Northeast Oregon Economic Development District Baker, Union and Wallowa Counties, Oregon. Annual Financial Report

Transcription

1 Northeast Oregon Economic Development District Baker, Union and Wallowa Counties, Oregon Annual Financial Report June 30, 2016

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3 Table of Contents INTRODUCTORY SECTION: Board of Directors... i FINANCIAL SECTION: Independent Auditors Report Management s Discussion and Analysis Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position... 9 Statement of Activities Fund Financial Statements: Governmental Funds Financial Statements Balance Sheet Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Statement of Revenues, Expenditures, and Changes in Fund Balances Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities Proprietary Fund Financial Statements Statement of Net Position Statement of Revenues, Expenses, and Changes in Fund Net Position Statement of Cash Flows Notes to Basic Financial Statements Required Supplementary Information: Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: General Fund Northeast Oregon Business Development Administration Fund E.D.A. Planning Grant Fund Brownsfields Assessment Fund Agri-Tourism RBDG Fund Notes to Required Supplementary Information Supplementary Information Combining Statements of Revenues, Expenditures, and Changes in Fund Balances - General Funds Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: General Fund Indirect Costs Fund Car Fund Schedules of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual: Nonmajor Governmental Funds Agri-Touism RBEG Schedules of Revenues, Expenses and Changes in Fund Balance - Budget and Actual - Major Proprietary Funds: E.D.A. Revolving Loan Fund IDA Fund RBEG Revolving Loan Fund Local Investing Fund Contract Services Fund Combining Statements - Nonmajor Proprietary Funds: Statement of Net Position Statement of Revenues, Expenses and Changes in Fund Net Position Statement of Cash Flows... 50

4 Table of Contents Schedules of Revenues, Expenses and Changes in Fund Balance - Budget and Actual - Nonmajor Proprietary Funds: MICRO CDBG Fund Wallowa Micro CDBG Fund Rural Tourism Studies Fund AGORA Fund Food Initiatives Fund INDEPENDENT AUDITORS REPORT ON COMPLIANCE AND INTERNAL CONTROL REQUIRED BY OREGON STATE REGULATIONS AUDIT DELIVERABLES REQUIRED BY THE SINGLE AUDIT ACT OF 1996: Schedule of Expenditures of Federal Awards Notes to Schedule of Expenditures of Federal Awards 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 Independent Auditor s Report on Compliance for Each Major Program and on Internal Control Over Compliance Required by The Uniform Guidance Schedule of Findings and Questioned Costs Summary Schedule of Prior Audit Findings... 67

5 INTRODUCTORY SECTION

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7 District Officials Administrative Office: 101 NE First Street, Suite 100 Enterprise, Oregon Executive Director: Lisa Dawson BOARD OF DIRECTORS Member County Representation Robert Strope, Chairman Union City Government Michele Young, First Vice Chairman Wallowa City Government Mark Bennett Baker County Government Debbie Gargalis Baker Labor Richard Langrell Baker City Government Ed Hibbard Baker Private Sector Bill Harvey Baker County Government Robert Parker Baker Economic Development Steve McClure (Alternate) Union County Government Mark Davidson Union County Government Don Waldrop Union Private Sector Kristen Dollarhide Union Private Sector Tim Seydel Union Public Education Jack Howard Union County Government Joe McCormack Wallowa Tribal Government Susan Roberts Wallowa County Government Vicki Searles Wallowa Private Sector Paul Castilleja Wallowa County Government Dennis Sands Wallowa City Government Ron Gay Wallowa Private Sector All board members can be contacted at: 101 NE First Street, Suite 100 Enterprise, OR The District has not designated a registered agent. i

8 FINANCIAL SECTION

9 LEWIS, POE, MOELLER, GUNDERSON & ROBERTS, LLC CERTIFIED PUBLIC ACCOUNTANTS 1121 ADAMS AVENUE P.O. BOX 1024 LA GRANDE, OREGON Independent Auditors' Report Board of Directors Northeast Oregon Economic Development District 101 NE First Street, Suite 100 Enterprise, Oregon Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of Northeast Oregon Economic Development District, as of and for the year ended June 30, 2016, and the related notes to the financial statements which collectively comprise the District's basic financial statements as listed in the table of contents. 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 opinions 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 of 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 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 estimated 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 opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of Northeast Oregon Economic Development District, as of June 30, 2016, and the respective changes in financial position, and where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. 1

10 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management s discussion and analysis on pages 4 through 8, and the budgetary comparison information on pages 32 through 36 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the management discussion and analysis 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 basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the management discussion and analysis information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The budgetary comparison information is the responsibility of management and was derived from, and, relate directly to, the underlying accounting and other records used to prepare the financial statements. This information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Northeast Oregon Economic Development District s basic financial statements. The introductory section and combining and individual fund financial statements are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. The combining and individual fund financial statements and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic 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 fund financial statements and the schedule of expenditures of federal awards are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory section has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on it. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 8, 2016, on our consideration of Northeast Oregon Economic Development 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 in considering Northeast Oregon Economic Development District s internal control over financial reporting on compliance. 2

11 Report on Other Legal and Regulatory Requirements In accordance with Minimum Standards for Audits of Oregon Municipal Corporations, we have issued our report dated November 8, 2016, on our consideration of Northeast Oregon Economic Development District s compliance with certain provisions of laws and regulations, including the provisions of Oregon Revised Statutes as specified in Oregon Administrative Rules. The purpose of that report is to describe the scope of our testing of compliance and the results of that testing and not to provide an opinion on compliance. LEWIS, POE, MOELLER, GUNDERSON & ROBERTS, LLC Certified Public Accountants By Brent M. Gunderson, CPA Owner/Member La Grande, Oregon November 8,

12 Management's Discussion and Analysis The Northeast Oregon Economic Development District (District) presents its annual audited financial report for the year ending June 30, The format of the financial statements is designed to provide a comprehensive picture of the District s financial health and activities. The information presented should be read in conjunction with the financial statements and notes to the financial statements that follow. FINANCIAL HIGHLIGHTS The District s government-wide total assets and deferred outflows exceeded total liabilities and deferred inflows as of June 30, 2016 by $1,236,384 (net position), up from $1,158,027 in Overall, the District s net position increased $78,357 during the year. Of total net position, $322,588 is unrestricted net position, $912,333 is restricted for revolving loan programs and $863 is invested in capital assets. Part of the unrestricted net position is available to meet the District s ongoing operating costs. During the year, governmental activities net position decreased by $5,281. During the year, business-type activities net assets increased by $83,638. The District earned $1,297 in bank interest income during the year. The District did not incur any new long-term debt. OVERVIEW OF THE FINANCIAL STATEMENTS This annual report consists of four components: 1) management s discussion and analysis (this section); 2) basic financial statements; 3) required supplementary information; 4) supplementary information. The basic financial statements include two kinds of statements that present different views of the District: The first two statements are government-wide financial statements that provide both long-term and short-term information about the District s overall financial status. The remaining statements are fund financial statements that focus on individual parts of the government, reporting the District s operations in more detail than the government-wide statements. The governmental funds statements tell how general government services were financed in the short term as well as what remains for future spending. Proprietary fund statements offer short and long-term financial information about the activities the government operates like businesses. The basic financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. Government-Wide Financial Statements The government-wide statements report information about the District as a whole using accounting methods similar to those used by private-sector companies. The Statement of Net Position presents information on all of the District s assets, deferred outflows, liabilities, and deferred inflows with the difference between the two reported as net position. This statement serves a purpose similar to that of the balance sheet of a private-sector business. Over time, increases or decreases in net position may serve as one indicator of whether the financial position of the District is improving or deteriorating. The Statement of Activities presents information showing how the District s net position changed during the fiscal year. In this statement we divide the District into two kinds of activities: Governmental activities - Most of the District s basic services are included here, such as economic development. State and Federal grants finance most of these activities. 4

13 Business-type activities - The District charges fees to customers to help it cover the costs of certain services it provides. Economic development, technical assistance and lending services are included here. Economic Development, program and board administration includes activities for which the District is taking a lead role in organizing the activities of a board, providing administrative services for a board and working to improve the economy of the region. Technical assistance includes activities for which the District is either taking a support role in providing grant writing or grant administration, board development services, project management assistance to another organization, or implementing a grant funded project. The District operates two lending programs for businesses which are included in the lending category. The following table shows the funds within the district by type and category. Fund Name Type Economic Development Categories Lending Technical Assistance General Fund Governmental X NOBD Admin Fund Governmental X EDA Planning Grant Fund Governmental X Brownfields Assessment Governmental X Agri-Tourism RBGD Governmental X Agri Tourism RBEG Governmental X EDA RLF Fund Proprietary RBEG RLF Fund Proprietary Food Initiatives Proprietary X Contract Services Fund Proprietary Local Investing Fund Proprietary X Micro CDBG Fund Proprietary Wallowa Micro CDBG Proprietary Agora Fund Proprietary X IDA Fund Proprietary X Rural Tourism Studies Proprietary X Fund Financial Statements X X X X X The fund financial statements provide more detailed information about the District s most significant funds-not the District as a whole. Funds are accounting devices that the District uses to keep track of specific sources of funding and spending for particular purposes. The District has two kinds of funds: Governmental Funds - Most of the District s basic services are included in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. Consequently, the governmental funds statements provide a detailed short-term view that helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the District s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, we describe the relationship (or differences) between governmental activities (reported in the Statement of Net Assets and Statement of Activities) and governmental funds in a reconciliation on the subsequent page to the fund financial statements. Proprietary Funds - Services for which the District charges a fee are generally reported in proprietary funds. Proprietary funds, like the government-wide statements, provide both long- and short-term financial information. In fact, the District s enterprise funds (a component of proprietary funds) are the same as the business-type activities we report in the government-wide statements but provide more detail and additional information, such as cash flows. 5

14 FINANCIAL ANALSYIS OF THE DISTRICT AS A WHOLE Statement of Net Position As noted earlier, changes in net position may serve as a useful indicator of a government s financial position. The District s net assets totaled $1,158,027 as of June 30, Table 1 below is a condensed version of the Government- Wide Statement of Net Position comparing the current fiscal year with the prior. Table 1 Governmental Activities 6/30/15 6/30/16 Business-Type Activities 6/30/15 6/30/16 Totals 6/30/15 6/30/16 Current Assets Capital Assets Other Noncurrent Assets Total Assets $ 94,200 $ 133,440 $ 560,143 $ 601,129 $ 654,343 $ 734,569 2, , , , , , , ,103 1,053,232 2, ,487 1,190, ,470 1,290,013 Current Liabilities Long-Term Liabilities Total Liabilities 10,644 9,451 20,095 36,709 9,577 46,286 6,048 1,829 16,692 38,538 6,280 5,514 15,731 15,091 12,328 7,343 32,423 53,629 Invested in capital assets, net of related debt Restricted for revolving loan program Unrestricted Total Net Position $ 2, , , , , ,632 $ 190,495 75,941 $ 962, ,956 $ 1,045,889 2, , , ,652 $ 1,158, ,588 $ 1,236,384 By far, the District s largest portion of net position is in the business-type activities, particularly related to loan receivables. Changes in Net Position Table 2 and the narrative that follows provide our analysis on the changes to net position. Revenues: Program Revenues: Charges for Services Operating Grants General Revenues: Interest Income Miscellaneous Income Total Revenues Expenses: Economic Development Lending Technical Assistance Depreciation - Unallocated Total Expenses Transfers Change in Net Position Table 2 Governmental Business-Type Activities Activities Totals 6/30/15 6/30/16 6/30/15 6/30/16 6/30/15 6/30/16 $ 53,161 $ 52,416 $ 118,716 $ 162,468 $ 171,877 $ 214, , ,744 67,829 53, , , ,519 27, , , , , , ,190 1,297 27, , , ,000 95,790 43, , ,227 25,477 23,355 25,477 23,355 48,906 66,926 48,906 66,926 2,454 2, ,454 2, , , , , , ,854 27,462 (487) (27,462) $ 5,419 $ (5,281) $ (10,874) $ 83,638 $ (5,455) $ 78,357 6

15 The overall financial position of the District increased during the past year. Net position increased by a total of $78,357 for the year ending June 30, 2016 while they decreased $5,455 for the year ending The governmental activities of the district had a loss of $5,281. The business-type activities of the District had a gain of $83,638. The District s total revenues increased by over 33% and total expenses increased by over 10%. The majority of the increases were related to the new Brownfields Assessment Fund and Local Investing Fund which both received additional grants in the current year. FINANCIAL ANALYSIS OF THE DISTRICT S FUNDS Governmental Funds Analysis The District maintains six governmental funds and each fund has a unique purpose. Five funds are classified as major funds for the purposes of this report, based on criteria set forth by the Governmental Accounting Standards Board. The activity in the major funds is described below. The fund balance in the General Fund decreased by $5,809 during the year. Revenues, including transfer in were $8,112 and expenses, including transfers out, were $13,921. The fund balance in the E.D.A. Planning Grant Fund did not change during the year. Revenues, including transfers in and expenses were both $89,568. The fund balance in the NOBD Administration Fund increased by $882 during the year. Revenues and expenses were $53,299 and $52,417 respectively. The fund balance in the Brownfields Assessment Fund decreased by $7,289 during the year. Revenues were $93,440 and expenses were $100,729. The Environmental Protection Agency does not allow indirect (overhead) costs to be reimbursed with their funds; therefore, NEOEDD will lose money on this grant while providing funds for environmental assessments in the region. The fund balance in the Agri-Tourism RBDG Fund increased by $8,636 during the year. Revenues, including tranfers in were 37,910 and expenses, including transfers out were $29,274. Proprietary Funds Analysis Proprietary funds or enterprise funds are those funds that account for government operations where the intent is for the costs to be primarily paid for by the beneficiary. The business-type activities of the District are accounted for in ten enterprise funds. Five of these funds are classified as major funds for the purposes of this report. The activity in the major funds is described below. The fund balance in the EDA Revolving Loan Fund increased by $19,628 during the year. Revenues were $38,388 and expenses were $18,760. The fund balance in the IDA Fund increased by $8,402. Revenues were $24,395 and expenses were $15,993. The fund balance in the RBEG RLF Fund increased by $4,607. Revenues were $9,202 and expenses were $4,595. The fund balance in the Local Investing Fund increased by $32,622. Revenues were $54,141 and expenses were $21,519. The fund balance in the Contracted Services Fund increased by $17,044. Revenues were $57,796 and expenses were $40,752. Budgetary Highlights The District budgets on an annual basis in accordance with the requirements of Local Budget law. The District is organized as a council of governments (COG). COG budget laws do not require the District to appropriate funds and allow the District to over-expend budgeted amounts and to spend unappropriated ending fund balances. No budget amendments were adopted by the District during the year. There were a few significant differences between budgeted and actual revenues and expenditures in the general fund. Capital outlays in the general fund were less than budgeted. $8,000 was budgeted for capital outlays and $700 was expended. Miscellaneous revenues were not budgeted, but totaled $1,941 due to some unexpected miscellaneous revenue. Transfers out were budgeted for 699, but totaled $12,777. 7

16 The Northeast Oregon Business Development Administration Fund had revenues and expenditures approximately $16,000 less than budgeted. The greatest variances in cost were in contractual services which were $13,647 less than budgeted. Administrative revenue is budgeted to equal expenses. The Brownfields Assessment Fund had budgeted revenues of $150,000; however revenues only totaled $93,440. Expenditures were lower than budgeted by a total of $151,350. Expenses in most accounts were less than budgeted, but contractual services accounted for the biggest difference between budgeted and actual expenses. Contractual services expenses were $64,884 less than budgeted. The Planning Grant expenditures were approximately $14,544 higher than budgeted. A transfer in of $12,777 covered costs greater than the grant amount. Most costs were slightly higher than budgeted. The cost that was significantly higher than budgeted was salary cost which was $8,366 greater than budgeted and employee insurance which was $3,209 greater than budgeted. The Agri-Tourism RBDG revenues were approximately $12,170 lower than budgeted. Expenditures were $20,799 lower than budgeted. The greatest difference in expenditures was for contracted services which were $19,000 lower than budget. The EDA Revolving Loan Fund revenues were $4,673 less than expected while expenses were $2,645 less than expected. Revenues for the IDA fund were $1,305 more than expected. Expenses were $1,169 less than budgeted. The Local Investing Fund revenues were $24,138 more than budgeted. Expenses were $16,052 less than budgeted due to decreased revenue. The RBEG Revolving Loan Fund revenue was $1,056 more than budgeted. Expenditures were $1,014 less than budgeted. The Contracted Services Fund revenue was $8,572 more than budgeted. budgeted. Expenditures were $4,001 less than CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets The District s investment in capital assets for its governmental activities as of June 30, 2016 totaled $36,561, net of accumulated depreciation it was $974. This investment is comprised solely of office equipment and a vehicle. Current year additions amounted to $700. Long-Term Debt The District has no long-term debt other than a capital lease of copy machine. ECONOMIC FACTORS AND NEXT YEAR S BUDGET The District s budget is based entirely upon grants, contracts and fees for services. District staff is actively pursuing funding opportunities to continue and improve entrepreneurial support activities. At this time, it is hard to project whether or not new contracts or grants will be received or continued. The District anticipates that these may be opportunities to contract for Community Development Block Grant administration services in the coming year. CONTACT THE DISTRICT This financial report is designed to provide the public, grantors and others with a general overview of the District s finances and to demonstrate the District s accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to: Northeast Oregon Economic Development District 101 NE First Street, Suite 100 Enterprise, OR fax lisadawson@neoedd.org 8

17 BASIC FINANCIAL STATEMENTS

18 GOVERNMENT-WIDE FINANCIAL STATEMENTS

19 Statement of Net Position June 30, 2016 Governmental Business-Type Activities Activities Total Assets Current assets: Cash and investments $ 44,950 $ 449,596 $ 494,546 Accounts receivable 59,359 51, ,426 Accrued interest receivable - 2,194 2,194 Notes receivable, net (current) 16, , ,403 Internal balances 12,671 (12,671) - Total current assets 133, , ,569 Capital assets: Equipment & furniture 36,561-36,561 Accumulated depreciation (35,587) - (35,587) Total capital assets, net of depreciation Other noncurrent assets: Notes receivable - NOBD 102, ,367 Notes receivable - 452, ,103 Total other noncurrent assets 102, , ,470 Total assets 236,781 1,053,232 1,290,013 Deferred outflows of resources Liabilities Current liabilities: Accounts payable 36,598 1,829 38,427 Current Portion of long-term obligations Total current liabilities 36,709 1,829 38,538 Noncurrent liabilities: Compensated absences 9,577 5,514 15,091 Total liabilities 46,286 7,343 53,629 Deferred inflows of resources Net Position Net investment in capital assets Restricted for revolving loan programs - 912, ,933 Unrestricted 189, , ,588 Total net position $ 190,495 $ 1,045,889 $ 1,236,384 (The accompanying notes are an integral part of these financial statements) 9

20 Statement of Activities For the Fiscal Year Ended June 30, 2016 Program Revenues Operating Capital Charges for Grants and Grants and Functions/Programs Expenses Services Contributions Contributions Governmental activities: Economic development $ 272,000 $ 52,416 $ 188,744 $ - Depreciation - unallocated 2,346 Total governmental activities 274,346 52, ,744 - Business-type activities: Economic development 43,227 18,106 32,500 - Lending 23,355 47,258 - Technical assistance 66,926 97,104 21,306 Total business-type activities 133, ,468 53,806 - Total primary government $ 407,854 $ 214,884 $ 242,550 $ - General revenues: Interest income Miscellaneous income Total general revenues Transfers Change in net position Net position - beginning Net position - ending 10

21 Net (Expense) Revenue and Changes in Net Position Governmental Business-Type Activities Activities Total $ (30,840) $ - $ (30,840) (2,346) (2,346) (33,186) - (33,186) - 7,379 7,379 23,903 23,903 51,484 51,484-82,766 82,766 (33,186) 82,766 49, ,297 27,480-27,480 28, ,777 (487) (5,281) 83,638 78, , ,251 1,158,027 $ 190,495 $ 1,045,889 $ 1,236,384 (The accompanying notes are an integral part of these financial statements) 11

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23 FUND FINANCIAL STATEMENTS

24 Balance Sheet Governmental Funds June 30, 2016 E.D.A. NOBD Planning Brownfields Agri-Tourism Non Major Totals General Administration Grant Assessment RBDG RBEG Governmental Fund Fund Fund Fund Fund Fund Funds Assets and Deferred Outflows of Resources Cash and investments $ 30,914 $ - $ 5,030 $ - $ 9,006 $ - $ 44,950 Accounts receivable - 12,653-31,807 14,899-59,359 Interfund loan receivable 158, ,709 Note receivable - NOBD - 118, ,827 Total assets 189, ,480 5,030 31,807 23, ,845 Deferred outflows of resources Total assets and deferred outflows of resources $ 189,623 $ 131,480 $ 5,030 $ 31,807 $ 23,905 $ - $ 381,845 Liabilities, Deferred Inflows of Resources, and Fund Balances Liabilities: Accounts payable $ 991 $ 1,565 $ 1,124 $ 17,803 $ 15,115 $ - $ 36,598 Compensated absences 3, ,906 1, ,577 Interfund loan payable 119,430 26, ,038 Total liabilities 4, ,977 5,030 45,429 15, ,213 Deferred inflows of resources Fund balances: Restricted ,636-8,636 Assigned 19,663 9,503-29,166 Unassigned 165, (13,622) ,830 Total fund balances 185,115 9,503 - (13,622) 8, ,632 Total liabilities, deferred inflows of resources, and fund balances $ 189,623 $ 131,480 $ 5,030 $ 31,807 $ 23,905 $ - $ 381,845 (The accompanying notes are an integral part of these financial statements) 12

25 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2016 Total fund balances - governmental funds Amounts reported for governmental activities in the statement of net position are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds. Those assets consist of: $ 189,632 Equipment 36,561 Accumulated Depreciation (35,587) 974 Certain liabilities are not due and payable in the current period and therfore are not reported as liabilities in governmental funds. Capital lease liabilities at year-end consist of: Capital Lease - copy machine (111) Total net position - governmental activities $ 190,495 (The accompanying notes are an integral part of these financial statements) 13

26 Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2016 E.D.A. Non Major NOBD Planning Brownfields Agri-Tourism Agri-Tourism Totals General Administration Grant Assessment RBDG RBEG Governmental Fund Fund Fund Fund Fund Fund Funds Revenues Intergovernmental revenues Federal sources $ - $ - $ 75,000 $ 93,439 $ 20,305 $ - $ 188,744 Charges for services Adminstrative revenue - 52, ,416 Miscellaneous Interest income Other local sources 8,092-1,788 17,600-27,480 Total revenues 8,112 53,299 76,791 93,440 37, ,552 Expenditures Current: Economic development - 52,417 89, ,729 29, ,000 Debt Service: Principal Capital outlay Total expenditures 1,144 52,417 89, ,729 29, ,144 Excess of revenues over (under) expenditures 6, (12,777) (7,289) 8,636 (12) (3,592) Other Financing Sources (Uses) Transfers in , ,777 Transfers out (12,777) (487) (13,264) Total other financing sources (uses) (12,777) - 12, (487) (487) Net change in fund balances (5,809) (7,289) 8,636 (499) (4,079) Fund balances, beginning 190,924 8,621 - (6,333) ,711 Fund balances, ending $ 185,115 $ 9,503 $ - $ (13,622) $ 8,636 $ - $ 189,632 (The accompanying notes are an integral part of these financial statements) 14

27 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2016 Total net change in fund balances - governmental funds Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay $700 exceeded depreciation expense ($2,346 ) in the current period. $ (4,079) (1,646) Repayment of capital lease principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position. Change in net position of governmental activities $ 444 (5,281) (The accompanying notes are an integral part of these financial statements) 15

28 Statement of Net Position Proprietary Funds June 30, 2016 EDA RBEG Revolving IDA Revolving Loan Fund Fund Loan Fund Assets Current assets: Cash and cash equivalents $ 308,590 $ 1,394 $ 40,657 Accounts receivable - - Notes receivable, net (current) 72,882 38,061 Accrued interest receivable 1, Total current assets 383,212 1,394 79,172 Noncurrent assets: Notes receivable 402,796-49,307 Total assets 786,008 1, ,479 Deferred outflows of resources Liabilities Current liabilities: Accounts payable Interfund loan payable - Total current liabilities Compensated absences Total liabilities 1, Deferred inflows of resources Net Position Restricted for loan programs 784, ,325 Unrestricted Total net position $ 784,608 $ 436 $ 128,325 16

29 Local Contracted Other Total Investing Services Enterprise Enterprise Fund Fund Funds Funds $ 10,049 $ 47,277 $ 41,629 $ 449,596 28,462 14,586 8,019 51, ,943 2,194 38,511 61,863 49, , ,103 38,511 61,863 49,648 1,065, , ,671 12, ,798 14,500 1,227 1,700 1,234 5,514 1,423 2,047 14,032 20, ,933 37,088 59,816 35, ,956 $ 37,088 $ 59,816 $ 35,616 $ 1,045,889 (The accompanying notes are an integral part of these financial statements) 17

30 Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds For the Fiscal Year Ended June 30, 2016 EDA RBEG Revolving IDA Revolving Loan Fund Fund Loan Fund Operating Revenues Loan fees $ 250 $ - $ - Loan interest 35,277-6,902 Bad debt recovery 2,550 2,279 State grants Foundation/Corporate grant 7,500 VIDA revenue - 16,891 Administrative revenue - - Miscellaneous income - - Total operating revenues 38,077 24,391 9,181 Operating Expenses Salary 3,447 8, Employee insurance 191 1,972 - Payroll taxes Advertising - - Closing costs Bank fees 170 Insurance 1, Duplicating - - Phone Internet Legal Postage Rent Miscellaneous - - Services Supplies 12 Travel and meals Special projects - Contractual services 10,454-3,593 Indirect expenses 1,865 4, Total operating expenses 18,760 15,993 4,595 Operating income (loss) 19,317 8,398 4,586 Non-Operating Revenues (Expenses) Interest income Income (loss) before transfers 19,628 8,402 4,607 Transfers In (out) Change in net position 19,628 8,402 4,607 Net position - beginning 764,980 (7,966) 123,718 Net position - ending $ 784,608 $ 436 $ 128,325 18

31 Local Contracted Other Total Investing Services Enterprise Enterprise Fund Fund Funds Funds $ - $ - $ - $ ,179 4,829 21,306 21,306 25,000-32,500-16,891 28,461 57,772 10,871 97, ,215 54,138 57,772 32, ,274 10,808 19,680 12,835 55,329 2,421 3,529 2,410 10, ,571 1,115 4, , , , ,678 1,716 1,455 2,759 4,336 8, ,047 4,598 10,945 7,232 29,350 21,519 40,752 31, ,508 32,619 17, , ,622 17, , ,622 17,044 1,335 83,638 4,466 42,772 34, ,251 $ 37,088 $ 59,816 $ 35,616 $ 1,045,889 (The accompanying notes are an integral part of these financial statements) 19

32 Statement of Cash Flows Proprietary Funds For the Fiscal Year Ended June 30, 2016 EDA RBEG Revolving IDA Revolving Loan Fund Fund Loan Fund Cash Flows from Operating Activities Cash received from customers $ 37,712 $ 9,924 $ 9,183 Cash received from operating grants - 7,500 - Cash payments to employees for services (3,380) (8,241) (472) Cash payments for other operating expenses (14,379) (7,793) (4,049) Net cash provided (used) by operating activities 19,953 1,390 4,662 Cash Flows from Noncapital Financing Activities Due to/from other funds Transfers in (out) - - Proceeds from repayment of loans 44,836 18,708 Net cash provided (used) by noncapital activities 44,836-18,708 Cash Flows from Investing Activities Interest and dividends Net increase in cash and cash equivalents 65,100 1,394 23,391 Beginning cash and investments 243,490-17,266 Ending cash and investments $ 308,590 $ 1,394 $ 40,657 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) By Operating Activities Operating income (loss) $ 19,317 $ 8,398 $ 4,586 Adjustments to reconcile operating income to net cash provided (used) by operating activities: Change in assets and liabilities: Receivables, net (365) (6,967) 2 Compensated absences 67 (157) 3 Accounts and other payables Net cash provided (used) by operating activities $ 19,953 $ 1,390 $ 4,662 20

33 Local Contract Other Total Investing Services Enterprise Enterprise Fund Fund Funds Funds $ 677 $ 49,124 $ 49,561 $ 156,181 25, ,799 (11,146) (19,020) (13,836) (56,095) (16,194) (20,753) (19,230) (82,398) (1,364) 9,351 16,495 50, ,171 10, , ,658 74, (1,361) 9,375 27, ,074 11,410 37,902 14, ,522 $ 10,049 $ 47,277 $ 41,629 $ 449,596 $ 32,619 $ 17,020 $ 826 $ 82,766 (28,162) (8,648) 16,846 (27,294) (338) 660 (1,001) (766) (5,483) 319 (176) (4,219) $ (1,364) $ 9,351 $ 16,495 $ 50,487 (The accompanying notes are an integral part of these financial statements) 21

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35 NOTES TO BASIC FINANCIAL STATEMENTS

36 Notes to Basic Financial Statements Note 1 - Summary of Significant Accounting Policies Reporting Entity The accompanying financial statements present the activities of Northeast Oregon Economic Development District (NEOEDD). The District was created under Oregon Revised Statutes through ORS 190 enables the local units of government, the three counties of Baker, Union and Wallowa, to perform the functions and activities of various regional programs funded by federal, state and local resources. The District operates under policies established by a Board of Directors. The Board of Directors is comprised primarily of elected public officials of the county and city subdivisions of the member counties, and representatives of agriculture, minorities, business and industry. Basis of Presentation, Basis of Accounting Government-Wide Statements : The statement of net position and the statement of activities display information about the primary government. These statements include the financial activities of the overall government. Eliminations have been made to minimize the double-accounting of internal activities. These statements distinguish between the governmental and business-type activities of the District. Governmental activities generally are financed through intergovernmental revenues and other nonexchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties. The statement of activities presents a comparison between direct expenses and program revenues for the different business-type activities of the District and for each function of the District s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Indirect expense allocations that have been made in the funds have been reversed for the statement of activities. Program revenues include (a) fees and charges paid by the recipients of goods or services offered by the programs and (b) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues are presented as general revenues. Fund Financial Statements: The fund financial statements provide information about the District s funds. Separate statements for each fund category - governmental and proprietary - are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal values. Non-operating revenues, such as subsidies and investment earnings, result from nonexchange transactions. The District reports the following major governmental funds: General Fund - This is the District s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. NOBD Administration Fund - NEOEDD contracted with Northeast Oregon Business Development (NOBD) to provide services in administering NOBD s Intermediary Relending Program. NEOEDD s Board of Directors had agreed to subsidize administrative and operating costs for the Intermediary Relending Program for a period of two years, following which it was anticipated the program would become self-supporting. The program was not selfsupporting for about 10 years, but is now. A note receivable has been recorded from NOBD for the prior period costs subsidized by NEOEDD. 22

37 Notes to Basic Financial Statements EDA Planning Grant - The purpose of this grant is to help NEOEDD in completing development plans and strategies for the District. This includes, but is not limited to, (1) preparing a Comprehensive Economic Development Strategy in cooperation with local economic development committees, (2) undertaking activities as requested by local government entities that relate to economic growth in the District, (3) coordinating economic development activities between entities to eliminate duplication and maximize available resources, (4) and referring businesses and individuals seeking information on financial, employment and management assistance to appropriate service providers. EDA Planning Grant match comes from Contract Services and Local Investing. Brownfields Assessment Fund - The District received a $400,000 grant from the Environmental Protection Agency to provide no-cost level one and level two assessments of public and private property with suspected contamination. The grant has up to a three year implementation schedule which was extended 15 months. NEOEDD contracted with DEQ to provide project oversight and manage consultants completing the assessment work. NEOEDD also contracted with Anderson Perry & Associates to conduct planning and assessment work related to the Wallowa Union Railroad rail with trail project. Agri-Tourism RBDG Fund - The District received federal funding in addition to other grant revenue to promote economic development specific to Agri-Tourism. The District reports the following major enterprise funds: EDA Revolving Loan Fund - This fund accounts for loans granted, collection of principal and interest on the loans, funds available to be loaned, and payment of administrative expenses related to the loan program. Funds are restricted for utilization in the revolving loan program. The goal of the Revolving Loan Fund is creation of jobs. Grants from the Economic Development Administration were matched by local funds. The funds were used to establish a revolving fund to offer assistance to eligible recipients in Union, Wallowa, and Baker counties. IDA Fund - This fund is used to account for activity related to the Individual Development Account Program. RBEG Revolving Loan Fund - This fund accounts for revolving loan fund activity established from a $99,999 grant from USDA Rural Development matched with $20,001 of District funds. Local Investing Fund - This fund accounts for activity related to local investing support system to serve businesses and investors in the region. Contracted Services Fund - NEOEDD periodically enters into contracts to write and administer grants and provide other technical assistance services to non-profits and local governments. Rather than establishing separate funds for each of these activities, the District uses this fund to account for these services. 23

38 Notes to Basic Financial Statements Measurement Focus, Basis of Accounting Government-wide and Proprietary Fund Financial Statements The government-wide and proprietary fund financial statements are reported using the economic resources measurement focus. The government-wide and proprietary fund financial statements are reported using the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Non-exchange transactions, in which the District gives (or receives) value without directly receiving (or giving) equal value in exchange, include grants. Revenue from grants is recognized in the fiscal year in which all eligibility requirements have been satisfied. Governmental Fund Financial Statements Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. The District considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Miscellaneous revenues are recorded as revenue when received in cash because they are generally not measurable until actually received. Expenditures are recorded when the related fund liability is incurred. General capital asset acquisitions are reported as expenditures in governmental funds. Proceeds of general long-term debt and acquisitions under capital leases are reported as other financing sources. Under the terms of grant agreements, the District funds certain programs by a combination of specific costreimbursement grants, categorical block grants, and general revenues. Thus, when program expenses are incurred, there are both restricted and unrestricted net resources available to finance the program. It is the District's policy to first apply cost-reimbursement grant resources to such programs, followed by categorical block grants, and then by general revenues. Financial Position Deposits and Investments The cash balances of substantially all funds are pooled and invested by the District for the purpose of increasing earnings through investment activities. The pool's investments are reported at fair value at June 30, 2016, based on market prices. The individual funds' portions of the pool's fair value are presented as cash and cash equivalents. Earnings on the pooled funds are apportioned and paid or credited to the funds monthly based on the ending balance of each participating fund. Cash and Cash Equivalents The government s cash and cash equivalents include cash on hand, demand deposits, short-term investments with original maturities of three months or less from the date of acquisition. Receivables Activities between funds that are representative of lending or borrowing arrangements outstanding at the end of the fiscal year are referred to as interfund loan receivables/payables. Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as internal balances. Grants and other receivables from other government agencies are generally expected to be collectible and, therefore an allowance for uncollectable is not considered necessary or recorded. Notes receivable in the E.D.A. Revolving Loan Fund are reported net of an allowance for uncollectible. Note Receivable-NOBD is expected to be collectible and, therefore an allowance for uncollectible is not considered necessary or recorded. All accounts receivable are expected to be collected within one year. 24