Coastalaska, Inc., and Member Stations
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COASTALASKA, INC., AND MEMBER STATIONS FINANCIAL STATEMENTS As of and for the Years Ended June 30, 2014 and 2013 TOGETHER WITH INDEPENDENT AUDITOR’S REPORT COASTALASKA, INC., AND MEMBER STATIONS FINANCIAL STATEMENTS As of and for the Years Ended June 30, 2014 and 2013 TABLE OF CONTENTS Page COASTALASKA, INC. Independent Auditor’s Report 1-2 Statements of Financial Position 3 Statements of Activities 4 Statements of Cash Flows 5 Notes to the Financial Statements 6-13 COMPLIANCE Schedule of State Financial Assistance 14 Notes to the Schedule of State Financial Assistance 15 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial 16-17 Statements Performed in Accordance with Government Auditing Standards Independent Auditor’s Report on Compliance with Requirements that could have a Direct and Material Effect on Each Major Program and on 18-19 Internal Control Over Compliance in Accordance with the State of Alaska Audit Guide and Compliance Supplement for State Single Audits Schedule of Findings and Questioned Costs and Summary Schedule of Prior Year Findings and Questioned Costs 20 SUPPLEMENTAL SCHEDULES Schedule of Activity by Member for the year ended June 30, 2014 21-23 Schedule of Activity by Member for the year ended June 30, 2013 24-26 RAVEN RADIO FOUNDATION, INC. (KCAW) Independent Auditor’s Report 27-28 Statements of Financial Position 29 Statements of Activities 30 Statements of Cash Flows 31 Notes to the Financial Statements 32-35 NARROWS BROADCASTING CORPORATION (KFSK) Independent Auditor’s Report 37-38 Statements of Financial Position 39 Statements of Activities 40 Statements of Cash Flows 41 Notes to the Financial Statements 42-45 - i - COASTALASKA, INC., AND MEMBER STATIONS FINANCIAL STATEMENTS As of and for the Years Ended June 30, 2014 and 2013 TABLE OF CONTENTS Page RAINBIRD COMMUNITY BROADCASTING CORPORATION (KRBD) Independent Auditor’s Report 47-48 Statements of Financial Position 49 Statements of Activities 50 Statements of Cash Flows 51 Notes to the Financial Statements 52-55 WRANGELL RADIO GROUP, INC. (KSTK) Independent Auditor’s Report 57-58 Statements of Financial Position 59 Statements of Activities 60 Statements of Cash Flows 61 Notes to the Financial Statements 62-65 CAPITAL COMMUNITY BROADCASTING, INC. (KTOO) Independent Auditor’s Report 67-68 Statements of Financial Position 69 Statements of Activities 70 Statements of Cash Flows 71 Notes to the Financial Statements 72-76 - ii - This Page Intentionally Left Blank - iii - ELGEE REHFELD MERTZ, LLC CERTIFIED PUBLIC ACCOUNTANTS 9309 Glacier Highway, Suite B-200 Juneau, Alaska 99801 907.789.3178 FAX 907.789.7128 www.ermcpa.com INDEPENDENT AUDITOR’S REPORT To the Board of Directors CoastAlaska, Inc. Report on the Financial Statements We have audited the accompanying financial statements of CoastAlaska, Inc. (a nonprofit corporation), which comprise the statements of financial position as of June 30, 2014 and 2013, and the related statements of activities, functional expenses, and cash flows for the year then ended and the related notes to the financial statements. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes 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. Auditor’s Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. - 1 - Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CoastAlaska, Inc. as of June 30, 2014 and 2013, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. As described in Note 1, during fiscal 1999, five non-profit Alaska corporations, which operate seven noncommercial public radio stations and one noncommercial public television in Southeast Alaska, formed CoastAlaska, Inc. Administrative and financial activities of the seven radio stations and public television station are now conducted under a Compact Agreement by and between the stations. Other Matters Other Information Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying Schedule of Activity by Member for the years ended June 30, 2014 and 2013 appearing on pages 21-26 and the Schedule of State Financial Assistance on page 14 are presented for purposes of additional analysis as required by management and the State of Alaska Audit Guide and Compliance Supplement for State Single Audits, 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 audits 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 State Financial Assistance and the Schedule of Activity by Member are fairly stated in all material respects in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 21, 2014 on our consideration of CoastAlaska, Inc.’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial 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 in considering CoastAlaska, Inc.’s internal control over financial reporting and compliance. October 21, 2014 - 2 - COASTALASKA, INC. STATEMENTS OF FINANCIAL POSITION For the Years Ended June 30, 2014 and 2013 2014 2013 ASSETS: Current Assets: Cash $ 1,414,328 $ 1,309,007 Investments 603,560 516,421 Accounts receivable, net 182,861 159,938 Grants receivable 10,060 1,029 Contributions receivable, net 104,886 89,905 Prepaid expenses 13,695 58,839 Total Current Assets 2,329,390 2,135,139 Property and Equipment, net 19,278 22,597 Total Assets $ 2,348,668 $ 2,157,736 LIABILITIES AND NET ASSETS: Current Liabilities: Accounts payable and accrued liabilities $ 269,663 $ 340,746 Total Current Liabilities 269,663 340,746 Deferred revenue 142,493 128,761 Total Liabilities 412,156 469,507 Net Assets: Unrestricted: Undesignated - available for operations 1,917,234 1,665,632 Designated - invested in property and equipment 19,278 22,597 Total Net Assets 1,936,512 1,688,229 Total Liabilities and Net Assets $ 2,348,668 $ 2,157,736 The accompanying notes to financial statements are an integral part of these statements. - 3 - COASTALASKA, INC. STATEMENTS OF ACTIVITIES For the Years Ended June 30, 2014 and 2013 2014 2013 Changes in Unrestricted Net Assets from Operating Activities: SUPPORT: Contributions $ 778,019 $ 694,911 Membership 657,447 664,436 Total support 1,435,466 1,359,347 REVENUES: Government and CPB operating grants 2,977,302 2,339,706 Underwriting income 1,024,829 886,601