Red River Radio Network June 30,2010 Manageivient's Discussion and Analysis

Iiz^ KDAQ-FM, KLSA-FM, KBSA-FM, AND KLDN-FM RADIO STATIONS LOUISUNA STATE UNIVERSITY IN SHREVEPORT STATE OF LOUISIANA JUNE 30,2010 Underprovlsions of state law, this report is a public document. A copy of the report has been submitted to the entity and other appropriate public officials. The report is available for public inspection at the Baton Rouge office of the Legislative Auditor and, where appropriate, at the office of the parish cleri< of court. Release Date l^/•^//i / KDAQ-FM, KLSA-FM. ICBSA-FM. AND KLDN-FM RADIO STATIONS LOUISIANA STATE UNIVERSITY IN SHREVEPORT STATE OF LOUISIANA TABLE OF CONTENTS Page Management's Discussion and Analysis (Unaudited) i-iii AUDITED FINANCIAL STATElVtENTS Statement Independent Auditor's Report 1 Statement ofFinancial Position A 2 Statement of Activities B 3-4 Statement of Cash Flows C 5 Notes to the Financial Statements 6-12 OTHER REPORTS Report on Intemal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Govemment A uditing Standards 13-14 Schedule of Findings and Questioned Costs 15 Schedule of Prior Year Findings 16 Management's Corrective Action Plan 17 RED RIVER RADIO NETWORK JUNE 30,2010 MANAGEIVIENT'S DISCUSSION AND ANALYSIS Our discussion and analysis of the Red River Radio Network's (the Network) financial performance provides an overview ofthe Network's financial activities for the fiscal year ended June 30, 2010. Please read in conjunction with the Network's financial statements. Financial Highlights The Network's net assets decreased by $68,853, or 23% ofthe beginning value ofthe station's net assets, during the year ended June 30,2010. Most ofthe decrease is attributed to depreciation (89,709 for FY 2010). The other major change was in the deferred revenue category. This current liability mcreased by close to $300,000 and it represents unexpended amounts received by the network to be spent on a newer facility to house the radio network. Using the Annual Report This armual report consists of Management's Discussion and Analysis, the basic financial statements, and notes to the fmancial statements. Management's Discussion & Analysis provides a narrative ofthe ' Network's fmancial performance and activities for the year ended June 30,2010. The basic financial statements provide readers with a broad view ofthe Network's fmances, in a manner similar to a private-sector business. The notes provide additional information that is essential to a fiiU understanding ofthe data provided in the basic financial statements. The basic financial statements consist of three statements: • The Statement ofFinancial Position present infonnation on all ofthe Network's assets and liabilities, with the difference between the two reported as net assets. Over time, increases and decreases in net assets may serve as a useful indicator of whether the financial position ofthe Network is improving or deterioratmg. • The Statement of Activities presents information showing how the Network's net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless ofthe tunmg ofthe related cash flows. Certain revenues and expenses are reported in this statement that will result in cash flows in fiiture periods. • The Statement of Cash Flows presents information how the Network's cash changed during the most recent fiscal year. It shows the sources and uses of cash. Financial Analysis of the Network as a Whole A summary of net assets is presented below. Table I Net Assets 2010 2009 % Change Current and other assets 317,858 15,120 2002% Capital assets, net of depreciation 233,108 322,817 -28% Total Assets 550,966 337,937 63% Current Liabilities 372,006 91,361 307% Noncurrent Liabilities 38,525 37,288 3% Total Liabilities 410,531 128,649 219% Restricted Net assets 173,455 244,690 -29% Unrestricted net assets (33,020) (35,402) -7% Total Net Assets 140,435 209,288 -33% Invested in capital assets represent the Network's long term investment in capital assets, net of accumulated depreciation, and not available for current operations A summary of changes in net assets is presented below Table 2 > Changes in Net Assets 2010 2009 % Change Operating Reveunes (memberships, underwriting, leasise agreements, non capital grants) 912,409 897,455 2% Total Reveunes 912,409 897,455 2% Operating Expenses Depreciation 89,709 89,709 0% Otiier 891,553 905,178 -2% Total Expenses 981,262 994,887 -1% Capital Contributions _ 11,625 -100% Change in net assets (68,853) (85,807) 20% Capital Assets For the year ending June 30,2010, the Network had no capital activities as the conversion of its broadcasting equipment into high definition (HD) broadcasting has already been completed during the year ending June 30,2009. Non-Current Liabilities The Network's non-current Liabilities consist of accrued compensated absences for annual and sick leave payable. These liabilities increased by $1,237 during the fiscal year, fi'om $37,288 at the beginning of the year to $38,525 at the end of tiie year. Other Currently known Facts, Decisions, or Conditions The network continues to make infrastructure updates to improve the reliability and quality of service. Back-up power was installed at the Alexandria and Shreveport transmitters. This meant tying into Louisiana Public Broadcasting generators with our own automatic switching systems. This work was completed in June. In tiie fiiture, the network will seek fimdmg for back-up power systems in El Dorado and Lufkin. Also, capital funds were raised to begin the project of creatmg a new studio facility for the network. Initial design work has been completed. Remaining fiinds will be raised, and the project completed over the course ofthe coming year. Also, flagship station KDAQ will continue to celebrate its 25^ anniversary during the coming year. Contacting the Network's Financial Management This financial report is designed to provide a general overview ofthe Network's accountability for the money it receives. If you have questions about this report or you need additional information, please contact the Red River Radio Network at Louisiana State University in Shreveport, One University Place, Shreveport, Louisiana 71115. U! AUDITED FINANCIAL STATEMENTS HEARD, MCELROY, & VESTAL . __ iLLP CERTIFIED PUBLIC ACCOUNTANTS 333 TriNAS STKEET. SUITE 1525 SHREVEI'OUT, LOUISIANA 71101 31S-429-1525 PHONE • 318-429-2070 FAX December 9, 2010 Louisiana State University in Shreveport State of Louisiana Shreveport, Louisiana Independent Auditor's Report We have audited the accompanying statement of financial position, statement of activities, and statement of cash flows of Radio Stations KDAQ-FM, KLSA-FM. KBSA-FM. and KLDN-FM, Louisiana State University in Shreveport, public telecommunications entities operated by Louisiana State University in Shreveport, as of and for the year ended June 30,2010 (with summarized totals for 2009). These financial statements are the responsibility of management of the radio stations. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and 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 audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial stetements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opmion. As described-in Note 1, die financial statements of Radio Stations KDAQ-FM, KLSA-FM, KBSA-FM, and KLDN-FM, Louisiana State University in Shreveport, are intended to present the financial position, changes in net assets, and cash flows on only that portion ofthe fimds ofLouisiana State University in Shreveport that is attributable to tile transactions ofthe radio stations. In our opinion, the financial statements referred to above present fairly, in all material respects, tiie financial position of Radio Stations KDAQ-FM, KLSA-FM, KBSA-FM. and KLDN-FM. Louisiana State University in Shreveport, at June 30,20.10, and the changes in net assets and tiie cash flows for tiie year then ended, in conformity with accounting principles generally accepted in tiie United States of America. The management's discussion and analysis on Pages i-iii is not a requked part ofthe basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of tiie required supplementary information. However, we did not audit tiie information and ejqjress no opinion on it. In accordance with Government Auditing Standards, we have also issued a report dated December 9 2010 on our consideration of tiie Radio Stations KDAQ-FM, KLSA-FM, KBSA-FM, and KLDN-FM, Louisiana Smte Uiiiversity in Shreveport's intemal conti-ol over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and otiier matters. The purpose of tiiat report is to describe tiie scope of our testing of intemal contiol over financial reporting and compliance and tiie results of tiiat testing, and not to provide an opinion on the internal conti-ol over financial reporting or on compliance. That report is an integral part of an audit perfbnned m accordance wifli Government Auditing Standards and should be considered in assessing tiie results of our audit.

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