Audit - 2016 alSCEDOL p
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Salina Community Economic Development Organization
June 5, 2017
Jason Gage,City Manager
City-County Building
300 West Ash Street
Salina, KS 67401
Dear Jason,
Enclosed is the completed audit for Fiscal Year 2016. James Trower will be at the board meeting on
Thursday,June 15 to review his firm's work. If you have any questions, please feel free to call or email.
Sincerely,
D. Mitch Robinson,CEcD
Executive Director
Salina Community EDO
120 W.Ash I Salina,KS 67402-0586 I 785.404.3131 I www.salinaedo.org
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• . CH A.R T•E R E D accounwnts i
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' May 15, 2017
To the Board of Directors • .
• Salina Community Economic Development'Organization
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' . Salina, Kansas 67401' . -
We have audited the financial statements of Salina Community Economic,Development Organisation.for .
• theyear ended December 31; 2016, and Rave issued our report thereon.dated May 15, 2017. Professional I.
standards require'that we provide you with information about our responsibilities under generally accepted '
auditing standards as well as certain_information related to the planned scope and timing of,our audit. We I
. • .have communicated,"such information in• our letter to you dated December 22; 2016. Professional i• •
standards'also require that we communicate to you the following information related to our audit. I
. • Significant Audit Findings •
Qualitative Aspects of.Accounting Practices ' •
.Management is responsible for the selection and use of appropriate accounting.policies. The•significant
'accounting policies used by the Organization are'described.in Note 1--to the financial.statements. We noted I
no transactions entered into by the'Organization during the.year•for which there is a lack of authoritative i . .
guidance or consensus. We believe all significant transactions have been recognized.in the financial
statements in the proper-period. . . :
Accounting estimates are'an integral part of the financial statements prepared'.by management and are j
•
.based on management's'knowledge and experience about past and current events and assumptions about 1- .
future-events. Certain accounting estimates are particularly Sensitive because of their significance to the I
financial statements and because of the possibility that future events'affecting them may differsignificantly i
from those expected. -
• • Difficulties Encountered in Performing the Audit. .
We.encountered no significant difficulties in dealing with management in performing and completing our
audit.
.
Corrected and.Uncorrected Misstatements - i
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' • Professional standards require us to accumulate all known and likely misstatements identified during the •1 .
audit, other than those that are trivial, and communicate them to the appropriate.level of-management. 1
Management has corrected all such misstatements. In addition, none of the misstatements detected as a
. result"of audit procedures and corrected. by management were material, either individually or in the
' .aggregate, to the financial statements taken as a whole.
. Disagreements with Management i
For purposes of this letter, professional standards define a disagreement with management as a financial i .
accounting, reporting, or auditing matter; whether- or .not .resolved to our satisfaction, that could' be
. • ' significant to the financial statements-or the-auditor's report. -We are pleased to.report that no such
disagreements arose during the-course of our.audit. - 111
Management Representations' - i•
We have requested certain representations from management that are included in the management i' .
•
. • representation letter dated May 15, 2017. .
Management Consultations.with Other Independent Accountants •
In some.cases,-management may decide to consult-with other accountants about auditing and accounting
matters', similar to'obtaining a °second opinion' on certain situations. If a consultation:involves application
of an accounting. principle to.the Organization's financial statements or:a determination of-the type of
. . auditor's opinion that may be expressed on those statements, our professional standards 'require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our I
knowledge, there were no such consultations with'other accountants.
•
1619 E. Iron Avenue • P.O. Box 1516 • Selina,Kansas 67402-1516 • Phone 785-8255494
' Fax 785-825-4450 •• www.woodsanddurham.com
Communication of Internal Control
.
In planning and performing our audit .of the financialstatements 'of 'Salina 'Community Economic
• Development'Organization as of and for the'year ended December.31, 2016, in accordance with auditing : '
standards generally accepted.in the United States of America, we considered the Organization's internal
control over financial reporting (internalcontrol) as a basis for designing our auditing procedures for"the I
purpose of expressing our opinion on the financial statements, but not for the purpose of expressing,an
opinion on the effectiveness of the Organization's internal control. Accordingly, we "de not express 'an •
opinion on the effectiveness Of the.Organization's internal control. .
i
• Our consideration of internal control was for the limited purpose described in the'preceding paragraph and •
"was not designed to identify all' deficiencies in internal control that might be significant deficiencies or { '
material'weaknesses and, therefore, there can'be noassurance that all'such deficiencies have been I , -
identified.`' However, as discussed below, we identified certain 'deficiencies in internal control`that we
• consider to be a significantdeficiency.
-,A deficiency in internal control exists when the design or operation of a control does not allow management
' • or employees, in the normal course of performing their assigned functions, to prevente'or detect and correct •
misstatements on a.timely basis. A material weakness is a deficiency"or combination of deficiencies in
internal .control,,such that there is a reasonable possibility. that .a material misstatement of the entity's ,
, financial'statements will-not be prevented, or detected and corrected on a timely basis. We did not identify '
any deficiencies in internal control that we consider to be a' matenal weakness:
A significant deficiency,is a deficiency, or a combination' of deficiencies, in internal control :that is less
severe than•a.material weakness, yet important enough to merit ..attention-by ',those charged with
.governance. We considered the .following deficiency in Salina Community Economic 'Development
-Organizations program internal'control,to be a.significant deficiency in the current year and'prior yearauditi ,
•
Organizational Structure .. . . I . . . ;
The small size of theiOrganization limits the opportunities to provide optimum segregation of,duties. -A lack
• of segregation of duties increases the risk of.undetected'errors or misappropriation of assets. The controls
that have been .implemented along with the active participation from•Management and ,the. Board help
mitigate concerns that we generally have in this area.
.
. This information is intended solely for theuseof the executive director, board of directors and management-
of Salina Community Economic,Development Organization and is not intended to be and•should not ibe
used by anyone other than these specified parties.
,Sincer ly yours, . . . i ..
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Cat• a/4q . . . , .
' WOODS & DUR. AM,.CHID:
Salina, Kansas . ,
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certified•
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public i
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. C.H A R T•E R E D accountants
May 15, 2017
To the Board of Directors I .
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Salina Community Economic• ,Development Organization .,
Salina• , Kansas 67401'
We have audited the financial statements of Salina Community Economic Development,Organizationfor
the year ended December 31; 2016, and have issued our report thereon dated May 15, 2017. Professional l
Standards require•that.we provide•you with information about our responsibilities under generally accepted 1
• auditing standards•as well as certain-information related to the planned scope and timing of;our audit. We
have communicated such information in- our letter to you dated December 22; 2016. Professional •
-
standards also require that we communicate to_you the following information related to our audit. •
• - . I
Significant Audit Findings • .
•
Qualitativ• e Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant •
• .'accounting policies-used by'the Organization are'described.in Note 1.-to the financial statements. We noted • •
no'transactions.entered into by theOrganization during the.year.for which there is a lack of authoritative .
guidance or consensus. • We believe all significant transactions-have been recognized.in the financial
statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management.and •are• I
based on management's-knowledge and experience about past and current events and assumptions about i .
•
. future-events. Certain accounting estimates are particularly Sensitive because of their significance to the I
financial statements and because of the possibility that future events'affecting them may differ significantly I .
from those expected. ,
I
.
• Difficulties Encountered in.Performing.the Audit: - •
I
• We.encountered no significant difficulties in dealing with management in performing and completing our I
audit.
Corrected and.Uncorrected Misstatements . ' • • l
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of-management. I .
Management has corrected all such misstatements. In addition, none of the misstatements detected as a
'result'of audit procedures and corrected. by management were material, either individually or in the '
.aggregate, to the financial statements taken as a whole. ,
Disagreements with Management - j
- For purposes of this letter, professional standards define a disagreement with management as a financial
accounting,. reporting, or auditing matter, whether- or not .resolved to:our satisfaction, that could- be
• ' significant to the financial statements,or the-auditor's report. -We are pleased toreport that no such
disagreements arose during the course of our.audit. -
Management Representations" •
We have requested•certain representations from management that are included in the management i'
representation letter dated May 15, 2017. -
I
Management Consultations.with Other Independent Accountants I
In some-cases,:management may decide to consult-with other accountants about auditing and accounting
' matters; similar to obtaining a "second opinion' on certain situations. If a consultation.'involves application
of an accounting principle to'the•Organization's financial statements or:a determination of the type of i •
auditor's opinion that may be expressed on those statements, our.professional standards 'require the
consulting accountant to check with us to determine that the consultant has all the relevant facts. To our i
' • knoviledge, there were rio such consultations with other accountants.
••
1619 E. Iron Avenue • P.O. Box 1516 • Salina,Kansas 67402-1516 • Phone 785825=5494
Fax 785-825-4450 • www.woodsanddurham.com •
Communication of Internal Control •
• In planning and performing our audit .of •the. financial. statements"'of `Salina Community Economic
Development'Organization as of,and for, the year ended December.31, 2016, in accordance with auditing
standards generally accepted,in.the United States of America, we considered the Organization's internal .
control over financial reporting (internal,control) as a basis for designing our auditing procedures for the I .
' purpose of expressing our opinion on the financial statements,' but not for the purpose of expressing,an
opinion on the effectiveness of the Organization's internal control. Accordingly, we do notexpress"an
• opinion on the effectiveness of the Organization's internal control. ' . . .
I.
Our consideration of internal control was for.the limited purpose described in the preceding paragraph and 1. ',
•was not'designed to identify all'deficiencies in internal control that might be:significant deficiencies or l '..
• material'weaknesses and, therefore, there can be no assurance that.all such-deficiencies.have .been 1- • -
• identified.`"However, as discussed below, we_identifed 'certain- deficiencies in internalcontrol that we '
consider to be a significant deficiency. '
••,A deficiency in internal control exists when the design or operation of a control does not allow management '
• or"employees,rin the normal course of performing their assigned functions, to prevent, or detect and correct
misstatements on a-timely basis: A material weakness is a deficiency'or combination of deficiencies in
internal control,-such that there is a reasonable possibility that .a material'misstatement of the entity's) •
financial statements will•not be prevented, or detected and corrected on a timely•basis. We did not identify '
any deficiencies in internal control that we consider to be a'material weakness.. : • ,
A significant deficiency is a deficiency, or,a combination of deficiencies, in internal control that is.less, •
severe than a.material weakness,- yet important enough to merit :attention_ by those charged with -
.governance. We considered the .following deficiency in Salina Community, Economic ,Development
Organization's program internal control,to be asignificant.deficiency in the current year and prior year.audit:
Organizational Structure
•
The small size of the Organization limits the opportunities'to provide segregation,of duties. -A lackI
of segregation of duties increases the risk of-undetected'errors or misappropriation of assets. The controls.I
•that have been implemented along with the active participation from'Management and the. Board help 1
mitigate concerns that we generally have in this area. . •• ' I
This information is intended'solely for the use of the executive director, board of directors and management
of Salina Community Economic Development Organization and is not intended to beand should.not be '
used by anyone other than these specified parties.
Sinter ly yours,. ! r
. WOODS & DUR. A�TD:
Salina, Kansas . -
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ISALINA COMMUNITY ECONOMIC DEVELOPMENT ORGANIZATION
Salina, Kansas
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AUDITED FINANCIAL STATEMENTS
IDecember 31, 2016
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I WOODS & DURHAM, CHARTERED
Certified Public Accountants
ISalina, Kansas
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ISALINA COMMUNITY ECONOMIC DEVELOPMENT ORGANIZATION
Salina, Kansas
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TABLE OF CONTENTS
Page
INumbers
' Independent Auditor's Report 1
Statement of Financial Position 2
IStatement of Activities 3
1 Statements of Cash Flows 4
Notes to Financial Statements 5 - 6
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INDEPENDENT AUDITOR'S REPORT,
• Members
t, Salina Community Economic Development Organization -
Salina, Kansas •
We have audited the accompanying financial statements of Salina Community Economic Development
Organization (a nonprofit organization), which comprise the statement"of financial •position as of
. December 31, 2016, and the related statements of activities and cash flows for the year then ended,
and the related notes to the financial statements.
Management's Responsibility for the Financial Statements
' Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this includes
the design, implementation, and the maintenance of internal control relevant to the preparation and fair
presentation of financial statements that are free from material Misstatement, whether due to fraud or
error. •
Auditor's Responsibility •
Our responsibility•is to express an opinion on these financial statements based on our audit. We
• conducted our audits 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 from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and.disclosures in
the financial statements. The procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditors considers internal control relevant to the entity's
' . preparation and fair presentation of the financial statements in order to design audit procedures that are
• appropriate in the circumstances, but not for the purpose of expressing an'opinion on the effectiveness •
of the entity's internal control. Accordingly, we express no such. opinion. -An audit also includes
evaluating the appropriateness of accounting .policies used and the •reasonableness of significant
I accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
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We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion •
In our opinion, the-financial statements referred to above present fairly, in all material respects, the
financial position of Salina Community Economic Development Organization as of December 31, 2016,
•and the changes in its net assets and its cash flows for the year then ended in accordance with
accounting principles generally accepted in the United States of America.
Woods eh Durham, Cad
• - WOODS & DURHAM,.CHTD.
• May 15, 2017" Certified Public Accountants
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1619 E. Iron Avenue • P.O. Box 1516 • Salina, Kansas 67402-1516 • Phone 785-825-5494
Fax 785-825-4450 ! www.woodsanddurham.com .
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' SALINA COMMUNITY ECONOMIC DEVELOPMENT ORGANIZATION
Salina, Kansas
' STATEMENT OF FINANCIAL POSITION
December 31, 2016
ASSETS
Current Assets
' Cash S 300,657
Member contributions receivable - current 320,000
' Total Current Assets 620,657
Property and Equipment
' Equipment 2,595
Less: Accumulated depreciation (72)
Net Property and Equipment 2,523
Other Assets
' Member contributions receivable - non-current 320,000
TOTAL ASSETS S 943,180
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LIABILITIES AND NET ASSETS
Current Liabilities
Accounts payable S 18,728
Payroll liabilities 3,527
Deferred member contributions -current 320,000
Total Current Liabilities 342,255
' Long-Term Liabilities
Deferred member contributions - non-current 320,000
Total Long-Term Liabilities 320,000
' TOTAL LIABILITIES 662,255
Net Assets
' Unrestricted 280,925
TOTAL LIABILITIES AND NET ASSETS S 943,180
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' See Independent Auditors Report and Notes to Financial Statements.
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SALINA COMMUNITY ECONOMIC DEVELOPMENT ORGANIZATION
Salina, Kansas
STATEMENT OF ACTIVITIES
For the Year Ended December 31, 2016
' SUPPORT AND REVENUE
Private Support
Member contributions $ 343,000
Total Support and Revenue 343,000
' Expenses
Program Services
Economic Development Expenses
Travel and meetings 4,175
Advertising and promotion 1,713
Payroll and benefits 8,414
Total Program Services 14.302
' Supporting Services
Consulting expense 43,960
1 Insurance 3,418
Depreciation expense 72
Miscellaneous expense 323
Total Supporting Services 47,773
Total Expenses 62,075
Change in Net Assets - Unrestricted 280,925
Net Assets - Unrestricted -January 1, 2016
Net Assets - Unrestricted - December 31, 2016 S 280,925
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' SALINA COMMUNITY ECONOMIC DEVELOPMENT ORGANIZATION
Salina, Kansas
STATEMENT OF CASH FLOWS
December 31, 2016
CASH FLOWS FROM OPERATIONS
Increase in Net Assets S 280,925
CASH - BEGINNING OF YEAR
' CASH - END OF YEAR S 280,925
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See Independent Auditors'Report and Notes to Financial Statements.
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SALINA COMMUNITY ECONOMIC DEVELOPMENT ORGANIZATION
1 Salina, Kansas
NOTES TO FINANCIAL STATEMENTS
December 31, 2016
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Salina Community Economic Development Organization was created by an agreement dated November
17, 2015, between the members: Saline County, Kansas, The Salina Airport Authority, The City of Salina,
Kansas, and the Salina Area Chamber of Commerce, to be the community's primary economic development
entity. It is funded solely by member contributions on a three-year contractual basis.
Basis of Accounting - The Organization prepares its financial statements on the accrual basis of accounting,
which is a basis of accounting in compliance with generally approved accounting principles. Under this basis,
revenues are recorded when earned and expenses are recorded when they are incurred.
' Basis of Presentation - 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 of December 31, 2016, the entire balance of net assets is classified as
Unrestricted Net Assets, as no restrictions have been placed on the net assets of the Organization.
Property and Equipment - The amount recorded as Property and Equipment represents equipment
purchased by the Salina Community Economic Development Organization and is recorded at cost.
Depreciation has been provided for those assets based upon the straight-line method over the useful life of the
assets. It is the policy of the Organization to capitalize equipment in excess of$1,000.
Cash and Cash Equivalents - Cash and Cash Equivalents includes all monies in the Organization's bank
account. Fair market value equals carrying amounts.
' Use of Estimates - The preparation of financial statements requires management to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from
those estimates.
' Income Taxes - The Salina Community Economic Development Organization is exempt from federal income
taxes under Section 501(c)(6) of the Internal Revenue Code, and is classified as "other than a private
foundation." Therefore, no provision for income taxes is reflected in these financial statements.
tAdvertising Costs - Advertising and promotional costs are charged to expense as incurred. During the year,
the Organization spent S1,713 for advertising and promotional expense.
NOTE 2 - SUPPORT - MEMBER CONTRIBUTION
The funding for the Organization is based upon scheduled member contributions over a three-year funding
' model beginning in 2016.
The current funding schedule is as follows:
1 2016 2017 2018
City of Salina S 308,000 $ 275,000 S 250,000
Saline County 20,000 20,000 20,000
' Salina Airport Authority 15,000 25,000 50,000
S 343,000 S 320,000 S 320,000
The Organization considers these contribution receivables as fully collectible, so, accordingly, no allowance for
uncollectibility is recorded.
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1 SALINA COMMUNITY ECONOMIC DEVELOPMENT ORGANIZATION
Salina, Kansas
NOTES TO FINANCIAL STATEMENTS
December 31, 2016
NOTE 3 - CONCENTRATION OF CREDIT RISK
As of December 31, 2016, and for certain periods prior to year-end, the cash balance of the Organization
exceeded the FDIC account limits at the banking institution.
NOTE 4 - UNCERTAIN INCOME TAX POSITION
1 The Organization follows the provision of uncertain tax positions as addressed in FASB Accounting Standards.
The Organization believes that it has appropriate support for any tax position taken, and as such, does not have
any uncertain tax positions that are material to the financial statements. The Organization recognizes interest
1 accrued related to unreconciled tax benefits in interest expense and penalties in operating expenses. No such
interest or penalties were recognized during the period presented.
The Organization files a Federal Exempt Organization Income Tax Return (Form 990). The Organization is not
1 subject to the statute of limitations for tax examinations by tax authorities because it has not been in operation
for greater than three years. Accordingly, the December 31, 2015 and 2016 Forms 990 could be subject to IRS
examination.
NOTE 5 - COMPENSATED ABSENCES
Employees are not permitted to carry over unused vacation or illness allowances. Accordingly, no accrual for
such is included in these financial statements.
NOTE 6- SUBSEQUENT EVENTS
1 Management has evaluated subsequent events through May 15, 2017, the date on which these financial
statements were available to be issued. Management concluded that there were no material subsequent
events or transactions that required additional disclosure in these financial statements.
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