the accompanying statement of assets, liabilities and net assets -
modified cash basis of Community Access Television of Salina, Inc. as of December 31,
2006, and the related statements of revenues, expenses and other changes in net assets -
modified cash basis, and cash flows - modified cash basis, for the year then ended. These
financial statements are the responsibility of Community Access Television of Salina, Inc.'s
management. Our responsibility is to express an opinion 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. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of material
misstatements. 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. We believe that our audit provides
a reasonable basis for our opinion.
As described in Note 1, these financial statements were prepared on the basis of cash
receipts and expenditures except that the statements include a provision for depreciation of
property and equipment and accrued payroll taxes. This basis is a comprehensive basis of
accounting other than generally accepted accounting principles.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the assets, liabilities and net assets of Community Access Television of Salina,
Inc. as of December 31, 2006, and its revenues collected and expenses paid for the year
then ended, on the basis of accounting described in Note 1.
June 20, 2007
CLLUff1
B,INEAND RETTELE, CHARTE�REEDD, Q � .
tCOMMUNITY ACCESS TELEVISION OF SALINA, INC.
Salina, Kansas
STATEMENT OF ASSETS, LIABILITIES AND NET ASSETS
MODIFIED CASH BASIS
' December 31, 2006
ASSETS
' Current Assets
Cash in bank
Donated facilities, current portion
Total Current Assets
Property and Equipment, at cost
' Building improvements
Equipment
Deduct - Accumulated depreciation
Total Property and Equipment
' Total
LIABILITIES AND NET ASSETS
Current Liabilities
Accrued payroll taxes and withholdings
' Net Assets
Unrestricted
' Undesignated
Designated for equipment repair
Designated for construction project
Designated for youth programs
Temporarily restricted
Total Net Assets
' Total
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' See accompanying notes which are an integral part
of the financial statements.
' (2)
Exhibit I
$ 180,504
4,200
184,704
153,097
824,991
978,088
(845,107 )
132.981
$ 317,685
171
301,825
2,360
2,769
3,360
4,200
314,514
$ 317,685
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COMMUNITY ACCESS TELEVISION OF SALINA, INC.
Salina, Kansas
Exhibit II
STATEMENT OF REVENUES, EXPENSES AND OTHER CHANGES
IN NET ASSETS - MODIFIED CASH BASIS
For the Year Ended December 31, 2006
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Changes in Unrestricted Net Assets
Revenue and Reclassifications
Revenue
Cable franchise
$ 144,594
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City ordinance
199,173
Contributions
6,010
Tapes
3,675
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Fees and classes
Interest
3,715
6,089
Miscellaneous
2,804
Total Revenue
Net Assets Released From Restrictions
366,060
51,600
Total Revenue and Reclassifications
417,660
Expenses
Accounting
5,670
Legal
144
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Cable consultant
13,988
Office supplies
2,099
Postage and mailing
2,056
Printing
3,286
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Repairs and maintenance
4,774
Telephone and cable
5,070
Salnet
259
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Board icontingency
87
Dues and publications
1,110
Miscellaneous
3,020
Tapes and expendables
7,157
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Community relations
1,450
Community grant expenses
3,308
Youth programs
Advertising and fund raising
1,845
8,978
Wages
211,216
Payroll taxes
16,619
Retirement plan
4,091
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Continuing education
621
Underwriting usage
250
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Insurance
Travel and recruitment
16,379
2,058
Depreciation
70,920
Donated facilities
51,600
Total Expenses
438,055
Total Changes in Unrestricted Net Assets
(20,395)
Changes in Temporarily Restricted Net Assets
Net Assets Released From Restrictions
Donated facilities
(51,600)
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Change in Net Assets
(71,995)
Net Assets at Beginning of Year
386,509
Net Assets at End of Year
$ 314,514
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See accompanying notes which are an integral part
of the financial statements.
(3)
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COMMUNITY ACCESS TELEVISION OF SALINA, INC.
Salina, Kansas
STATEMENT OF CASH FLOWS
MODIFIED CASH BASIS
For the Year Ended December 31, 2006
Cash Flows From Operating Activities
Cash received from cable contracts and others
Interest received
Cash paid to suppliers and others
Net Cash Provided by Operating Activities
Net Cash Used by Investing Activities
Purchase of property and equipment
Net Increase in Cash
Cash at Beginning of Year
Cash at End of Year
RECONCILIATION OF DECREASE IN NET ASSETS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Decrease in Net Assets
Adjustments to reconcile decrease in net assets
to net cash provided by operating activities
Increase in accrued payroll taxes and withholdings
Donated facilities, net
Depreciation
Total Adjustments
Net Cash Provided by Operating Activities
See accompanying notes which are an integral part
of the financial statements.
(4)
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Exhibit III
$ 359,971
6,089
(312,504)
53,556
(29,947)
23,609
156,895
$ 180.504
$ (71,995)
3,031
51,600
70,920
125,551
$ 53,556
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COMMUNITY ACCESS TELEVISION OF SALINA, INC.
Salina, Kansas
NOTES TO FINANCIAL STATEMENTS
December 31, 2006
Community Access Televisioh of Salina, Inc. was organized as a Kansas not - for - profit corporation with exempt
status under Internal Revenue Code Section 501(c)(3) on April 15, 1991. The organization operates cable
television channels to distribute noncommercial, educational, community -based media programs and information
to local citizens and provides equipment and technical knowledge for local citizens who produce the programs.
The following is a summary of the significant accounting policies:
A. The accounting records are maintained and the financial statements prepared on the modified cash basis of
accounting. Under the cash basis, receipts are recognized when collected and disbursements are
recognized when paid rather than when incurred. This method is modified to include a provision for
depreciation of property and equipment and for accrued payroll taxes.
In 1996, the organization adopted Statement of Financial Accounting Standards (SFAS) No. 117, "Financial
Statements of Not - For - Profit Organizations ". Under SFAS No. 117, the organization is required to report
information regarding its financial position and activities according to three classes of net assets: unrestricted
net assets, temporarily restricted net assets, and permanently restricted net assets. As permitted by this new
statement, the corporation has discontinued its use of fund accounting and, accordingly, has reclassified its
financial statements to present the three classes of net assets required.
C. The organization also adopted SFAS No. 116, "Accounting for Contributions Received and Contributions
Made,' whereby contributions received are recorded as unrestricted, temporarily restricted, or permanently
restricted support depending on the existence and /or nature of any donor restrictions. Restricted net assets
are reclassified to unrestricted net assets upon satisfaction of the time or purpose restrictions.
D. The organization's expenses are primarily program related with an insignificant amount of expenses related
to administration and fund raising. Thus, the Statement of Functional Expenses is not presented.
E. For the purposes of the Statement of Cash Flows - Modified Cash Basis, cash equivalents include bank
checking accounts, certificates of deposit and bank repurchase agreements.
Property and equipment are recorded at cost. Depreciation is determined using the straight -line method over
estimated lives of 5 to 15 years.
G. The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the financial statements and reported .
amounts of revenues and expenses during the reporting period. Actual results could differ from those
estimates.
2. A contract with the City of Salina dated March 23, 1992, provides for funds to be paid to Community Access
Television of Salina, Inc. in exchange for providing the services in Note 1. The term of the agreement was five
years commencing April 4, 1992, and could be extended by mutual agreement for two additional five year periods.
On January 27, 1997, both parties involved agreed to extend this contract an additional five years to April 3, 2002.
On March 14, 2002, the parties agreed to a contract extension to February 3, 2007.
Under the terms of the agreement, the City of Salina furnishes a building and utilities for the operations of
Community Access Television of Salina, Inc. The fair rental value for the life of the second contract extension of
this facility, including utilities, was estimated to be $268,800, and recognized as revenue in 2002. The expense for
2006 of $51,600 is shown under the caption "Donated Facilities" on the Statement of Revenues, Expenses and
Other Changes in Net Assets - Modified Cash Basis, in accordance with SFAS No. 116.
The City of Salina maintains a security interest in all assets and upon termination of the agreement, all real estate,
equipment, deposit accounts or other assets become the property of the City of Salina.
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3. Revenues from the cable franchisee represent an additional amount billed to each cable subscriber and remitted
quarterly to Community Access Television of Salina, Inc. The fourth quarter payment for 2006 of $38,474 was not
payable until after year -end.
Revenues from the city ordinance represent a percentage of fees paid to the City of Salina by the cable
franchisee. These are remitted quarterly to Community Access Television of Salina, Inc. The fourth quarter
payment for 2006 of $54,253 was not payable until after year -end.
From time to time, additional funds may be provided by the City of Salina and the cable franchisee for equipment
purchases at the request of Community Access Television of Salina, Inc. This revenue is recorded under the
caption "City equipment reserve" when received. In 2006, no such funds were received.
All of the revenues from the cable franchisee and the City of Salina are subject to the perpetuity of the contract
mentioned in Note 2.
4. The organization does not recognize any revenues or expenses from services contributed by volunteers. If any
revenues or expenses were recorded, it would be determined based on the difference of any amount paid to an
individual and the comparable compensation which would be paid to an individual if they were to occupy those
paid positions. The organization had no contributed services which would require reporting in accordance with
SFAS No. 116.
5. The cash in bank includes $106,293 invested with a bank under a repurchase agreement which is not insured by
the Federal Deposit Insurance Corporation.
6. Certain employees of the organization are entitled to paid vacation and sick days depending on various factors
which can be carried over to following years up to certain limits. The liability for these compensated absences at
December 31, 2006, is estimated to be $23,100. This estimated liability has not been reflected in these financial
statements.
7, The organization sponsors a Simple IRA Plan which began January 1., 1999. Contributions to the pension plan
were $4,091 for the year ended December 31, 2006.
8. The "Community Grant Expenses" on Exhibit II are for a grant to help increase community awareness about
recycling and waste reduction through educational programs. Upon completion, the expenses are summarized
and submitted for reimbursement. This process was not completed by December 31, 2006.
9. In 2007 and subsequent years, revenue will be substantially reduced under a new contract with the City of Salina.
The reduction is due to Kansas legislation passed in 2006 which eliminated local franchise relationships between
municipalities and video service providers.
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