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HomeMy WebLinkAbout2012 CIAWWCACHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2012 WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 2011 DEATON & COMPANY, CHARTERED CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY TABLE OF CONTENTS TITLE PAGE TABLE OF CONTENTS FINANCIAL STATEMENTS Independent Auditor's Report Statements of Net Assets Statements of Activities Statement of Cash Flows Notes to Financial Statements Report on Internal Control Over Financial Reporting Schedule of Findings and Responses Page 1 2 3 4 5 6 7-s 9-10 11 DEATON & COMPANY, CHARTERED Deaton & Company, Chartered Certified Public Accountants _ 215 North 9th, Suite A - Pocatello, Idaho 83201-5278 (208) 232-5825 Ni mbers of Idaho Society orcertified Pubtie-Accountants Mcrttbers of American Institute of Certified Public Accountants INDEPENDENT AUDITOR'S REPORT To the Board of Directors Chubbuck Impact Area Wastewater Collection Authority Chubbuck, Idaho We have audited the accompanying financial statements of the business -type activities, and the aggregate remaining fund information of Chubbuck Impact Area Wastewater Collection Authority, component unit of City of Chubbuck as of and for the years ended September 30, 2012, and 2011, which collectively comprise the Authority's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Chubbuck Impact Area Wastewater Collection Authority's Board of Directors. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year summarized comparative information has been derived from the Authority's 2011 financial statements and, in our report dated March 22, 2012, we expressed unqualified opinions on the respective financial statements of the business -type activities and the aggregate remaining fund information. We conducted our audit in accordance with U.S, generally accepted auditing standards 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business -type activities and the aggregate remaining fund information of the Chubbuck Impact Area Wastewater Collection Authority as of September 30, 2012 and 2011, and the respective changes in financial position and, where applicable, cash flows thereof for the years then ended, in conformity with U.S. generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated March 25, 2013, on our consideration of the Organization's internal control over financial reporting and our tests 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 tsting of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit, The Authority has not presented the management's discussion and analysis that accounting principles generally accepted in the United States have determined is necessary to supplement, although not required to be part of, the basic financial statements. � Pocatello, Idaho March 25, 2013 CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY STATEMENT OF NET ASSETS PROPRIETARY FUND AS OF SEPTEMBER 30, 2012 WITH COMPARATIVE TOTAL AS OF SEPTEMBER 30, 2011 ASSETS Cash and cash equivalents Capital assets, net of accumulated Depreciation, where applicable: Work in process LIABILITIES Long-term liabilities (Note - 4) Due after one year FUND BALANCE/NET ASSETS NET ASSETS Invested in capital assets, net of related debt Unrestricted 4 2012 2011 $ - $ 16,266 18,287,554 17,629,414 18,287,554 17,645,680 18,282,069 17,642,935 18,282,069 17,642,935 5,485 2,745 $ 5,485 $ 2,745 The accompanying notes are an integral part of these statements DEATON & COMPANY, CHARTERED CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY STATEMENTS OF ACTIVITIES PROPRIETARY FUND FOR THE YEAR ENDED AS OF SEPTEMBER 30, 2012 WITH COMPARATIVE TOTAL AS OF SEPTEMBER 30, 2011 EXPENSES GENERAL REVENUES Charges for services CHANGE IN NET ASSETS NET ASSETS — BEGINNING OF THE YEAR NET ASSETS — ENDING OF THE YEAR 5 2012 $ 2,750 $ 2011 5,490 2,745 5,490 2,745 2,740 2,745 2,745 - $ 5,485 $ 2,745 The accompanying notes are an integral part of these financial statements DEATON & COMPANY, CHARTERED CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY STATEMENT OF CASH FLOWS PROPRIETARY FUND FOR THE YEAR ENDED AS OF SEPTEMBER 30, 2012 WITH COMPARATIVE TOTAL AS OF SEPTEMBER 30, 201'1 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net income $ 2,740 $ 2,745 NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,740 $ 2,745 0 The accompanying notes are an integral part of these financial statements DEATON & COMPANY, CHARTERED 20'12 2011 CASH FLOW FROM OPERATING ACTIVITIES Cash received from customers $ 5,490 $ 2,745 Cash paid to suppliers (2,750) - Net cash provided (used) by operating activities 2,740 2,745 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Proceeds from capital debt 639,134 5,527,997 Purchase of capital assets (658,140) (5,514,476 Net cash used in capital and related financing activities (19,006) 13,521 NET INCREASE (DECREASE) IN CASH (16,266) 16,266 BEGINNING CASH AND CASH EQUIVALENTS 16,266 - ENDING CASH AND CASH EQUIVALENTS $ - $ 16,266 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES Net income $ 2,740 $ 2,745 NET CASH PROVIDED BY OPERATING ACTIVITIES $ 2,740 $ 2,745 0 The accompanying notes are an integral part of these financial statements DEATON & COMPANY, CHARTERED CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY NOTES TO FINANCIAL STATEMENTS (PAGE 1 OF 2) SEPTEMBER 30, 2012 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 - Summa 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 discretely presented 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. DEATON & COMPANY, CHARTERED CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY NOTES TO FINANCIAL STATEMENTS (PAGE 2 OF 2) SEPTEMBER 30, 2012 NOTE 2 - Deposits Deposits at yearend consist of the following: Deposits Cash in bank 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 $17,629,414 $ 658,140 $ - $ 18,287,554 Accumulated Depreciation - - - - Book Value $17,629,414 $ 658,140 $ - $ 18,287,554 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 $17,642,935 $ 639,134 $ - $ 18,282,069 The authority has no current portion of long term debt as of September 30, 2012. NOTE 5 - Subsequent Events Subsequent events were evaluated up to March 25, 2013, the date the financial statements were available to be issued. E. DEATON & COMPANY, CHARTERED 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 Ceclified Public Accountants 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 Directors Chubbuck Impact Area Wastewater Collection Authority Chubbuck, Idaho We have audited the accompanying financial statements of the governmental activities, the business -type activities, each major fund, and the aggregate remaining fund information of the Chubbuck Impact Area Wastewater Collection Authority, as of and for the years ended September 30, 2012 and 2011, which collectively comprise the Chubbuck Impact Area Wastewater Collection Authority's basic financial statements and have issued our report thereon dated March 25, 2013. 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. 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 Chubbuck Impact Area Wastewater Collection 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. This report is intended solely for the information and use of management, the audit committee, Board of Directors, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. Pocatello, Idaho March 25, 2013 DEATON & COMPANY, CHARTERED CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY SCHEDULE OF FINDINGS AND RESPONSES FOR THE YEAR ENDED SEPTEMBER 30, 2012 Findings Of Significant Deficiency And Responses NONE 11 DEATON & COMPANY, CHARTERED