Audit - 2007
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COMMUNITY ACCESS TELEVISION OF SALINA, INC.
Salina, Kansas
FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT
December 31, 2007
CLUBINE AND RETTELE, CHARTERED
CERTIFIED PUBLIC ACCOUNTANTS
SALINA, KANSAS
.,
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COMMUNITY ACCESS TELEVISION OF SALINA, INC.
Salina; Kansas
IN D EX
Paqe
INDEPENDENT AUDITORS' REPORT
1
STATEMENT OF ASSETS, LIABILITIES AND NET ASSETS -
- MODIFIED CASH BASIS - Exhibit I .
2
STATEMENT OF REVENUES, EXPENSES AND OTHER CHANGES
IN NET ASSETS - MODIFIED CASH BASIS - Exhibit II
3
STATEMENT OF CASH FLOWS - MODIFIED CASH BASIS - Exhibit III
4
NOTES TO THE FINANCIAL STATEMENTS
5-6
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CLUBlNE&
RETIELE
CHARfERED
Certified Public Aavuntants
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Robert I. Clubine, C.PA
David A. ReUele, C.P.A.
Jay D. Langley, C.PA
Jon K. Bell, C.P.A.
Leslie M. Corbett, C.P.A.
Stacy J. Sokol, C.PA
Marci K. Fox, C.P.A.
John T. Millikin, C.P.A.
Linda A. Sue Iter, C.P.A.
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218 South Santa Fe
P.O. Box 2267
Salina, Kansas
67402-2267
Salina
785/825-5479
Salina Fax
785 / 825-2446
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Ellsworth
785/472-3915
Ellsworth Fax
785/472-5478
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,
2007, 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 31,2007, and its revenues collected and expenses paid for the year
then ended, on the basis of accounting described in Note 1.
CLUBINE AND RETTELE, CHARTERED
~.~~
June 23, 2008
(1)
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COMMUNITY ACCESS TELEVISION OF SALINA, INC.
Salina, Kansas
STATEMENT OF ASSETS, LIABILITIES AND NET ASSETS
MODIFIED CASH BASIS
December 31, 2007
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
Other Assets
Donated facilities, less current portion
Total
LIABILITIES AND NET ASSETS
Current Liabilities
Accrued payroll taxes and with holdings
Net Assets
Unrestricted
Undesignated
Designated for equipment repair
Designated for construction project
Designated for youth programs
Total Unrestricted
Temporarily restricted
Total Net Assets
Total
See accompanying notes which are an integral part
of the financial statements. .
(2)
Exhibit I
$
200,509
85,200
285,709
153,097
861,205
1,014,302
(897,936)
116,366
237,200
$
639,275
$
104
306,229
2,391
4,800
3,351
316,771
322,400
639,171
$ 639,275
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COMMUNITY ACCESS TELEVISION OF SALINA, INC.
Salina, Kansas
I
STATEMENT OF REVENUES, EXPENSES AND OTHER CHANGES
IN NET ASSETS - MODIFIED CASH BASIS
For the Year Ended December 31,2007
I
Changes in Unrestricted Net Assets
Revenue and Reclassifications
Revenue
Cable franchise
City ordinance
Grant
Contributions
Tapes
Sponsorship
Fees and classes
Interest
Miscellaneous
Total Revenue
Net Assets Released From Restrictions
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Total Revenue and Reclassifications
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Program Expenses
Accounting
Legal
Office supplies
Postage and mailing
Printing
Repairs and maintenance
Telephone and cable
Sainet
Board contingency
Dues and publications
Miscellaneous
Tapes and expendables
Community relations
Community grant expenses
Advertising
Wages
Payroll taxes
Retirement plan
Continuing education
Underwriting usage
Insurance
Travel and recruitment
Depreciation
Donated facilities rent
Total Program Expenses
Other Changes in Net Assets
Loss on sale of assets
Total Changes in Unrestricted Net Assets
Changes in Temporarily Restricted Net Assets
Donated facilities revenue
Net assets released from restrictions
Total Changes in Temporarily Restricted Net Assets
Change in Net Assets
Net Assets at Beginning of Year
Net Assets at End of Year
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See accompanying notes which are an integral part
of the financial statements.
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(3)
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Exhibit II
$
86,995
275,529
3,841
6,633
2,483
4,115
4,208
7,591
5,205
396,600
70,300
466,900
5,765
50
2,149
1,872
3,610
6,795
4,148
559
129
1,100
4,809
4,825
1,359
261
5,262
250,420
19,388
5,220
1,315
710
10,852
6,488
52,961
70,300
460,347
(96)
6,457
$
388,500
(70,300)
318,200
324,657
314,514
639,171
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COMMUNITY ACCESS TELEVISION OF SALINA, INC.
Salina, Kansas
Exhibit III
STATEMENT OF CASH FLOWS
MODIFIED CASH BASIS
For the Year Ended December 31, 2007
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
$
389,009
7,591
(340,153)
56,447
Cash Flow From Investing Activities
Proceeds from sale of equipment
Purchase of property and equipment
Net Cash Used by I nvesting Activities
2,400
(38,842)
(36,442)
Net Increase in Cash
Cash at Beginning of Year
20,005
180,504
Cash at End of Year
$
200,509
RECONCILIATION OF DECREASE IN NET ASSETS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Increase in Net Assets
$
324,657
Adjustments to reconcile decrease in net assets
to net cash provided by operating activities
Decrease in accrued payroll taxes and with holdings
Donated facilities, net
Loss on sale of equipment
Depreciation
Total Adjustments
(3,067)
(318,200)
96
52,961
(268,210)
Net Cash Provided by Operating Activities
$
56,447
See accompanying notes which are an integral part
of the financial statements.
(4)
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COMMUNITY ACCESS TELEVISION OF SALINA, INC.
Salina, Kansas
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
1. Community Access Television 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.
B. 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.
C. F9r the purposes of the Statement of Cash Flows - Modified Cash Basis, cash equivalents inciude bank
checking accounts, certificates of deposit and bank repurchase agreements.
D. Property and equipment are recorded at cost. Depreciation is determined using the straight-line method over
estimated lives of 5 to 15 years.
E. 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, provided 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. On April 2, 2007, the parties
agreed to a new contract beginning April 4, 2007, and terminating December 31,2011. The contract may be
renewed for periods of five years at a time.
In 2007 and subsequent years, revenue will be substantially reduced under the 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. This contract contains a declining revenue provision as
follows: 70% for April 4, 2007 through December 31,2007,65% for 2008,60% for 2009, 55% for 2010 and 50%
for2011.
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 estimated fair rental value for the life of the new contract of this
facility, including utilities, was estimated to be $388,500, and recognized as restricted revenue in 2007. For 2007,
the revenue released from restrictions of $70,300 is shown as a reclassification and the expense of $70,300 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.
(5)
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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. This agreement was not renewed, therefore a payment
for the period from April to June, 2007 will be the last received.
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 2007 of $81 ,510 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 2007, no such funds were received.
All of the revenues from 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 $124,198 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 31,2007, is estimated to be $21,433. 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 $5,220 for the year ended December 31,2007.
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 completed during 2007.
(6)
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