KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
FINANCIAL AUDIT AND
COMPLIANCE EXAMINATION
For the Year Ended June 30, 2011
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Year Ended June 30, 2011
TABLE OF CONTENTS
Page
Authority Officials 1
Management Assertion Letter 2
Compliance Report
Summary 3
Accountants’ Reports
Independent Accountants’ Report on State Compliance, on Internal
Control Over Compliance, and on Supplementary Information for
State Compliance Purposes 4
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
Schedule of Findings
Current Findings – Government Auditing Standards 9
Current Findings – State Compliance 10
Financial Statement Report
Summary 12
Independent Auditors’ Report 13
Basic Financial Statements
Statement of Net Assets 15
Statement of Revenues, Expenses and Changes in Fund Net Assets 16
Statement of Cash Flows 17
Notes to the Basic Financial Statements 18
Supplementary Information for State Compliance Purposes
Summary 21
Fiscal Schedules and Analysis
Schedule of Receipts, Disbursements and Fund Balance (Cash
Basis) – Locally-Held Funds 22
Analysis of Operations
Functions and Planning Program 23
Personnel 24
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Year Ended June 30, 2011
AUTHORITY OFFICIALS
Chairman Vacant
Vice Chairman Mr. Phil Kambic
Treasurer Vacant
Secretary Mr. Greg Dralle
The Authority’s office is located at:
350 N. Wall Street
Kankakee, Illinois 60901
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2
Honorable William G. Holland KRVAAA
Auditor General ILLINOIS' THIRD AIRPORT AUT~1'flllber 30, 2011
State of Illinois
Iles Park Plaza
740 E. Ash Street
Springfield, Illinois 62703-3154
Dear Mr. Holland:
We are responsible for the identification of, and compliance with, all aspects of laws,
regulations, contracts, or grants that could have a material effect on the operations of the Kankakee
River Valley Area Airport Authority (Authority). We are responsible for and we have established
and maintained an effective system of, internal controls over compliance requirements. We have
performed an evaluation of the Authority's compliance with the following assertions during the one
year period ended June 30, 2011. Based on this evaluation, we assert that during the year ended
June 30, 2011, the Authority has materially complied with the assertions below.
A. The Authority has obligated, expended, received and used public funds in accordance with
the purpose for which such funds have been appropriated or otherwise authorized by law.
B. The Authority has obligated, expended, received and used public funds in accordance with
any limitations, restrictions, conditions or mandatory directions imposed by law upon such
obligation, expenditure, receipt or use.
C. The Authority has complied, in all material respects, with applicable laws and regulations in
its financial and fiscal operations.
D. Revenues and receipts collected by the Authority are in accordance with applicable laws and
regulations and the accounting and recordkeeping of such revenues and receipts is fair,
accurate and in accordance with law.
E. The money or negotiable securities or similar assets handled by the Authority have been
properly and legally administered and the accounting and recordkeeping relating thereto is
proper, accurate and in accordance with law.
Yours very truly,
Kankakee River
One Diversatech Drive
Suite 2000
Manteno, Illinois 60950
815' 468' 7078
FAX: 815. 468 . 8731
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Year Ended June 30, 2011
COMPLIANCE REPORT
SUMMARY
The compliance testing performed during this examination was conducted in accordance
with Government Auditing Standards and in accordance with the Illinois State Auditing Act.
ACCOUNTANTS’ REPORTS
The Independent Accountants’ Report on State Compliance, on Internal Control Over
Compliance and on Supplementary Information for State Compliance Purposes does not contain
scope limitations, disclaimers, or other significant non-standard language.
SUMMARY OF FINDINGS
Current Prior
Number of Report Report
Findings 2 2
Repeated findings 2 2
Prior recommendations implemented
or not repeated 0 0
Details of findings are presented at pages 9 through 11 of this report.
SCHEDULE OF FINDINGS
Item No. Page Description Finding Type
FINDINGS (GOVERNMENT AUDITING STANDARDS)
11-1 9 Inadequate Segregation of Duties Significant Deficiency
FINDINGS (STATE COMPLIANCE)
11-2 10 Noncompliance with Kankakee River
Valley Area Airport Authority Act
Material Weakness and
Material Noncompliance
In addition, the following finding which is reported as a current finding related to Government
Auditing Standards also meets the reporting requirements for State compliance.
11-1 9 Inadequate Segregation of Duties Significant Deficiency
and Noncompliance
EXIT CONFERENCE
An exit conference has been declined by the Authority. The responses to the findings were
provided by the Authority’s Vice Chairman, Phillip Kambic.
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4
SPRINGFIELD OFFICE:
ILES PARK PLAZA
740 EAST A SH • 62703-3 154
PHONE: 2 17n82-604 6
FAX: 2 17n85-8222 • TTY: 888/261-2887
CHICAGO OFFICE:
M ICHAEL A. BILANDIC BLDG. · SUITE S-900
160 NORTH LASALLE · 60601-3 103
PHONE: 3 12/8 14-4000
FAX : 3 1 2/8 14-4006
OFFICE OF THE A UDITOR GENERAL
WILLIAM G. HOLLAND
INDEPENDENT ACCOUNTANTS' REPORTON STATE COMPLIANCE.
ON rNTERNAL CONTROL OVER COMPLIANCE. AND ON
SUPPLEMENTARY INFORMATION FOR STATE COMPLIANCE PURPOSES
Honorable William G. Holland
Auditor General
State of fll inois
Compliance
We have examined the Kankakee Ri ver Valley Area Airport Authority's compliance with the
requirem ents listed below, as more fully described in the Audit Gu ide for Financial Audits and
Compliance Attestation Engagements of Illinois State Agencies (A udit Guide) as adopted by the
Auditor General, during the year ended June 30, 20 II . The management of the Kankakee River
Valley Area Airport Authority is responsible for compliance with these requirements. Our
responsibility is to express an opinion on the Kankakee River Valley Area Airport Authority's
compliance based on our examination.
A. The Kankakee River Valley Area Airport Authority has obligated, expended, rece ived,
and used funds in accordance with the purpose for which such funds have been
authorized by law.
B. The Kankakee River Valley Area Airport Authority has obligated, expended, received,
and used funds in accordance with any limitations, restrictions, conditions or mandatory
directions imposed by law upon such obligation, expenditure, receipt or use.
C. The Kankakee Ri ver Valley Area Airport Authority has complied, in all material
respects, with app licable laws and regulations in its fin ancial and fi scal operations.
D. Revenues and receipts collected by the Kankakee River Valley Area Airport Authority
are in accordance with applicable laws and regul ations and the accounting and
record keeping of such revenues and receipts is fair, accurate and in accordance with law.
E. Money or negotiab le securities or similar assets handled by the Kankakee River Valley
Area Airport Authority held in trust by the Kankakee River Valley Area Airport
Authority have been properly and legally administered and the accounting and
recordkeeping relating thereto is proper, accurate, and in accordance with law.
We conducted our examination in accordance with attestation standards established by the
American Institute of Certified Publ ic Accountants; the standards app licable to attestation
engagements contained in Government Auditing Standards issued by the Comptroller General of the
United States; the Illinois State Auditing Act (Act); and the Audit Guide as adopted by the Auditor
General pursuant to the Act; and, accordingly, included examining, on a test basis, evidence about
the Kankakee River Valley Area Airport Authority's compliance with those requirements listed in
the first paragraph of this rep011 and performing such other procedures as we considered necessary
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in the circumstances. We believe that our examination provides a reasonable basis for our opinion.
Our examination does not provide a legal determination on the Kankakee River Valley Area
Airport Authority's compliance with specified requirements.
As described in finding 11-2 in the accompanying schedule of findings, the Kankakee River Valley
Area Airport Authority did not comply with applicable laws and regulations in its financial and
fiscal operations. Compliance with such requirements is necessary, in our opinion, for the '
Kankakee River Valley Area Airport Authority to comply with the requirements listed in the first
paragraph of this report.
In our opinion, except for the noncompliance described in the preceding paragraph, the
Kankakee River Valley Area Airport Authority complied, in all material respects, with the
compliance requirements listed in the first paragraph of this report during the year ended June
30, 2011. However, the results of our procedures disclosed another instance of noncompliance,
which is required to be reported in accordance with criteria established by the Audit Guide,
issued by the Illinois Office of the Auditor General and which is described in the accompanying
schedule of findings as finding 11-1.
Internal Control
The management of the Kankakee River Valley Area Airport Authority is responsible for
establishing and maintaining effective internal control over compliance with the requirements
listed in the first paragraph of this report. In planning and performing our examination, we
considered the Kankakee River Valley Area Airport Authority's internal control over compliance
with the requirements listed in the first paragraph of this report as a basis for designing our
examination procedures for the purpose of expressing our opinion on compliance and to test and
report on internal control over compliance in accordance with the Audit Guide issued by the
Illinois Office of the Auditor General, but not for the purpose of expressing an opinion on the
effectiveness of the Kankakee River Valley Area Airport Authority's internal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of the Kankakee
River Valley Area Airport Authority's internal control over compliance.
Our consideration of internal control over compliance was for the limited purpose described in
the preceding paragraph and was not designed to identify all deficiencies in internal control over
compliance that might be significant deficiencies or material weaknesses and therefore, there can
be no assurance that all deficiencies, significant deficiencies, or material weaknesses have been
identified. However, as described in the accompanying schedule of findings we identified
certain deficiencies in internal control over compliance that we consider to be material
weaknesses and other deficiencies that we consider to be significant deficiencies.
A deficiency in an entity's 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 the
requirements listed in the first paragraph of this report on a timely basis. A material weakness in
internal control over compliance is a deficiency, or combination of deficiencies, such that there
is a reasonable possibility that material noncompliance with a requirement listed in the first
paragraph of this report will not be prevented, or detected and corrected on a timely basis. We
6
consider the defi ciency in internal control over compliance as described in the accompanying
schedule of findings as finding 11-2 to be a materi al weakness.
A significant deficiency in internal control over compliance is a defic iency, or combination of
defi ciencies, in internal control that is less severe than a material weakness, yet important enough
to merit attention by those charged with governance. We consider the defi ciency in internal
control over compliance described in the accompanying schedule of fi ndings as finding Il-l to
be a significant defi ciency.
There were no immaterial findings that have been excluded from this report.
The Kankakee River Valley Area Airport Authori ty's responses to the findings identified in our
examination are described in the accompanying schedule of findin gs. We did not examine the
Kankakee Ri ver Valley Area Airport Authority's responses and, accord ingly, we express no
opinion on them.
Supplementary Information for State Compliance Purposes
We have audited the financial statements of the business-type activities of the Kankakee River
Valley Area Airport Authority as of and for the year ended June 30, 20 II , which collectively
comprise the Kankakee River Valley Area Airport Authority's bas ic financial statements, and
have issued our report thereon dated November 30, 20 I I. The accompanying supplementary
information, as li sted in the table of contents as Supplementary Information for State Compli ance
Purposes, is presented for purposes of additional analysis and is not a req uired part of the basic
fi nancial statements of the Kankakee Ri ver Valley Area Airport Authority. The 20 II
Supplementary Information for State Compliance Purposes has been subjected to the auditing
procedures applied in the audit of the bas ic financial statements and, in our opinion, is fa irly
stated in all material respects in re lation to the bas ic financial statements for the year ended June
30, 20 II taken as a whole.
We have also previously audited, in accordance with auditing standards generally accepted in the
United States, the Kankakee River Valley Area Airport Authori ty's basic financial statements for
the year ended June 30, 20 10. In our report dated July 12, 2011 , we expressed an unqualified
opinion on the respective financial statements of the business-type activities. In our opinion, the
20 I 0 Supplementary In formation for State Compli ance Purposes is fa irly stated in all material
respects in relation to the bas ic fin ancial statements for the year ended June 30, 20 I 0, taken as a
whole.
This report is intended so lely for the information and use of the Auditor General, the General
Assembly, the Legislative Audit Commission, the Governor, and Kankakee Ri ver Valley Area
Airport Authority management and is not intended to be and should not be used by anyone other
than these specified parties.
.xs~.z. 58~
BRUCE L. BULLARD, CPA
Director of Financial and Compliance Audits
November 30, 20 I I
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SPRINGFIELD OFFICE:
ILES PARK PLAZA
740 EAST A S H • 62703-3154
PHONE: 2 17n82-6046
FAX: 217n85-8222 • TTY: 888/26 1-2887
CHICAGO O FFICE:
M ICHAEL A . BILANDIC BLDG. · SUITE S -900
160 NORTH LASALLE· 60601-3103
PHONE: 3 12/814-4000
FAX: 312/814-4006
OFFI C E OF T H E A UDITOR G ENERA L
WILLIAM G. HOLLAND
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OYER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT
OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT
AUDITING STANDARDS
Honorable William G. Holland
Auditor General
State of Illinois
We have audited the financial statements of the business-type activities of the Kankakee
River Valley Area Airport Authority, as of and for the year ended June 30,20 11 , which collectively
comprise the Kankakee Ri ver Valley Area Airport Authority's basic fin ancial statements and have
issued our report thereon, dated November 30, 20 II. We conducted our audit in accordance with
auditing standards generally accepted in the United States of America and the standards applicable
to financial audits contained in Government Auditing Standards· issued by the Comptroller General
ofthe United States.
Internal Control Over Financial Reporting
In planning and performing our audit. we considered the Kankakee River Valley Area
Airport Authority's internal control over financial reporting as a basis for designing our auditing
procedures for the purpose of expressing our opinion on the financial statements and not for the
purpose of expressing an opinion on the effectiveness of the Kankakee River Valley Area Airport
Authority's internal control over financial reporting. Accordingly, we do not express an opinion on
the effectiveness of the Kankakee Ri ver Valley Area Airport Authority's internal control over
financial reporting.
A deficiency in internal conlrol 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 de ficiency,
or a combination of deficiencies, in internal control such that there is a reasonable possibility that a
material misstatement of the entity's financial statements will not be prevented, or detected and
corrected on a timely basis.
Our consideration of inte rnal control over fin ancial reporting was for the limi ted purpose
described in the first paragraph of th is section and was not des igned to identi fy all deficiencies in
the internal control over fin ancial reporting that might be deficiencies, significant de ficiencies or
material weaknesses. We did not identify any deficiencies in internal control over financial
reporting that we consider to be materi al weaknesses, as defined above. However, we identi fied
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a deficiency in internal control over financial reporting, as described in finding 11-1 in the
accompanying schedule of findings that we consider to be a sign ificant defic iency in internal
control over financial reporting. A significant deficiency is a defic iency, or 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.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Kankakee River Valley Area
Airport Authority's financial statements are free of material misstatement, we performed tests of its
compliance with certain provisions of laws, regulations, contracts, and grant agreements,
noncompliance with which could have a direct and materi al effect on the determ ination of financial
statement amounts. However, providing an opinion on compliance with those provisions was not
an objective of our aud it, and accord ingly, 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.
The Kankakee River Valley Area Airport Authority's response to the finding identified in
our audit is described in the accompanying schedule of findings. We did not audit the Kankakee
River Valley Area Airport Authority's response and, accordingly, we express no opinion on it.
This report is intended solely for the in formation and use of the Auditor General, the
General Assembly, the Legislative Audit Commission, the Governor, and Kankakee River Valley
Area Airport Authority management and is not intended to be and should not be used by anyone
other than these specified parties.
~;;<.23~
BRUCE L. BULLARD, CPA
Director of Financial and Compliance Audits
November 30, 20 II
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Year Ended June 30, 2011
(Government Auditing Standards)
11-1. FINDING (Inadequate Segregation of Duties)
The Kankakee River Valley Area Airport Authority (Authority) did not have adequate
segregation of duties in the area of expenditure control.
During testing, we noted that the Authority’s Vice Chairman had the ability to write and
sign checks, reconcile bank statements, and maintain all Authority records. However, the
Authority had not written a check since August 2004.
The Fiscal Control and Internal Auditing Act (30 ILCS 10/3001) requires State agencies to
establish and maintain a system, or systems, of internal fiscal and administrative controls to
provide assurance that funds, property, and other assets and resources are safeguarded
against waste, loss, unauthorized use, and misappropriation. Good internal controls would
require the Authority maintain adequate segregation of duties in order to help ensure the
safeguarding of assets and ensure the accuracy and reliability of accounting data. Further,
the recordkeeping functions should be adequately segregated from the expenditure approval
or signature and the reconciliation process.
Authority officials stated they are unable to properly segregate duties due to the size of the
Board and the lack of activity within the Authority.
A lack of adequate segregation of duties increases the likelihood that a loss from errors or
irregularities could occur and would not be found in the normal course of members
carrying out their assigned duties. (Finding Code No. 11-1, 10-1, 09-1, 08-1)
RECOMMENDATION
We recommend the Authority implement adequate segregation of duties over
recordkeeping, expenditure approval, and reconciliation.
AUTHORITY RESPONSE
The Authority agrees with the recommendation. Due to the Authority’s lack of board
members, the member remaining is scheduling a meeting with the Kankakee County
Board Chairman to discuss the Authority’s future.
9
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Year Ended June 30, 2011
(State Compliance)
11-2. FINDING (Noncompliance with Kankakee River Valley Area Airport Authority Act)
The Kankakee River Valley Area Airport Authority (Authority) failed to comply with
certain provisions of the Kankakee River Valley Area Airport Authority Act (Act). We
noted the following deficiencies:
• The Authority did not create and submit a written statement and report to the
Governor covering its activities for the preceding fiscal year by November 15th as
required by statute. The Act (70 ILCS 15/18(a)) states the Authority shall file with
the Governor, by November 15 of each year, a written statement and report covering
its activities for the preceding fiscal year.
• The Authority had three vacancies requiring appointment. One vacancy required
an appointment by the Will County Board and two vacancies required an
appointment by the Kankakee County Board. As of June 30, 2011, Will County
and Kankakee County did not appoint any individuals to fill the vacant Authority
member seats. The Act (70 ILCS 15/4) states four members shall be appointed by
the Kankakee County Board and four members shall be appointed by the Will
County Board.
• Five of five (100%) Authority members did not file bonds in the amount of
$100,000 or file their constitutional oath of office with the Office of the Secretary
of State in accordance with the Act. The Act (70 ILCS 15/4) states that each
Authority member shall, before entering upon the duties of his office, take and
subscribe to the constitutional oath of office and give bond in the penal sum of
$100,000 conditioned upon the faithful performance of his duties. The oath and
bond shall be filed with the Office of the Secretary of State.
The Authority stated the Authority did not comply with the requirements due to oversight.
Failure to properly appoint members, file the constitutional oath and bonds with the
Secretary of State, and submit the required annual report to the Governor renders the
Authority in noncompliance with State law. (Finding Code No. 11-2, 10-2, 09-2, 08-2, 07-
1, 06-1, 05-1)
RECOMMENDATION
We recommend the Authority prepare and submit a written statement and report covering
its activities over the preceding fiscal year to the Governor by November 15th of each
year as required. In addition, we recommend the Authority strengthen controls to ensure
the Authority obtains the constitutional oath of office and bond in the penal sum of
$100,000 for appointed members and that the oaths and bonds are filed with the Office of
the Secretary of State or seek legislative remedy.
10
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Year Ended June 30, 2011
(State Compliance)
Further, due to the Authority’s inactivity over the past several years and their inability to
maintain eight appointed board members, we recommend the Authority either ensures
members are appointed in accordance with the Act or seek legislative remedy.
AUTHORITY RESPONSE
The Authority agrees with the recommendation. With the lack of board members and
inactivity it was thought no report was necessary. There is a meeting scheduled with the
Kankakee County Board Chairman to discuss the Authority’s future.
11
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Year Ended June 30, 2011
FINANCIAL STATEMENT REPORT
SUMMARY
The audit of the accompanying basic financial statements of the Kankakee River
Valley Area Airport Authority was performed by staff of the Office of the Auditor
General.
Based on our audit, we expressed an unqualified opinion of the Kankakee River
Valley Area Airport Authority’s basic financial statements.
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SPRINGFIELD OFFICE:
I L ES PARK PLAZA
740 EAS T A S H • 62703-3 1 54
PHONE: 2 17/782·6046
FAX: 217/785-8222 • TTY: 888/261-2887
C HICAGO OFFICE:
M ICHAEL A. BI LANDIC BLDG. · SUITE S -900
160 NORTH LASALLE · 6 060 1-3 103
PHONE: 312/81 4-4000
OFFICE OF THE AUDITOR GENERAL
WILLIAM G. HOLLAND
INDEPENDENT AUDITORS' REPORT
FAX: 312/8 14-4006
Honorable William G. Holland
Auditor General
State of Illinois
We have audited the accompanying financial statements of the business-type activities of
the Kankakee River Valley Area Airport Authority, as of and for the year ended June 30, 20 II ,
which collectively comprise the Kankakee River Valley Area Airport Authority's basic financial
statements as listed in the table of contents. These fin ancial statements are the responsibility of
the Kankakee River Valley Area Airport Authority's management. Our responsibility is to
express an opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards genera lly accepted in the
United States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An aud it includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An aud it also includes assessing
the accounting principles used and the sign ificant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the respective financial position of the business-type activities of the Kankakee River
Valley Area Airport Authority, as of June 30, 20 II , and the respective changes in financial position
and cash flows thereo f for the year then ended in conformity with accounting principles generally
accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued a report dated
November 30, 20 II on our consideration of the Kankakee River Valley Area Airport Authori ty's
internal control over financial reporting and on our tests of its compliance with certain provisions of
laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to
describe the scope of our testing of internal control over financia l reporting and compliance and the
results of that testing, and not to provide an opinion on the internal control over financial reporting
or on compliance. That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be considered in assessing the results of our aud it.
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The Kankakee River Valley Area Airport Authority has not presented a management's
discussion and analysis and budgetary comparison information for the Kankakee River Valley Area
Airport Authority Operating Fund that accounting principles generally accepted in the United States
of America has determined is necessary to supplement, although not required to be part of, the basic
financial statements.
This report is intended solely for the information and use of the Auditor General, the
General Assembly, the Legislative Audit Commission, the Governor, the Comptroller, and
Kankakee River Valley Area Airport Authority management, and is not intended to be and should
not be used by anyone other than these spec ified parties.
BRUCE L. BULLARD, CPA
Director of Financial and Compliance Audits
November 30, 20 II
Operating Fund
ASSETS
Current Assets:
Cash and Cash Equivalents (Note 3) $ 2,051
Total Assets 2,051
LIABILITIES
Current Liabilities:
Accounts Payable -
Total Liabilities -
NET ASSETS
Unrestricted 2,051
Total Net Assets $ 2,051
The accompanying notes to the financial statements are an integral part of this statement.
June 30, 2011
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
STATEMENT OF NET ASSETS
PROPRIETARY FUND
15
Operating Fund
OPERATING EXPENSES $ -
NONOPERATING REVENUES
Interest Income 2
Total Nonoperating Revenues 2
Change in Net Assets 2
Net Assets - Beginning of the Year 2,049
Net Assets - End of the Year $ 2 ,051
The accompanying notes to the financial statements are an integral part of this statement.
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
PROPRIETARY FUND
For the Year Ended June 30, 2011
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS
16
Operating Fund
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on Investments $ 2
Net Cash Provided (Used) by Investing Activities 2
Net Increase (Decrease) in Cash and Cash Equivalents 2
Cash and Cash Equivalents - July 1, 2010 2,049
Cash and Cash Equivalents - June 30, 2011 $ 2,051
The accompanying notes to the financial statements are an integral part of this statement.
For the Year Ended June 30, 2011
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
STATEMENT OF CASH FLOWS
PROPRIETARY FUND
17
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2011
NOTE 1 - ORGANIZATION:
The Kankakee River Valley Area Airport Authority (Authority) was established by the Kankakee
River Valley Area Airport Authority Act (Act) (70 ILCS 15/ et seq.). The Authority was created
to facilitate safe and convenient air travel and transportation to and from the Kankakee River
Valley Area, by the acquisition or construction, maintenance and operation of one or more
airports in the Kankakee River Valley Area.
The Authority is authorized to issue debt to finance construction of an Area airport. Currently,
no debt has been issued.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES:
The financial statements of the Authority have been prepared in accordance with accounting
principles generally accepted in the United States of America (GAAP), as prescribed by the
Governmental Accounting Standards Board (GASB). To facilitate the understanding of data
included in the financial statements, summarized below are the more significant accounting
policies.
a. Financial Reporting Entity
The Authority is not a part of the State of Illinois reporting entity. The accompanying
financial statements present the balances and results of operations of the Authority.
The Authority does not receive appropriations, or any other financial assistance, from the
State of Illinois. The Authority does not administer any nonshared funds held in the State
Treasury or receive or expend federal financial assistance.
b. Basis of Presentation
The financial activities of the Authority are organized in an individual fund. A fund is
defined as an independent fiscal and accounting entity with a self-balancing set of
accounts recording cash and/or other resources together with all related liabilities,
obligations, reserves, and equities which are segregated for the purpose of carrying on
specific activities or attaining certain objectives in accordance with special regulations,
restrictions or limitations. A Statement of Net Assets, Statement of Revenues, Expenses,
and Changes in Fund Net Assets, and Statement of Cash Flows has been presented for the
Authority’s Operating Fund.
The activities of the Authority have been classified as a proprietary fund – enterprise
fund. An enterprise fund is used to account for operations when the cost of providing
goods or services to the general public on a continuing basis is primarily financed with
user charges. An enterprise fund may also be used when the periodic measurement of the
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KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2011
results of operations is appropriate for capital maintenance, public policy, management
control, accountability, or other purposes.
The Authority’s operating fund is used to pay its administrative expenses. The fund was
funded with donations received in periods prior to fiscal year 2004 and interest is earned
on deposits.
c. Basis of Accounting
The proprietary fund 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 at the time liabilities are incurred, regardless of when
the related cash flow takes place. Nonexchange transactions, in which the Authority
gives (or receives) value without directly receiving (or giving) equal value in exchange,
include donations and interest income. On an accrual basis, revenues from donations are
recognized in the fiscal year in which the underlying exchange transaction occurs.
Private-sector standards of accounting and financial reporting issued prior to December 1,
1989, generally are followed in the proprietary fund financial statements to the extent that
those standards do not conflict with or contradict guidance of the Governmental
Accounting Standards Board. The Authority also has the option of following subsequent
private-sector guidance for their business-type activities and enterprise funds, subject to
this same limitation. The Authority has elected not to follow subsequent private-sector
guidance as it relates to the Authority’s operations.
d. Cash and Cash Equivalents
Cash and Cash Equivalents for the Authority include cash held in its bank account. See
Note 3 - Deposits with Financial Institutions for further detail.
e. Net Assets
In the proprietary fund financial statements, equity is displayed as “unrestricted.”
Unrestricted consists of net assets that do not meet the definition of “restricted” or
“invested in capital assets, net of related debt.”
f. Fixed Assets
The Authority does not own or lease any fixed assets.
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KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
NOTES TO THE BASIC FINANCIAL STATEMENTS
June 30, 2011
g. Compensated Absences or Pension Benefit Obligations
The Authority had no full-time employees during Fiscal Year 2011. Therefore, the
Authority had no obligation for pension benefits or compensated absences as of June 30,
2011.
h. Risk Management
The Authority makes no provision for anticipated losses in the event of involuntary
conversions.
NOTE 3 - DEPOSITS WITH FINANCIAL INSTITUTIONS:
The Authority maintains funds outside the State Treasury (locally held funds) and has
independent authority to manage those funds. On June 30, 2011, the carrying amount and the
bank balance of the Authority’s cash deposits was $2,051. The funds are held at PNC Bank and
are covered by federal depository insurance.
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KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
For the Year Ended June 30, 2011
SUPPLEMENTARY INFORMATION FOR STATE COMPLIANCE PURPOSES
SUMMARY
Supplementary Information for State Compliance Purposes presented in this
section of the report includes the following:
• Fiscal Schedules and Analysis:
Schedule of Receipts, Disbursements and Fund Balance
(Cash Basis) – Locally Held Funds
• Analysis of Operations:
Functions and Planning Program
Personnel
The accountants' report that covers the Supplementary Information for State
Compliance Purposes presented in the Compliance Report Section states that it has been
subjected to the auditing procedures applied in the audit of the basic financial statements
and, in the auditors’ opinion, it is fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
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Operating Fund
Cash Balance at July 1, 2010 $ 2 ,049
Receipts: 2
Disbursements: -
Cash Balance at June 30, 2011 $ 2 ,051
KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
SCHEDULE OF RECEIPTS, DISBURSEMENTS AND FUND BALANCE
(CASH BASIS) - LOCALLY HELD FUNDS
For the Year Ended June 30, 2011
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KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
ANALYSIS OF OPERATIONS
For the Year Ended June 30, 2011
FUNCTIONS AND PLANNING PROGRAM
The Kankakee River Valley Area Airport Authority (Authority) was created through the power
of the Kankakee River Valley Area Airport Authority Act (Act) (70 ILCS 15/ et seq.), approved
September 10, 1990. The purpose of the Authority is to facilitate safe and convenient air travel
and transportation to and from the Kankakee River Valley area by the acquisition or
construction, maintenance and operation of one or more airports in the Kankakee River Valley
area, and to promote the economic development of the surrounding area. Pursuant to the Act, the
Authority has statutory power to:
• acquire land for a new airport and related facilities subject to a declaration of public
interest enacted by the General Assembly and to construct, operate and maintain the
facilities, as well as grant concessions or privileges within the facilities;
• acquire land within the perimeter area of the airport and to construct, operate and
maintain related facilities in the perimeter area of the airport; and to let or grant
concessions in any part or all of the perimeter area of the airport and the perimeter
area facilities;
• exercise the right of eminent domain to acquire land for airports at such locations
within the Kankakee River Valley area as the Authority shall deem necessary;
• issue revenue bonds in anticipation of its income and revenues from any one or more
Authority airports, related facilities, perimeter areas, and perimeter area facilities to
accomplish any of the purposes of the Act;
• adopt all necessary bylaws, rules and regulations for the conduct of the business and
affairs of the Authority, and for the management and use of facilities and sites
acquired under the powers granted by the Act; and,
• secure grants or loans from the United States government, or any agency thereof, for
financing the planning, establishment, construction, and operation of any airport,
related facility, perimeter area or perimeter area facility authorized by the Act.
The Authority consists of an eight-member governing board. The Kankakee County Board and
the Will County Board each appoints four members. Authority members can receive up to $150
per day of regular or special service on behalf of the Authority, not to exceed $7,500 in any one
year. However, Board members did not accept this compensation during the current fiscal year.
In addition, State law requires Board members subscribe to the constitutional oath of office and
give a bond in the penal sum of $100,000 conditioned upon the faithful performance of the
members’ duties.
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KANKAKEE RIVER VALLEY AREA AIRPORT AUTHORITY
ANALYSIS OF OPERATIONS
For the Year Ended June 30, 2011
The Board members at June 30, 2011 were:
Appointed by Kankakee County
Vacant, Commissioner
Phil Kambic, Vice Chairman
Vacant, Commissioner
Greg Dralle, Secretary
Appointed by Will County
John Shea, Commissioner
Bernard Ward, Commissioner
Vacant, Commissioner
Charles P. Peterson, Commissioner
PERSONNEL
An eight-member board, comprised of four members appointed by each of the Will County and
the Kankakee County Boards, manages the Authority. The Authority has no full-time
employees.
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