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HomeMy WebLinkAbout2014 CIAWWCACHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2014 WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 2013 Certified Public Accountants CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY TABLE OF CONTENTS TITLE PAGE Page TABLE OF CONTENTS 2 FINANCIAL STATEMENTS Independent Auditor's Report 3-5 Statements of Net Position 6 Statements of Activities 7 Statement of Cash Flows 8 Notes to Financial Statements 9-10 Report on Internal Control Over Financial Reporting 11-12 Schedule of Findings and Responses 13 Deaton & Company, Chartered Certified Public Accountants 215 North 9th, Suite A Pocatello, Idaho 83201-5278 (208)232-5825 Members of Idaho Society of Certified Public Accountants Members of American Institute of Certified Public Accountants INDEPENDENT AUDITOR'S REPORT To the Board of Commissioners Chubbuck Impact Area Wastewater Collection Authority Chubbuck, Idaho Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities and each major fund of the Chubbuck Impact Area Wastewater Collection Authority, a component unit of the City of Chubbuck, Idaho, as of and for the year ended September 30, 2014, and the related notes to the financial statements, which collectively comprise the Authority's basic financial statements as listed in the table of contents. 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 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 opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. 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 auditor 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 accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund information of the Chubbuck Development Authority, as of September 30, 2014, and the respective changes in financial position for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Management has omitted the management and discussion analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Other Information We also have previously audited, in accordance with auditing standards generally accepted in the United States of America, the Authority's basic financial statements for the year ended September 30, 2013, which are not presented with the accompanying financial statements and we expressed unmodified opinions on the respective financial statements of the governmental activities, and the aggregate remaining fund information. That audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Chubbuck Impact Area Wastewater Collection Authority's basic financial statements as a whole. The summarized comparative information is consistent, in all material respects, with the audited financial statements from which it has been derived. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 26, 2015, on our consideration of the Authority's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in consideringChubbuck Impact Area Wastewater Collection Authority's internal control over financial reporting and compliance. Chubbuck, Idaho March 26, 2015 CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY STATEMENT OF NET POSITION PROPRIETARY FUND AS OF SEPTEMBER 30, 2014 WITH COMPARATIVE TOTAL AS OF SEPTEMBER 30, 2013 ASSETS Accounts receivable Capital assets, net of accumulated Depreciation, where applicable: Work in process LIABILITIES Accounts payable Long-term liabilities (Note - 4) Due within one year Due after one year NET POSITION Net investment in capital assets Unrestricted 11 2014 228,000 $ 18, 560, 669 18,788,669 18,334,688 18,334,688 453,981 $ 453,981 The accompanying notes are an integral part of these statements 2013 $ 18,408,131 18,408,131 18,179,220 18,179,220 228,911 $ 228,911 CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY STATEMENTS OF ACTIVITIES PROPRIETARY FUND FOR THE YEAR ENDED AS OF SEPTEMBER 30, 2014 WITH COMPARATIVE TOTAL AS OF SEPTEMBER 30, 2013 EXPENSES GENERAL REVENUES CDA grant revenue CHANGE IN NET POSITION NET POSITION — BEGINNING OF THE YEAR NET POSITION — ENDING OF THE YEAR 7 2014 2013 $ 2,930 $ 4,574 228,000 228,000 228,000 228,000 225,070 228,911 223,426 5,485 $ 453,981 $ 228,911 The accompanying notes are an integral part of these financial statements CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY STATEMENT OF CASH FLOWS PROPRIETARY FUND FOR THE YEAR ENDED AS OF SEPTEMBER 30, 2014 WITH COMPARATIVE TOTAL AS OF SEPTEMBER 30, 2013 NET INCREASE (DECREASE) IN CASH - - BEGINNING CASH AND CASH EQUIVALENTS - - ENDING CASH AND CASH EQUIVALENTS RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net income $ 225,070 $ 223,426 Change in accounts payable - (11,579) Change in accounts receivable (228,000) - NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ (2,930) $ 211,847 0 The accompanying notes are an integral part of these financial statements 2014 2013 CASH FLOW FROM OPERATING ACTIVITIES Cash received from customers $ - $ 228,000 Cash paid to suppliers (2,930) (16,153) Net cash provided (used) by operating activities (2,930) 211,847 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from capital debt 155,468 (102,850) Purchase of capital assets (152,538) (108,997) Net cash provided (used) by capital and related financing activities 2,930 (211,847) NET INCREASE (DECREASE) IN CASH - - BEGINNING CASH AND CASH EQUIVALENTS - - ENDING CASH AND CASH EQUIVALENTS RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net income $ 225,070 $ 223,426 Change in accounts payable - (11,579) Change in accounts receivable (228,000) - NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ (2,930) $ 211,847 0 The accompanying notes are an integral part of these financial statements CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY NOTES TO FINANCIAL STATEMENTS (PAGE 1 OF 2) SEPTEMBER 30, 2014 The Chubbuck Impact Area Wastewater Collection Authority (the Authority) is a legal joint venture between the City of Chubbuck, the City of Pocatello, and Bannock County. The Authority was created in August 2007, as a separate legal entity pursuant to Section 67-2328, of the Idaho Code. The purpose of the Authority is to acquire, construct, own, operate, and maintain the Facility, and to provide wastewater transmission and disposal services. NOTE 1 - Summary of Significant Accounting Policies A. Reporting Entity For financial reporting purposes, management has considered potential component units. The decision to include a potential component unit in the reporting entity is made by applying the criteria set forth in generally accepted accounting principles. The basic criterion for including a potential component unit within the reporting entity is the governing body's responsibility for financial accountability. Financial accountability is defined as the level of accountability that exists if a primary government appoints a voting majority of an organization's governing board and is either able to impose its will on that organization or there is potential for the organization to provide specific financial benefits to, or impose specific financial burdens on, the primary government. A primary government may also be financially accountable for governmental organizations that are fiscally dependent on it. Based upon the application of these criteria, the Authority has no potential component units. Under generally accepted accounting principles, as adopted by the Governmental Accounting Standards Board, the Authority is included in the Annual Financial Statements of the City of Chubbuck as a blended component unit. B. Fund Accounting The Authority uses funds to report its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. A fund is a separate accounting entity with a self -balancing set of accounts. The Operating Fund is used to account for all business type transactions in a manner similar to commercial enterprises. C. Basis of Accounting The accrual basis of accounting is used. Under the accrual basis of accounting, revenues are recognized when susceptible to accrual (i.e., when they become both measurable and available). "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The Authority considers assessments as available when they are assessed. A one-year availability period is used for revenue recognition. Expenditures are recorded when the related fund liability is incurred. D. Reclassification In the prior year, the Authority presented the fund as a governmental fund in order to better provide transparency of the asset and liability received by the Authority. However, due to the nature of the Authority to receive revenues on a fee basis and not having the ability to levy property taxes, the Authority has reclassified the fund as an enterprise fund. CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY NOTES TO FINANCIAL STATEMENTS (PAGE 2 OF 2) SEPTEMBER 30, 2014 NOTE 2 - Deposits Deposits at yearend consist of the following: Deposits Cash and cash equivalents Bank Book Deposits - Custodial Credit Risk for deposits is the risk that, in the event of bank failure, the government's deposits may not be returned to it. The Authority's deposits at yearend, were entirely covered by federal depository insurance. NOTE 3 - Fixed Assets All fixed assets are valued at historical cost or estimated historical cost if actual historic cost is not available. Donated fixed assets are valued at their estimated fair value on the date donated. Beginning Ending Balance Additions Deletions Balance Work in Process $18,408,131 $ 152,538 $ - $ 18,560,669 Accumulated Depreciation - - - - Book Value $18,408,131 $ 152,538 $ - $ 18,560,669 NOTE 4 - Long -Term Debt The Authority has received loans from the City of Chubbuck. The loans have an undetermined schedule of payment with zero percent (0%) interest. Long-term Debt transactions Beginning Ending Balance Additions Deletions Balance City of Chubbuck Advances $18,179,219 $ 155,469 $ - $ 18,334,688 NOTE 5 - Subsequent Events Subsequent events were evaluated up to March 26, 2015, the date the financial statements were available to be issued. 10 CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY SCHEDULE OF FINDINGS AND RESPONSES FOR THE YEAR ENDED SEPTEMBER 30, 2014 Findings Of Significant Deficiency And Responses NONE 11 Deaton & Company, Chartered Certified Public Accountants 215 North 9th, Suite A Pocatello, Idaho 83201-5278 (208)232-5825 Members of Idaho society of Certified Public Accountants Members of A merican Institute of Certified Public Accountants INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Board of Commissioners Chubbuck Impact Area Wastewater Collection Authority Chubbuck, Idaho We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standardsd issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund, and the aggregate remaining fund information of Chubbuck Impact Area Wastewater Collection Authority, as of and for the years ended September 30, 2014, and the related notes to the financial statements, which collectively comprise Chubbuck Impact Area Wastewater Collection Authority's basic financial statements, and have issued our report thereon dated March 26, 2015. Internal Control Over Financial Reporting In planning and performing our audit, we considered Chubbuck Impact Area Wastewater Collection Authority's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Chubbuck Impact Area Wastewater Collection Authority's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Chubbuck Impact Area Wastewater Collection Authority's internal control over financial reporting. 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 prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a 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. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining reasonable assurance about whether Authority's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. L Chubbuck, Idaho March 26, 2015