Audit - 2009
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SALINE COUNTY-CITY BUILDING AUTHORITY
December 31,. 2009
Thomas G. Arnett, CPA, P.A.
717 Roach Street
Salina, Kansas 67401
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SALINE COUNTY-CITY BUILDING AUTHORITY
December 31,.2009
TABLE OF CONTENTS
Summary of Cash Receipts, Expenditures
and Unencumbered Cash
General Fund Statement of Cash Receipts
and Expenditures - Actual and Budget
2
Notes to Financial Statements
3-7
Independent Auditor's Report
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I SALINE COUNTY -CITY BUILDING AUTHORITY
I Salina, Kansas
GENERAL FUND
I STATEMENT OF CASH RECEIPTS AND
EXPENDITURES - ACTUAL AND BUDGET
For the year ended December 31,2009
I Over (Under)
Actual Budget Budget
I Cash Receipts
City of Salina - Maintenance 900 900
I City of Salina - Regular 290,329 290,329
Miscellaneous receipts 23,415 600 22,815
Salina Public Library 9,000 9,000
I Saline County 473,694 473,694
Interest income 2,760 26,387 (23,627)
Vending commissions 2,910 3,000 (90)
I Total Cash Receipts 803,008 $ 803,910 $ (902)
Expenditures and Transfers
I Audit fees 3,750 6,500 (2,750)
Beautification 4,037 7,500 (3,463)
Capital projects 68,442 166,000 (97,558)
I Clerical services 1,500 1,500
Consultant fees 889 5,000 (4,111)
Education 1,797 3,000 (1,203 )
I Equipment 6,378 8,000 (1,622)
Group insurance 76,741 85,000 (8,259)
Insurance - Work comp.,Auto & Building 49,351 50,000 (649)
I Janitor supplies 26,286 30,000 (3,714)
KPERS - Retirement 14,282 17,000 (2,718)
Maintenance agreement 51,333 55,120 (3,787)
I Miscellaneous expenditures 3,103 5,000 (1,897)
Repairs & maintenance 28,495 45,000 (16,505)
Salaries 266,788 280,000 (13,212)
I Social Security 20,091 22,000 (1,909)
Unemployment insurance 184 280 (96)
Utilities 138,513 190,000 (51,487)
I Total Expenditures and Transfers 761,960 $ 976,900 $ (214,940)
I Receipts Over (Under) Expenditures 41,048
Unencumbered Cash, Beginning 1,171,853
I Unencumbered Cash, Ending $ 1,212,901
I The accompanying notes are an integral part of these financial statements.
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SALINE COUNTY-CITY BUILDING AUTHORITY
Salina, Kansas
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
Note 1 Summary of Significant Accounting Policies
The Saline County-City Building Authority (Authority) was formed March 22, 1965,
under the Interlocal Cooperation Act of Kansas (KSA 12-2907) by Saline County
(County), the City of Salina (City), and the Board of Education U.S.D. #305 (School
District). The Authority was created to provide for the acquisition of land and the
construction, equipping, operating, and maintenance of a building and parking area to
house the county offices and courts, the city offices and courts, and the school district
offices. On January 16, 1996, the lnterlocal Agreement was restated to relieve the School
District from any ongoing responsibility or expense relating to the Authority. The School
District retained its beneficial ownership interest in the Building Authority.
The accounting policies of the Authority conform to the statutory basis of accounting, as
regulated by the State of Kansas, which demonstrates compliance with the cash basis and
budget laws of Kansas. The following is a summary of the more significant policies.
A. Reporting Entity
The governing board of the Authority is composed of seven members, six of whom are
appointed from the governing boards of the participating municipalities, and one of who
is selected at large by the six appointed members. The makeup of the appointed members
is three from Saline County, two from the City of Salina, and one from the District Court.
The accompanying financial statements include all funds which are controlled by or are
dependent on the Authority.
The Authority is considered to be a joint venture because it is a separate legal entity that
is jointly controlled by the County and City. The County and the City both have an
ongoing financial responsibility for the Authority. The Authority's Interlocal
Cooperation Agreement grants a beneficial interest to the County, City, and the School
District in proportion to the respective share of the original acquisition costs of the
building.
B. Fund Accounting
A fund is defined as an independent fiscal and accounting entity with a self-balancing set
of accounts recording cash, receipts, expenditures and unencumbered cash balance. The
funds segregate specific activities or certain objectives in accordance with special
regulations, restrictions, or limitations.
The following types of funds were utilized in recording the financial activities of the
Authority:
General Fund - to account for all unrestricted resources exceptthose required to
be accounted for in another fund.
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SALINE COUNTY-CITY BUILDING AUTHORITY
NOTES TO FINANCIAL STATEMENTS - continued
December 31, 2009
C. Basis of Accounting
The statutory basis of accounting, as used in the preparation of these statutory financial
statements, is designed to demonstrate compliance with the cash basis and budget laws of
the State of Kansas. Cash receipts are recognized when the cash balance of a fund is
increased. Expenditures include disbursements, accounts payable, and encumbrances,
with disbursements being adjusted for prior year's accounts payable and encumbrances.
Encumbrances are commitments related to unperformed (executory) contracts for goods
and services, and are evidenced by a purchase order or written contract. For an interfund
transaction, a cash receipt is recorded in the fund receiving cash from another fund, and
an expenditure is charged in the fund from which the transfer was made.
The Authority has approved a resolution that is in compliance with KSA 75-1120a(c),
waiving the requirement for application of generally accepted accounting principles and
allowing the Commission to use the statutory basis of accounting.
D. Departure from Accounting Principles Generally Accepted In the United States
of America
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The basis of accounting described above results in a financial statement presentation
which shows cash receipts, expenditures, cash, unencumbered cash balances, and
expenditures compared to budget. Balance sheets that would have shown noncash assets
such as receivables, inventories, and prepaid expense; liabilities such as deferred revenue,
outstanding debt, and interest payable; and reservations of the fund balance are not
presented. Under generally accepted accounting principles, encumbrances are only
recognized as a reservation of fund balance; encumbrances outstanding at year-end do not
constitute expenditures or liabilities. Consequently, the expenditures as reported do not
present the cost of goods and services received during the fiscal year in accordance with
generally accepted accounting principles. Capital assets that account for the land,
buildings, and equipment owned by the municipality are not presented in the financial
statements.
E. Budgetary Information
The Authority does not have tax levying powers and is not required to publish a budget.
A budget is adopted annually by the Board of Directors to determine the amount of
appropriations to request from Saline County.
F. Cash and Investments
Cash includes amounts in time deposits and certificates of deposit. Kansas Statute 12-
1675 authorizes the Authority to invest in time deposits, certificates of deposit, U.S.
Obligations, and certain other investments.
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SALINE COUNTY-CITY BUILDING AUTHORITY
NOTES TO FINANCIAL STATEMENTS - continued
December 31, 2009
G. Risk Management
Commercial Insurance - The Authority carries commercial insurance to limit its exposure
to the various risks of loss related to torts; theft of, damage to and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. Settled claims have
not exceeded commercial insurance coverage in any of the past three years.
H. Compensated Absences
The Authority is liable for payments to employees for sick pay and vacation pay earned
according to Authority personnel policies. This liability is recorded as an encumbrance
and is included as an expenditure in the accompanying financial statements. .
I. Estimates
The preparation of financial statements requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and the
accompanying notes. Actual results may differ from those estimates. .
Note 2 Deposits - Cash Balances
As of December 31, 2009, the Authority had cash in financial banking institutions of
$1,279,983. Outstanding checks were $137 and the cash balance per books was
$1,279,846. These deposits were secured by $381,251 FDIC insurance and pledged
securities having a market value of $999,460.
The Authority does not have any activity in investment-type assets.
Interest rate risk - KSA 9-140 I establishes the depositories which may be used by
Kansas governments. The statue requires banks eligible to hold the government's funds
have a main or branch bank in the county in which the government is located, or in an
adjoining county if such institution has been designated as an official depository, and the
banks provide an acceptable rate of return on funds. In addition, KSA 9-1402 requires
the banks to pledge securities for deposits in excess of FDIC coverage. The Authority
has no other policies that would further limit interest rate risk.
Credit risk - KSA 12-1675 limits the government's investment of idle funds to time
deposits, open accounts, and certificates of de posit with allowable financial institutions;
U.S. government securities; temporary notes; no-fund warrants; repurchase agreements;
and the Kansas Municipal Investment Pool. The Authority has no investment policy that
would further limit its investment choices. The Authority's practice is to place idle funds
in certificates of deposit.
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SALINE COUNTY-CITY BUILDING AUTHORITY
NOTES TO FINANCIAL STATEMENTS - continued
December 31,2009
Custodial credit risk - The custodial credit risk for deposits is the risk that, in the event of
the failure of a depository financial institution, a government will not be able to recover
deposits or will not be able to recover collateral securities that are in the possession of an
outside party. Kansas Statutes 9-1402 and 9-1405 require that governments obtain
security.for all deposits. The Authority manages its custodial credit risk by requiring the
financial institutions to grant a security interest in securities held by third-party custodial
banks.
Concentration of credit risk - State statutes place no limit on the amount the government
may invest in anyone issuer as long as the investments are adequately secured under
KSA 9-1402 and 9-1405. The Authority has placed all of its resources with one financial
institution.
Note 3 Defined Benefit Pension Plan
Plan Description - The Saline County-City Building Authority participates in the
Kansas Public Employees Retirement System (KPERS), a cost-sharing multiple-
employer defined benefit pension plan as:provided by KSA 74-4901, et seq. KPERS
provides retirement benefits, life insurance,disability income benefits, and death benefits.
Kansas law establishes and amends benefit provisions. KPERS issues a publicly
available financial report that includes financial statements and required supplementary
information. That report may be obtained' by writing to KPERS (611 S. Kansas, Suite
100, Topeka, KS 66603) or by calling 1-88.8-275-5737.
Funding Policy - KSA 74-4919 establishes the KPERS member-employee contribution
rate at 4% of covered salary. The employer collects and remits member-employee
contributions according to the provisions of Section 414(h) of the Internal Revenue Code.
State law provides that the employer contribution rate be determined annually based
on the results of an annual actuarial valuation. KPERS is funded on an actuarial reserve
basis. State law sets a limitation on annual increases in the contribution rates for KPERS
employers. The employer rate established for calendar year 2009 was 5.54%. The
Authority's employer contributions to KPERS for the years ending December 31, 2009,
2008 and 2007 were $14,282, $15,226, arid $13,422 respectively, equal to the required
contribution for each year.
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SALINE COUNTY-CITY BUILDING AUTHORJTY
NOTES TO FINANCIAL STATEMENTS - continued
December 31, 2009
Note 4 Capital Assets
The presentation of the financial statements in accordance with the statutory basis of
accounting does not include the capital assets of the Authority. The Authority maintains
records on these capital assets. Depreciation expense is not calculated. The balances and
activity are reported at cost except for the initial value of the building $2,371,947 and
initial land $200,228 which are reported at appraised values at date of acquisition.
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Thomas G. Arnett, CPA, P .A.
CERTIFIED PUBLIC ACCOUNTANT
717 ROACH STREET
SALINA, KANSAS 67401
PHONE: (785) 827-7244
F~:(785)827-0048
INDEPENDENT AUDITOR'S REPORT _
To the Board of Directors
Saline County-City Building Authority
Salina, Kansas 67401
I have audited the accompanying statutory basis financial statements of Saline County-City
Building Authority, Salina, Kansas, a component unit of Saline County, as of and for the year ended
December 31, 2009 as listed in the table of contents. These financial statements are the responsibility of
the Authority's management. My responsibility is to express an opinion on these financial statements
based on my audit.
I conducted my audit in accordance with audi#ng standards generally accepted in the United
States of America and the Kansas Municipal Audit Guide. Those standards require that I plan and
perform the audit to obtain reasonable assurance abo\.it 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 provides a reasonable basis for my opinion.
As described more fully in Note 1, the Authorjty has prepared these financial statements using
accounting practices prescribed or permitted by the' State of Kansas, which practices differ from
accounting principles generally accepted in the United States of America. The effect on the financial
statements of the variances between these regulatory accounting practices and accounting principles
generally accepted in the United States of America, although not readily determinable, are presumed to be
material. .
In my opinion, because of the effects of the matter discussed in the preceding paragraph, the
financial statements referred to above do not present fairly, in conformity with accounting principles
generally accepted in the United States of America, the financial position of the Authority as of December
31,2009, the changes in its financial position, or where applicable, its cash flows for the year then ended.
In my opinion, the financial statements referred to above present fairly, in all material respects the
cash and unencumbered cash balances of the Saline County-City Building Authority, as of December 31,
2009, and the cash receipts, expenditures, and budgetary results for the year then ended, on the basis of
accounting described in Note 1.
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Thomas G. Arnett, CPA, P.A.
February 6, 2010
MEMBER OF :i
DIVISION FOR CPA FIRM PRIVATE COMPANIES PRACTICE SECTION
AMERICAN INSTITUTE OF CERTIFIED PUBUCACCOUNTANTS
KANSAS SOCIETY OF CERTIFIED PUBLIC ACCOUNTANTS