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HomeMy WebLinkAboutSupplemental Attachments - 1/16/2018 c � L Ln f d L , ( U C .0 O � 3 c r o ? f (D 0 U Ca (0 C C C d Q N O � V C C 0 (p O N L y N L N d N n / U O ( O N N � � H wro P O ON O v � O 'C l0 N � ID t J 3 d O LLI w ( O ICD o +' Amo_ d r om / O. N.0 (F '^ e V! 1 _ O C m c N c E O N ( —iI O J N /yOry) � � t d E CO U y r 1 EL N d d c f ( LA i � � I a-0 ( L �U ry U NV— co ® ti .Q LIr- E u) a. O O C: += N () O c :3 co ® v Q O O +� O -'-j p O U C E O .� M U� j z < m m E - L Q • E E L _O m ( E E _O _0 Cn (n CLol Q J N N t � L 1 1 l .0 � ■ r C U � � M O 4-0 � m � E o 0 m U) Co O a) cu OU U CU, C6 n -1--j N a) .Q a) a) a-- c U U c C: a) (� O O (a to .— O � Q Q o cn ca +� O � � (n � � � .U? � � � C:(D a) 4-A c6 � 00 00 0 a) 4- E 4- E � — a) a) oa) o0 C: _ i i (D - - - X O C6 C/) O Q cn cr cn 0- W % LZ Lf r . t , ( � C ME # ! ! 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Ln t t ' t � ( t t ( t t t t f ( t z f ( N m f • a f a J f � f � O N ( f t RSM RSM US LLP J201 N Harrison St January 12, 2018 Suite 300 Davenport,IA 52801 Report to the Honorable Mayor and City Council T+1563 888 4000 City of Waterloo, Iowa F+1 563 324 6939 Waterloo, Iowa www.rsmus.com This letter is to inform the City Council of the City of Waterloo (the City) about significant matters related to the conduct of our audit as of and for the year ended June 30, 2017, so that it can appropriately discharge its oversight responsibility and we comply with our professional responsibilities. The following summarizes various matters that must be communicated to you under auditing standards generally accepted in the United States of America. The Respective Responsibilities of the Auditor and Management Our responsibility under auditing standards generally accepted in the United States of America and Government Auditing Standards issued by the Comptroller General of the United States have been described to you in our arrangement letter dated July 5, 2017. The audit of the financial statements does not relieve management or those charged with governance of their responsibilities, which are also described in that letter. Overview of the Planned Scope and Timing of the Financial Statement Audit We have issued a separate communication dated July 5, 2017 regarding the planned scope and timing of our audit and have communicated with you our identification of, and planned audit response to, significant risks of material misstatement. Significant Accounting Practices, Including Policies, Estimates and Disclosures Under generally accepted accounting principles, in certain circumstances, management may select among alternative accounting practices. In our view, in such circumstances, management has selected the preferable accounting practice. Management has the ultimate responsibility for the appropriateness of the accounting policies used by the City. The City adopted Governmental Accounting Standards Board (GASB) Statement No. 77, Tax Abatement Disclosures. As a result of the implementation, the City added disclosures in the footnotes to the basic financial statements.We did not identify any significant or unusual transactions or significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus. The following is a list of the significant estimates which you may wish to monitor for your oversight responsibilities of the financial reporting process: • Allowance for doubtful accounts • Other postemployment benefit plan assumptions (OPEB) • Depreciable life of capital assets • Worker's compensation, healthcare and other risk ,management liabilities • Net pension liability(NPL) assumptions • Allocation of indirect costs Audit Adjustments There were no audit adjustments made to the original trial balance presented to us to begin our audit. THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING R5M US LLP is the U.S.member firm of RSM International,a global network of Independent audit,tax;and consulting firms.MsR rsmus.com/aboutus for more Information regarding RSM US LLP and RSMlntemdtional. L City of Waterloo, Iowa January 12, 2018 Page 2 f p6 Uncorrected Misstatements We are not aware of any uncorrected misstatements other than misstatements that are clearly trivial. Internal Control Matters We have separately issued a report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements and major programs, as required by Government Auditing Standards and Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards at 2 CFR 200 (Uniform Guidance). This communication is included within the City's Compliance Report for the year ended June 30, 2017. Disagreements with Management We encountered no significant difficulties with management over the application of significant accounting principles,les the basis of management's judments on significant matters, the scope of the audit or significant disclosures to be included in the financial statements. Consultation With Other Accountants We are not aware of any consultations management had with other accountants about accounting or auditing matters, other than the use of other auditors for the discretely presented component units of the City. t Significant Issues Discussed with Management C No significant issues arising from the audit were discussed or were the subject of correspondence with management. Difficulties Encountered in Performing the Audit We did not encounter any significant difficulties in dealing with management during the audit. t Management Representations Attached is a copy of the management representation letter. Closing We will be pleased to respond to any questions you have about the foregoing. We appreciate the opportunity to continue to be of service to the City of Waterloo, Iowa. This report is intended solely for the information and use of City Council and is not intended to be, and should not be, used by anyone other than this specified party. �sw vs ,C.t.P y I { I CITY OF WATERLOO , IOWA e QUENTIN HART • Mayor- MICHELLE WEIDNER,CPA • Chief Financial Officer i MaPor January 12, 2018 QUENTIN HART i RSM US LLP l 201 North Harrison Street COUNCIL Suite 300 MEMBERS Davenport, IA 52801 This representation letter is provided in connection with your audit of the basic financial statements MARGARET of City of Waterloo, Iowa(the City) asof and for the year ended June 30, 2017 for the purpose of KLEIN expressing an opinion on whether the financial statements are presented fairly, in all material Ivard� respects, in accordance with accounting principles generally accepted in the United States of BRUCEAmerica(U.S.GAAP). rd2 Ward aWe confirm, to the best of our knowledge and belief, that as of January 12, 2018: Wnrd2 PATRICK Financial Statementsi W rai3,MRRsEY 1. We have fulfilled our responsibilities, asset out in the terms of the audit arrangement letter dated July 5, 2017,for the preparation and fair presentation of the financial statements referred JEROME to above in accordance with U;S. GAAP. AMOS,:JR. ward', 2. We acknowledge our responsibility for the design, implementation and maintenance of Internal control relevant to the:preparatioh and fair presentation of financial statements that are free CHRIS from material misstatement, whether due to fraud or error. I SHIMP Wm-ds 3. We acknowledge ourresponsibility for the design, implementation and maintenance of internal Control to prevent and detect fraud, SHARON JUON 4. Significant assumptions used by us in making accounting estimates, including those measured t At-range at fair value;are reasonable and reflect our,judgment based on our knowledge and experience about past and current events, and our assumptions about conditions wet expect to exist and STEVE courses of action we expect to take. SCHMITT At-Large 5. Related-party transactions, including those,with component units for which the City Is = accountable,jointly governed oiganizations.in which the City participates, and interfund transactions; ihcluding interfund accounts and advances receivable and payable, sale and purchase transactions,interfund transfers, long-term loans, leasing arrangements and guarantees, have been recorded in accordance with the economic substance of the transaction F and appropriately accounted for and disclosed in accordance with the requirements of U.S. GAAP. 6. All events subsequent to the dateofthe financial statements, and for which U.S. GAAP requires adjustment or disclosure, have been adjusted or disclosed. 7. The effects of all known actual or possible litigation and claims have been accounted for and disclosed in accordance with U.S. GAAP, s i WE'RE WORKING FOR YOU! An Equal Opportunity/APormalive Action Employer f RSM US LLP January 12, 2018 Page 2 j F 8. The following have been properly recorded and/or disclosed in the financial statements: f a. Net position and fund balance classifications. h I b. Arrangements with financial institutions involving compensating balances or other arrangements involving restrictions on cash balances. k c. Risk financing activities. d. Future changes in accounting pronouncements for GASB Statement Nos, 75, 83, 84, 85, 86, and 87, which have been issued, but which we have not yet adopted. e. We believe the implementation of GASB Statement Nos. 74, 77, 80, 81 and 82 is appropriate, and their impact, if any, has been properly disclosed in the financial statements. 9. There are no unasserted claims or assessments that our lawyer has advised us are probable of assertion and must be disclosed in accordance with U.S. GAAP. 10. We have no direct or indirect legal or moral obligation for any debt of any organization, public or private, or to special assessment bond holders that is not disclosed in the financial statements. 11. We have no knowledge of any uncorrected misstatements in the financial statements. 12. We agree with the findings of specialists used by (PERS and MFPRSI in evaluating the assumptions and financial amounts related to the defined benefit plans and have adequately considered the qualifications of the specialists in determining the amounts and disclosures used in the financial statements and underlying accounting records. We did not give or cause any instructions to be given to the specialists with respect to the values or amounts derived in an attempt to bias their work and we are not otherwise aware of any matters that have had an impact on the independence or objectivity of the specialists. Information Provided C l 13. We have provided you with: a. Access to all information of which we are aware that is relevant to the preparation and fair C presentation of the financial statements such as records, documentation and other matters; j b. Additional information that you have requested from us for the purpose of the audit; n s, c. Unrestricted access to persons within the City from whom you determined it necessary to obtain audit evidence; and a d. Minutes of the meetings of the governing board and committees, or summaries of actions of recent meetings for which minutes have not yet been prepared. 14. All transactions have been recorded in the accounting records and are reflected in the financial statements. 15. We have disclosed to you the results of our assessment of risk that the financial statements may be materially misstated as a result of fraud. r 16, We have no knowledge of allegations of fraud or suspected fraud affecting the City's financial statements involving: y RSM US LLP January 12, 2018 Page 3 K A a. Management. �r b. Employees who have significant roles in internal control. c. Others where the fraud could have a material effect on the financial statements. 17. We have no knowledge of any allegations of fraud or suspected fraud affecting the City's financial statements received in communications from employees, former employees, analysts, regulators or others. 18. We have no knowledge of noncompliance or suspected noncompliance with laws and regulations whose effects were considered when preparing financial statements. 19. We have disclosed to you all known actual or possible litigation and claims whose effects should be considered when preparing the financial statements. 20. We have disclosed to you the identity of the City's related parties and all the related-party relationships and transactions of which we are aware. 21. We are aware of no significant deficiencies or weaknesses, in the design or operation of internal controls that could adversely affect the City's ability to record, process, summarize and report financial data. 22. We are aware of no communications from regulatory agencies concerning noncompliance with, or deficiencies in, financial reporting practices. b t 23. During the course of your audit, you may have accumulated records containing data that should be r reflected in our books and records. All such data have been so reflected. Accordingly, copies of such records in your possession are no longer needed by us. Supplementary Information 24. With respect to supplementary information presented in relation to the financial statements as a whole: a. We acknowledge our responsibility for the presentation of such information. b. We believe such information, including its form and content, is fairly presented in accordance with U.S. GAAP. 1 c. The methods of measurement or presentation have not changed from those used in the prior period. t 6 G' d. When supplementary information is not presented with the audited financial statements,we will make the audited financial statements readily available to the intended users of the supplementary information no later than the date of issuance of the supplementary information and the auditor's report thereon. .i RSM US LLP January 12, 2018 Page 4 E r 25. With respect to management's discussion and analysis, budget schedules, Iowa Public Employee Retirement System (for the City and Waterloo Water Works), the Municipal Fire and Police Retirement System of Iowa Schedules of Employer's Proportionate Share of the Net Pension Liability and Schedules of Employee's Contributions,Waterloo Water Works pension plan schedules, and other postemployment benefit schedule of funding progress presented as required by Governmental Accounting Standards Board to supplement the basic financial statements: i a. We acknowledge our responsibility for the presentation of such required supplementary information. b. We believe such required supplementary information is measured and presented in accordance with guidelines prescribed by U.S. GAAP. c. The methods of measurement or presentation have not changed from those used in the prior period. d. The underlying significant assumptions or interpretations regarding the measurement or presentation of such information includes the assumptions used by the actuary for the Pension Plans and OPEB calculation as noted in the schedule of funding progress and the pension plan information. i Compliance Considerations 26. In connection with your audit, conducted in accordance with Government Auditing Standards, we confirm that management: a. is responsible for the preparation and fair presentation of the financial statements in accordance with the applicable financial reporting framework. b. Is responsible for compliance with the laws, regulations, and provisions of contracts and grant agreements applicable to the auditee. c. Is not aware of any instances that have occurred or are likely to have occurred, of fraud and noncompliance with provisions of laws and regulations that have a material effect on the financial statements or other financial data significant to the audit objectives, and any other instances that warrant the attention of those charged with governance. d. Is not aware of any instances that have occurred or are likely to have occurred, of noncompliance with provisions of contracts and grant agreements that have a material effect on the determination of financial statement amounts. e. Is not aware of any instances that have occurred or are likely to have occurred of abuse that could be quantitatively or qualitatively material to the financial statements. f. Is responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. g. Acknowledges its responsibility for the design, implementation, and maintenance of internal controls to prevent and detect fraud. h. Has a process to track the status of audit findings and recommendations. r ( RSM US LLP January 12, 2018 Page 5 i e E fl i. Has identified for the auditor previous audits, attestation engagements, and other studies related to the audit objectives and whether related recommendations have been implemented. j. Acknowledges its responsibilities as it relates to nonaudit services performed by the auditor, j including a statement that it assumes all management responsibilities; that it oversees the services by designating, Michelle Weidner, Chief Financial Officer, who possesses suitable skill, knowledge, or experience; that it evaluates the adequacy and results of the services performed; and that it accepts responsibility for the results of the services. 27. In connection with your audit of federal awards conducted in accordance with Subpart F of Title 2 U.S. Code of Federal Regulations(CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards(Uniform Guidance), we confirm: a. Management is responsible for complying, and has complied, with the requirements of Uniform Guidance. t b. Management is responsible for understanding and complying with the requirements of laws, regulations, and the provisions of contracts and grant agreements related to each of its federal programs. c. Management is responsible for establishing and maintaining, and has established and maintained, effective internal control over compliance for federal programs that provides reasonable assurance that the auditee is managing federal awards in compliance with laws, regulations, and the provisions of contracts or grant agreements that could have a material effect on its federal programs. d. Management has prepared the schedule of expenditures of federal awards in accordance with Uniform Guidance and has included expenditures made during the period being audited for all awards provided by federal agencies in the form of grants, federal cost-reimbursement contracts, loans, loan guarantees, property(including donated surplus property), cooperative agreements, interest subsidies, insurance, food commodities, direct appropriations, and other assistance. s e. Management has identified and disclosed all of its government programs and related activities subject to the Uniform Guidance compliance audit. f. Management has identified and disclosed to the auditor the requirements of laws, regulations, and the provisions of contracts and grant agreements that are considered to have a direct and material effect on each major program. g. Management has made available all federal awards (including amendments, if any) and any other correspondence relevant to federal programs and related activities that have taken place with federal agencies or pass-through entities. h. There are no amounts questioned or any known noncompliance with the direct and material compliance requirements of federal awards. L Management believes that the City has complied with the direct and material compliance requirements. j. Management has made available all documentation related to compliance with the direct and material compliance requirements, including information related to federal program financial reports and claims for advances and reimbursements. j c u RSM US LLP January 12, 2018 Page 6 ( t k. Management has provided to the auditor its interpretations of any compliance requirements that are subject to varying interpretations. I. There are no communications from grantors and pass-through entities concerning possible noncompliance with the direct and material compliance requirements, including communications I received from the end of the period covered by the compliance audit to the date of the auditor's j report. m. There are no findings received and related corrective actions taken for previous audits, attestation engagements, and internal or external monitoring that directly relate to the objectives of the compliance audit, including findings received and corrective actions taken from the end of the period covered by the compliance audit to the date of the auditor's report. n. There were no changes in internal control over compliance or other factors that might significantly affect internal control that have occurred subsequent to the period covered by the auditor's report. o. e l F deral program financial reports and claims for advances and reimbursements are supported by the books and records from which the basic financial statements have been prepared. t p. The copies of federal program financial reports provided to the auditor are true copies of the reports submitted, or electronically transmitted, to the federal agency or pass-through entity, as applicable. r q. Management has monitored subrecipients to determine that they have expended pass-through x assistance in accordance with applicable laws and regulations and the terms and conditions of the subaward and have met the other pass-through entity requirements of the Uniform Guidance. r. Management has charged costs to federal awards in accordance with applicable cost principles and the Uniform Guidance. s. Management is responsible for, and has accurately prepared, the summary schedule of prior audit findings to include all findings required to be included b Uniform Guidance. 9 9 q Y t. The reporting package does not contain protected personally identifiable information. y u. Management has accurately completed the appropriate sections of the data collection form. t 28. In connection with your audit of the Passenger Facility Charge Program (PFC),we confirm: a. Management is responsible for complying, and has complied, with the requirements of the PFC. b. Management is responsible for establishing and maintaining, and has established and maintained, effective internal control over compliance for the PFC that provides reasonable assurance that the auditee is managing the PFC in compliance with laws and regulations that could have a material effect on the PFC. c. Management has prepared the schedule passenger facility charges receipts and disbursements and schedule of passenger facility charges cash activity in accordance with the Passenger Facility Charge Audit Guide for Public Agencies. d. Management believes that the auditee has complied with the requirements of the PFC. r RSM US LLP January 12, 2018 Page 7 e. Management has made available all documentation related to compliance with the compliance with the PFC. f. Management is not aware of any known noncompliance.with PFC requirements occurring subsequent to the period covered by the auditor's report. t City of Waterloo, Iowa Quentin Hart, Mayor Michelle Weidner, Chief Financial Officer RSM RSM US LLP 201 N Harrison St January 12, 2018 Suite 300 Davenport,IA 52801 Members of the Cit Council T+1 563 888 4000 Y F+15633246939 City of Waterloo, Iowa Waterloo, Iowa www.rsmus.com In planning and performing our audit of the financial statements of the City of Waterloo, Iowa (the City) as of and for the year ended June 30, 2017, in accordance with auditing standards generally accepted in the United States of America, we considered the City's internal control over financial reporting (internal control)as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we do not express an opinion on the effectiveness of the City'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 deficiency in design exists when (a) a control necessary to meet the control objective is missing, or(b) an existing control is not properly designed so that, even if the control operates as designed, the control objective would not be met. A deficiency in operation exists when a properly designed control does not operate as designed or when the person performing the control does not possess the necessary authority or competence to perform the control effectively. 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 City'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. Certain deficiencies in internal control that have been previously communicated to you, in writing, by us or by others within the City are not repeated herein. Following are descriptions of all identified deficiencies in internal control that we determined did not constitute significant deficiencies or material weaknesses: Information Technology Two employees have super-user access to the financial system for which user logs are not being reviewed. Also, there is no formal modification of access level form in place at the City. We recommend a formal policy for access modification be implemented at the City as well as a review of super-user logs. This would ensure no unauthorized access within the financial systems at the City. THE POWER OF BEING UNDERSTOOD AUDIT i TAX I CONSULTING RSM US LLP Is the U.S.member firm of RSM Internatlonal,a global network of Independent audit,tax,and consulting firms.Visit rsmus.mm/aboutus for mare Information regarding RSM US LLP and RSM International, City of Waterloo, Iowa January 12, 2018 Page 2 L r Offsite Cash Collections The City has several outside departments that have an employee with the ability to collect, reconcile, and deposit cash receipts. There is no independent review. We recommend segregating the cash collection E function in these outside departments in order to ensure proper segregation of duties over the cash collections. r This communication is intended solely for the information and use of management, the City Council and t others within the organization, and is not intended to be, and should not be, used by anyone other than these specified parties. �s,w us .444 r 3 l I: t k i I t' z I J 1 C i RSM Report on Compliance for the Passenger Facility Charge Program, RSM US LLP Report on Internal Control Over Compliance and Report on the Schedule of Passenger Facility Charge Receipts and Disbursements and the Schedule of Passenger Facility Charges Cash Activity as Required by the Passenger Facility Charge Audit Guide for Public Agencies Independent Auditor's Report Waterloo Regional Airport Board and Honorable Mayor and City Council Waterloo Regional Airport City of Waterloo, Iowa Report on Compliance We have audited City of Waterloo, Iowa's(the City)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 the City's passenger facility charge program for the year ended June 30, 2017. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts and grants applicable to its passenger facility charge program. Auditor's Responsibility Our responsibility is to express an opinion on compliance for the City's passenger facility charge program based on our audit of the types of compliance requirements referred to above.We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America 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 types 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 City'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 passenger facility charge program. However, our audit does not provide a legal determination of the City's compliance. Opinion on the Passenger Facility Charge Program In our opinion,the City complied, in all material respects,with the types of 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, 2017. Report on Internal Control Over Compliance Management of the City 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 City'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 for the passenger facility program 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 City's internal control over compliance. THE POWER OF BEING UNDERSTOOD AUDIT I TAX I CONSULTING 1 RSM US LLP is the US.member Porn of RSM International,a global network of if aofIt.tax,and mosuItit g fimrs.Mlslt rsrr usce r/about us for more Ioformatian regaling RSM US LLP and RSM International. r i i A deficiency in internal control over compliance exists when the design or operation of a control over compliance f does not allow management or employees, in the normal course of performing their assigned functions, to prevent, w or detect and correct, noncompliance with a type of compliance requirement of the passenger facility charge program on a timely basis. A material weakness in internal control overcompliance is a deficiency, or combination i of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of the passenger facility charge 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 the passenger facility charge 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 the Schedule of Passenger Facility Charges Receipts and Disbursement and the Schedule of Passenger Facility Charges Cash Activity We have audited the financial statements of the governmental activities, the business-type activities,the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City, which includes the Federal Aviation Agency Projects Fund, a special revenue fund of the City, as of and for the year ended June 30, 2017, and the related notes to the financial statements,which collectively comprise the City's basic financial statements. We issued our report thereon dated January 12, 2017. Our report includes a reference to other auditors. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of passenger facility receipts and disbursements and schedule of passenger facility charges cash activity is presented for purposes of additional analysis as specified in the Guide and are not a required part of the basic 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 basic financial statements. It provides relevant information that is not provided by the historical accrual based financial statements, and is not intended to be a presentation in conformity with j accounting principles generally accepts in the United States of America or a complete presentation in accordance with the cash basis used for this financial statement presentation. Under the cash basis, certain revenue and the w related assets are recognized when cash is received rather than earned, and certain expense are recognized when paid rather than when the obligation is incurred. 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 basic financial statements or to the basic 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 passenger facility receipts and disbursements and schedule of passenger facility charges cash activity are fairly stated in all material respects in relation to the financial statements as a whole. �P_s y VS Davenport, Iowa January 12, 2017 2 w City of Waterloo, Iowa h Schedule of Passenger Facility Charges Receipts and Disbursements Year Ended June 30, 2017 i r Beginning Ending I e Application Balance Balance Approval Unliquidated PFC Interest Unliquidated Number PFC Collections Earned Expenditures Transfers PFC PFC Administration Costs 11-10-C-00-ALO $ 6,683 $ - $ - $ 6,683 $ - $ - Rehab Taxiway A(East) 12-11-C-00-ALO 38,848 - - 23,508 (15,140) - Rehab Taxiway C 16-13-C-00-ALO 4,408 91,833 114 9,208 15,140 102,287 PFC Administration Costs 16-13-C-HALO - 15,000 - 8,657 - 6,343 Total $ 49,739 $ 106,833 $ 114 $ 48,056 $ $ 108,630 Passenger Facility Charges(PFCs)are expended as the local match required for CFDA No.20.105,Airport Improvement Program,as displayed on the schedule of expenditures of federal awards plus additional amounts approved by the Federal Aviation Administration(FAA). Cumulative approvals for collections and uses are$1,451,058 and$1,342,430,respectively. i, 4 1 i r 3 City of Waterloo, Iowa Schedule of Passenger Facility Charges Cash Activity Year Ended June 30, 2017 Totals Totals Totals Description July 1,2016 Quarter#1 Quarter#2 Quarter#3 Quarter#4 for Year June 30,2017 I Passenger Facility Charges receipts $ 2,724,361 $ 27,955 $ 21,458 $ 29,084 $ 28,336 $ 106,833 $ 2,831,194 Interest 31,873 19 23 33 39 114 31,987 Disbursements (2,706,495) (6,683) (23,508) (9,208) (8,657) (48,056) (2,754,551) Total $ 49,739 $ 71,030 $ 69,003 $ 88,912 $ 108,630 $ 58,891 $ 108,630 jl s i 5 L i t a s �i 1 4