TOLEDO-LUCAS COUNTY PORT AUTHORITY AUDITED FINANCIAL STATEMENTS AND OTHER SUPPLEMENTARY INFORMATION AND INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED DECEMBER 31, 2016 Board of Directors Toledo-Lucas County Port Authority One Maritime Plaza Toledo, Ohio 43604 We have reviewed the Independent Auditor’s Report of the Toledo-Lucas County Port Authority, Lucas County, prepared by Gilmore Jasion & Mahler, LTD, for the audit period January 1, 2016 through December 31, 2016. Based upon this review, we have accepted these reports in lieu of the audit required by Section 117.11, Revised Code. The Auditor of State did not audit the accompanying financial statements and, accordingly, we are unable to express, and do not express an opinion on them. Our review was made in reference to the applicable sections of legislative criteria, as reflected by the Ohio Constitution, and the Revised Code, policies, procedures and guidelines of the Auditor of State, regulations and grant requirements. The Toledo-Lucas County Port Authority is responsible for compliance with these laws and regulations. Dave Yost Auditor of State November 16, 2017 88 East Broad Street, Fifth Floor, Columbus, Ohio 43215‐3506 Phone: 614‐466‐4514 or 800‐282‐0370 Fax: 614‐466‐4490 www.ohioauditor.gov This page intentionally left blank. CONTENTS PAGE INDEPENDENT AUDITOR’S REPORT ................................................................................... 1 - 3 MANAGEMENT’S DISCUSSION AND ANALYSIS .............................................................. 4 - 11 STATEMENT OF NET POSITION ............................................................................................ 12 - 13 STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION ............. 14 STATEMENT OF CASH FLOWS.............................................................................................. 15 - 16 NOTES TO FINANCIAL STATEMENTS ................................................................................. 17 - 44 SCHEDULE OF NET POSITION INFORMATION BY DIVISION.......................................... 45 SCHEDULE OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION INFORMATION BY DIVISION ........................................................................................... 46 SCHEDULE OF THE AUTHORITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABLILITY ........................................................................................................ 47 SCHEDULE OF AUTHORITY CONTRIBUTIONS .................................................................. 48 SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS .................................................. 49 NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS ................................ 50 SCHEDULE OF PASSENGER FACILITY CHARGES COLLECTED AND EXPENDED – CASH BASIS ................................................................................................ 51 NOTES TO SCHEDULE OF PASSENGER FACILITY CHARGES COLLECTED AND EXPENDED – CASH BASIS ...................................................................................... 52 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO THE PASSENGER FACILITY CHARGE PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE ................................................................. 53 - 54 INDEPENDENT AUDITOR’S 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 ....................................................................... 55 - 56 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM; REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE ................................................................... 57 - 58 SCHEDULE OF FINDINGS AND QUESTIONED COSTS ....................................................... 59 SCHEDULE OF STATUS OF PRIOR YEAR (2015) AUDIT FINDINGS ................................ 60 This page intentionally left blank. INDEPENDENT AUDITOR’S REPORT Board of Directors Toledo-Lucas County Port Authority Toledo, OH Report on the Financial Statements We have audited the accompanying financial statements of Toledo-Lucas County Port Authority, which consists of the statement of net position as of December 31, 2016, and the related statements of revenues, expenses and changes in net position 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 audit. 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 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. GJMLTD.COM TOLEDO OFFICE: 1715 INDIAN WOOD CIR, STE 100 PHONE: 419.794.2000 MAUMEE OH 43537‐4055 FAX: 419.794.2090 RSM US Alliance member firms are separate and independent businesses and legal FINDLAY OFFICE: entities that are responsible for their own acts and omissions, and each are separate 551 LAKE CASCADES PKWY PHONE: 419.423.4481 and independent audit, tax, and consulting firms. Members of RSM US Alliance have PO BOX 1106 FAX: 419.423.4865 access to RSM International resources through RSM US LLP but are not member firms of RSM International. FINDLAY OH 45839‐1106 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Toledo-Lucas County Port Authority as of December 31, 2016, and the changes in its net position and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that management’s discussion and analysis on pages 4 - 11 be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by GASB who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that comprise the Toledo-Lucas County Port Authority’s financial statements. The accompanying schedule of expenditures of federal awards on page 49 is presented for purposes of additional analysis, as required by the Single Audit Act and 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); the accompanying schedule of passenger facility charges collected and expended – cash basis on page 51 is presented for purposes of additional analysis as specified in the Passenger Facility Charge Audit Guide for Public Agencies issued by the Federal Aviation Administration; and the supplementary information