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TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA FINANCIAL REPORT SEPTEMBER 30, 2015

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Page 1: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

TRI-COUNTY AIRPORT AUTHORITY

BONIFAY, FLORIDA

FINANCIAL REPORT

SEPTEMBER 30, 2015

Page 2: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

TABLE OF CONTENTS

---------------------------------------------------------------------------------------------------------------------

PAGE

INDEPENDENT AUDITOR'S REPORT 1

FINANCIAL STATEMENTS

STATEMENT OF NET POSITION 4

STATEMENT OF ACTIVITIES 5

STATEMENT OF NET POSITION – PROPRIETARY FUND 6

STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN

FUND NET POSITION - PROPRIETARY FUND 7

STATEMENT OF CASH FLOWS - PROPRIETARY FUND 8

NOTES TO THE FINANCIAL STATEMENTS 9

SUPPLEMENTARY INFORMATION

SCHEDULE OF EXPENDITURES OF STATE AWARDS 14

INDEPENDENT ACCOUNTANTS' REPORT ON COMPLIANCE WITH SECTION

218.415, FLORIDA STATUTES, LOCAL GOVERNMENT INVESTMENT POLICIES 15

INDEPENDENT AUDITOR'S REPORT REQUIRED BY

GOVERNMENTAL AUDITING STANDARDS

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS IN ACCORDANCE

WITH GOVERNMENT AUDITING STANDARDS 16

INDEPENDENT AUDITOR'S REPORT TO MANAGEMENT REQUIRED BY

THE STATE SINGLE AUDIT ACT

INDEPENDENT AUDITORS REPORT ON COMPLIANCE FOR

EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER

COMPLIANCE REQUIRED BY CHAPTER 10.550, RULES OF THE

AUDITOR GENERAL 18

Page 3: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

TABLE OF CONTENTS

---------------------------------------------------------------------------------------------------------------------

PAGE

SCHEDULE OF FINDINGS AND QUESTIONED COSTS 21

CORRECTIVE ACTION PLAN 28

INDEPENDENT AUDITORS REPORT TO MANAGEMENT REQUIRED 31

BY THE STATE OF FLORIDA

RESPONSE TO AUDIT FINDINGS 34

Page 4: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

INDEPENDENT AUDITOR'S REPORT

Page 5: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Gnnvrsr¡y, Cavnq c. Covpetw,P.A.C¡Rrrrre o PueLtc AccoururRrurs

OwEru W. GRIMSLEY, C.P.A.

DALE L. CAVIN. C.P.A.

MEMBERs

FLoRtDA INSilTUTE AND

Av¡nrcnru lNsÏTUTE oF

Cent¡n¡o PuBuc AccoUNTANTS

INDEPENDENT AUDITOR'S REPORT

Board of DirectorsTri-County Airport AuthorityBonifay, Florida

Report on the Financial Statements

We have audited the accompanying financial statements of the business{ype activities and majorfund of the Tri-County Airport Authority as of and for the year ended September 30, 2015, and therelated notes to the financial statements, which collectively comprise the Tri-County AirportAuthority's basic financial statements as listed in the table of contents.

Management's Responsíb ility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in the United States of America; thisincludes the design, implementation, and maintenance of internal control relevant to thepreparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error.

Aud itor's Res pon si bil ity

Our responsibility is to express opinions on these financial statements based on our audit. Weconducted our audit in accordance with auditing standards generally accepted in the United Statesof America and the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States. Those standards require thatwe plan and perform the audits to obtain reasonable assurance about whether the financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment, including the assessment of the risks of material misstatement of the financialstatements, whether due to fraud or error. ln making those risk assessments, the auditorconsiders internal control relevant to the entity's preparation and fair presentation of the financialstatements in order to design audit procedures that are appropriate in the circumstances, but notfor 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 appropriatenessof accounting policies used and the reasonableness of significant accounting estimates made bymanagement, as well as evaluating the overall presentation of the financial statements.

Post Office Box220 o 4243 Lafayette Street o Marianna, Florida 32447-0220 o 850-526-3910 ¡ FAX 850-482-6019Post Office F,ox 47 5 o 983 Sixth Avenue ¡ Graceville, Florida 32440-047 5 o 850-263-3636 '

Page 6: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport AuthorityPage 2

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinions.

Opinions

ln 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 major fund of the Tri-County Airport Authority, as of September 30, 2015, and the respective changes in financialposition, and, where applicable, cash flows thereof for the years then ended in accordance withaccounting principles generally accepted in the United States of America.

Other Matters

Required Su pplementary I nformation

Management has omitted the Management Discussion and Analysis that accounting principlesgenerally accepted in the United States of America require to be presented to supplement thebasic financial statements. Such missing information, although not a part of the basic financialstatements, is required by the governmental Accounting Standards Board who considers it to bean essential part of financial reporting for placing the basic financial statement in an appropriateoperational, economic, or historical context. Our opinion on the basic financial statements is notaffected by this missing information.

Other lnformation

Our audit was conducted for the purpose of forming opinions on the financial statements thatcollectively comprise the Tri-County Airport Authority's basic financial statements. Theaccompanying schedule of expenditures of state projects is presented for purposes of additionalanalysis as required by Chapter 10.550, Rules of the Auditor General, and is not a required partof the basic financial statements. Such information is the responsibility of management and wasderived from and relates directly to the underlying accounting and other records used to preparethe basic financial statements or to the basic financial statements themselves, and other additionalprocedures in accordance with auditing standards generally accepted in the United States ofAmerica. ln our opinion, the schedule of expenditures of state projects is fairly stated, in allmaterial respects, in relation to the basic financial statements as a whole.

2

Page 7: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport AuthorityPage 3

Other Reporting Required by Government Auditing Standards

ln accordance with Government Auditing Standardg we have also issued our report datedSeptember 1,2016, on our consideration of the Tri-County Airport's internal control over financialreporting 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 ofour testing of internal control over financial reporting and compliance and the results of thattesting, 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 AuditingStandards in considering Tri-County Airport Authority's internal control over financial reportingand compliance.

çtù,fisfE, Cøvin {c Company

Marianna, FloridaSeptember 1, 2016

Grimsley, Cavin & Company, P.A.Certified Public Accountants

3

Page 8: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

FINANCIAL STATEMENTS

Page 9: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Statement of Net Position

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

4

2015

ASSETS

Cash and Cash Equivalents 72,714$

Accounts Receivable 85,270

Capital Assets:

Land and Construction in Process 1,729,435

Other Capital Assets, Net of Depreciation 6,436,871

Total Capital Assets 8,166,306

Total Assets 8,324,290

LIABILITIES

Accounts Payable 101,684

Total Liabilities 101,684

NET POSITION

Invested in Capital Assets, Net of Related Debt 8,084,711

Unrestricted 137,895

Total Net Position 8,222,606$

Business-type

Activities

The notes to the financial statements are an integral part of this statement.

Page 10: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Statement of Activities

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

5

Net (Expense)

Revenue and

Changes in

Net Position

Capital

Charges for Grants and Business-type

Expenses Services Contributions Activities

Functions/Programs

Business-type Activities:

Airport 639,887$ 230,544$ 2,587,464$ 2,178,121$

Change in Net Position 2,178,121

Net Position - beginning 6,044,485

Net Position - ending 8,222,606$

Program Revenues

The notes to the financial statements are an integral part of this statement.

Page 11: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Statement of Net Position – Proprietary Fund

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

6

2015

ASSETS

Current Assets:

Cash and Cash Equivalents 72,714$

Accounts Receivable 85,270

Total Current Assets 157,984

Noncurrent Assets:

Capital Assets:

Land 56,990

Buildings and Improvements 3,652,064

Equipment and Machinery 719,773

Infrastructure 5,800,272

Construction In Process 1,672,445

Less Accumulated Depreciation (3,735,238)

Total Noncurrent Assets 8,166,306

Total Assets 8,324,290

LIABILITIES

Current Liabilities:

Accounts Payable 101,684

Total Liabilities 101,684

NET POSITION

Invested in Capital Assets, Net of Related Debt 8,084,711

Unrestricted 137,895

Total Net Position 8,222,606$

The notes to the financial statements are an integral part of this statement.

Page 12: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Statement of Revenues, Expenses and Changes in Fund Net Position –

Proprietary Fund

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

7

2015

OPERATING REVENUES:

Charges for Services 230,544$

Total Operating Revenue 230,544

OPERATING EXPENSES:

Insurance 11,397

Utility Service 18,057

Fuel 91,895

Repair and Maintenance 5,140

Office Expense 5,514

Commissions 22,480

Accounting and Auditing 12,897

Miscellaneous 5,766

Depreciation 466,741

Total Operating Expenditures 639,887

Operating Loss (409,343)

(Loss) before Contributions (409,343)

Capital Contributions 2,587,464

Change in Net Position 2,178,121

Net Position, beginning of year 6,044,485

Net Position, end of year 8,222,606$

The notes to the financial statements are an integral part of this statement.

Page 13: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Statement of Cash Flows – Proprietary Fund

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

8

2015

Cash Flows from Operating Activities:

Charges for Services 230,544$

Payments to Suppliers (183,244)

Net Cash provided in Operating Activities 47,300

Cash Flows from Capital and Related Financing Activities:

Capital Contributions 2,582,648

Purchases of Capital Assets (2,624,499)

Net Cash Provided by Capital and Related Financing

Activities (41,851)

Net Decrease in Cash and Cash Equivalents 5,449

Cash and Cash Equivalents, beginning of year 67,265

Cash and Cash Equivalents, end of year 72,714$

Reconciliation of Operating Loss to Net Cash Used in Operating

Activities:

Operating Loss (409,343)$

Adjustments to Reconcile Operating Loss to Net Cash Used in

Operating Activities:

Depreciation 466,741

Increase/Decrease in Accounts Payable related to operations (10,098)

Net Cash provided in Operating Activities 47,300$

The notes to the financial statements are an integral part of this statement.

Page 14: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

NOTES TO THE FINANCIAL STATEMENTS

Page 15: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Notes to the Financial Statements

September 30, 2015

------------------------------------------------------------------------------------------------------------------------

9

NOTE 1 – REPORTING ENTITY

The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes,

Washington, and Jackson Counties, Florida, was established as an independent special

district by the Florida Legislature, House Bill 2859, Chapter 69-534, in 1969. Its purpose is

to accomplish the cooperative joint effort of the Boards of County Commissioners of Holmes,

Jackson, and Washington Counties in the establishment and operation of an airport near

their common geographical boundary point. The Authority is governed by a fifteen member

board of directors consisting of five members appointed by each county commission.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Government-wide and fund financial statements

The Tri-County Airport Authority has only one fund, which is a proprietary fund. There are

no governmental funds, as such the Authority’s government-wide financial statements refer

only to the proprietary fund. The financial statements have been prepared in accordance

with generally accepted accounting principles in the United States of America (“GAAP”)

applicable to state and local governments. The Governmental Accounting Standards Board

(“GASB”) is the accepted standard-setting body for establishing governmental accounting

and financial reporting principles. The significant accounting and reporting policies and

practices used by the Authority are described below.

The government-wide financial statements (i.e., the statement of net position and the

statement of activities) report information on all of the nonfiduciary activities of the primary

government.

The statement of activities demonstrates the degree to which the direct expenses of a given

function or segment are offset by program revenues. Direct expenses are those that are

clearly identifiable with a specific function or segment. Program revenues include 1) charges

to customers or applicants who purchase, use or directly benefit from goods, services, or

privileges provided by a given function or segment and 2) grants and contributions that are

restricted to meeting the operational or capital requirements of a particular function or

segment. Other items not properly included among program revenues are reported instead

as general revenues.

Measurement focus, basis of accounting, and financial statement presentation

The government-wide financial statements are reported using the economic resources

measurement focus and the accrual basis of accounting. Revenues are recorded when

earned and expenses are recorded when a liability is incurred, regardless of the timing of

related cash flows. Grants and similar items are recognized as revenue as soon as all

eligibility requirements imposed by the provider have been met.

Governmental fund financial statements are reported using the current financial resources

measurement focus and the modified accrual basis of accounting. Revenues are recognized

as soon as they are both measurable and available. Revenues are considered to be

available when they are collectible within the current period or soon enough thereafter to

pay liabilities of the current period.

Page 16: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Notes to the Financial Statements

September 30, 2015

------------------------------------------------------------------------------------------------------------------------

10

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued

For this purpose, the government considers revenues to be available if they are collected

within sixty days of the end of the current fiscal period. Expenditures generally are recorded

when a liability is incurred, as under accrual accounting.

Grants and entitlements and interest associated with the current fiscal period are all

considered susceptible to accrual and so have been recognized as revenues of the current

fiscal period. All other revenue items are considered measurable and available only when

the Authority receives cash.

Fund Accounting

The financial statements of the Authority include the funds and account groups required to

account for those financial activities which are related to the Authority and are controlled by

or dependent upon the Authority’s legislative body. Control or dependence upon the

Authority is determined on the basis of budget adoption, taxing authority, and outstanding

debt secured by revenues or general obligation of the Authority, and the Authority’s legal

responsibility to fund any deficits that may occur. On this basis, all of the Authority’s activities

are reported in the Enterprise Fund.

The accounting policies of the Authority conform to generally accepted accounting principles

as applicable to governmental entities, specifically Proprietary Fund types (Enterprise

Funds).

All proprietary funds are accounted for using the economic resources measurement focus

and the accrual basis of accounting. Revenue is recognized when earned and expenses

are recorded when they are incurred.

When both the restricted and unrestricted resources are available for use, it is the Authority’s

policy to use restricted resources first, then unrestricted resources as needed.

Enterprise Funds are used to account for operations (a) that are financed and operated in a

manner similar to private business enterprises - where the intent of the governing body is

that the costs (expenses, including depreciation) of providing goods or services to the

general public on a continuing basis be financed or recovered primarily through user

charges; or (b) where the governing body has decided that periodic determination of

revenues earned, expenses incurred, and/or net income is appropriate for capital

maintenance, public policy, management control, accountability, or other purposes.

The Authority reports the following major proprietary fund:

Airport – accounts for the revenue and expense and capital improvements of the Airport

Authority.

Cash and Cash Equivalents

Amounts shown as cash include cash in checking account.

Page 17: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Notes to the Financial Statements

September 30, 2015

------------------------------------------------------------------------------------------------------------------------

11

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

Capital Assets

Capital assets used in proprietary fund type operations are capitalized at cost when

purchased and depreciation is recognized over the useful lives of the fixed assets using the

straight line method as follows:

Building and Improvements 10-20 years

Infrastructure and improvement

other than buildings 10-50 years

Equipment 5-10 years

Net Position

Net position present the difference between assets and liabilities in the statement of net

position. Net position invested in capital assets are reduced by the outstanding balances of

any borrowing used for the acquisition, construction or improvement of those assets.

Budgets

Florida Statutes governs the preparation, adoption, and administration of the budget for the

special district. The District did not adopt a budget for the fiscal year ending September 30,

2015.

Financial Reporting Entity

The financial statements include the accounts of the Authority’s various funds. The following

criteria was used to determine that no other governmental units should be included in this

report:

- Financial independency

- Selection of governing authority

- Designation of management

- Ability to significantly influence operations

- Accountability for fiscal matters

Risk Management and Insurance

The Authority insures itself against losses from casualty, accident and dishonesty by

purchasing insurance. During the year ended September 30, 2015, the Authority received

no significant refunds nor additional bills for prior year premiums.

The Authority believes the level of insurance purchased is adequate to protect it from

material loss. No significant changes in coverage or claims have been made in recent years.

Estimates

The preparation of financial statements in conformity with generally accepted accounting

principles requires management to make estimates and assumptions that affect certain

reported amounts and disclosures. Accordingly, actual results could differ from those

estimates.

Page 18: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Notes to the Financial Statements

September 30, 2015

------------------------------------------------------------------------------------------------------------------------

12

NOTE 3 - CASH AND DEPOSITS WITH FINANCIAL INSTITUTIONS

Tri-County Airport Authority, in accordance with state and local regulations, deposits its cash

funds in approved financial institutions. The financial institutions are required to pledge U.S.

Government Securities as collateral for such funds. Custodial credit risk is the risk that in

the event of a bank failure, the district’s deposits may not be returned to it. The district does

not have a deposit policy for custodial credit risk or interest rate risk. The district maintains

cash balances at one bank in Chipley, Florida. At September 30, 2015, the carrying amount

of the Authority’s deposits was $72,714 and the bank balance was as follows:

Amount insured by FDIC 250,000$

Amount Subject to Custodial Risk (Risk of loss due to bank failure)

Collateralized with securities pledged by the financial institution and

held in trust, but not in the Authority's name 409,677

Total Deposits with Financial Institutions 659,677$

NOTE 4 - ACCOUNTS RECEIVABLE

The Authority reported receivables in the amount of $85,270 at September 30, 2015 from

various grant projects. No allowance for uncollectible accounts is considered necessary.

NOTE 5 - CHANGES IN CAPITAL ASSETS

Additions and deletions of capital assets for the year ended September 30, 2015 were:

Balance Additions Deletions Balance

Capital assets not being depreciated:

Land 56,990$ -$ -$ 56,990$

Construction in Process 522,090 1,452,246 301,891 1,672,445

Total capital assets not being depreciated: 579,080 1,452,246 301,891 1,729,435

Other capital assets:

Buildings and Improvements 3,599,003 53,061 - 3,652,064

Machinery and equipment 719,773 - - 719,773

Infrastructure 4,416,110 1,384,162 - 5,800,272

Total other capital assets: 8,734,886 1,437,223 - 10,172,109

Less Accumulated Depreciation (3,268,498) (466,740) - (3,735,238)

Net 6,045,468$ 2,422,729$ 301,891$ 8,166,306$

Page 19: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Notes to the Financial Statements

September 30, 2015

------------------------------------------------------------------------------------------------------------------------

13

NOTE 6 - CAPITAL IMPROVEMENT GRANTS

During the year ended September 30, 2015, the Authority received capital improvement

grant funds from the State of Florida in the form of Aviation Development Grants with the

Florida Department of Transportation (FDOT) and from the Federal Aviation Administration.

The Authority received grant revenues from the following contracts during the year ended

September 30, 2015:

Amount

Project Contract # Received

Rehabilitate Taxiway and Construct Taxiway

Extension AQS93 46,671

Construct Runway and Taxiway Extension AR361 614,275

Construct Partial Parallel Taxiway ARC26 111,095

Construct Runway and Taxiway Extension Phase 2 AR397 521,058

Construct Runway and Taxiway Extension Phase 3 ARL07 329,684

Overlay Runway 1-19 ARL08 484,038

Construct Runway and Taxiway Extension Phase 4 GO335 57,509

Runway/Taxiway Extension Phase 3 3-12-0007-010-2014 423,134

2,587,464$

NOTE 7 - NET WORKING CAPITAL

The net working capital of the Enterprise Funds current assets less current liabilities was

$56,300 as of September 30, 2015.

Page 20: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

SCHEDULE OF EXPENDITURES OF STATE AWARDS

Page 21: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Schedule of Expenditures of State Awards

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

14

State Agency, Contract Financial

Pass-through Entiy, CSFA Grant Project

State Project Number Number Number Expenditures

Florida Department of Transportation

Aviation Development Grants 55.004 AQS93 42361519401 46,671$

Aviation Development Grants 55.004 AR361 42362129401 614,275

Aviation Development Grants 55.004 ARC26 42362149401 111,095

Aviation Development Grants 55.004 AR397 42562319401 521,058

Aviation Development Grants 55.004 ARL07 42562329401 329,684

Aviation Development Grants 55.004 ARL08 42562349401 484,038

Aviation Development Grants 55.004 G0335 42562339401 57,509

2,164,330$

Note 1-

Basis of Presentation

The accompanying schedule of expenditures of state financial assistance projects includes the state award

activity of Tri-County Airport Authority and is presented on the accrual basis of accounting.

Page 22: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

INDEPENDENT ACCOUNTANTS’ REPORT ON COMPLIANCE WITH

SECTION 218.415, FLORIDA STATUTES LOCAL GOVERNMENT

INVESTMENT POLICIES

Page 23: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

GnnvrsrEy, Carm'v & Covpa¡uy, P.A.Ce nrrrrro PuaLrc AccoururRnrs

OWEN W, GRIMSLEY, C.P,A.

DALE L. CNvIru, C.P.A.

MEMBERS

FroRtDA lNsrtrurE AND

AMERTcAN lNsllufE oF

CERITFIED Pu gLrc AccouNr¡Nrs

INDEPENDENT ACCOUNTANTS' REPORT ON COMPLIANCE WITHSECTION 218.415, FLORIDA STATUTES, LOCAL GOVERNMENT

INVESTMENT POLIC/ES

To the Board of DirectorsTri-County Airport AuthorityBonifay, Florida

We have examined the Tri-County Airport Authority's compliance with the requirements of Section218.415, Florida Statutes, Local Governments lnvestment Policies, during the year endedSeptember 30, 2015. Management is responsible for the Tri-County Airport Authority'scompliance with those requirements. Our responsibility is to express an opinion on the Tri-CountyAirport Authority's cooperation based on our examination.

Our examination was conducted in accordance with attestation standards established by theAmerican lnstitute of Certified Public Accountants and, accordingly, including examining, on a testbasis, evidence about the Tri-County Airport Authority's compliance with those requirements andperforming such other procedures as we considered necessary in the circumstances. We believethat our examination provides a reasonable basis for our opinion. Our examination does notprovide a legal determination on the Tri-County Airport Authority's compliance with specifiedrequirements.

ln our opinion, the Tri-County Airport Authority complied, in all material aspects, with theaforementioned requirements for the year ended for the year ended September 30, 2015.

This report is intended solely for the information and use of management and the State of FloridaAuditor General and is not intended to be and should not be used by anyone other than thesespecified parties.

çriîrßb, Cøvin {e Cornpøny

September 1,2016Marianna, Florida

Grimsley, Cavin & Company, P.ACertified Public Accountants

Post Office Box220 o 4243 Lafayette Street. Marianna, Florida 32441-0220 ¡ 850-526-3910 o FAX 850-482-6019Post Office Box475 o 983 Sixth Avenue o Graceville, Florida 32440-0475 o 850-263-3636

15

Page 24: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

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

Page 25: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Gnnvrsrny, Cavn q & CON¡PANY, P.A.

Crnrrrr ro Pu sLrc AccoururRrursOw¡n¡ W. GnrvsleY, C.P.A.

DALE L. CAVIN, C.P,A.

MEMBERS

FLoRtDA lNSTtrurE AND

AMERTcAN INSflTUTE oF

CERÌFrED PUBUc AccouNTANrs

INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON ANAUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH

G OV E RN M E NT AU D IT ING S IANDARDS

To the Board of DirectorsTri-County Airport AuthorityBonifay, Florida

We have audited, in accordance with the auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in GovernmentAuditing Standards issued by the Comptroller General of the United States, the financialstatements of the business{ype activities and major fund of Tri-County Airport Authority, as ofand for the year ended September 30,2015, and the related notes to the financial statements,which collectively comprise Tri-County Airport Authority's basic financial statements and haveissued our report thereon dated September 1,2016.

lnternal Control over Financial Reporting

ln planning and performing our audit of the financial statements, we considered Tri-County AirportAuthority's internal control over financial reporting (internal control) to determine the auditprocedures that are appropriate in the circumstances for the purpose of expressing our opinionson the financial statements, but not for the purpose of expressing an opinion on the effectivenessof Tri-County Airport Authority's internal control. Accordingly, we do not express an opinion onthe effectiveness of Tri-County Airport Authority's internal control.

Our consideration of internal control was for the limited purpose described in the precedingparagraph and was not designed to identify all deficiencies in internal control that might bematerial weaknesses or significant deficiencies and therefore, material weaknesses or significantdeficiencies may exist that were not identified. However, as described in the accompanyingschedule of findings and questioned costs, we identified certain deficiencies in internal controlthat we consider to be material weaknesses and significant deficiencies.

Post Office Box220 c 4243 Lafayette Street. Marianna, Florida 32447-0220 o 850-526-3910 o FAX 850-482-6019Post Office Box475 o 983 Sixth Avenue o Graceville, Florida 32440-0415 o 850-263-3636

16

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Tri-County Airport AuthorityPage 2

A deficiency in internal controlexists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, toprevent, or detect and correct, misstatements on a timely basis. A material weakness is adeficiency, or combination of deficiencies, in internal control such that there is a reasonablepossibility that a material misstatement of the entity's financial statements will not be prevented,or detected and corrected on a timely basis. We consider the deficiencies described in theaccompanying schedule of findings and questioned costs as items 07-01 , 12-01, and 14-03 to bematerial weaknesses.

A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that isless severe than a material weakness, yet important enough to merit attention by those chargedwith governance. We consider the deficiencies described in the accompanying schedule offindings and questioned costs as item 03-2 to be a significant deficiency.

Compliance and Other Matters

As part of obtaining reasonable assurance about whether Tri-County Airport Authority's financialstatements are free from material misstatement, we performed tests of its compliance with certainprovisions of laws, regulations, contracts, and grant agreements, noncompliance with which couldhave 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, andaccordingly, we do not express such an opinion. The results of our tests disclosed instances ofnoncompliance or other matters that are required to be reported under Government AuditingStandards and which are described in the accompanying schedule of findings and questionedcosts as items 14-01 , 14-02, and 15-01 .

Tri-County Airport Authority's Response to Findings

Tri-County Airport Authority's response to the findings identified in our audit is described in theaccompanying schedule of findings and questioned costs. Tri-County Airport Authority's responsewas not subjected to the auditing procedures applied in the audit of the financial statements and,accordingly, we express no opinion on it.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control andcompliance and the results of that testing, and not to provide on opinion on the effectiveness ofthe entity's internal control or on compliance. This report is an integral part of an audit performedin accordance with Government Auditing Standards in considering the entity's internal control andcompliance. Accordingly, this communication is not suitable for any other purpose.

Çris,zsfe$ Cævt?, & Conpany

Marianna, FloridaSeptember 1,2016

Grimsley, Cavin & Company, P.A.Certified Public Accountants

17

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INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR STATE

PROJECT AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY

CHAPTER 10.550, RULES OF THE AUDITOR GENERAL

Page 28: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Gnnusrny, Crvm c Covrp¿,wy, P.A.Ce nrrrrro PusLrc AccounrRrurs

OWEN W. GRIMSLEY, C.P.A,

DALE L. CAVIN, C.P.A.

MÊMBERS

FLoRTDA INS1TUTE AND

AMERTcAN lruslrurr orCeRrrseo Pualrc AccouNr¡tirrs

INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAMAND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY CHAPTER 10.550,

RULES OF THE AUDITOR GENERAL

Board of DirectorsTri-County Airport AuthorityBonifay, Florida

Report on Compliance for Each Major State Project

We have audited Tri-County Airport Authority's compliance with the types of compliancerequirements described in the Department of Financial Services' State Projects ComplianceSupplement, that could have a direct and material effect on each of Tri-County Airport Authority'smajor state projects for the year ended September 30,2015. Tri-County Airport Authority's majorstate projects are identified in the summary of auditor's results section of the accompanyingschedule of findings and questioned costs.

M a n ag e menf 's Re s po n si b i I ity

Management is responsible for compliance with the requirements of state statutes, regulations,and the terms and conditions of its state awards applicable to its state pro.¡ects.

Au ditor's Res pon si bil ity

Our responsibility is to express an opinion on compliance for each of Tri-County Airport Authority'smajor state projects based on our audit of the type of compliance requirements referred to above.We conducted our audit of compliance in accordance with auditing standards generally acceptedin the United States of America; the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States and theaudit requirements of Chapter 10.550, Rules of the Auditor General. Those standards andChapter 10.550, Rules of the Auditor General require that we plan and perform the audit to obtainreasonable assurance about whether noncompliance with the types of compliance requirementreferred to above that could have a direct and material effect on a major state project occurred.An audit includes examining, on a test basis, evidence about Tri-County Airport Authority'scompliance with those requirements and performing such other procedures as we considerednecessary in the circumstances.

Post Office Box220 o 4243 Lafayette Street ¡ Marianna, Florida 32441-0220 o 850-526-3910 o FAX 850-482-6019Post Office Box475 o 983 Sixth Avenue o Graceville, Florida 32440-0415 o 850-263-3636

1B

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We believe that our audit provides a reasonable basis for our opinion on compliance for eachmajor state project. However, our audit does not provide a legal determination of Tri-CountyAirport Authority's compliance.

Basis for Adverse Opinion on CSFA 55.004, Aviation Development Grant

As described in the accompanying schedule of findings and questioned costs, Tri-County AirportAuthority did not comply with requirements regarding CSFA 55.004, Aviation Development Grantas described in finding numbers 15-02 for Cash Management. Compliance with suchrequirements is necessary, in our opinion, for Tri-County Airport Authority to comply with therequirements applicable to that program.

Averse Opinion on GSFA 55.004, Aviation Development Grant

ln our opinion, because of the significance of the matter discussed in the Basis for AdverseOpinion paragraph, Tri-County Airport Authority did not comply, in all material respects, with thetypes of compliance requirements referred to above that could have a direct and material effecton CSFA 55.004, Aviation Development Grant for the year ended September 30, 2015.

Report on lnternal Control over Compliance

Management of Tri-County Airport Authority is responsible for establishing and maintainingeffective internal control over compliance with the types of compliance requirements referred toabove. ln planning and performing out audit of compliance, we considered Tri-County AirportAuthority's internal control over compliance with the types of requirements that could have a directand material effect on each major state project to determine the auditing procedures that areappropriate in the circumstances for the purpose of expressing an opinion on compliance for eachmajor state project and to test and report on internal control over compliance in accordance withChapter 10.550, Rules of the Auditor General, but not for the purpose of expressing an opinionon the effectiveness of internal control over compliance. Accordingly, we do not express anopinion on the effectiveness of Tri-County Airport Authority's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a controlover compliance does not allow management or employees, in the normal course of performingtheir assigned functions, to prevent, or detect and correct, noncompliance with a type ofcompliance requirement of a state project on a timely basis. A material weakness in internalcontrol over compliance is a deficiency, or combination of deficiencies, in internal control overcompliance, such that there is a reasonable possibility that material noncompliance with a type ofcompliance requirement of a state project will not be prevented, or detected and corrected, on atimely basis. A significant deficiency in internal control over compliance is a deficiency, orcombination of deficiencies, in internal control over compliance with a type of compliancerequirement of a federal program that is less severe than a materialweakness in internal controlover compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in thefirst paragraph of this section and was not designed to identify all deficiencies in internal controlover compliance that might be material weaknesses or significant deficiencies and therefore,

19

Page 30: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

material weaknesses or significant deficiencies may exist that were not identified. We identifiedcertain deficiencies in internal control over compliance, as described in the accompanyingschedule of findings and questioned costs as items 15-03 and 15-04, that we consider to bematerial weaknesses.

Tri-County Airport Authority's response to the internal control over compliance findings identifiedin our audit is described in the section of this report titled Response to Audit Findings. Tri-CountyAirport Authority's response was not subjected to the auditing procedures applied in the audit ofcompliance and, accordingly, we express no opinion on the response.

The purpose of this report on internal control over compliance is solely to describe the scope ofour testing of internal control over compliance and the results of that testing based on therequirements of 10.550, Rules of the Auditor General. Accordingly, this report is not suitable forany other purpose.

Marianna, FloridaSeptember 1,2016

çîúns@, Cøvin &ComPany

Grimsley, Cavin & Company, P.A.Certified Public Accountants

20

Page 31: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

SCHEDULE OF FINDINGS AND QUESTIONED COSTS

Page 32: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Schedule of Findings and Questioned Costs

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

21

SUMMARY OF AUDITOR’S RESULTS

1. The auditor’s report expresses on unmodified opinion on whether the financial

statements of Tri-County Airport Authority were prepared in accordance with GAAP.

2. Three material weaknesses and one significant deficiency disclosed during the audit

of the financial statements are reported in the Independent Auditor’s Report on

Internal Control over Financial Reporting and on compliance and Other Matters

Based on an Audit of Financial Statements in Accordance with Government Auditing

Standards.

3. Three instances of noncompliance material to the financial statement of Tri-County

Airport Authority, which were required to be reported in accordance with Government

Auditing Standards, were disclosed during the audit.

4. One material weakness in internal control over major state projects disclosed during

the audit is report in the Independent Auditor’s Report on Compliance for each Major

Project and on Internal Control over Compliance Required by Chapter 10.550, Rules

of the Auditor General.

5. The auditor’s report on compliance for the major state award project for Tri-County

Airport Authority expresses an adverse opinion on the major state project.

6. Audit findings that are required to be reported in accordance with Chapter 10.550,

Rules of the Auditor General are reported in this Schedule.

7. The program tested as a major project were: Aviation Development Grant; CSFA No.

55.004.

8. The threshold used for distinguishing between Type A and B programs was $300,000.

9. Tri-County Airport Authority was determined to not be a low risk auditee.

Page 33: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Schedule of Findings and Questioned Costs

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

22

FINDINGS – FINANCIAL STATEMENT AUDIT

03-02

Criteria – Custody of assets, record keeping and recording of assets should have adequate

separation.

Condition – Due to the size of the organization, proper separation of duties may not be

feasible.

Effect – There is a lack of adequate internal controls over financial reporting.

Cause – This is a small one-person bookkeeping system.

Recommendation – The Board of Directors should remain very active and involved in the

day-to-day operations. It is essential that records be maintained current and up-to-date.

Controls should be established to provide checks and balances.

07-01

Criteria – An entity’s system of internal control over financial reporting should include

controls over the prevention, detection and correction of misstatements in the audited

financial statements. Condition – Tri-County Airport Authority relies on the external audit to assist with preparing

and explaining financial statements in conformity with generally accepted accounting

principles.

Effect – Since the auditor cannot be a part of an entity’s system of internal accounting

control, Tri-County Airport Authority’s system of internal accounting control over the financial

reporting is not sufficient by itself to prevent, detect or correct misstatements in the audited

financial statements.

Cause – Tri-County Airport Authority has a small accounting staff necessitated by the overall

small size of the entity. They do not consider it cost effective to develop and maintain a

system of internal accounting control sufficient by itself to prepare financial statements in

accordance with generally accepted accounting principles, nor to maintain internal staff with

sufficient knowledge to develop and maintain controls to prevent, detect or correct

misstatements in audited financial statements. Recommendation – The entity should continue to consider the effects of the cost of

developing and benefits of implementing such a system as compared with understanding

that due to the size of their accounting department, they will continue to need external

assistance with the preparation and understanding of financial statements in accordance

with generally accepted accounting principles.

Page 34: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Schedule of Findings and Questioned Costs

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

23

12-01

Criteria – Proper financial and accounting management requires a system of internal

controls sufficient in design and operation to reduce to a relative low level the risk of errors

and irregularities in the control of assets.

Condition – No physical inventory is taken and fuel sales are not reconciled on a monthly

basis to the amount of fuel that is dispensed out the fuel tanks.

Effect – Fuel could be improperly dispensed out of the fuel tanks and management would

have no knowledge of the missing fuel.

Cause – Those in charge of governance are not properly monitoring the fuel sales and

consumption.

Recommendation – We recommend that a physical inventory be taken and that fuel sales

be reconciled monthly with the amount of fuel that is dispensed out of the fuel tanks.

14-01

Criteria – Per Florida Statute Chapter 189.016, the Tri-County Airport Authority is required

to adopt a balanced budget by resolution and post the budget on the District’s or County’s

website.

Condition – The Airport Authority did not adopt a balanced budget by resolution.

Effect – The Airport Authority is in violation of Florida Statutes, Chapter 189.016.

Cause – Due to the fact that the Airport Authority does not know what state and federal

funding they will receive, they find it difficult to prepare a budget.

Recommendation – The Airport Authority should prepare a budget in order to be in

compliance with Florida Statute 189.016 and make necessary amendments as the year

progresses.

Page 35: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Schedule of Findings and Questioned Costs

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

24

14-02

Criteria – The Tri-County Airport Authority is required to deliver their audit report to the

Florida Auditor General within nine months after the end of the audit period.

Condition – The Airport Authority did not file their audit report with the Florida Auditor

General within nine months after the end of the audit period as required by Florida Statute

218.39(7) for fiscal year ended September 30, 2014 and September 30, 2015.

Effect – The Airport Authority is in violation of Florida Statute 218.39(7).

Cause – The Airport Authority’s records were not made available in a timely manner in order

to facilitate the completion of the audit within nine months after the end of the audit period.

Recommendation – The Airport Authority should have controls in place to have their financial

records available for audit in a timely manner after the fiscal year end. All reports are due

nine months after the end of the audit period. Therefore, time should be allowed for the

audit process to occur within the required parameters.

14-03

Criteria - Proper financial and accounting management requires a system of internal control

sufficient in design and operation to reduce to a relatively low level the risk of errors and

irregularities in the control of assets, and that financial statement misstatement caused by

error or fraud in material amounts be able to be detected in a timely period by employees in

their normal course of their duties.

Condition - The hangar rental detail reports, prepared by the Airport Manager, which are

used for internal management purposes contained numerous errors.

Effect – Management is receiving poor information for supervision and planning.

Cause - The Airport Authority’s financial and accounting internal control system was not

adequate to ensure financial records are free from errors.

Recommendation - The Board should stay appraised of the status of the financial accounting

and controls system and follow up on any problems that exist. It is important that staff be

provided proper training, assistance and supervision to maintain the internal accounting

controls.

Page 36: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Schedule of Findings and Questioned Costs

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

25

15-01

Criteria – Proper financial and accounting management requires there should be adequate

internal controls to prevent the same invoices being used in the preparation of

reimbursement requests submitted to multiple granting agencies and to prevent incorrect

invoices being submitted to granting agencies.

Condition – Controls are not sufficient to have prevented invoicing two different granting

agencies with the same invoice or to prevent the Federal Aviation Administration being

invoiced for project expenses that were not related to Federal Aviation Projects.

Cause – The internal control system is not designed to prevent improperly invoicing granting

agencies, and there is insufficient oversight by management to prevent the incorrect

invoicing.

Effect – The Airport Authority improperly invoiced granting agencies.

Recommendation – Better training and supervision by board of directors, and improvement

of internal control within the Authority to prevent incorrect invoicing.

Page 37: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Schedule of Findings and Questioned Costs

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

26

FINDINGS AND QUESTIONED COSTS – MAJOR STATE PROJECT AUDIT

DEPARTMENT OF TRANSPORTATION

Aviation Development Grant, CSFA 55.004, Contract Numbers: AQS93, AR361, ARC26,

AR397, AR607, ARL08, GO335.

15-2

Criteria – Proper grant management standards require that only proper invoices be

submitted to granting agencies.

Condition – On three occasions the same invoice was used in the preparation of

reimbursement requests for both the Florida Department of Transportation and the Federal

Aviation Administration.

Cause – Controls are not sufficient to prevent reimbursement requests being submitted to

both the Florida Department of Transportation and the Federal Aviation Administration using

the same invoice.

Effect – The Airport Authority is in violation of the grant agreement.

Recommendation – Better training and supervision by board, as well as improvement of

internal controls within the Authority to improve oversight of the preparation of

reimbursement requests.

Questioned Costs – $224,502

15-03

Criteria – The Tri-County Airport Authority should have a system of internal control sufficient

to prevent invoices used in the preparation of reimbursement requests from being sent to

the incorrect granting agency.

Condition – The same invoices were used in preparation of submittal packages sent to two

different granting agencies.

Cause – The internal control system is not sufficient to prevent incorrect invoices being used

in the preparation of submittal packages.

Effect – The Airport Authority improperly invoiced granting agencies.

Recommendation – Better training and supervision by board, as well as improvement of

internal control within the Authority to prevent the same invoices being used in submittal

packages.

Page 38: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport Authority

Schedule of Findings and Questioned Costs

For the Year Ended September 30, 2015

------------------------------------------------------------------------------------------------------------------------

27

15-04

Criteria – The Tri-County Airport Authority is required to deliver their audit report to the

Florida Auditor General within nine months after the end of the audit period.

Condition – The Airport Authority did not file their audit report with the Florida Auditor

General within nine months after the end of the audit period as required by the Florida Single

Audit Act for the fiscal year ended September 30, 2015.

Effect – The Airport Authority is in violation of the Florida Single Audit Act.

Cause – The Airport Authority’s records were not made available in a timely manner in order

to facilitate the completion of the audit within nine months after the end of the audit period.

Recommendation – The Airport Authority should have controls in place to have their financial

records available for audit in a timely manner after the fiscal year end. All reports are due

nine months after the end of the audit period. Therefore, time should be allowed for the

audit process to occur within the required parameters.

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28

CORRECTIVE ACTION PLAN

Page 40: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri-County Airport AuthorityPO Box 756

Bonifayn FL 32425

. , , 'Serying Holmes,l{ashinglonr and Jackson Counties'

CORRECTIVE ACTION PLAN

September 6, 2016

C-ognizant or Oveisight Agency for Audit

The Tri-County Airport Authority respectfully submits the following eorrective act¡on plan forthe year ended September 30, 2015.

Name and address of ind:ependent public accounting firm:

Grimsley;,CavÌn & Gompany, P.A.Certified Public AecountàntsP.O. Box 220Marianna, FL32447

Audit Period: Octobêr 1 , 2014,through September 30, 2015

FINDINGS AND SUESTIONEÐ GOSTS - MAJCIR STATE PROJECT AUÐIT

DEPARTMENT OF TRANSPORTATION

Aviation Development Grant, CSFA 55.004, Contract Numbers. AQS93, 4R361, ARC26,AR397, AR6O7, ARLOB, GO335.

15-2Criteria - Proper grant management standards require that only proper invoices be submittedto granting agencies.

Condition - On three occasions the same invoice was used in the preparation ofreimbursement requests for both the Florida Department of Transportation and the FederalAviation Ad ministration.

28

Page 41: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Cause - Controls are not sufficient to prevent reimbursement requests being submitted toboth the Florida Department of Transportation and the Federal Aviation Administration usingthe sarne invoice.Effect - The Airport Authority is in violation of the grant agreement.

Recommendation - Better training and supervision by board, as wEll as improvement ofinte::nal controls within the Authority to improve oversight of the preparation of reimbursementrequests.

Questioned Costs - $ú_-5ÚË

Corrective Action Plan - The Airport Author.ity has implemented a plan for invoices that aresubmitted to the funding agencies. An Authority mernber has',been trained on the FAA Delphilnvoicing system and has been assigned to rnen¡tor ,and submit tlre FAA invoices. Thisseparation of duties should make sure the invoices are suþmïtted properly and ih a timelymanner,

1'5j.03Criteria * The Tri-County Airport Authori[y should havç'a gystem sf internal cgntrol sufficientto prevent invoices used in the preparatìon of reimbursømel.t ri¡quests û'om being,sènt to theincorrect granting agency.

,Condition - The same invoices were used i¡r prep4ration:sf submi.ttal'paekages sent to twodifferent granting agencies.

Cause - The internal control system is not sufficient to prevent incorrect invoices being usedin the preparation of submittal packages.

Effect - The Airport Authority improperly invoiced granting aEênc¡es.

Recommendation - Better training and supervision by board, as well as improvement ofinternal control within the Authority to prevent the sarne invoices being used in submittalpackages.

Corrective Action Plan - The internal control system mention in 15-02 should be sufficient tocorrect this problem. The Airport Authority members will be better trained and have moresupervision over the invoicing procedures.

15-CI4

Criteria - The Tri-County Airport Authority is required to deliver their audít report to the FloridaAuditor General within nine months after the end of the audit period.

29

Page 42: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Condition - The Airport Authority did not file theír audit report with the Florida Auditor Generalwithin nine months after the end of the audit period as required by the Florida Single AuditAct for the fiscal year ended September 30; 2015.

Effect - The Airpori Authority is in violation of the Florida Single Audit Act,

Cause - The Airport Authorify's records were not made available in a timely manner in orderto facilítate the completion of the audit wlthin nine months after the end of the audit period.

Recomrnendation - The Airport Authority should have controls in place to have their financialrecords available for audit in a timely manner after the fiscal year end. All reports are duenine months after the end of the audit period. Therefore, time should be allowed for the auditprocess to occur within thg reqqired param-eters;

Corrective Action Plah * The Airpeirt'Authority will ôtart getting the information needed for thenext audit as soon as the¡r received the'audjt frorn the previous year. The Authority will submíta letter to the CPA resuesied,a list of items needed for the upcoming audit as soon aspossible.

30

Page 43: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

INDEPENDENT AUDITOR’S REPORT TO MANAGEMENT

Page 44: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Gnnasrnv, CAvnq& Con¡pawy, P.A.Cgnrrrr ¡o PuaLrc AccoururRrurs

Owrru W. GRTMSLEY, C.P.A.

DALE L. CAVIN, C.P.A.

MEMBERS

FroÂrDA lNsïTUTE AND

Avtn¡cnru lrusrtutE orCrnn¡rro PuBLrc AccouNTANTs

Board of DirectorsTri-County Airport AuthorityBonifay, Florida

Report on the Financial Statements

We have audited the financial statements of the Tri-County Airport Authority, as of and for thefiscal year ended September 30, 2015, and have issued our report thereon dated September 1,

2016

Aud itor's Responsi bil ity

We conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America; the standards applicable to financial audits contained in Government AuditingStandards, issued by the Comptroller General of the United States; OMB Circular A-133, Auditsof Sfafes, Local Governments, and Non-Profit Organizations; and Chapter 10.550, Rules of theAuditor General.

Other Reports and Schedule

We have issued our lndependent Auditor's Report on lnternal Control over Financial Reportingand Compliance and Other Matters Based on an Audit of the Financial Statements Performed inAccordance with Government Auditing Standards; Report on lnternal Control over Compliance;Schedule of Findings; and lndependent Accountant's Report on an examination conducted inaccordance with AICPA Professional Standards, Section 601, regarding compliance requirementsin accordance withChapter 10.550, Rules of the Auditor General. Disclosures in those reportsand schedule, which are datêd September 1,2O16, should be considered in conjunction with thismanagement letter

Prior Audit Findings

Section 10.554(1 Xi)1 ., Rules of the Auditor General, requires that we determine whether or notcorrective actions have been taken to address findings and recommendations made in thepreceding annual financial audit report. Corrective actions have been taken to address findingsand recommendations made in the preceding annualfinancial audit report except as noted belowunder the heading Prior Year Findings and Recommendations.

Post Office Box220 o 4243 Lafayette Street ¡ Marianna, Florida 32447-0220 o 850-526-3910 o FAX 850-482-6019Post Office Box 475 o 983 Sixth Avenue o Graceville, Florida 32440-0475 c 850-263-3636

31

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Tri-County Airport AuthorityPage 2

The management letter items are as follows:

Tabulation of Uncorrected Audit FindingsCurrent Year

Findins #2013-14 FY

Finding #2012-13 FY

Findinq #2011-1 2011-1 2011-12014-1 2014-1 N/A

The Schedule of Findings and Questioned Costs items are as follows:

Tabulation of Uncorrected Audit FindingsCurrent

YearFindins #

2013-14 FYFindinq #

2012-13 FYFindinq #

03-02 03-02 030-207-01 07-o1 07-o112-O1 12-O1 12-O1

14-O1 14-O1 N/A14-O2 14-O2 N/A14-O3 14-O3 N/A15-01 N/A N/A15-O2 N/A N/A15-03 N/A N/A15-O4 N/A N/A

Official Title and Legal Authority

Section 10.554(1 Xi)4., Rules of the Auditor General, requires that the name or official titleand legal authority for the primary government and each component unit of the reportingentity be disclosed in the management letter, unless disclosed in the notes to the financialstatements. This information is disclosed in the notes to the financial statements.

Financial Gondition

Section 10.554(1)(i)5.a., Rules of the Auditor General, requires that we report the results ofour determination as to whether or not the Tri-County Airport Authority has met one or moreof the conditions described in Section 218.513('1), Florida Statutes, and identification of thespecific condition(s) met . ln connection with our audit, we determined that the Tri-CountyAirport Authority did not meet any of the conditions described in Section 218.503(1), FloridaStatutes.

Pursuant to Section 10.554(1)(i)5.c. and 1 0.556(B), Rules of the Auditor General, we appliedfinancial condition assessment procedures. It is management's responsibility to monitor theTri-County Airport Authority's financial condition, and our financial condition assessmentwas based in part on representations made by management and the review of financialinformation provided by same.

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Tri-County Ai rport AuthorityPage 3

Annual Financial Report

Section 10.554(1Xi)s.b., Rules of the Auditor General, requires that we report the resultsof our determination as to whether the annual financial report for the Tri-County AirportAuthority for the financial year ended September 30, 2015, filed with the FloridaDepartment of Financial Services pursuant to Section218.32(1)(a), Florida Statutes, is inagreement with the annual financial audit report for the fiscal year ended September 30,2015. ln connection with our audit, we determined that these two reports were in

agreement.

Other Matters

Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in themanagement letter any recommendation to improve financial management. See itemsbelow under Prior Year Findings for our recommendations.

Section 10.554(1Xi)3., Rules of the Auditor General, requires that we addressnoncompliance with provisions of contracts or grant agreements, or abuse, that haveoccurred, or are likely to have occurred, that have an effect on the financial statementsthat is less than material but which warrants the attention of those charged withgovernance. See items in the Schedule of Findings and Questioned Costs for therecommendations.

Purpose of this Letter

Our management letter is intended solely for the information and use of the LegislativeAuditing committee, members of the Florida Senate and the Florida House ofRepresentatives, the Florida Auditor General, Federal and other granting agencies, theCity Council, and applicable management, and is not intended to be and should not beused by anyone other than these specified parties.

Prior Year Findinqs2011-1: lt was noted during the audit that invoices were not stamped paid. lt isrecommended that invoices be cancelled after payment to improve internal controlwithinthe organization. This item remains.

2014-1: lt was noted during the audit that a board member did not approve invoices priorto payment. lt is recommended that a member of the board of directors review andapprove invoices prior to their payment to insure proper internal controls are in place. Thisitem remains.

Current Year FindinosNone

çtttnsø, Cü(tin t Cwnpwrl

Grimsley, Cavin & Company, P.ACertified Public Accounta nt

Marianna, FloridaSeptember 1,2016

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RESPONSE TO FINDINGS

Page 48: TRI-COUNTY AIRPORT AUTHORITY BONIFAY, FLORIDA … · The Tri-County Airport Authority (the “Authority”), located in the adjacent corners of Holmes, Washington, and Jackson Counties,

Tri'Co unty Airpor{ Autho rityPO Box ?5ó

Bonifay, FL 32425

., , , , 5e1i¡g Holmes;"lilashingtol, aud Jacl¡sqn Coqnfiesf , , ,

Septenrber 7,2A16

Grirnsley, Cavin & Company, F.dPost Oflce Box220Marianna, Florida lZq+l

Re: Audit for Fiscal Yea,r Ending Septc'qber 30, 2CI1ö

Dear Mr. Grimsley:

This letter is in response to the audit for the ab.ov-e rçfrcrcnioed period fo¡ the Tri-Co¡¡4tyAirport Authorit¡r. We have listed'below òur,re,Sponss "to the findings.noted by yourCompany.

1. RegSrding the Schedule of Findings, Ite.m t3'02¡ T.he Airport Authoriiy will beinvolved in the day-to-day operations as much as vshmteer board members with fullrtimejobs can be. The Authority has hired an Airport Manager that helps in the managing ofthe revenue and records at the aiqport. Authority members receive minutes and financialreports at each monthly meeting and are giveù a dctail briefing of the status of all p¡ojectson the airport. The Authority financial records will be rnaintained çurrent and up to dateas we have hired an accounting firm to do the Authorities financials. The Treasurer givesa financial report at each monthly meeting with a financial statement provided f¡om theAuthority's accountant. Controls are no\¡/ in place to provide checks and balances.

2. Regarding the Schedule of Findings, Item 07-01: The Authority Treasurer monitorsthe banking account on line and all checks written on the Authority's account are

required to be signed by both the Chairman and the Treasurer. The Airport Authorìty hashired a local accounting firm to assist with the pr.eparation of monthly statements, andproviding the required checks a¡d balances needed for the Authority. The Authority willoonsider the effects of the cost of developing and benefits of implementing a system forintemal controi over financial reporting.

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3. Regarding the Schedule of Findings, Ite¡r 12-01: The Authority will conduct aphysical inventory each year and the fuel sales will be rcconciled rnonthly u'ith thearnount of fuel that is dispensed out of the fuel tanks.

4. Regarding the Sehedule of Findings, ltem 14-01: The Authority will be sure to prepaïea budget each yoar, forwa¡d it to Holnes Ccunty,and make amendments to it inacsordance r\.ith FS 189.016,

5. Regæding the ScÌredule of Findings, item 14-.02: The Authorit¡r ivill have cont¡ols inplace to ma-ke sure they have their financials available for audit in a timely mânner.

6:,' Regarding the Schedule ofF.i¡.{ings, Itçr¡l 14-03' Thp Authoriþ has hire an,additionalperson to assist in ,the area of finances to work with,the'.êrþort Manager antl Treasurer tohelp with maintaining tht ihternäl accounting controls.

7., Regarding'the Scåedulep..f-Fìhdiugs; Itep 15-0-1: Thç,Ajrport Authority has recentlyimplemented aplau forinvoices that are subryrilted to the funding agencies. An Authorityrne.mber hasbeen trai¡sd,on the FAA".Deþi Invoióing:system and has been assigned tomoníto¡ and;sub¡nit tlie;FAå- inir.olces. Tbis 'seÞaradori of duties should make sure theinvoices are submitted pr,operly and in a tir4e-ly:manner.

'I hope this has proþenly' addressed "the issues you had in thexçor.t, If other information isrequired, pleaso Jet rrlç know-

Y'ou h¿ve the Authority's 4ppqoval tb çub¡nü.,thi$ aUdit ¡eport 1o the Auditor General'sOffice as soon asp.ossibler Thanks;foryour heþ in,getting this audit completed.

Sincerely,

J CooleyChairman

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