BROKEN BOW AIRPORT AUTHORITY

CRITERIA - CFR 200.305(B) STATES THAT TIME ELAPSING BETWEEN THE TRANSFER OF FUNDS FROM THE PASS-THROUGH ENTITY AND DISBURSEMENT BY THE AUTHORITY MUST BE MINIMIZED. CONDITION AND CONTEXT - FROM OUR SAMPLE SELECTION OF DRAWDOWN REQUESTS, WE IDENTIFIED SEVEN INVOICES THAT WERE PAID LATER THAN THREE DAYS OF RECEIPT FROM FUNDING OF THE PASS-THROUGH ENTITY. CAUSE - THE AUTHORITY DOES NOT HAVE WRITTEN PROCEDURES AND POLICIES IN PLACE TO ASSIST IN ENSURING TIMELY PAYMENTS AFTER RECEIPT OF GRANT PROCEEDS. POTENTIAL EFFECT - THE AUTHORITY RECEIVED UNSPENT CASH UPON REQUEST OF DRAWDOWNS UNTIL A LATER DATE. RECOMMENDATION - WE RECOMMEND THAT THE AIRPORT AUTHORITY APPROVE PROCEDURES AND POLICIES WHICH REFLECT ITS SPECIFIC NEEDS. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION - THE AIRPORT AUTHORITY WILL APPROVE WRITTEN PROCEDURES AND POLICIES AS IT RELATES TO FEDERAL REGULATIONS OF GRANT AWARDS.

CRITERIA - AS DESCRIBED IN OUR ENGAGEMENT LETTER, MANAGEMENT IS RESPONSIBLE FOR ESTABLISHING AND MAINTAINING INTERNAL CONTROLS, INCLUDING MONITORING, AND FOR THE FAIR PRESENTATION OF THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (SEFA), INCLUDING THE NOTES TO THE SEFA, IN CONFORMITY WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA. CONDITION AND CONTEXT - MANAGEMENT SHOULD POSSESS THE EXPERTISE TO PREPARE THE SEFA AND RELATED DISCLOSURES IN ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERCIA WITHOUT ASSISTANCE FROM THE AUDITORS. DURING OUR AUDIT, WE COMPILED A LIST OF THE FEDERAL AWARDS FROM FINANCIAL AND OTHER RECORDS PROVIDED BY THE AUTHORITY AND DRAFTED THE SEFA AND RELATED NOTE DISCLOSURES. CAUSE - THE AIRPORT AUTHORITY PERSONNEL DO NOT OBTAIN THE EXPERIENCE NECESSARY TO PROVIDE THE AUDITORS WITH A SEFA, IN ACCORDANCE WITH ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED STATES OF AMERICA AND TO DRAFT THE NOTES TO THE SEFA. POTENTIAL EFFECT - THE POTENTIAL EXISTS THAT A MATERIAL MISSTATEMENT OF THE SEFA COULD OCCUR AND NOT BE PREVENTED OR DETECTED BY THE AIRPORT AUTHORITY'S INTERNAL CONTROL. RECOMMENDATION - WE RECOMMEND THAT THE AIRPORT AUTHORITY REVIEW AND APPROVE THE PROPOSED AUDITOR ADJUSTING ENTRIES AND WORKPAPERS AND THE ADEQUACY OF SEFA DISCLOSURES PREPARED BY THE AUDITORS AND APPLY ANALYTIC PROCEDURES OF THE DRAFT FINANCIAL STATEMENTS AND OTHER RECORDS TO ENSURE THAT ALL EXPENDITURES OF FEDERAL PROGRAMS OF THE AIRPORT AUTHORITY ARE PROPERLY RECORDED, AMONG OTHER PROCEDURES AS CONSIDERED NECESSARY BY MANAGEMENT. VIEWS OF RESPONSIBLE OFFICIALS AND PLANNED CORRECTIVE ACTION - THE AIRPORT AUTHORITY RELIES ON THE AUDITOR TO PROPOSE ADJUSTMENTS AND PROVIDE WORKPAPERS NECESSARY TO PREPARE THE SEFA INCLUDING THE RELATED NOTE DISCLOSURES. THE AUTHORITY REVIEWS THE DRAFT OF THE SEFA AND RELATED NOTE DISCLOSURES AND APPROVES ALL ADJUSTMENTS AND CERTAIN WORKPAPERS.