HomeMy WebLinkAbout2019 CIAWWCA
AUDITED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2019
WITH COMPARATIVE TOTALS AS OF SEPTEMBER 30, 2018
Chubbuck Impact Area Wastewater Collection Authority
Page
1
2
3-4
5
6
Statement of Cash Flows 7
8-11
12-13
Schedule of Findings and Responses 14
CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY
TABLE OF CONTENTS
Report on Internal Control Over Financial Reporting
TITLE PAGE
TABLE OF CONTENTS
Statements of Net Position
Independent Auditor’s Report
Notes to Financial Statements
Statements of Activities
FINANCIAL STATEMENTS
WITH COMPARATIVE TOTAL AS OF SEPTEMBER 30, 2018
2
Report on the Financial Statements
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 information
of Chubbuck Impact Area Wastewater Collection Authority,a component unit of City of Chubbuck as
of and for the year ended September 30,2019,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.
Opinions
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards,we have also issued our report dated January
15,2020,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 considering the Authority's
internal control over financial reporting and compliance.
Pocatello, Idaho
January 15, 2020
In our opinion,the financial statements referred to above present fairly,in all material respects,the
respective financial position of the business-type activities information of the Chubbuck Impact Area
Wastewater Collection Authority,as of September 30,2019,and the respective changes in financial
position,and,where applicable,cash flows thereof for the year 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’s discussion and 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 basis financial statements of the year ended September 30,
2018,which are presented as comparative totals only with the accompanying financial statement and
we expressed unmodified opinions on the respective financial statements of the governmental active,
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
form which it has been derived.
2019 2018
$ - $ 1,035
Land 386,226 386,226
15,758,768 16,364,874
16,144,994 16,752,135
$ 16,879,253 $ 17,127,318
16,879,253 17,127,318
(734,259) (376,218)
- 1,035
(734,259)$ (375,183)$
CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY
AS OF SEPTEMBER 30, 2019
ASSETS
PROPRIETARY FUND
Cash and cash equivalents
WITH COMPARATIVE TOTAL AS OF SEPTEMBER 30, 2018
STATEMENT OF NET POSITION
Capital assets, net of accumulated
LIABILITIES
Depreciation, where applicable:
Infrastructure
Due after one year
Unrestricted
FUND BALANCE/NET ASSETS
NET POSITION
Net investment in capital assets
Long-term liabilities (Note - 4)
5
The accompanying notes are an integral part of these statements
2019 2018
$ 21,960 $ 66,915
21,960 66,915
Professional fees 2,930 2,930
Depreciation Expense 606,106 606,106
609,036 609,036
(587,076) (542,121)
Capital grant revenue 228,000 228,000
228,000 228,000
(359,076) (314,121)
(375,183) (61,062)
(734,259)$ (375,183)$
CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY
STATEMENTS OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
FOR THE YEAR ENDED AS OF SEPTEMBER 30, 2019
WITH COMPARATIVE TOTAL AS OF SEPTEMBER 30, 2018
PROPRIETARY FUND
OPERATING REVENUES
Charges for services
OPERATING EXPENSES
OPERATING INCOME (LOSS)
NONOPERATING REVENUES
NET ASSETS – BEGINNING OF THE YEAR
NET ASSETS – ENDING OF THE YEAR
CHANGE IN NET POSITION
6
The accompanying notes are an integral part of these financial statements
2019 2018
CASH FLOW FROM OPERATING ACTIVITIES
Cash received from customers 21,960$ 66,915$
Cash paid to suppliers (2,930) (2,930)
Net cash provided by operating activities 19,030 63,985
Proceeds from debt 2,930 2,930
Proceeds from capital grants 228,000 228,000
Principal paid on obligations (250,995) (293,880)
Net cash used by capital and related
financing activities (20,065) (62,950)
NET INCREASE (DECREASE) IN CASH (1,035) 1,035
BEGINNING CASH AND CASH EQUIVALENTS 1,035 -
ENDING CASH AND CASH EQUIVALENTS -$ 1,035$
Net operating loss (587,076)$ (542,121)$
Depreciation 606,106 606,106
NET CASH PROVIDED BY OPERATING
ACTIVITIES 19,030$ 63,985$
RECONCILIATION OF OPERATING INCOME
TO NET CASH PROVIDED
BY OPERATING ACTIVITIES
CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
FOR THE YEAR ENDED AS OF SEPTEMBER 30, 2019
WITH COMPARATIVE TOTAL AS OF SEPTEMBER 30, 2018
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
7
The accompanying notes are an integral part of these financial statements
CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY
NOTES TO FINANCIAL STATEMENTS (PAGE 1 OF 4)
NOTE 1 -
A. Reporting Entity
B. Fund Accounting
C. Basis of Accounting
D. Cash and Cash Equivalents
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.
For the purpose of the proprietary fund Statement of Cash Flows,“cash and cash equivalents”
include all demand and savings accounts,and certificates of deposit or short-term investments with
an original maturity of three months or less.
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.
Summary of Significant Accounting Policies
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.
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.
8
CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY
NOTES TO FINANCIAL STATEMENTS (PAGE 2 OF 4)
NOTE 1 -
E. Property, Plant, and Equipment
30 years
F. Operating and Nonoperating Revenue
G. Reclassification
H. Restricted Resources
I. Use of Estimates
J.
It is the Authority's policy to first apply restricted resources when an expense is incurred for
purposes for which both restricted and unrestricted net position is available.
In the financial statements,the assets are accounted for as capital assets.All capital assets are
valued at historical cost,or estimated historical cost if actual is unavailable,except for donated
assets which are recorded at their estimated fair value at the date of donation.All purchases
expected to last longer than one year and exceed $11,000 are capitalized.
Depreciation of all exhaustible capital assets is recorded as an allocated expense in the Statement
of Activities, with accumulated depreciation reflected in the Statement of Net Position. Depreciation
is provided over the assets’estimated useful lives using the straight-line method of depreciation.
The range of estimated useful lives by type of asset is as follows:
Operating revenue is revenue generated from the Authority's primary business activities.The
operating revenues are produced through charges for services.Nonoperating revenue is the
portion of the Authority's revenue that is derived from activities not related to its core operations.
Grant revenue is the source of the nonoperating revenue for the Authority.
Summary of Significant Accounting Policies (Continued)
Infrastructure
Various account balances were reclassified during the year,as previously reported.These
reclassifications were required for the comparability to the current year's financial statements and
must be considered when comparing the financial statements of this report with those of prior
reports.
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States of America requires the Authority's management to make estimates and
assumptions that affect certain reported amount and disclosures.Accordingly,actual results could
differ from those estimates.
Recently Issued Accounting Pronouncements
GASB Statement No.86,Certain Debt Extinguishment lssues was issued to improve consistency
in accounting and financial reporting for in-substance defeasance of debt by providing guidance for
transactions in which cash and other monetary assets acquired with only existing
resources—resources other than the proceeds of refunding debt -are placed in an irrevocable trust
for the sole purpose of extinguishing debt.The requirements of GASB Statement No.86 are
effective for fiscal year 2018.The Authority implemented the applicable requirements of GASB
Statement No. 86 in fiscal year 2018 with no significant impact to the financial statements.
9
CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY
NOTES TO FINANCIAL STATEMENTS (PAGE 3 OF 4)
NOTE 1 -
J.
NOTE 2 -
Deposits at yearend consist of the following:
Deposits Bank Book
$ - $ -
Deposits
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.
Cash in bank
GASB Statement No.87,Leases,was issued to better meet the information needs of financial
statement users by improving accounting and financial reporting for leases by governments.The
requirements of GASB Statement No.87 are effective for fiscal year 2021.The Authority has early
implemented GASB Statement No.87,as encouraged by the standard.There was no impact to
the financial statements as no leases were noted.
GASB Statement No.88,Certain Disclosures Related to Debt,including Direct Borrowings and
Direct Placements,was issued to improve the information that is disclosed in notes to the
government financial statements related to debt,including direct borrowings and direct placements.
It also clarifies which liabilities governments should include when disclosing information related to
debt.The requirements of GASB Statement No.88 are effective for fiscal year 2019.The Authority
has implemented this standard with little to no impact on its financial statements.
GASB Statement No.89,Accounting for lnterest Cost lncurred before the End of a Construction
Period,was issued to enhance the relevance and comparability of information about capital assets
and the costs of borrowing for a period and to simplify accounting for interest cost incurred before
the end of a construction period.The requirements of GASB Statement No.89 are effective for
fiscal year 2021.The Authority is currently evaluating the impact GASB Statement No.89 may
have on its financial statements.
GASB Statement No.90,Majority Equity lnterests—an Amendment of GASB Statement No.14 and
No.61,was issued to improve the consistency and comparability of reporting a government’s
majority interest in a legally separate organization and to improve the relevance of financial
statement information for certain component units.The requirements of GASB Statement No.90
are effective for fiscal year 2020.The Authority is currently evaluating the impact GASB Statement
No. 90 may have on its financial statements.
Summary of Significant Accounting Policies (Continued)
Recently Issued Accounting Pronouncements (Continued)
10
CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY
NOTES TO FINANCIAL STATEMENTS (PAGE 4 OF 4)
NOTE 3 -
Beginning
Balance Additions Deletions Ending Balance
$ 386,226 $ - $ - $ 386,226
18,183,193 - - 18,183,193
(1,818,319) (606,106) - (2,424,425)
$16,751,100 $(606,106) $ - $ 16,144,994
NOTE 4 -
Long-term Debt transactions
Beginning
Balance Additions Deletions Ending Balance
City of Chubbuck Advances $17,127,318 $ 2,930 $(250,995) $ 16,879,253
NOTE 5 -
NOTE 6 -
Subsequent events were evaluated up to January 15,2020,the date the financial statements were
available to be issued.
Subsequent Events
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.
Accumulated Depreciation
Book Value
The Authority has received advances from the City of Chubbuck.The advances have an
undetermined schedule of payment with zero percent (0%)interest and are paid when funds are
available.
Land (nondepreciated)
Infrastructure
Fixed Assets
Long-Term Debt
Deficit Fund Balance
The fund had a deficit fund balance as of the date of this report in the amount of $734,259.
11
To the Board of Directors
Chubbuck Impact Area Wastewater Collection Authority
Chubbuck, Idaho
Internal Control Over Financial Reporting
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
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
30,2019,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 January 15, 2020.
In planning and performing our audit,we considered Chubbuck Impact Area Wastewater Collection
Authority’s internal control over financial reporting (internal control)to determine the audit procedures
that are appropriate in the circumstances 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.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.
Our consideration of internal control was for the limited purpose described in the first paragraph of
this section and was not designed to identify all deficiencies in internal control that might be material
weaknesses or,significant deficiencies.Given these limitations,during our audit we did not identify
any deficiencies in internal control that we consider to be material weaknesses.However,material
weaknesses may exist that have not been identified.
Compliance and Other Matters
Chubbuck, Idaho
January 15, 2020
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.
As part of obtaining reasonable assurance about whether the Authority’s financial statements are
free from 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.
Findings Of Significant Deficiency And Responses
NONE
CHUBBUCK IMPACT AREA WASTEWATER COLLECTION AUTHORITY
SCHEDULE OF FINDINGS AND RESPONSES
FOR THE YEAR ENDED SEPTEMBER 30, 2019
14