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Audit Report - 1987 SALINA AIRPORT AUTHORITY Salina, Kansas I I AUDIT REPORT Year 1987 ~ ~ ~ ~ ~ ~ ~ i ì HARRISON & ARNETT, CHARTERED Certified Public Accountants Accounting Bldg., 719 East Crawford Salina, Kansas 67401 I I I I I SALINA AIRPORT AUTHORITY TABLE OF CONTE~TS I I Auditor's Report 1 I GENERAL PURPOSE FINANCIAL STATEMENTS I Financial Statements Balance Sheet Statement of Revenues, Expenses and Changes Statement of Changes in Financial Position Summary of Capital Expenditures Notes to Financial Statements in Equity 2-3 4 5 6 7-9 I I SUPPLEMENTAL INFORMATIOH I Financial Statements-Airport Revolving Account Balance Sheet Statement of Revenues, Expenses and Changes Statement of Changes in Financial Pos1tion Capital Expenditures-Airport Revolving Account Financial Statements-Building Revenue Account Balance Sheet Statement of Revenues, Expenses and Changes Statement of Changes in Financial Po81tion Capital Expenditures-Building Revenue Account Bonds of Indebtedness (Summary) General Obligat10n Bonds Build1ng Revenue Bonds-Series 1984 Building Revenue Bonds-Series 1985 Reconcilement of F1scal Agency Account Schedule of Investments Insurance in Force in Equity 10 11-12 13 14-15 I in Equity 16-17 18 19 20 21 22 23 24 25 26 27 I I I I ADDITIONAL INFORMATION REQUIRED BY OHB CIRCULAR A-128 I Report on Internal Accounting Controls Based Solely on a Study and Evaluation Made as Part of the Audit of the General Purpose Financial Statements Report on Compliance With Laws and Regulations That Hay Have a Material Effect on the F1nancial Statements Report on Internal Accounting and Administrative Controls Used to Administer Federal Financial Assistance Programs Report on Compliance With Laws and Regulations Relating to Federal Financial Assistance Programs Schedule of Findings and Quest10ned Costs Recipients Comments on Current and Prior Findings Report on Supplementary Federal Financial Assistance Schedule of Federal Assistance Programs Summary of Federal Assistance Programs 28-29 I 30 31-33 I 34-35 36 36 37 38 39 I I I I HARRISON & ARNETT I CHARTERED CERTIFIED PUBLIC ACCOUNTANTS I EUGENE 0 HARRISON, CPA THOMAS G. ARNETT, CPA A H LECKBAND, CPA (913) 827.7244 719 EAST CRAWFORD SALINA, KANSAS 67401 I February 3, 1988 I ~ The Board of Directors Salina Airport Authority Salina, Kansas ~ We have examined the general purpose financial statements Clf the Salina Airport Authority, Salina, Kansas, as of and for the years ended December 31, 1987 and December 31, 1986 as listed in the table of contents. Our examinations were made in accordancE~ with generally accepted auditing standards and the Minimum Standard Audit Program approved by the State Municipal Accounting Board and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circum- stances. ~ ì ~ In our opinion, the general purpose financial statements referred to above present fairly the financial position of the Salina Airport Authority at December 31, 1987 and December 31, 1986, and the results of its operations and changes in its financial position for the years then ended, in conformity vith generally accepted accounting principles applied an a basis consistent with that of the preceding year. ~ ~ Our examination was made for the purpose of farming an opinion on the general purpose financial statements taken as a whole. The individual fund financial statements and schedules listed in the table of contents are presented fer purpose of additional analysis and are not a required part of the general purpose financial statements. Such information has been subJected to the auditing procedures applied in the examination of the general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial statements taken as a whole. ~ ~ ~ ~ HARRISON & ARNETT, CHARTERED ~~ THOMAS G. ARNETT CPA In charge of and actively engaged in this audit ~ ~ II Page 1 MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS Decembe.r 31 1987 1986 $ 50.00 $ 50.00 709,507.24 722,899.17 2,000.00 110,000.00 51,854.90 10,311. 08 11,373.84 9,994.30 $ 774,785.98 $ 853,254.55 ø - J I SALINA AIRPORT AUTHORITY BALANCE SHEET ASSETS CURRENT ASSE:TS Cash cn hand Cash in banks Note 4 Cert~iicates of deposit Account receivable Notes receivable-current Note 5 portion TOTAL CURRENT ASSETS RESTRICTED ASSETS Certificates of deposit Bond reserve Note 5 Replacement and depreciation Cash 1n Bank Eccnomic development Nate 8 Prooeeda of land sale Note 9 Nate 7 TOTAL RESTRICTED ASSETS FEED ASSETS Equipment Buildings Other improvements Land Less-aocurnulated depre=1ation TOTAL fIXED ASSETS OTHER ASSETS Long-term notes receivable Less-current portion TOTAL OTHER ASSETS TOTAL ASSETS (continued) I I I $ 60,000.00 $ 40,000.00 60,000.00 40,000.00 753,925.82 714,319.78 7,422.13 s 873,925.82 $ 801,741. 91 $ 857,799.96 $ 828,070.46 6,572,509.12 6,510,900.07 5, 762, 221. 24 ::1,240, 158. 16 1,018,057.50 1,018,057.50 $14,210,587.82 $11,597,186.19 3,394,494.06 2,835,202.89 $10,816,093.76 $ B,761,983.30 $ 47,156.87 $ 57,151. 17 11,373.84 9,994.30 s 35,783.03 $ 47,156.87 $12,500,588.59 $10,464,136.63 -------------- ---.----------- -------------- - --,-- - - - -- -- -- I I I I I I I I I I I 8 The nates to financial statements are an integral part of thief statement Page 2 (continued) LIABILITIES AND EQUITY December 31 1987 1986 23,618.21 $ 5,170.44 4,447.21 145,000.00 145,000.00 5,626.69 '3, 915. 11 10,937.78 11,608.34 190,353.12 $ 170,970.66 CURRENT LIABILITIES Account payable Note 11 Payroll taxes Band payable-current portion Deferred rent income Accrued bond interest $ TOTAL CURRENT LIABILITIES s LO~G-TERM LIABILITIES Bonds payable Lees-current portion $ 1,145,000.00 145,000.00 TOTAL LONG-TERM LIABILITIES $ 1,000,000.00 TOTAL LIABILITIES $ 1,190,353.12 RESTRICTED EQUITY Bond reserve Replacement & depreciat~on reserve Econo~ic development reserve Proceeds of land sale reserve $ 60,000.00 60,000.00 753,925.82 TOTAL RESTRICTED EQUITY EQUITY-UNRESTRICTED $ 873,925.82 10,436,309.65 TOTAL EQUITY $11,310,235.47 TOTAL LIABILITIES & EQUITY $12,500,588.59 -------------- -------------- $ 1,290,000.00 145,000.00 $ 1,145,000.00 $ 1,315,970.66 $ 40,000.00 40,000.00 714,319.78 7,422.13 $ 801,741. 91 8,346,424.06 $ 9,148,165.97 $10,464,136.63 -------------- -------------- The notes to financial statements are an integral part of this statement. I Page 3 SALINA AIRPORT AUTHORITY GENERAL OPERATING FUND STATEMENT OF REVENUE, EXPENSES AND CHANGES IN EQUITY REVENUES Operating revenues Income from mill levy Proceeds of Airport Development Aid Program grants Sale of property Interest on property sales Interest on investments TOTAL REVENUES EXPENSES Office and administration Maintenance Bond ~nterest and expenses Depreciation TOTAL EXPENSES REVENUES LESS EXPENSES EQUITY-January 1 PRIOR PERIOD ADJUSTMENT Note 10 RESTATED EQUITY-January 1 REVENUE LESS EXPENSES PROVISION PROVISION FOR-Band reserve FOR-Replacement & Depreciated reserve FOR-Economic development reserve FOR-Proceeds of bond sale reserve PROVISION PROVISION EQUITY-UNRESTRICTED-December 31 - - 81 January 1 to December 31 1987 1986 $ 1,294,581. 23 227.59 2,180,711. 81 6,848.06 93,950.15 5 3,576,318.84 $ 386,226.31 364,977.97 97,935.69 565,109.37 81 $J.,243,068.17 36,445.31 II 81 s 1,414,249.37 $ 2,162,069.50 -------------- -------------- $ 9,148,165.97 $ 9,148,165.97 2,162,069.50 $11,310,235.47 (50,000.00) (60,000.00) (753,925.82) $10,436,309.65 -------------- -------------- 126,055.22 60.543.32 7,345.98 83,336.06 5J., 556, 794.06 81 6 294,797.66 284,918.41 114,871. 42 459,840.90 81 $1,154,428.39 81 $ 402,365.67 81 81 -_._---------- --,----------- $/:1,813,979.26 (68,178.96) $e:, 745, 800. 30 402,365.67 81 II II $SI, 148, 165.97 (40,000.00) (40,000.00) (714,319.78) (7,422.13) II 68,346,424.06 ------------- ------------- II II II - The notes to financial statements are an integral part of this statement. Page <4 SALINA AIRPORT AUTHORITY GENERAL OPERATING FUND STATEMENT OF CHANGES IN FINA~CIAL POSITION I I WORKING CAPITAL PROVIDED BY: Revenues less expenses Items not effect1ng working capital Depreciation Ga1n on sale of fixed assets WORKING CAPITAL PROVIDED BY OPERATIONS I Proceeds from sale of f1xed assets De=rease in long-term receivables Increase in lang-term debt Undepreciated cast, asset traded Decrease in working cap1tal I TOTAL WORKING CAPITAL PROVIDED I WORKING CAPITAL APPLIED TO: Capital expenditures Reduction of long-term l1abilities Increase in restricted assets In=rease in working capital I TOTAL WORKING CAPITAL APPLIED I I CHANGES IN WORKING CAPITAL Current Assets-Increase (Decrease) Cash in banks and cash an hand Certificates of depos1t Accounts receivable Notes receivable-current portion I I Current Liabilities-Decrease (Increase) Accounts payable Payroll deductions Bonds payable-current portion Deierred rent 1ncome Accrued bond 1nterest ~ ~ TOTAL INCREASE (DECREASE) IN WORKING CAPITAL ~ ~ January 1 to December 1987 1986 $2,162,069.50 555,109.37 $2,727,178.87 11,373.84 3,878.80 97,851. 03 $2,840,282.54 ------------- ------------- $2,623,098.63 145,000.00 72,183.91 $2,840,282.54 ------------- ------------- $ ( 13,391. 93) (108,000.00) 41,543.82 1,379.54 (23,618.21) (723.23) 4,288.42 670.56 $ (97,851. 03) $ 402,365.67 459,840.90 (60,543.32) $ 801,663.25 597,750.00 8,957.48 705,000.00 471.10 $2, 1.13,841. 83 ----,--------- ----.--------- $1,008,553.37 754,751. 91 :350,536.55 52, JL13, 841. 83 ---..--------- ---..--------- 5 499,165.19 (102,000.00) (131,318.92) 612.20 156,980.00 (1,644.10) (70,000.00) 2,611. 35 (3,869.17) 5 350,536.55 ------------- ------------- ------------- ------------- The notes to f~nancial statements are an integral part of this statement. III Page 5 Equipment $ 39,426.50 $ 48,267.45 I I I I I I I I I I I I I I I I I I I SALINA AIRPORT AUTHORITY GENERAL OPERATING FUND CAPITAL EXPENDITURES January 1 to December 31 1987 1986 Buildings 61,609.05 443,071.12 Other improvements 2,522,063.08 172,157.30 Land 345,057.50 TOTAL CAPITAL EXPENDITURES $2,623,098.63 $1,,008,553.37 ------------- ------------- --.----------- --.----------- The notes to financial statements are an integral part of this statement. Page 6 I I I I I I I THE SALINA AIRPORT AUTHORITY NOTES TO FINANCIAL STATEMENTS December 31, 1987 1. The Salina Airport Authority is governed by a board of five directors appo~nted by the City Commission of the City of Salina, Kansas. The following directors served during the period of our examinat~on: Thomas J. Kennedy, Chait"man Kenneth C. Stephenson, Vice-Chairman Charles Walker, Secretary Roger Morrison, Treasurer Charles B. Roth, Assistant Secretary-Treasurer Robert D. Wilbur, term expired April 25, 1987 Ed D. Pogue, term expired April 26, 1987 2. The fallowing officials, appointed by the Salina Airport Authority Board of Directors, served during the period of our examination: Timothy F. Rogers, Executive Director Donald C. Kneubuhl, Director of Operations 3. Summary of accounting policies A. The General Operating Fund is composed of two accounts, the Airport Revolving Account and the Building Revenue Account. The Airport Revolving Account is used for general airport operations and the Euilding Revenue Account is for segregation of monies and estab- l~shment of reserves as provided by the bond ordinances. The provisions of the bond ordinances have been complied with. B. The acctual basis of accounting is used. C. Depositary security is adequate for all accounts. D. Investments are stated at cast. E. F~xed assets are stated at cost. Depreciation is computed using the straight-line method based on estimated useful lives as follows: Equipment Bulld~ngs Other ~mprovements 5 - 10 years 15 - 30 years 20 years 4. Composition of cash in bank balances Bank IV, Sal:.oa, Kansas National Bank of America, Salina, Kansas 5 69,972.06 £:39,535.18 $ 709,507.24 ------------- ------------- Page 7 SALINA AIRPORT AUTHORITY II NOTES TO FINANCIAL STATEMENTS (continued) December 31, 1987 II 5. Composition of certificates of depos1t Bank IV, Sal1na, Kansas - 5 2,000.00 6. The Building Revenue Bond agreements for this Series 1984 and Series 1985 Building Revenue Bonds, require set-aside Bond Reserve at Decem- ber 31, 1987 of $40,000.00 and $20,000.00, respectively. II 81 Composition of Bond Reserve certificates of deposit Bank IV, Sal1na, Kansas National Bank of America, Salina, Kansas s 20,000.00 40,000.00 II s 60,000.00 II --.----------- --.----------- 7. The Building Revenue Eond agreements for the Series 1984 and Series 1985 Building Revenue Bands require set-aside Replacement and Dep- reciation Account at December 31, 1987 of $40,000.00 and $20,000.00 respectively. 81 Composition of Replacement and Depreciation Account certificates of deposit National Bank of America, Salina, Kansas First National Bank and Trust, Salina, Kansas 81 $ 40,000.00 20,000.00 II $ 60,000.00 --,----------- --.----------- 81 8. The board of directors of the Salina Airport Authority resolvl~d on May 14, 1986 to create a restricted account for economic development. II Composition of Economic Development account Cash in bank, First National Bank & Trust Co., Salina, Kansas Repurchase Agreement First National Bank & Trust Ca., Salina, Kansas 5 5,401. 34 81 748,524.48 s 753,925.82 81 --.--------.--- --.----------- 9. $7,287.00 in proceeds from a 1985 land sale were used to offs~t the casts of AlP 06 in 1ge7. F.A.A. restrictions on this account were released in 1987. II 81 81 II Page 8 II I I I I I I , ~ ~ I I I ~ ~ ~ ~ ~ ~ ~ SALINA AIRPORT AUTHORITY NOTES TO FINANCIAL STATEMENTS (continued) December 31, 1987 10. The December 31, 1985 1nventory of fixed assets revealed that certain fixed assets had not been removed from the accounts ~rhen the assets were sold, abandoned or demolished in prior years. This adjustment recogn1zes the removal of these fixed assets from the accounts. Cost Accumulated Depreciation $ 156,164.53 87,985.57 Undepreciated Cast s 68,178.96 ------------ ------------ 11. In 1984 the Salina Airport Authority acquired certain property commonly kno~n as the Federal Mogul Property. At the time of the aGquisition of this property the Salina Airport Authority filed an application ~ith the Baaed of Tax Appeals and requested that the property be removed from the tax rolls. In 1986 the Board of Tax Appeals denied the claim for exemption by the Salina Airport Authority. In DeGember of 1987 the D~strict Court of Sha~nee County, Kansas affirmed the decision of the Board of Tax Appeals. This adverse ruling an the tax exemption has no~ been appealed to the Kansas Court of Appeals. In the event of an adverse decision in regards to the exemptilJn of this property from taxation, the Salina Airport Authority ~il.L o~e the accrued taxes an this property from the date of its acqui!3ition as follo~s: 1985 1986 1937 $ 9,812.05 8,948.34 8,091. 78 $26,852.17 ---------- ---------- Page 9 SALINA AIRPORT AUTHORITY AIRPORT REVOLVING ACCOUNT EALANCE SHEET ASSETS CURRENT ASSETS Cash on hand Cash in banks Ao~ounts receivable TOTAL CURRENT ASSETS FIXED ASSETS Equipment Buildings Other 1mprovements Less-accumulated depreciation TOTAL FIXED ASSETS RESTRICTED ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Accounts payable Payroll deductions Deferred rent AND EQUITY TOTAL CURRENT LIABILITIES RESTRICTED EQUITY Econom~~ development reserve Prcceeds of bond sale reserve TOTAL RESTRICTED EQUITY EQUITY-UNRESTRICTED TOTAL EQUITY TOTAL LIABILITIES & EQUITY $ 828,070.46 2,459,201. 30 .2..t 240, 158. 16 - - - - II 81 II II II - II II II II II II II - ~ December 31 1987 1986 $ 50.00 $ 50.00 69,972.06 222,436.66 43, 118.78 10,161.08 $ 113,140.84 51 232,647.74 56,527,429.92 -.k 600,012.40 $4,927,417.52 5 721,741. 91 $ 857,799.96 2,917,651. 85 5, 762, 221. 24 59,537,673.05 2,234, 241. 82 $7,303,431. 23 $ 753,925.82 $5, 881. 807. 17 ------------- ------------- $ 4,447.21 9,715.11 Q ... 14,162.32 58,170,497.89 ------------- ------------- $ 23,618.21 5,170.44 5,466.69 $ 714,319.78 7,422.13 $ 34,255.34 $ 721,741. 91 ~145,902.94 55,867,644.85 $5,881,807.17 ------------- ------------- Page 10 The notes to f1nancial statements are an integral part of this statement. $ 753,925.82 $ 753,925.82 7,382,316.73 $8,136,242.55 $8,170,497.89 ------------- ------------- I I SALINA AIRPORT AUTHORITY AIRPORT REVOLVING ACCOUNT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN EQUITY I I TOTAL OPERATING REVENUES January 1 to DecE'mber 31 1987 1986 9 505,118.31 $ <1,69,145.16 31,874.74 20,690.01 9,324.14 10,991. 43 33,773.40 36,169.80 600.00 500.00 87,352.26 85,050.14 5,988.45 6,302.22 11,511. 94 9,183.44 7,824.00 7,544.00 390.00 1,267.48 $ 693,757.24 $ 6,46,843.68 $ $ 60,543.32 2,180,711. 81 126,055.22 227.59 36,445.31 51,815.66 33,724.25 $ 2,232,755.06 $ 256,768.10 $ 2,926,512.30 $ 903,611. 78 REVENUES OPERATING REVENUES Build1ng rents Agr1cultural land rents Other land rents Hangar rents Other rents Fixed base operator Landing fees Comml.ssions Ramp rents Miscellaneous income I I I I OTHER REVENUES Sale of property Proceeds from A1rport Development Aid program grants Income from mill levy Interest an investments I I TOTAL OTHER REVENUES TOTAL REVENUES I I EXPENSES OPERATING EXPENSES Office and Administration Office salaries 51 98,470.01 51 92, 862. 11 Ofiice supphes 4,701. 90 3,242.96 Postage 2,016.86 2,352.54 Travel expense 6,249.06 6,750.57 Agricultural land expense 5, 116.36 4,652.65 Legal and auditing 34,524.43 28,896.05 Insurance 62,107.90 60,370.68 Engineering 36,305.20 20,517.81 Payroll taxes 29,638.11 16,880.65 Employees retirement 8,823.35 6,364.01 Telephone 5,315.39 4,973.58 Industrial development program 20,000.00 20,000.00 Promotion 51,339.69 13,949.01 Other office and adm1nistration 18,772.55 11,074.38 SUB-TOTAL $ 383,380.81 $ 292,887.00 I I I I I I (continued) I Page 11 81 SALINA AIRPORT AUTHORITY AIRPORT REVOLVING ACCOUNT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN EQUITY (continued) Maintenance Building maintenan~e Runways, taxiways, and ramps Equipment, gas, oil and repairs Utl.li ties Grounds maintenance Maintenance salaries Snow removal Fire department expense Other maintenance expense SUB-TOTAL Depreciation TOTAL EXPENSES REVENUES LESS EXPENSES EQUITY-January 1 PRIOR PERIOD ADJUSTMENT REVENUE LESS EXPENSES TRANSFERS FROH BUILDING REVENUE ACCOUNT PROVISION FOR-Economic development reserve PROVISION FOR-Proceeds oi land sale reserve ECUITY-UNRESTRICTED-December 31 81 81 January 1 to December 31 1987 1986 $ 51,601. 11 $ 36,419.98 60,000.14 22,204.81 23,887.37 19,732.48 35,249.55 36,186.94 8,474.86 11,067.08 169,976.41 143,144.22 3,902.20 5,357.98 11,886.33 10,804.92 $ 364,977.97 $ 284,918.41 $ 443,522.89 $ 329,973.01 $1,191,881. 67 $ 907,778.42 $1,734,630.63 $ (4,166.64) ------------- ------------- ------------- ------------- 81 81 . . . . . $5,867,644.85 $5,574,668.80 (33,508.07) II $5,867,644.85 1,734,630.63 533,967.07 $5,541,160.73 (4,166.64) 330,650.76 II $9,136,242.55 $5,867,644.85 (753,925.82) (714,319.78) (7, 422. 13) 81 $7,382,316.73 $5" 145,902,94 81 81 II II II - ------------- ------------- ------------- ------------- Page 12 The notes to financial statements are an integral part of this ~tatement. I SALIHA AIRPORT AUTHORITY AIRPORT REVOLVING ACCOUNT STATEMENT OF CHANGES IN FINANCIAL POSITION I I I WORKING CAPITAL PROVIDED EY: Revenues less expenses Items not effecting work1ng capital Depreciation Ga1n on sale of fixed assets I WORKING CAPITAL PROVIDED BY OPERATIONS I Proceeds from sale of fixed assets Transfers from Building Revenue Account Undepreciated cost, asset traded Decrease in working capltal I TOTAL WORKING CAPITAL PROVIDED I I wORKING CAPITAL APPLIED TO: Capital expenditures Build~ngs transferred from Building Revenue Account Increase in restr1cted assets Increase in work1ng capital I TOTAL WORKING CAPITAL APPLIED I I 8 CHANGES IN WORKING CAPITAL Cùrrent Assets-Increase (Decrease) Cash in banks & cash an hand Accounts receivable 8 Current Liabilities-Decrease (Increase) Accounts payable Payroll deductions Deferred rent I January 1 to December 31 1987 1985 $1,734,630.63 443,522.89 $2,178,153.52 533,967.07 3,878.80 139,599.92 $2,855,599.31 ------------- ------------- $2, 608, 571. 86 214,843.54 32,183.91 $2,855,599.31 ------------- ------------- $ (152,454.60) 32,957.70 (23,618.21) (723.23) 4,248.42 TOTAL I~CREASE (DECREASE) IN WORKING CAPITAL $ (139,599.92) I ì I ------------- ------------- 5 (4,166.64) :129,973.01 (50,543.32) $ 255,253.05 ~¡97, 750. 00 :130,650.76 471.10 $1,194,134.91 -------------- ---..--------- 5 284,572.41 714,751. 91 194,810.59 $1,194,134.91 ---.---------- ---.---------- $ 167,784.25 (131,120.92) 155,980.00 (1,644.10) 2,811,35 $ 194,810.59 ------------- ------------- The notes to f1nancial statements are an integral part of th~s statement. ì Page 13 SALINA AIRPORT AUTHORITY AIRPORT REVOLVING ACCOUNT CAPITAL EXPENDITURES II 81 January 1 to DecE~mber 31 1987 1986 EQUIPMENT Off1ce equipment S 2,160.43 $ 1987 Oldsmobile Ciera 9,293.80 Motor grader 3,000.00 1987 GMC dump truck 20,970.25 Plate oompactor 1,000.00 Communication equipment 3,002.02 Mower 9,885.00 198£ Chevrolet p1ck-up 10,497.00 Mobil radi08 7,380.55 Office equipment 14,901. 69 Spraying equipment 1,205.43 Shop equipment 4.397.78 TOTAL EQUIPMENT s 39,426.50 s 48,267.45 81 81 . . . . . BUILDINGS A. S. 1. hangar door S 28,046.67 $ 10,553.00 A. S. 1. hangar 6,483.00 Term¡.nal bldg. improvereent 1,680.39 12,692.64 Airport industrial paving 4,396.70 Airport Industr1al Center 6,475.52 40,902.02 TOTAL BUILDINGS s 47,082.28 $ 64,147.65 . . Page 14 . - - ~ ~ ~ ~ ~ (continued) SALINA AIRPORT AUTHORITY AIRPORT REVOLVING ACCOUNT CAPITAL EXPENDITURES (continued) January 1 to December 31 1987 1986 OTHER IMPROVEMENTS AlP 05 Master plan update AlP 06 Runway overlay, f1re station and supporting communications AIP 07 Lighting proJect AIP 08 Runway taxiway paving AIP 09 Runway 12/30 paving TOTAL OTHER IMPROVEMENTS 5 21,480.00 5 2~), 808. 18 955,907.06 1013,037.00 445,565.41 26,653.12 1,087,483.85 ~5, 079. 00 11,626.76 6,580.00 $2,522,063.08 $ 17:2,157.30 52, 608, 571. 86 $ 28'~, 572. 41 ------------- ------------- ------------- ------------- TOTAL CAPITAL EXPENDITURES The notes to financial statements are an integral part of this stéltement. Page 15 - SALINA AIRPORT AUTHORITY BUILDING REVENUE ACCOUNT BALANCE SHEET - II portion December 31 19B7 1986 5 639,535.18 $ 500,462.51 2,000.00 110,000.00 8,736.12 150.00 11,373. B4 9,994.30 $ 661,645.14 $ 620,606.81 II ASSETS CURRENT ASSETS Cash in banks Cert1ficates of deposit Accounts receivable Notes receivable-current - - TOTAL CURRENT ASSETS RESTRICTED ASSETS Certificates of deposit Provision for bond reserve Provision for replacement and depreciat10n 8 TOTAL RESTRICTED ASSETS $ 60,000.00 5 40,000.00 60,000.00 40,000.00 9 120,000.00 $ BO, 000. 00 8 II FIKED ASSETS Buildings Land TOTAL FIXED ASSETS $ 3,654,857.27 $4, 051, 69B. 77 1,018,057.50 -.h.°1B,057.50 $ 4,572,914.77 $5,069,756.27 1,160,252.24 -.h.235,190.49 $ 3,512,662.53 $3,834,565.78 II Less-accumulated deprec1ation - OTHER ASSETS Long-term notes receivable Less-current portion $ 47,156.87 11, 373. 84 $ 57, 151. 17 9,994.30 47,156.87 81 - TOTAL OTHER ASSETS $ 35,783.03 $ - TOTAL ASSETS $ 4,330,090.70 54,5B2, 329. 46 -------------- -------------- ------------- ------------- - 81 II (continued) II The notes to f1nancial statements are an integral part of this statement. Page 16 II LIABILITIES AND EQUITY CURRENT LIABILITIES Bonds payable-current portion Deferred rent income Accrued bond interest TOTAL CURRENT LIABILITIES LO~G-TERM LIABILITIES Bonds payable Less-current portion TOTAL LONG-TERM LIABILITIES TOTAL LIABILITIES (continued) RESTRICTED EQUITY Bond reserve Replacement and depreciation reserves TOTAL RESTRICTED EQUITY EQUITY-UNRESTRICTED TOTAL EQUITY TOTAL LIABILITIES & EQUITY December 31 1987 1986 $ 145,000.00 160.00 10,937.78 Iii 156,097.78 $1,145,000.00 145,000.00 51,000,000.00 51,156,097.78 8 60,000.00 60,000.00 $ 145,000.00 200.00 U, 608. 34 $ 1~)6, 808. 34 51,290,000.00 145,000.00 $1,145,000.00 $1,301,808.34 $ 40,000.00 40,000.00 $ 120,000.00 3,053,992.92 $3,173,992.92 $4,330,090.70 ------------- ------------- $ 00,000.00 3,200,521. 12 53, 2BO, 521. 12 54,502,329.46 ----.--------- ----.--------- The notes to financial statements are an 1ntegral part of this statement. I Page 17 TOTAL OPERATING REVENUES January 1 to Dec:ember 31 1987 1986 $ 530,447.97 51 :511,935. 10 18,528.66 19,467.03 17,722.36 19,272.36 34,125.00 45,450.00 100.00 $ 600,823.99 $ :596,224.49 $ 6,848.06 $ 7,345.98 42,134.49 49,611. 81 51 48,982.55 51 56,957.79 51 649,806.54 $ 653,182.28 . . . . SALINA AIRPORT AUTHORITY BUILDING REVENUE ACCOUNT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN EQUITV REVENUES OPERATING REVENUES Build1ng rents Agricultural land rents Other land rents Tank farm rent Other rents . . OTHER REVENUES Interest on sale of property Interest on 1nvestments (60,000,00) (40,OOO.00) . . . . . . ~ ~ ~ ~ ~ ~ ~ TOTAL OTHER REVENUES TOTAL REVENUES EXPENSES OPERATING EXPENSES Agricultural land expenses Build1ng maintenance Engineering Bond interest expense EKpense relating to bond issues Depreciation 51 2,845.50 51 1,910.66 97,274.44 108,494.17 661. 25 6,377.25 121,586.48 129,867.89 51 222,367.67 51 :246,649.97 $ 427,438.87 51 406,532.31 ------------- ---.---------- ------------- ---.---------- TOTAL EXPENSES REVENUES LESS EXPENSES EQUITY-January 1 PRIOR PERIOD ADJUSTMENT $3, 280, 521. 12 53,239,310.46 (34,670.89) REVENUES LESS EXPENSES TRANSFERS TO AIRPORT REVOLVING ACCOUNT 513,280,521. 12 427,438.87 (533,967.07) S3,:204,639.57 'W6, 532. 31 <:330,650.76 ) PROVISIONS FOR-Band reserve PROVISIONS FOR-Replacement & depreciation reserve $3,173,992.92 (60,000.00) 53,280,521. 12 (40,OOO.00) EQUITY-UNRESTRICTED-December 31 $3,053,992.92 53, 200, 521. 12 ------------- ------------- -------------- ---.---------- The notes to financial statements are an integral part of this statement. Page 18 SALINA AIRPORT AUTHORITY BUILDING REVENUE ACCOUNT STATEMENT OF CHANGES IN FINANCIAL POSITION January 1 to December 31 1987 1986 WORKING CAPITAL PROVIDED BY: Revenues over expenses Items not effecting work1ng capital depreciation $ 427,438.87 121,586.48 WORKING CAPITAL PROVIDED BY OPERATIONS $ 549,025.35 receivable debt to Airport 11,373.84 Decrease in long-term Increase in lang-term Buildings transferred Revolving Account Decrease in working capital 214,843.54 TOTAL WORKING CAPITAL PROVIDED $ 775,242.73 -------------- -------------- WORKING CAPITAL APPLIED TO: Capital expenditures Transfers to Airport Revolving Increase in restricted assets Decrease in long-term debt Increase in work1ng capital $ 14,526.77 533,967.07 40,000.00 145,000.00 41,748.89 Account TOTAL WORKING CAPITAL APPLIED $ 775,242.73 -------------- -------------- CHANGES IN WORKING CAPITAL Current Assets-Increase (Decrease) Cash in banks Certificates of depos1t Accounts rece1vable Notes receivable-current portion $ 139,072.67 (108,000.00) 8,586.12 1,379.54 Current Liabilities-Decrease (Increase) Bands payable-current portion Deferred rent income Accrued bond 1nterest 40.00 670.56 TOTAL INCREASE (DECREASE) IN WORKING CAPITAL $ 41,748.89 -------------- -------------- $ 406,532.31 129,867.89 s 5:16,400.20 8,957.48 705,000.00 s 1, 2~50, 357.68 -- - ------ - - - --- -- --- .----- ---- $ 723,980.96 3:30, 650. 76 40,000.00 1~55, 725. 96 $ 1, 2~50, 357.68 -----.- - - - - -- -- -- --- .----- ---- $ 3:31,380.93 (102,000.00) ( 198. 00> 612.20 (70,000.00) (200.00) (3,869.17) $ 155,725.96 -------------- -------------- The notes to f1nancial statements are an integral part of this statement. Page 19 SALINA AIRPORT AUTHORITY BUILDING REVENUE ACCOUNT CAPITAL EXPENDITURES BUILDING Ag chem building 1021 improvements Schwan's ingred~ents cooler Schwan's bldg. 820 improvement LAND Johnson 80 acres S.R. & G. 77 acres TOTAL CAPITAL EXPENDITURES $ 1:5,000.00 350,000.00 1:3,923.46 JI JI -- -- -- . . . ~ ~ ~ ~ . II II II 118 II II January 1 to December 31 1987 1986 11:5,212.50 22'3,845.00 $ 72:3,980.96 ---_._------- ----,-------- Page 20 The notes to financial statements are an integral part of this stéltement. $ 14,526.77 $ 14,526.77 ------------- ------------- I I I I I I I I General Obligation Bonds Building Revenue Bonds Series 1984 Building Revenue Bonds Series 1985 I I I I I I I I SALINA AIRPORT AUTHORITY BONDS OF INDEBTEDNESS December 31, 1987 Original Issue $ 790,000.00 400,000.00 900,000.00 $2,090,000.00 ------------- ------------- Page 21 Principal Outstanding Paid Balance $ 745,000.00 $ 45,000.00 80,000.00 :320,000.00 120,000.00 780,000.00 $ 945,000.00 51,145,000.00 ------------- ----.--------- ------------- ---.---------- THE SALINA AIRPORT AUTHORITY GENERAL OBLIGATION BONDS December 31, 1987 Date of Issue: Amount of Issue: Interest Rate: Maturity Date: Principal Paid: Outstanding Balance: February 1, 1967 $790,000.00 4.25, 3.375, 3.4X February 1, 1988 $745,000.00 5 45,000.00 Schedule of Payments Due in Year 1988 Bond Principal $ 45,000.00 Page 22 Bond Interest -- $ 76:5.00 8 SALINA AIRPORT AUTHORITY BUILDING REVENUE BONDS-SERIES 1984 December 31, 19B7 8 I Date of Is8ue: Amount of Issue: Interest Rate: Matur1ty Date: Principal Paid: Outstanding Balance: May 1, 1984 $400,000.00 I May 1, 1994 $ 80,000.00 $320,000.00 8 I Schedule of Band Princ1pal Payments 8 Due in Year Bond Principal - 1988 1989 1990 1991 1992 1993 1994 $ 30,000.00 40,000.00 40,000.00 50,000.00 50,000.00 50,000.00 EO, 000. 00 - I $320,000.00 ----------- ----------- I IInterest rate to be calculated an each interest payment date for the ensuing six months period. I I ~ ~ ~ ~ ~ i i Page 23 THE SALINA AIRPORT AUTHORITY , BUILDING REVENUE BONDS-SERIES 1985 December 31, 1987 , Date of Bands Date of Issue Interest Rate December 1, 1985 January 17, 1986 Variable, Maximum lQ.04X-Minimum 8.0DX December 1, 1995 $900,000.00 780,000.00 - Haturity Date Principal Amount Outstanding Balance - Due in Year Band Principal - I Schedule of Bond Principal Payments 1988 1989 1990 1991 1992 1993 1994 1995 $ 70,000.00 70,000.00 90,000.00 90,000.00 110,000.00 110,000.00 110,000.00 130,000.00 I I 8 ------------ ------------ 8 $ 780,000.00 8 8 81 81 II II II 81 Page 24 II I I I I SALINA AIRPORT AUTHORITY RECONCILEMENT OF FISCAL AGENCY ACCOUNT December 31, 1987 BALANCE WITH FISCAL AGENCY-January 1, 1987 PAID TO FISCAL AGENT FOR: Matured bands Interest coupons Bond commi8s10n and postage I I TOTAL REMITTANCES AND BEGINNING BALANCE 8 RECEIVED FROM FISCAL AGENT: Cancelled bonds Interest coupons Commission and postage retained 8 I I I BALANCE WITH FISCAL AGENCY-December 31, 1987 I I I I I I I I Page 25 $45,000.00 2,295.00 645,000.00 2,295.00 $ -1L. 295. 00 647,295.00 --.iZ.L 295. 00 6 ----.------ ---..------ Page 26 I I I I I I I I I I I I I I I I I I I SALINA AIRPORT AUTHORITY SCHEDULE OF INVESTMENTS December 31, 1987 Balance Purchases Redemptioner Balance 1-1-87 Year 1987 Year 1987 12-31-87 AIRPORT REVOLVING ACCOUNT Certif1catea of deposit $ $> $> $ BUILDING REVENUE ACCOUNT Certificates of deposit 110,000 108,000 2,000 TOTAL GENERAL OPERATING Fund $> 110,000 $ $ 108,000 $> 2,000 ---------- --------- ---------- ---------- ---------- --------- ---------- ---------- ~ ~ ~ ~ ~ ~ Workmen's Compensation and Employer's Liability Comprehensive General Liability - Owners', Landlords', and Tenants' Liability - Rental Buildings- Industrial - Airport Terminal and Rental Buildings - - Vehicles and Equipment - Public Employees Blanket Bond I Public Officials and Employees Liabil~ty I Builders Risk - I I I II SALINA AIRPORT AUTHORITY INSURANCE IN FORCE December 31, 1987 Type of Coverage Bodily inJury and property damage Bodily inJury and property damage Fire and lightning, extended coverage, vandalism and malicious mischief-lass of rents Fire and lightning, extended coverage, vandalism and malicious mischief Liability Physical damage Medical payments Uninsured motorists Honesty blanket position bond coverage Errors & omissions including asbestos & pollution coverage on a claims made bas~s Structural damage coverage on building 1509 under construction Page 27 Amount of Co-Insurance Coverage Percentage $ 100,000.00 500,000.00 500,000.00 1,277,939.00 1,829,000.00 90~ 500,000.00 749,346.00 2,000.00 25/50,000.00 100,000.00 1,000,000.00 550,000.00 J HARRISON & ARNETT CHARTERED J CERTIFIED PUBLIC ACCOUNTANTS EUGENE 0 HARRISON, CPA THOMAS G. ARNETT, CPA AH LECKBAND, C PA (913) 827-7244 719 EAST CRAWFORD SALINA, KANSAS 67401 I I February 3, 1988 I The Board of Directors Salina Airport Authority Salina, Kansas 67401 I We have examined the general purpose financial statements of the Salina Airport Authority, Salina, Kansas, for the years ended December 31, 1987 and December 31, 1986, and have issued our reports thereon dated February 3, 1988 and January 25, 1987, respectively. As part of our examinations, ve made a study and evaluation of the system of internal accounting control of the Salina Airport Authority, Salina, Kansas, to the extent ve considered necessary to evaluate the system as required by generally accepted auditing standards and the standards for financial and compliance audits contained in the U.S. General Accounting Office Standards for Audit of Governmental Oraanizations Programs, Activities, and Functions. For the purpose of this report, we have classified the significant internal accounting controls in the follow1ng categories: I I I I I A. Cycles of the Entities' Activity Revenue/receipts Purchases/disbursements External financial reporting I I E. Financ1al Statement Caotiona Cash and cash equivalents Receivables Property and equipment ~ayables and accrued liabilities I c. Accounting Applications Billings Receivables Cash receipts Purchasing and receiving Accounts payable Cash d1sburaements Payroll Property and equipment General ledger I I I I Page 28 I MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (continued) Our study included all of the control categories list above. The purpose of our study and evaluation was to determine the nature, timing, and extent of the auditing procedures necessar~' for eKpressing an opinion on the entity's financial statements. Our study and evaluation was more limited than would be necessëlry to eKpress an opinion an the system of internal accounting control taken as a whole or an any of the categories of controls identified above. The management of the Salina Airport Authority, Salina, Kansas, is responsible for establishing and maintaining a system of internal accounting control. In fulfilling this responsibility, estimates and Judgements by management are required to assess the expected benefits and related casts of control procedures. The obJec:tives of a system 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 exE~cuted in accordance with management's authorization and recorded pr()perly to permit the preparation of financial statements in accordance with generally accepted accounting principles. Because of inherent limitations in any system of internal accounting control, errCJrs or irregularities may nevertheless occur and not be detected. Also, proJection of any evaluation of the system to future periIJds is subJect to the risk that procedures may become inadequate because of changes in conditions or that the degree of compliance with the procedures may deteriorate. I Our study and evaluation made for the limited purpose described in the f~rst paragraph would not necessarily disclose all material weaknesses in the system. Accordingly, we do not express an opinion an the system of internal accounting control of the Salina Airport Authority, Salina, Kansas, taken as a whole or on any of the categories of controls identified in the first paragraph. However, our study and evaluation disclosed no condition that we believe to be a mater1al weakness. I This report is intended solely for the use of management and the Salina Airport Authorities Board of Directors, and should not be used for any other purpose. This restriction is not intended to limit the distribution of this report which, upon acceptance by the Board of Directors, is a matter of public record. I I HARRISON & ARNETT, CHARTERED J~~ I THOMAS G. ARNETT, CPA I I Page 29 I HARRISON & ARNETT CHARTERED I CERTIFIED PUBLIC ACCOUNTANTS EUGENE 0 HARRISON, CPA THOMAS G ARNETT, CPA AH LECKBAND, CPA (913) 827-7244 719 EAST CRAWFORD SALINA, KANSAS 67401 I I February 3, 1988 I The Board of Directors Salina Airport Authority Salina, Kansas 67401 I We have examined the general purpose financial statements of the Salina Airport Authority, Salina, Kansas, for the years ended December 31, 1987 and December 31, 1986, and have issued our reports thereon dated February 3, 1988 and January 26, 1987, respectively. Our examinations were made in accordance with generally accepted auditing standards and the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office, and accordingly included such tests of the accounting records and such ether auditing procedures as we considered necessary in the ciroumstances. I I I 8 The management of the Salina Airport Authority is responsible for the Salina Airport Authority's compliance with laws and regula- tions. In connection with our examination referred to above, we selected and tested transactions and records to determine the Salina Airport Authority's compliance with laws and regulations noncompliance with which could have a material effect on the general purpose financial statements of the Salina Airport Author i ty. I 8 ~ The results of our tests indicate that for the items tested, the Salina Airport Authority, Salina, Kansas complied with those provisions of law: and regulations noncompliance with which could have a material ~~fect en the general purpose financial state- ments. Nothing c~me to our attention that caused us to believe that for the items not tested the Salina Airport Authority, Salina, Kansas was not in compliance with laws or regulations noncompliance with which could have a material effect on the Salina Airport Author~ty's general purpose financial statements. ~ ~ ~ .-1/ /]/7 /? \:>"( <-4"~L- ';7' ~ ~ HARR!SON & ARNETT, CHhRTERED THOMAS G. ARNETT, CPA ~ Page 30 ~ MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCCUNTANTS HARRISON & ARNElT CHARTERED CERTIFIED PUBLIC ACCOUNTANTS EUGENE O. HARRISON, CPA THOMAS G. ARNETT. CPA. AH LECKBAND, CPA (913) 827-7244 710 EAST CRAWFORD SALINA, KANSAS 67401 February 3, 1988 The Board of Directors Salina Airport Authority Salina, Kansas 67401 We have examined the general purpose financial statements of the Salina Airport Authority, Salina, Kansas, for the years ended December 31, 1987 and December 31, 1986, and have 1ssued our reports thereon dated February 3, 1987 and January 26, 1987, respectively. As part of our exam1nations, we made a study and evaluation of the internal control systems, including applicable internal administrative controls, used in administering federal financial assistance programs to the extent we considered necessary to evaluate the systems as required by generally accepted auditing standards, the standards for financial and compliance audits contained in the Standards for Audit of Governmental Orqanizations, Programs, Activities, and Functions, issued by the U.S. General Accounting Office, the Single Audit Act of 1984, and the provisions of OMB Circular A-128, Audits of State and Local Government~ For the purpose of this report, we have classified the significant internal accounting and administrative controls used in adminis- tering federal financial assistance programs in the fallowing categories: A. Cycles of Entities' Activity Revenues/receipts Purchases/disbursements External financial reporting B. Financial Statement Captions Cash and cash equivalents Receivables Inventory Property and equipment Payables and accrued liabilities I I I (continued) I Page 31 MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS 81 81 (continued) 81 C. Accounting Applications Bilhngs Rece1vables Cash receipts Purchasing and receiving Accounts payable Cash disbursements Payroll Property and equipment General ledger II I 81 The management of the Salina Airport Authority, Salina, Kansas, is responsible for establishing and maintaining internal control systems used in administering federal financial assistance programs. In fulfilling that responsibility, estimates and Judgments by management are required to assess the expected benefits and related costs of control procedures. The objectives of internal control systems used in administering federal f:lnancial assistance programs are to provide management with reasonable, but not absolute, assurance that, with respect to federal financial assistance programs, resource use is consistent with laws, regula- tions, and policies; resources are safeguarded against waste, lass, and misuse; and reliable data are obtained, maintained, and fairly disclosed in reports. II II II 8 Because of inherent limitations in any system of internal account- ing and adm1nistrat1ve controls used in administering federal financial ass1stance programs, errors or irregular1ties may nevertheless occur and nct be detected. Also, proJection of any evaluation of the systems to future periods is subJect to the risk that procedures may become inadequate because of changes in condi- tions or that the degree of compliance with the procedures may deteriorate. II II - Our study included all of the applicable control categorien listed above. Dur1ng the years ended December 31, 1987 and December 31, 1986, the Sal1na Airport Authority, Salina, Kansas, expended 100X cf its total federal financial assistance under maJor federal iinancial assistance programs. With respect to internal control systems used in administering maJor federal financial asflistance programs, our study and evaluation included considering the types of errors and irregularities that could occur, determining the internal control procedures that should prevent or detect such errors and irregularities, determining whether the necessary procedures are prescribed and are being followed satisfactorily, and evaluating any weaknesses. II II II II ~ Page 32 II (continued) Our study and evaluation was more limited than would be necessary to express an opinion on the internal control systems used in administering the federal financ1al assistance programs of the Salina Airport Authority, Salina, Kansas. Accordingly, we dl) not express an opinion on the internal control systems used 1n admin- istering the federal financial assistance programs of the Salina Airport Authority, Salina, Kansas. However, our study and evaluation and our examination disclosed no condition that we believe to be a material weakness in relation to a federal financial assistance program of the Salina Airport Authority, Salina, Kansas. Th~s report is intended solely for the use of management and the Federal Aviat10n Administration and should not be used for any ather purpose. This restriction is not intended to limit the distribution of this report, which, upon acceptance by the Salina Airport Authority, Salina, Kansas, 1S matter of public record. HARRISON & ARNETT, CHARTERED ~~ THOMAS G. ARNETT, CPA I I I I J' I I Page 33 I HARRISON & ARNETT CHARTERED I CERTIFIED PUBLIC ACCOUNTANTS EUGENE 0 HARRISON, C.P.A. THOMAS G ARNETT. CPA AH. LECKBAND, CPA (913) 827-7244 719 EAST CRAWFORD SALINA, KANSAS 67401 I I February 3, 1988 I The Board of Directors Salina Airport Author~ty Salina, Kansas 67401 I We have examined the general purpose financial statements of the Salina Airport Authority, Salina, Kansas for the years ended December 31, 1987 and December 31, 1986, and have ÌElsued our repcrts thereon dated February 3, 1988 and January 26, 1987, respectively. Our examinations were made in accordance with generally accepted auditing standards: the standards for financial and oompliance audits contained in the Standards for Audit of Governmental Oraanizations, Proqrams, Activities, and Functions, issued by the U.S. General Accounting Office; the Single Audit Act of 1984; and the pro' sions of OMB Circular A-128, Audits of State and Local Governments and, accord~ngly, included such tests of the accounting records and such other auditing procedures as we con- sidered necessary in the circumstances. I I I I The management of the Salina Airport Authority, Salina, Kansas, is responsible for the Salina Airport Authority's compliance with laws and regulations. In connection with the examination referred to above, we selected and tested transactions and records from each iederal financial assistance program. The purpose of our testing of transactions and records from these federal financial assistance programs was to obtain reasonable assurance that the Salina Airport Authcrity, Salina, Kansas, had, in all material respects, admin- ~stered maJor programs, in compliance with laws and regulations, including those pertaining to financial reports and claims for advances and reimbursements, noõcompliance with which we believe could have a mater1al effect on the allowability of program expenditures. I I I I I I I (continued) I Page 34 I MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS I - (continued) - 8 Our testing of transactions and records selected from maJor Federal financial assistance programs disclosed instances of noncompliance with those laws and regulations. All instances of noncompliance that we found and the programs to which they relate are identified in the accompanying schedule of findings and questioned costs. We believe that the ult1mate resolution of the instances of noncompli- ance identified in the accompanying schedule of findings and ques- tioned costs could not have a material effect on the allowability of expenditures of the programs identified in the schedule. 8 - ~ In our opinion, for the years ended December 31, 1987 and December 31, 1986, the Salina Airport Authority, Salina, Kansas, administer- ed each of its maJor federal financial assistance programs in compliance, in all material respects, with laws and regulations, including those pertaining to financial reports and claims for advances and reimbursements, noncompliance with which we believe could have a material effect on the allowability of program expendi tures. ~ I I HARRISON & ARNETT, CHARTERED I ~~ THOKAS G. ARNETT, CPA I I I I I I I rI Page 35 SALINA AIRPORT AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS With respect to 3-20-0072-06 Aggregate quantities used for bituminous leveling and surface course for a portion of runway 12-75 were reported and billed at 9,795.79 tans. The actual tonnage used, according to weigh bills, was 9818.74 tans; 22.95 tans more. Had quantities been properly billed, the Airport Authority would have paid addi- tional costs of $619.65. With respect to 3-20-0072-07 Request for reimbursement 18, 12-07-87 Cumulative casts per F.A.A. form 5100-60 $ 482,973.07 Less: Refund from Wilson & Co. improperly appl1ed to settlement in full (10,952.18) Add: Allowable costs not claimed 197.64 Cummulative costs per Aud1t $ 472,218.53 -----.------- -----.------- With respect to 3-20-0072-08 Request for reimbursement 16 (Final), 12-21-87 Cumulative casts per F.A.A. farm 5100-60 $1,104,807.04 Less: Allowable program casts recorded in 1988 (12,556.19) Add: Allowable costs not claimed 312.00 Cumulative costs per audit $1,092,562.85 ------------- ------------- RECIPIENTS COMMENTS Necessary adjustments to submitted to the F.A.A. above requests for reimbursement will be Page 36 . HARRISON & ARNETT If CHARTERED CERTIFIED PUBLIC ACCOUNTANTS II EUGENE 0 HARRISON, CPA. THOMAS G ARNETT, CPA. A.H LECKBAND, CPA (913) 827-7244 719 EAST CRAWFORD SALINA, KANSAS 67401 II February 3, 1988 II II The Board of Directors Salina Airport Authority Salina, Kansas 67401 II We have examined the general purpose financial statements of the Salina Airport Authority, Salina, Kansas, for the years ended December 31, 1987 and December 31, 1986, and have ~s;9ued our reports thereon dated February 3, 1988 and January 26, 1987 respectively. Our examination of such general purpose financial statements ~as made in accordance yith generally accepted auditing standards and the standards for financial and compliance audits contained in the Standards for Audit of Governmental Organizations, Programs, Activities, and Functions, issued by the U.S. General Acccunting Office, and accordingly, included such tests of the accounting records and such other auditing procedures as ~e considered necessary in the circumstances. II II II II Our examinat10n was made for the purpose of farming an opinion on the general purpose financial statements taken as a whole. The accompanying Schedule of Federal Financial Assistance is presented for purposes of additional analysis and is not a required part of the general purpose financial statements. The information in that schedule has been subjected to the auditing procedures applied in the examination of the general purpose financial statements and, in our opinion, is fairly stated in all material respects in relation to the general purpose financial 8t~~ement8 taken as a whale" II II II HARRISON & ARNETT, CHA~TERED II ~Ç? ~z+- THOMAS G. ARNETT, CPA II II II II Page 37 MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS SALINA AIRPORT AUTHORITY SCHEDULE OF FEDERAL ASSISTANCE CATALOG OF FEDERAL DOMESTIC ASSISTANCE NUMBER 20.106 For the year ended December 31, 1987 Ti tie Expendi ture's During Federal ID Number Year Program DEPARTMENT OF TRANSPORTATION Federal Aviation Administration Master plan update 1985-1991 3-20-0072-05 s 21,480.00 Federal Aviation Administration Runway overlay, fire station and supporting communications 3-20-0072-06 955,907.06 Federal Aviation Administration 3-20-0072-07 Lighting proJect, preapplication 445,565.41 Federal Aviat10n Administration 3-02-0072-08 Runway taxiway paving, preapplication 1,087,483.85 Federal Aviation Administration 3-02-0072-09 Runway 12/30 paving, preapplication 11,626.76 $2,522,063.08 ------------- ------------- ~ Page 38 Amount of Awards $ 19,627.25 754,335.22 423,723.58 983,025.76 $2,180,711. 81 ------------- ------------- - SALINA AIRPORT AUTHORITY SUMMARY OF FEDERAL ASSISTANCE PROGRAMS FEDERAL DOMESTIC ASSISTANCE NUMBER 20.106 For the yéar ending December 31, 1987 - - Program Title Federal ID Number Expenditures During Year Amount of A 'tarde -- - Federal Aviation Administration Master plan update 1985-1991 3-20-0072-05 - ~ TOTAL 5i 1,396.47 $ 25,808.18 24,188.94 21,480.00 113,627.25 $ 48,684.65 $ 4:3,816.19 ------------- -----.-------- ------------- -----.-------- 1985 1986 1987 ~ Federal Aviation Adm1nistration Runway overlay, fire 3-20-0072-06 station and supporting communications ~ I TOTAL $ 5,479.76 $ 108,037.00 101,780.78 955,907.06 754,335.22 $1,069,423.82 $ 8515,116.00 ------------- ------------- ------------- ------------- I 1985 1986 1987 I Federal Aviation Administration Lighting proJect, 3-20-0072-07 I TOTAL 5i 26,653.12 $ 445,565.41 42:3,723.58 5 472,218.53 $ 42:3,723.58 ------------- ------------- ------------- ------------- I 1986 1987 I Federal Aviation Administration Runway taxiway paving 3-20-0072-08 ~ 1986 1987 5 5,079.00 1,087,483.85 $ 98:3,025.76 TOTAL 51,092,562.85 $ 98:3,025.76 ------------- ------------- ------------- ------------- I Federal Aviation Administration Tax1wayoverlay 3-20-0072-09 Preapplication 1986 1987 5 6,580.00 11,626.76 $ I I TOTAL $ 18,206.76 $ ------------- ------------- ------------- ------------- íI Page 39 HARRISON & ARNETT CHARTERED CERTIFIED PUBLIC ACCOUNTANTS EUGENE O. HARRISON, CPA THOMAS G. ARNETI, CPA. AH LECKBAND, CPA (913) 827-7244 719 EAST CRAWFORD Sþ,LlNA, KANSAS 67401 February 4, 1988 Mr. Timothy Rogers, Executive Director Salina Airport Authority Terminal Building 120 Salina Airport Industrial Center Salina, KS 67401 Dear Mr. Rogers: We have, as part of the annual audit, made a review of the flow of transactions, documentation of transactions, method of authorizing transactions and in general the internal control over accounting data and administration. The review we have made followed the Minimum Standard Audit Program prescribed by the State of Kansas Director of Accounts and Reports, Department of Administration and approved by the State Municipal Accounting Board, September 15, 1987. I A system of internal control includes the measures and methods employed to safeguard assets, ascertain the accuracy and reliability of the accounting data, promote efficiency and encourage adherence to prescribed managerial policies. In general we found transactions to be well documented, properly authorized and accurately recorded. We understand that much of the time only one staff member will be in the office and that this prevents much of the separation of duties that would normally be found. It is unlikely that increasing staff size would be a cost effective internal control improvement. I CD With respect to receipt and recording of rents it would be helpful if management could receive an aged report of accounts receivable and if tenents were sent statements indicating aged balance due. (Þ With respect to fixed assets there has been established a procedure for the identification of fixed assets recorded in the books. It would be helpful if the assets were physically marked with the book identifica- tion number. I I I ci3 With respect to overtime pay and personal policies in general, there is a need for documentation of Airport policy through either a manual or a series of memoranda. Similarly there is a need for documentation with respect to accounting procedures in particular documentation of authorization for journal entries. I I I MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS II'. If If II'. If If If III'. It II'. If. II If , , , t t t February 4, 1988 Mr. Timothy Rogers Page ;? çp With respect to Federal Grants (A.I.P.) the dollar amount of these grants has increased materially and our discussion with F.A.A. indicates that the F.A.A. expects that our audit will provide assurance of quanities applied to contracts. We have in the past relied on assertions of independent engineers with respect to contractor's quantities. We will review with you the need to increase our audit testing of A.I.P. transactions. We thank you for this opportunity to serve the Airport. may be of further assistance, please let us know. If we Yours very truly, ~a~ Thomas G. Arnett, CPA TGA:tf