Financial Statements Audit Report Midway Sewer District King County
37 Pages
English

Financial Statements Audit Report Midway Sewer District King County

-

Downloading requires you to have access to the YouScribe library
Learn all about the services we offer

Description

Washington State Auditor’s Office Financial Statements Audit Report Midway Sewer District King County Audit Period January 1, 2009 through December 31, 2009 Report No. 1004778 Issue Date December 20, 2010 Washington State Auditor Brian Sonntag December 20, 2010 Board of Commissioners Midway Sewer District Kent, Washington Report on Financial Statements Please find attached our report on the Midway Sewer District’s financial statements. We are issuing this report in order to provide information on the District’s financial condition. Sincerely, BRIAN SONNTAG, CGFM STATE AUDITOR Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (360) 902-0370  TDD Relay (800) 833-6388 FAX (360) 753-0646  http://www.sao.wa.gov Table of Contents Midway Sewer District King County January 1, 2009 through December 31, 2009 Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters in Accordance with Government Auditing Standards ................. 1 Independent Auditor’s Report on Financial Statements .............................................................. 3 Financial Section ........................................................................................ 5 Independent Auditor’s Report on Internal Control over Financial Ring and on Compliance and Other Matters in ...

Subjects

Informations

Published by
Reads 35
Language English

Washington State Auditor’s Office

Financial Statements Audit Report






Midway Sewer District
King County



Audit Period
January 1, 2009 through December 31, 2009


Report No. 1004778























Issue Date
December 20, 2010




Washington State Auditor
Brian Sonntag



December 20, 2010


Board of Commissioners
Midway Sewer District
Kent, Washington


Report on Financial Statements

Please find attached our report on the Midway Sewer District’s financial statements.

We are issuing this report in order to provide information on the District’s financial condition.

Sincerely,

BRIAN SONNTAG, CGFM
STATE AUDITOR

Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (360) 902-0370  TDD Relay (800) 833-6388
FAX (360) 753-0646  http://www.sao.wa.gov
Table of Contents

Midway Sewer District
King County
January 1, 2009 through December 31, 2009


Independent Auditor’s Report on Internal Control over Financial Reporting and on
Compliance and Other Matters in Accordance with Government Auditing Standards ................. 1
Independent Auditor’s Report on Financial Statements .............................................................. 3
Financial Section ........................................................................................ 5

Independent Auditor’s Report on Internal
Control over Financial Ring and on
Compliance and Other Matters in Accordance
with Government Auditing Standards

Midway Sewer District
King County
January 1, 2009 through December 31, 2009


Board of Commissioners
Midway Sewer District
Kent, Washington


We have audited the basic financial statements of the Midway Sewer District, King County,
Washington, as of and for the years ended December 31, 2009 and 2008, and have issued our
report thereon dated December 3, 2010.

We conducted our audits in accordance with auditing standards generally accepted in the
United States of America and the standards applicable to the financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States.

INTERNAL CONTROL OVER FINANCIAL REPORTING

In planning and performing our audits, we considered the District’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, but not for the purpose of expressing an opinion on the
effectiveness of the District’s internal control over financial reporting. Accordingly, we do not
express an opinion on the effectiveness of the District’s internal control over financial reporting.

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 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 District's financial statements will not be
prevented, or detected and corrected on a timely basis.

Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all deficiencies
in internal control that might be deficiencies, significant deficiencies or material weaknesses.
We did not identify any deficiencies in internal control over financial reporting that we consider
to be material weaknesses, as defined above.

_________________________________________________________________________________________________________
Washington State Auditor's Office
1COMPLIANCE AND OTHER MATTERS

As part of obtaining reasonable assurance about whether the District’s financial statements are
free of material misstatement, we performed tests of the District’s compliance with certain
provisions of laws, regulations, contracts and grant agreements, noncompliance with which
could have a direct and material effect on the determination of financial statement amounts.
However, providing an opinion on compliance with those provisions was not an objective of our
audit, and accordingly, 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.

This report is intended for the information and use of management and the Board of
Commissioners. However, this report is a matter of public record and its distribution is not
limited. It also serves to disseminate information to the public as a reporting tool to help citizens
assess government operations.


BRIAN SONNTAG, CGFM
STATE AUDITOR

December 3, 2010

_________________________________________________________________________________________________________
Washington State Auditor's Office
2Independent Auditor’s Report on Financial
Statements

Midway Sewer District
King County
January 1, 2009 through December 31, 2009


Board of Commissioners
Midway Sewer District
Kent, Washington


We have audited the accompanying basic financial statements of the Midway Sewer District,
King County, Washington, as of and for the years ended December 31, 2009 and 2008, as
listed on page 5. These financial statements are the responsibility of the District’s management.
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 of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. 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 audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the Midway Sewer District, as of December 31, 2009 and 2008, and the
changes in financial position and cash flows thereof for the years 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 our report on our
consideration of the District’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 and
should be considered in assessing the results of our audits.

The management’s discussion and analysis on pages 6 through 10 is not a required part of the
basic financial statements but is supplementary information required by the Governmental
Accounting Standards Board. We have applied certain limited procedures, which consisted
principally of inquiries of management regarding the methods of measurement and presentation
of the required supplementary information. However, we did not audit the information and
express no opinion on it.

_________________________________________________________________________________________________________
Washington State Auditor's Office
3The Schedule of Operating Expense, Schedule of Long-Term Debt Principal and Interest
Requirements, Schedule of Liens on File and Schedule of Changes to Construction Work in
Progress are not a required part of the basic financial statements but are supplementary
information presented for purposes of additional analysis. Such information has not been
subjected to the auditing procedures applied in the audit of the basic financial statements and,
accordingly, we express no opinion on it.


BRIAN SONNTAG, CGFM
STATE AUDITOR

December 3, 2010

_________________________________________________________________________________________________________
Washington State Auditor's Office
4Financial Section

Midway Sewer District
King County
January 1, 2009 through December 31, 2009


REQUIRED SUPPLEMENTAL INFORMATION

Management’s Discussion and Analysis – 2009 and 2008


BASIC FINANCIAL STATEMENTS

Balance Sheet – 2009 and 2008
Statement of Revenues, Expenses and Changes in Net Assets – 2009 and 2008
Statement of Cash Flows – 2009 and 2008
Notes to Financial Statements – 2009 and 2008

SUPPLEMENTAL INFORMATION

Schedule of Operating Expense – 2009 and 2008
Schedule of Long-Term Debt Principal and Interest Requirements for the Two Years
Ending December 31, 2011
Schedule of Liens on File – 2009 and 2008
Schedule of Changes to Construction Work in Progress – 2009 and 2008


_________________________________________________________________________________________________________
Washington State Auditor's Office
5The balance sheet provides a record, or snap MIDWAY SEWER DISTRICT
shot, of the assets and liabilities of the District
at the close of the year. It provides INTRODUCTION information about the nature and amounts of investments in resources (assets) and the Midway Sewer District was organized in 1946 obligations to District creditors (liabilities). It to provide sewer services to customers provides a basis for evaluating the capital residing within the District boundaries. Our structure of the District and assessing its mission is to provide quality customer service liquidity and financial flexibility. and protect public health with cost effective, reliable, environmentally responsible The statement of revenues, expenses and wastewater collection and treatment. changes in net assets presents the results of the District’s business activities over the course of MANAGEMENT’S DISCUSSION the year. This information can be used to
AND ANALYSIS determine whether the District has
successfully recovered all its costs through its
This section of management’s discussion and user fees and other charges, and to evaluate
analysis presents our review of the District’s our profitability and credit worthiness.
financial position as of December 31, 2009
and 2008 and our financial performance for The statement of cash flows reports cash
the years then ended. Please read these receipts, cash payments and net changes in
comments in conjunction with the District’s cash resulting from operating, financing and
financial statements, which follow this investing activities over the course of the year.
section. It presents information regarding where cash
came from and what it was used for.
OVERVIEW OF THE FINANCIAL
STATEMENTS The notes to the financial statements provide
useful information regarding the District’s
The financial statements include a balance significant accounting policies, explain
sheet, statement of revenues, expenses and significant account balances and activities,
changes in net assets, statement of cash flows certain material risks, estimates, obligations,
and notes to the financial statements. commitments, contingencies, and subsequent
events, if any.
















_________________________________________________________________________________________________________
Washington State Auditor's Office
6CONDENSED FINANCIAL INFORMATION

CONDENSED BALANCE SHEETS AT DECEMBER 31
2009 2008 2007
Capital assets $ 57,236,998 $ 55,205,276 $ 55,348,878
Other assets 17,732,007 16,281,263 14,532,145
Total assets $ 74,969,005 $ 71,486,539 $ 69,881,023
Long term liabilities 4,858,954 2, 474,567 2, 013,505
Other Liabilities 1,165,350 836,169 1, 021,520
Total liabilities $ 6,024,304 $ 3,310,736 $ 3,035,025
Capital assets, net of related debt 52,825,539 53,231,994 53,378,647
Restricted for impaired investments 58,281 28,038 -
Unrestricted amounts 16,060,881 14,915,771 13,467,351
Total net assets $ 68,944,701 $ 68,175,803 $ 66,845,998
CONDENSED STATEMENTS OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS FOR THE YEAR ENDED
2009 2008 2007
Sewer service charges $ 6,207,207 $ 5,887,594 $ 6,256,133
Other operating revenue 54,585 74,402 66,401
Total operating revenues 6,261,792 5, 961,996 6, 322,534
Operating costs 2,224,741 2, 142,975 2, 203,692
General and administrative expenses 1,575,720 1, 506,968 1, 472,250
Depreciation and amortization 1,844,021 1, 816,579 1, 766,642
Total operating expenses 5,644,482 5, 466,522 5, 442,584
Operating Income 617, 310 495,474 879,950
Non-operating revenue:
Interest 219, 567 334,654 631,819
Other 101, 895 103,862 48,945
Non-operating expenses:
Interest (3,122)
Asset disposal ( 395,556) - (229,290)
Income before capital contributions 540, 094 933,990 1, 331,424
Capital contributions 228, 804 395,815 991,250
Increase in net assets $ 768,898 $ 1,329,805 $ 2,322,674



FINANCIAL POSITION and donated systems. Capital assets decreased
in 2008 due to depreciation in excess of
The District’s overall financial position construction activity and donated systems.
continues to be strong. The District is
financed primarily by equity. Substantial
liquid assets are available to fund liabilities The following charts indicate the components
and construction. Capital assets increased in of financial position.
2009 due to substantial construction activity
_________________________________________________________________________________________________________
Washington State Auditor's Office
7