KANW-FM A DEPARTMENT OF ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO.12 FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR S REPORT

Transcription

1 KANW-FM A DEPARTMENT OF ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO.12 FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR S REPORT JUNE 30, 2012

2 KANW -FM A DEPARTMENT OF ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT #12 TABLE OF CONTENTS FOR THE YEAR ENDED JUNE 30, 2012 FINANCIAL SECTION Independent Auditor s Report 1 Statement of Net Assets 2 Statement of Revenues, Expenses, and Changes in Net Assets 3 Statement of Cash Flows 4 Notes to Financial Statements 5-7 SUPPLEMENTARY INFORMATION Corporation for Public Broadcasting electronic submission

3 To the Board of Education Albuquerque Municipal School District #12 Albuquerque, New Mexico INDEPENDENT AUDITOR S REPORT We have audited the accompanying statement of financial position of KANW-FM of Albuquerque, New Mexico, as of and for the year ended June 30, 2012, as listed in the table of contents. These financial statements are the responsibility of Albuquerque Municipal School District #12 and KANW s management. Our responsibility is to express an opinion on these financial statements based on our audit. The prior year comparative information has been derived from KANW s June 30, 2011 financial statements and, in our report dated January 26, 2012, we expressed unqualified opinions on the respective statements of net assets, revenues, expenses, and changes in net assets, and the statement of cash flows. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. 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 audit provides a reasonable basis for our opinion. As discussed in Note # 1A, the financial statements present only the public broadcasting operations of KANW-FM and do not purport to, and do not, present fairly the financial position of the Albuquerque Municipal School District #12, as of June 30, 2012, and changes in its financial position and cash flows, where applicable, for the year then ended in conformity with accounting principles generally accepted in the United States of America. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of KANW-FM of Albuquerque, New Mexico, as of June 30, 2012 and the changes in financial position and cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. Ollie D. Waters, CPA, CMA Moye, Waters and Associates, LLC Albuquerque, New Mexico January 18, Lead Ave SE, Suite C Albuquerque, NM Phone: Fax: moyewaters.com 1

4 KANW-FM A Department of Albuquerque Municipal School District No. 12 Proprietary Fund June 30, 2012 (With Comparative Totals As Of June 30, 2011) ASSETS Current Assets: Cash and cash equivalemts $ 684,936 - Account Receivable-Albuquerque Public Schools - 218,121 Total Current Assets 684, ,121 Capital Assets: Land and Improvements (Note 2) - 76,483 Buildings and Equipment (Note 2) 845, ,791 Less Accumulated Depreciation (Note 2) (582,404) (403,551) Total Capital Assets 263, ,723 LIABILITIES Total Assets 948, ,844 Current Liabilities: Accounts Payable 15,398 - Salaries Payable - 7,870 Compensated Absences (Note 3) 5,140 14,771 Deferred Revenue (Note 4) 296,585 - Total Current Liabilities 317,123 22,641 Noncurrent Liabilities; Compensated Absences (Note 3) 10,281 29,543 Total Noncurrent Liabilities 10,281 29,543 Total Liabilities 327,404 52,184 NET ASSETS Invested in Capital Assets (Note 5) 263, ,723 Unrestricted (Note 5) 357, ,937 Total Net Assets 621, ,660 Total Liabilities & Net Assets $ 948,427 $ 332,844 SEE INDEPENDENT AUDITOR'S REPORTS The Accompanying Notes Are An Integral Part Of These Financial Statements 2

5 KANW-FM A Department of Albuquerque Municipal School District No. 12 Proprietary Fund For the Years Ended June 30, 2012 (With Comparative Totals As Of June 30, 2011) OPERATING REVENUES CPB Grant $ 273,468 $ 209,793 Local Government Support 11,238 13,675 Contributions - Memberships 176, ,748 Business Underwriting 56,255 57,956 Music and Other Merchandise Sales 116,517 87,385 Fundraising 38,984 57,474 Insurance Recovery 89,277 - Total Operating Revenue 761, ,031 OPERATING EXPENSES Management and General 123, ,818 Programming 174, ,493 Broadcasting 164,868 79,524 Program Information and Promotion 134,217 91,938 Fundraising and Membership Development 135, ,202 Indirect Administrative Support (Note 6) - 14,314 Depreciation 36,256 34,811 Total Operating Expenses 769, ,100 Income (Loss) before Transfers (7,570) (58,069) TRANSFER IN - 58,069 Change in Net Assets (7,570) - Restatement of Net Assets (Note 7) 347,933 - Total Net Assets - Beginning 280, ,660 Total Net Assets - Ending $ 621,023 $ 280,660 SEE INDEPENDENT AUDITOR'S REPORTS The Accompanying Notes Are An Intergral Part Of These Financial Statements 3

6 KANW-FM A Department of Albuquerque Municipal School District No. 12 Proprietary Funds For the Year Ended June 30, 2012 (With Comparative Totals As Of June 30, 2011) CASH FLOWS FROM OPERATING ACTIVITIES Receipts from Grantors $ 788,174 $ 209,793 Receipts from Contributions, Underwriting and Fundraising 282, ,853 Music and Merchandise Sales 116,517 87,386 Insurance Recovery 89,277 - Prior Period Adjustments associated with operations 252,186 - Operating Expenses (754,572) (600,645) Net cash provided (used) by operating activities 774,213 (24,613) CASH FLOWS FROM NON CAPITAL FINANCING ACTIVITIES Operating subsidies and transfers to other funds - 24,613 Net cash provided (used) by non capital financing activities - 24,613 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES None - - Net cash provided (used) by capital financing activities - - CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Fixed Assets (89,277) - Net cash provided (used) by investing activities (89,277) - Net increase (decrease) in cash and cash equivalents 684,936 - Cash and cash equivalents at beginning of year - - Cash and cash equivalents at end of year $ 684,936 $ - RECONCILIATION OF INCREASE IN NET ASSETS TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating Income (Loss) $ (7,570) $ - Adjustments to reconcile increases in net assets to cash provided by operating activities: Prior Period Adjustments associated with operations 252,186 - Depreciation Expense 36,256 34,811 Transfer from Albuquerque Public Schools - (58,069) Change in Assets and Liabilities: APS Receivable 218,120 - Accounts and Other Payables 15,398 (2,353) Payroll Liabilities (36,762) 998 Deferred Revenues 296,585 - Net Cash Provided by Operating Activitites $ 774,213 $ (24,613) SEE INDEPENDENT AUDITOR'S REPORTS The Accompanying Notes Are An Integral Part Of These Financial Statements 4

7 KANW-FM A DEPARTMENT OF THE ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2012 Note 1. Summary of Significant Accounting Policies A. Function of Entity KANW-FM (89.1 MHz) is a public radio station based in Albuquerque, New Mexico. Launched in 1951, it is the oldest FM radio station in the State of New Mexico. KANW-FM is administered by the Albuquerque Municipal School District #12. It is used for educational purposes at times but mostly has a music format featuring New Mexico based Spanish music artists. The KANW-FM is funded by the Corporation of Public Broadcasting, member and listener contributions, business underwriting of programs, and support from the Albuquerque Public Schools. These financial statements include only the financial information of KANW-FM and do not include any other financial information of the Albuquerque Municipal School District #12. B. Basis of Accounting In the financial statements of KANW-FM, business-like activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. C. Interfund Receivables and Payables During the course of operations, transactions occur between KANW-FM and the Albuquerque Public Schools that may result in amounts owed or receivable between the entities. Short-term transactions are reported as either receivables or payables from the Albuquerque Public Schools. D. Statement of Cash Flows For purposes of the statement of cash flows, KANW-FM considers all highly liquid investments as cash equivalents. At June 30, 2012, KANW-FM did not own any cash equivalents. Cash includes cash held in accounts administered by the Albuquerque Public Schools. E. Grant Receivables Grant receivables represent the amount expended during the grant period but reimbursed by the grantor after year-end. When revenues are received in the next year, the receivable will then be reduced F. Fixed Assets Fixed assets are stated at cost. KANW-FM capitalizes all acquisitions at cost in excess of $1,000 with a useful life of more than one year. Depreciation, which includes the assets recorded under capital leases, is computed principally using the straight-line method over the estimated useful lives of individual assets. Asset lives range from five to twenty years. 5

8 KANW-FM A DEPARTMENT OF THE ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2012 Note 1. Summary of Significant Accounting Policies-continued G. Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America require management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. Note 2. Capital Assets Capital Asset activity for the year ended June 30, 2012 is as follows: Balance as of Balance as of 06/30/2011 Additions Deletions 06/30/2012 Buildings 43, , ,652 Improvements 76, , Machinery & Equipment 341, , ,988 Automobiles 56, ,187 36,255 Total Capital Assets 518, ,291 96, ,895 Less Accumulated Depreciation (403,551) (282,832) 103,979 (582,404) Net Capital Assets $ 114,723 $ 141,459 $ 7,309 $ 263,491 Depreciation expense for the year ended June 30, 2012 was $36,256. Note 3. Compensated Absences The Albuquerque Public School District s policy regarding vacation time permit employees to accumulate earned but unused vacation leave. The liability for these compensated absences is reported in the financial statements of proprietary funds as a liability when it is incurred. The current portion of this debt is estimated based on historical trends. Note 4. Deferred Revenue The Albuquerque Public School District s policy regarding vacation time permit employees to accumulate earned but unused vacation leave. The liability for these compensated absences is reported in the financial statements of proprietary funds as a liability when it is incurred. The current portion of this debt is estimated based on historical trends. Note 5. Equity Classifications Equity is classified as net assets and displayed in three components: a. Invested in capital assets, net of related debt Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. b. Restricted net assets Consists of net assets with constraints placed on the use either by (1) external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation. c. Unrestricted net assets All other net assets that do not meet the definition of restricted or invested in capital assets, net of related debt. 6

9 Note 6. Indirect Licensee Support KANW-FM A DEPARTMENT OF THE ALBUQUERQUE MUNICIPAL SCHOOL DISTRICT NO. 12 NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2012 Indirect Licensee support represents KANW s allocated portion of the Albuquerque Public School s institutional administrative costs and physical plant support. Indirect Licensee Support provided in the year ended June 30, 2011 totaled $14,314. Due to the changes in reporting, described in Note 7, Indirect Licensee Support is no longer recorded in the audited financial statements of KANW. Indirect support represents a reconciling item when electronically preparing and submitting the CPB Annual Financial Report (AFR). Note 7. Restatement of Net Assets During the fiscal year ended June 30, 2012, KANW and the Albuquerque Public Schools achieved a greater degree of coordination as it relates to the recording and reporting of the financial transactions of KANW. Cash held on behalf of KANW was segregated and reported separately from the cash held in other funds under the control of Albuquerque Public Schools. In addition, the fixed assets reported by KANW in prior years was adjusted to reflect the fixed asset balances currently reflected in the records of Albuquerque Public Schools. Beginning net assets was restated to reflect these adjustments and corrections. Net Assets at June 30, 2011, as restated, is as follows: Net Assets at June 30, 2011 $280,660 Restatement of fixed asset transactions 95,747 Restatement of operational transactions Restated Net Assets at June 30, ,186 $628,593 7