HomeMy WebLinkAboutNantucket Passenger Facility Audit 2016
NANTUCKET MEMORIAL AIRPORT
An Enterprise Fund of the Town of
Nantucket, Massachusetts
Schedule of Passenger Facility Charges
and Expenditures
Year Ended June 30, 2016
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
TABLE OF CONTENTS
JUNE 30, 2016
Page(s)
Independent Auditors’ Report on Compliance with Requirements Applicable
to the Passenger Facility Charge Program and on Internal Control over
Compliance in Accordance with Requirements Issued by the
Federal Aviation Administration 1 – 3
Summary of Audit Results and Schedule of Findings and Questioned Costs 4
Schedule of Passenger Facility Charges and Expenditures 5
Note to Schedule of Passenger Facility Charges and Expenditures 6
Independent Auditors’ 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 7 – 8
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH REQUIREMENTS
APPLICABLE TO THE PASSENGER FACILITY CHARGE PROGRAM AND ON
INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH
REQUIREMENTS ISSUED BY THE FEDERAL AVIATION ADMINISTRATION
Nantucket Memorial Airport Commission
Nantucket Memorial Airport
Nantucket, Massachusetts
Report on Compliance for Passenger Facility Charge Program
We have audited the Nantucket Memorial Airport’s (the “Airport”), an enterprise fund of the Town of
Nantucket, Massachusetts, compliance with the types of compliance requirements described in the
Passenger Facility Charge Audit Guide for Public Agencies, issued by the Federal Aviation
Administration (the “Guide”), that could have a direct and material effect on its passenger facility charge
program for the year ended June 30, 2016.
Management’s Responsibility
Management is responsible for compliance with the requirements of laws, regulations, contracts and
grants applicable to the passenger facility charge program.
Auditors’ Responsibility
Our responsibility is to express an opinion on compliance for the Airport’s passenger facility charge
program based on out audit of the types of compliance requirements referred to above. We conducted our
audit in accordance with auditing standards generally accepted in the United States of America; the
standards applicable to financial audits contained in Government Auditing Standards issued by the
Comptroller General of the United States; and the Guide. Those standards and the Guide require that we
plan and perform the audit to obtain reasonable assurance about whether noncompliance with the type of
compliance requirements referred to above that could have a direct and material effect on the passenger
facility charge program occurred. An audit includes examining, on a test basis, evidence about the
Airport’s compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for the Airport’s
passenger facility charge program. However, our audit does not provide a legal determination of the
Airport’s compliance.
Opinion on Passenger Facility Charge Program
In our opinion, the Airport complied, in all material respects, with the compliance requirements referred
to above that could have a direct and material effect on its passenger facility charge program for the year
ended June 30, 2016.
Report on Internal Control Over Compliance
Management is responsible for establishing and maintaining effective internal control over compliance
with the types of compliance requirements referred to above. In planning and performing our audit of
compliance, we considered the Airport’s internal control over compliance with the types of requirements
that could have a direct and material effect on its passenger facility charge program to determine the
auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on
compliance and to test and report on internal control over compliance in accordance with the Guide, but
not for the purpose of expressing an opinion on the effectiveness of internal control over compliance.
Accordingly, we do not express an opinion on the effectiveness of the Airport’s internal control over
compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a
federal program on a timely basis. A material weakness in internal control over compliance is a
deficiency, or combination of deficiencies in internal control over compliance, such that there is a
reasonable possibility that material noncompliance with a type of compliance requirement of a federal
program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in
internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over
compliance with a type of compliance requirement of a federal program that is less severe than a material
weakness in internal control over 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 the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of the
Guide. Accordingly, this report is not suitable for any other purpose.
Report on Schedule of Passenger Facility Charges and Expenditures
We have audited the financial statements of the Airport as of and for the year ended June 30, 2016, and
have issued our report thereon dated October 4, 2016 which contained an emphasis paragraph on the
implementation of new accounting standards. Our audit was conducted for the purpose of forming an
opinion on the financial statements as a whole. The accompanying schedule of passenger facility charges
and expenditures for the year ended June 30, 2016 is presented for purposes of additional analysis as
specified in the Guide and is not a required part of the financial statements. Such information is the
responsibility of management and was derived from and relates directly to the underlying accounting and
other records used to prepare the financial statements. The information has been subjected to the auditing
procedures applied in the audit of the financial statements and certain additional procedures, including
comparing and reconciling such information directly to the underlying accounting and other records used
to prepare the financial statements or to the financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America. In
our opinion, the schedule of expenditures of passenger facility charges is fairly stated in all material
respects in relation to the financial statements taken as a whole.
Roselli, Clark & Associates
Certified Public Accountants
Woburn, Massachusetts
October 4, 2016
Roselli, Clark and Associates
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
July 2015 to October 2015 to January 2016 to April 2016 to
September 2015 December 2015 March 2016 June 2016 FY 2016 Total
Revenues:
Passenger facility charges collected 287,632$ 111,711$ 28,707$ 138,778$ 566,828$
Interest earned 337 507 536 584 1,964
287,969 112,218 29,243 139,362 568,792
Expenditures - - - - -
Excess of revenues over expenditures 287,969$ 112,218$ 29,243$ 139,362$ 568,792
Unliquidated passenger facility charges — beginning of year 444,455
Unliquidated passenger facility charges — end of year 1,013,247$
See accompanying notes to schedule of passenger facility charges and expenditures.
NANTUCKET MEMORIAL AIRPORT
SCHEDULE OF PASSENGER FACILITY CHARGES AND EXPENDITURES
YEAR ENDED JUNE 30, 2016
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
SUMMARY OF AUDIT RESULTS AND
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
AS OF AND FOR THE YEAR ENDED JUNE 30, 2016
SECTION I – SUMMARY OF AUDITORS’ RESULTS
Financial Statements
Type of auditors’ report issued: Unmodified
Internal control over financial reporting:
Material weakness identified? No
Significant deficiency identified that is not
considered to be a material weakness?
None reported
Noncompliance material to the financial statements noted? No
Noncompliance material to the PFC program? No
SECTION II – FINANCIAL STATEMENT FINDINGS
None.
SECTION III – PASSENGER FACILITY CHARGE PROGRAM FINDINGS AND
QUESTIONED COSTS
None.
NANTUCKET MEMORIAL AIRPORT
AN ENTERPRISE FUND OF THE TOWN OF NANTUCKET, MASSACHUSETTS
NOTES TO SCHEDULE OF PASSENGER FACILITY CHARGES AND EXPENDITURES
AS OF AND FOR THE YEAR ENDED JUNE 30, 2016
NOTE A – PASSENGER FACILITY CHARGES
Passenger Facility Charges (“PFCs”) are fees imposed on enplaned passengers by the Airport for the
purpose of generating revenue for Airport projects that enhance safety, security or capacity; reduce
noise; or increase air carrier competition in accordance with Federal Aviation Administration
(“FAA”) approvals.
Effective July 1, 2014, the Nantucket Memorial Airport (the “Airport”) began imposing PFCs of
$4.50 per enplaned passenger with collection and use authority of $6,942,081. Authority for the
imposition of these PFCs was granted by the FAA on May 28, 2014. The PFC program exempts that
class of air carrier defined as Air Taxi/Commercial Operations from the requirement to collect PFCs.
NOTE B – BASIS OF ACCOUNTING
The accompanying schedule of passenger facility charges and expenditures for the year ended June
30, 2016 presents the revenues received from PFCs and expenditures incurred on approved projects.
PFCs collected represent the cash collected through June 30, 2016 as reported to the FAA in
accordance with 14 CFR Part 158. The interest earned represents the actual interest collected and
accrued on invested PFC funds for the periods reported.
NOTE C – PFC APPROVED PROJECTS AND EXPENDITURES
The Airport commenced its PFC program effective July 1, 2014. During the year ended June 30,
2016, no amounts were expended under the PFC program. The following table illustrates FAA
approved projects, PFC approved amounts and cumulative expenditures through June 30, 2016:
Project Title
Identifying
Number
PFC Approved
Amount
Cumulative
Expenditures
Passenger terminal building
renovation and expansion
14-01-C-00-ACK
$ 6,865,761
$ —
Re-align and widen south apron
taxiway connector
14-01-C-00-ACK
16,833
—
Airport master plan and
sustainability program
14-01-C-00-ACK
24,487
—
PFC Program administration 14-01-C-00-ACK 35,000 —
$ 6,942,081 $ —
INDEPENDENT AUDITORS’ 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
Nantucket Memorial Airport Commission
Nantucket Memorial Airport
Nantucket, Massachusetts
We have audited, 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, the financial statements of the Nantucket
Memorial Airport (the “Airport”), an enterprise fund of the Town of Nantucket, Massachusetts, as of and
for the year ended June 30, 2016, and the related notes to the financial statements which collectively
comprise the Airport’s basic financial statements and have issued our report thereon October 4, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Airport’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 Airport’s internal control. Accordingly, we
do not express an opinion on the effectiveness of the Airport’s internal control.
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
As part of obtaining reasonable assurance about whether the Airport’s financial statements are free of
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The
results of our tests disclosed no instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the Airport’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.
Roselli, Clark & Associates
Certified Public Accountants
Woburn, Massachusetts
October 4, 2016
RoselliClark&Associates