HomeMy WebLinkAbout2015 FIFD Fishers Island Ferry District
A Component Unit of
the Town of Southold, New York
Financial Statements and
Supplementary Information
Year Ended December 31 , 2015
Fishers Island Ferry District
Table of Contents
Year Ended December 31, 2015
Paae No.
Independent Auditors' Report 1
Management's Discussion and Analysis 3
Basic Financial Statements
Exhibit
Government-Wide Financial Statements
1 Statement of Net Position 11
2 Statement of Activities 12
Fund Financial Statements
3 Balance Sheet - Governmental Funds 13
3a Reconciliation of Governmental Funds Balance Sheet to the Government-Wide
Statement of Net Position - Governmental Activities 14
4 Statement of Revenues, Expenditures and Changes in Fund Balances -
Governmental Funds 15
4a Reconciliation of the Statement of Revenues, Expenditures and Changes in
Fund Balances of Governmental Funds to the Statement of Activities 16
Notes to the Financial Statements 17
Required Supplementary Information
RSI
1 Schedule of Revenues, Expenditures and Changes in Budgetary Fund
Balance— Budget and Actual (Budgetary Basis) —General Fund 40
Other Post-Employment Benefits
2a Schedule of Funding Progress 42
2b Schedule of Employer Contributions 43
3 New York State and Local Retirement System 44
Internal Control and Compliance Reports
Government Auditing Standards Report 45
Schedule of Findings 47
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Independent Auditors' Report
The Board of Commissioners
Fishers Island Ferry District
We have audited the accompanying financial statements of the governmental activities and each major
fund of the Fishers Island Ferry District (the "District"), a component unit of the Town of Southold, New
York, as of and for the year ended December 31, 2015, 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.
Auditors'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 auditors' 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 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 and each major fund of the District as of
December 31, 2015, and the respective changes in financial position for the year then ended in conformity
with accounting principles generally accepted in the United States of America.
PKF O'CONNOR DAVIES,LLP
100 Great Meadow Road,Wethersfield,CT06109 I Tel:860.257.1870 I Fax:860.257.1875 I www.pkfod.com
PKF 0'Connor Davies,LLP is a member firm of the PKF International Limited network of Iegally independent firms and does not accept any responsibility or Iiability for the actions
or inactions on the part of any other individual member firm or firms.
The Board of Commissioners
Fishers Island Ferry District
Page 2
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that Management's
Discussion and Analysis and the schedules included under Required Supplementary Information in the
accompanying table of contents 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 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 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
information because the limited procedures do not provide us with sufficient evidence to express an opinion
or provide any assurance.
Other Reporting Required by GovernmentAuditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 24, 2016
on our consideration of the District's internal control over financial reporting and 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 the District's internal control over financial reporting and
compliance.
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June 24, 2016
Fishers Island Ferry District
Management's Discussion and Analysis
December 31 , 2015
Fishers Island Ferry District
Management's Discussion and Analysis
December 31, 2015
Our discussion and analysis of Fishers Island Ferry District's (the Government) financial performance
provides an overview of the Government's financial activities for the fiscal year ended December 31,
2015. Please read it in conjunction with the Government's financial statements, which begin with
Exhibit 1.
FINANCIAL HIGHLIGHTS
• The Government's total net position decreased by $420,092 in 2015. The Government's
unrestricted net position decreased by$335,164.
• Fund balance, a measure of the Government's short term health, decreased by $441,759.
• The Government's 2015 budget planned to use $436,870 of its fund balance to balance the
budget. The Government actually used $441,759 of its fund balance during 2015.
• The decreases in net position and fund balance were mainly caused by the net pay down on
debt of$387,000 which is discussed further in this analysis.
USING THIS ANNUAL REPORT
This annual report consists of a series of financial statements. The Statement of Net Position and the
Statement of Activities (Exhibits 1 and 2) provide information about the activities of the Government as
a whole and present a longer-term view of the Government's finances. Fund financial statements start
with Exhibit 3. For governmental activities, these statements tell how these services were financed in
the short term as well as what remains for future spending. Fund financial statements also report the
Government's operations in more detail than the government-wide statements by providing information
about the Government's most significant funds.
Reporting the Government as a Whole
Our analysis of the Government as a whole begins with Exhibit 1. One of the most important questions
asked about the Government's finances is, "Is the Government as a whole better off or worse off as a
result of the year's activities?" The Statement of Net Position and the Statement of Activities report
information about the Government as a whole and about its activities in a way that helps answer this
question. These statements include all assets and liabilities using the accrual basis of accounting,
which is similar to the accounting used by most private-sector companies. All of the current year's
revenues and expenses are taken into account regardless of when cash is received or paid.
These two statements report the Government's net position and changes in them. You can think of the
Government's net position—the difference between assets and liabilities—as one way to measure the
Government's financial health, or financial position. Over time, increases or decreases in the
Government's net position are one indicator of whether its financial health is improving or deteriorating.
You will need to consider other nonfinancial factors, however, such as changes in the Government's
property tax base and the condition of the Government's roads, to assess the overall health of the
Government.
In the Statement of Net Position and the Statement of Activities, the Government shows the following
activity:
• Governmental activities—The Government's basic services are reported here, including the ferry
operations and general administration. Property taxes, state and federal grants and property
management revenues finance most of these activities.
3
Fishers Island Ferry District
Management's Discussion and Analysis
December 31, 2015
Reporting the Government's Most Significant Funds
Our analysis of the Government's major funds begins in the section titled "The Government's Funds".
The fund financial statements begin with Exhibit 3 and provide detailed information about the most
significant funds—not the Government as a whole. Some funds are required to be established by State
law and by bond covenants. However, the Board of Commissioners may establish many other funds to
help it control and manage money for particular purposes or to show that it is meeting legal
responsibilities for using certain taxes, grants, and other money.
• Governmental funds—The Government's basic services are reported 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. The governmental fund statements provide a detailed short-term view of the
Government's general government operations and the basic services it provides. Governmental
fund information helps you determine whether there are more or fewer financial resources that can
be spent in the near future to finance the Government's programs. We describe the relationship (or
differences) between governmental activities (reported in the Statement of Net Position and the
Statement of Activities) and governmental funds in a reconciliation at the bottom of the fund
financial statements.
4
Fishers Island Ferry District
Management's Discussion and Analysis
December 31, 2015
THE GOVERNMENT AS A WHOLE
The Government's combined net position decreased by $420,092 from a year ago — decreasing from
$8,283,556 to $7,863,464. Last year net position decreased by $193,548. Our analysis below focuses
on the net position (Table 1) and changes in net position (Table 2) of the Government.
Table 1
Change in Net Position (on Exhibit 1)
Change During Year
2015 Dollars Percent 2014
Current and other assets $ 1,075,772 $ (348,026) -24.44% $ 1,423,798
Capital assets 9,684,907 (471,928) -4.65% 10,156,835
Total assets 10,760,679 (819,954) -7.08% 11,580,633
Deferred outFlows of resources 148,221 (12,775) -7.93% 160,996
Long-term debt outstanding 2,454,317 (496,975) -16.84% 2,951,292
Other liabilities 411,590 74,332 22.04% 337,258
Totalliabilities 2,865,907 (422,643) -12.85% 3,288,550
Deferred inflows of resources 179,529 10,006 5.90% 169,523
Net position
Net investment in capital assets 7,847,907 (84,928) -1.07% 7,932,835
Unrestricted 15,557 (335,164) -95.56% 350,721
Total net position $ 7,863,464 $ (420,092) -5.07% $ 8,283,556
Capital assets decreased during the year by $471,928. This was the result of $602,305 depreciation
expense and $130,377 in additions during the year. These changes are discussed further in Capital
Asset and Debt Administration. Debt was reduced by a net amount of$387,000 due to 2014's $849,000
BAN being rolled into a $699,000 BAN and the payoff of $1,200,000 in debt with a refunding bond of
$1,138,000 in addition to the normal principal payment of $175,000. These changes caused the
$84,928 decrease in net investment in capital assets. The decrease in debt also caused the majority of
the decrease in current and other assets and unrestricted net position.
5
Fishers Island Ferry District
Management's Discussion and Analysis
December 31, 2015
Table 2
Change in Net Position (on Exhibit 2)
Change During Year
2015 Dollars Percent 2014
Revenues
Program revenues
Charges for services $ 2,833,044 $ 40,973 1.47% $ 2,792,071
Operating grants and contributions 1,532 (17,184) -91.81% 18,716
Capital grants and contributions - (398) -100.00% 398
General revenues
Property taxes 788,116 15,448 2.00% 772,668
Interest and investment earnings 476 (424) -47.11% 900
Other general revenues 79,685 79,685 100.00% -
Total revenues 3,702,853 118,100 3.29% 3,584,753
Program expenses
General government 363,446 231,147 174.72% 132,299
Ferry operations 3,646,065 88,797 2.50% 3,557,268
Airport 35,041 21,724 163.13% 13,317
Theater 12,877 10,336 406.77% 2,541
Rental activities 9,049 (1,033) -10.25% 10,082
Interest on long-term debt 56,467 (6,327) -10.08% 62,794
Total expenses 4,122,945 344,644 9.12% 3,778,301
Increase(decrease) in net position $ (420,092) $ (226,544) 117.05% $ (193,548)
The significant changes between 2015 and 2014 were as follows:
• Charges for services relating to property management revenues increased $33,000 from the
prior year. This was due to:
o The theatre was not open during much of 2014 due to repair issues with the building.
The theatre was opened back up in 2015.
o Rental properties had a 5% increase in rent.
o The Government entered into an agreement during the year with the airport manager to
receive a percentage of the revenues.
• Operating grants and contributions decreased by $17,184 due to a FEMA grant. $17,735 was
received in 2014 and only $963 was received in 2015.
• Other general revenues increased mainly due to $77,270 in premiums received on the refunding
bond in 2015.
• General government expenditures increased due to a number of factors including:
o Accounting and finance expenditures increase $38,000 due to the hiring of a new
accountant and related training.
o Legal fees and fines increased $142,000 due to ongoing litigation, union contract
negotiations and a legal settlement
o Property tax expenditures increased $24,000 due to a $500,000 increased in
assessment.
• Ferry operations expenditures increased due to a number of factors including:
o $82,000 in vacation and sick time payouts, mainly to an employee who retired during the
yea r.
o Repairs on the Munnatawket decreased $67,689 from the prior year as the engine was
replaced in 2014. 2014 was the Munnatawket's year for dry dock.
o Repairs on the Race Point increased $255,689 from the prior year. 2015 was the Race
Point's year for dry dock. The two ferries alternate years for dry dock repairs.
o Fuel oil for the vessels decreased $136,203 from the prior year due to significantly lower
fuel prices in 2015. Fuel dropped from approximately $3 per gallon to $2 per gallon.
6
Fishers Island Ferry District
Management's Discussion and Analysis
December 31, 2015
• Airport expenditures increased mainly due to $35,000 spent on engineering work for repairs.
The Government is in the process of getting a FEMA grant to cover the remaining expenditures
for this project.
Governmental Activities
Table 3 presents the cost of each of the Government's governmental programs as well as each
governmental program's net cost (total cost less revenues generated by the activities). The net cost
shows the financial burden that was placed on the Government's taxpayers by each of these functions.
Table 3
Governmental Type Activities
Total Cost Net Cost
of Services Incr. of Services Incr.
2015 2014 Decr. 2015 2014 Decr.
Governmental Activities
General government $ 363,446 $ 132,299 174.72°/o $ 363,446 $ 132,299 174.72°/o
Ferry operations 3,646,065 3,557,268 2.50°/o 921,805 823,998 11.87°/o
Airport 35,041 13,317 163.13% 21,468 12,919 66.17%
Theater 12,877 2,541 406.77°/o 4,539 2,541 78.63°/o
Rental activities 9,049 10,082 -10.25°/o (79,356) (67,435) 17.68°/o
Interest on long-term debt 56,467 62,794 -10.08°/a 56,467 62,794 -10.08°/a
Totals $ 4,122,945 $ 3,778,301 9.12% $ 1,288,369 $ 967,116 33.22%
The significant changes in the total cost of services were discussed above. The net cost of ferry
operations increased by $97,807 due to the increase in expenditures and $17,184 decrease in
operating grants discussed above.
THE GOVERNMENT'S FUNDS
While the year showed a $420,092 decrease in net position in Exhibit 2, it showed a $441,759
decrease in fund balance in the governmental funds as presented in Exhibits 3 and 4. The difference
for this is primarily the treatment of long-term debt and capital assets. In the fund balance principal
payments on long-term debt are a reduction in fund balance when the payments on the debt are made.
Debt payments are never a direct reduction in net position on the government-wide statements.
Likewise, purchases of capital assets are a reduction in fund balance when the purchase is made.
Capital asset purchases are never a direct reduction in net position on the government-wide
statements, except that depreciation is deducted.
7
Fishers Island Ferry District
Management's Discussion and Analysis
December 31, 2015
In addition, these other changes in fund balances should be noted:
• In the General Fund, the majority of the change in fund balance was related to the issuance and
payment of debt. During 2015, the Government issued $1,837,000 in new debt and paid off
$2,224,000 of old debt. The Government also received $77,270 in premiums and paid $15,270
in costs related to the refunding.
General Fund Budgetary Highlights
Over the course of the year, the Board of Commissioners can revise the Government budget with
additional appropriations and budget transfers. These are subject to the approval of the Town Board.
Additional appropriations increase the total budget. Transfers do not increase the total budget, but
instead pull appropriations to one department that needs additional funding from other departments that
might have excess funding. Below is a summarized view of the final budget and actual results for the
General Fund:
Table 4
General Fund- Budget Summary
Final
Revenues Budget Actual Variance
Ferry $2,841,840 $2,722,728 $ (119,112)
Propertytax 788,103 788,116 13
Property management 81,000 110,316 29,316
Grant revenue 337,148 1,532 (335,616)
Other 500 2,891 2,391
Total Revenues 4,048,591 3,625,583 (423,008)
Expenditures
General government 460,584 451,371 9,213
Transportation 3,092,001 2,686,905 405,096
Theater 13,000 12,877 123
Employee benefits 536,113 532,644 3,469
Debt service 383,763 383,545 218
Total Expenditures 4,485,461 4,067,342 418,119
Increase(Decrease)
in Fund Balance $ (436,870) $ (441,759) $ (4,889)
The original budget called for expenditures of $4,485,461. During the year no additional appropriations
were made. The budgeted revenues were $4,048,591. If everything happened right on budget, the
Government would have used $436,870 of its accumulated Fund Balance to balance the budget.
Actual revenues were $423,008 less than anticipated and actual expenditures were $418,118 less than
budget resulting in the Ferry District subtracting $441,759 from its Fund Balance.
8
Fishers Island Ferry District
Management's Discussion and Analysis
December 31, 2015
Significant variances are summarized as follows:
• Ferry revenues were $119,112 under budget. This was mainly due to:
o Ferry operation revenues were $96,620 less than expected although they were
comparable with prior years.
o Charter revenues were $22,776 less than expected. These tend to fluctuate from year to
year and were in line with the average of the last four years.
• Property management revenues were $29,316 above budget. This was mainly due to:
o Services to other governments (rental revenues) which were $18,405 over budget,
mainly due to 5% rent increases and the rental of a house for the second half of the year
that had been empty in 2014.
o Elizabeth Airport revenue was $13,573 over budget. During the year, the Government
signed an agreement with the airport manager to receive a portion of the revenue
generated by the airport.
• Grant revenue was $335,616 under budget mainly due to a $337,148 FEMA grant that was
budgeted for but was not approved by FEMA during the year.
• Transportation expenditures were $405,096 under budget mainly due to the budgeting of
$358,287 in repairs to the airport. These were anticipated to be paid by the FEMA grant that
was not approved. As such, only $35,000 in engineering costs for the project were spent during
the year.
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At the end of this year, the Government had $9,684,907 invested government activity capital assets.
This amount represents a net decrease (including additions and deductions) of$471,928 from last year.
This is due to depreciation expense of $602,305 and $130,377 of new assets capitalized during the
year. The asset additions were repairs to the South ramp performed during the year. More detailed
information about the Ferry District's capital assets is presented in Note 3D to the financial statements.
Debt
At year end, the Government had $1,837,000 in bonds and notes outstanding. This is a decrease of
$387,000 from last year. The Government's general obligation bonds carry an Aa1 rating. More
detailed information about the Government's long-term liabilities is presented in Note 3E to the financial
statements.
ECONOMIC FACTORS AND NEXT YEAR'S BUDGET
The Ferry District's elected and appointed officials considered many factors when setting the fiscal-year
2016 budget and rates including trying to anticipate an accurate level of ridership, budgeting for
continued improvements to the systems while keeping expenditures in line, and planning for future
capital needs.
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Fishers Island Ferry District
Management's Discussion and Analysis
December 31, 2015
CONTACTING THE GOVERNMENT'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, and investors and
creditors with a general overview of the Ferry District's finances and to show the Ferry District's
accountability for the money it receives. If you have questions about this report or need additional
financial information, contact the Board of Commissioners at Fishers Island Ferry District, P.O. Box
607, Fishers Island, NY 06390.
10
Fishers Island Ferry District
Basic Financial Statements
December 31 , 2015
Fishers Island Ferry District Exhibit 1
Statement of Net Position
December 31, 2015
Governmental
Activities
ASSETS
Cash and cash equivalents $ 752,573
Receivables 53,972
Due from primary government 177,219
Prepaid expenses 92,008
Capital assets
Nondepreciable 41,717
Depreciable, net of accumulated depreciation 9,643,190
Total Assets 10,760,679
DEFERRED OUTFLOWS OF RESOURCES
Difference between expected and actual experience 4,295
Net difference between projected and actual earnings 23,305
Contributions after the measurement date 120,621
Total Deferred Outflows of Resources 148,221
LIABILITIES
Accounts payable 299,746
Accrued payroll 78,818
Security deposit 13,232
Accrued interest payable 19,794
Noncurrent liabilities
Due within one year 932,835
Due in more than one year 1,521,482
Total Liabilities 2,865,907
DEFERRED INFLOWS OF RESOURCES
Changes in proportion 2,310
Taxes paid in advance 177,219
Total deferred inflows of resources 179,529
NET POSITION
Net investment in capital assets 7,847,907
Unrestricted 15,557
Total Net Position $ 7,863,464
The notes to the financial statements are an integral part of this statement.
11
Fishers Island Ferry District Exhibit 2
Statement of Activities
For the Year Ended December 31, 2015
Net (Expense)
Revenue and
Changes in Net
Program Revenues Position
Charges Operating
for Grants and
Functions/Programs Expenses Services Contributions Total
Governmental activities
General government $ 363,446 $ - $ - $ (363,446)
Ferry operations 3,646,065 2,722,728 1,532 (921,805)
Airport 35,041 13,573 - (21,468)
Theater 12,877 8,338 - (4,539)
Rental activities 9,049 88,405 - 79,356
Interest on long-term debt 56,467 - - (56,467)
Total Government 4,122,945 2,833,044 1,532 (1,288,369)
General Revenues
Property taxes, interest and liens 788,116
Interest and investment earnings 476
Miscellaneous 79,685
Total General Revenues 868,277
Change in Net Position (420,092)
Net Position - Beginning of Year, as reported 8,302,040
Cumulative Effect of Change in Accounting Principle (18,484)
Net Position - Beginning of Year, as restated 8,283,556
Net Position - Ending $ 7,863,464
The notes to the financial statements are an integral part of this statement.
12
Fishers Island Ferry District Exhibit 3
Balance Sheet
Governmental Funds
December 31, 2015
ASSETS
Cash and cash equivalents $ 752,573
Receivables 53,972
Due from primary government 177,219
Prepaid expenditures 49,964
Total Assets $ 1,033,728
LIABILITIES, DEFERRED INFLOWS
OF RESOURCES, AND FUND BALANCE
Liabilities
Accounts payable $ 299,746
Accrued payroll 78,818
Security deposit 13,232
Total Liabilities 391,796
Deferred inflows of resources
Deferred revenue 11,133
Taxes paid in advance 177,219
Total Deferred Inflows of Resources 188,352
Fund balance
Nonspendable 49,964
Unassigned 403,616
Total Fund Balance 453,580
Total Liabilities, Deferred Inflows
of Resources, and Fund Balance $ 1,033,728
The notes to the financial statements are an integral part of this statement.
13
Fishers Island Ferry District Exhibit 3a
Reconciliation of Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position - Governmental Activities
December 31, 2015
Fund Balances - Total Governmental Funds $ 453,580
Amounts Reported for Governmental Activities in the Statement of
Net Position are Different Because
Net capital assets used in governmental activities are not financial
resources and, therefore, are not reported in the funds 9,684,907
Difference in treatment of prepaid insurance 42,044
Other long-term assets are not available to pay for current-period
expenditures and, therefore, are deferred in the funds 11,133
Deferred outflows - difference between expected and actual experience 4,295
Deferred outflows - net difference between projected and actual earnings 23,305
Deferred outflows - contributions after the measurement date 120,621
Deferred inflows - changes in proportion (2,310)
145,911
Long-term liabilities are not due and payable in the current period and,
therefore, are not reported in the funds.
Bonds, notes, capital leases payable and unamortized premiums (1,837,000)
Compensated absences and special termination benefits (159,340)
Pension liability (134,178)
Other post-employment benefits (323,799)
Accrued interest payable (19,794)
(2,474,111)
Net Position of Governmental Activities $ 7,863,464
The notes to the financial statements are an integral part of this statement.
14
Fishers Island Ferry District Exhibit 4
Statement of Revenues, Expenditures and Changes in Fund Balance
Governmental Funds
For the Year Ended December 31, 2015
REVENUES
Ferry revenues $ 2,722,728
Property taxes 788,116
Property management 110,316
Grants 1,532
Other 2,891
Total Revenues 3,625,583
EXPENDITURES
Current
General government 348,176
Ferry operations 3,145,025
Airport 38,294
Theater 12,877
Rental activities 9,048
Debt service
Principal 1,024,000
Interest 58,545
Payment to refunded bond escrow agent - refunding bond issuance costs 15,270
Capital outlay 130,377
Total Expenditures 4,781,612
Deficiency of Revenues over Expenditures (1,156,029)
OTHER FINANCING SOURCES
Issuance of long-term debt 699,000
Refunding bonds issued 1,138,000
Payment to refunded bond escrow agent (1,200,000)
Premium on financing 77,270
Total Other Financing Sources 714,270
Net Change in Fund Balance (441,759)
Fund Balance - Beginning of Year 895,339
Fund Balance - End of Year $ 453,580
The notes to the financial statements are an integral part of this statement.
15
Fishers Island Ferry District Exhibit 4a
Reconciliation of the Statement of Revenues, Expenditures and Changes
in the Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended December 31, 2015
Amounts Reported for Governmental Activities in the Statement of Activities are
Different Because
Net Change in Fund Balances - Total Governmental Funds $ (441,759)
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
Capital outlay expense 130,377
Depreciation expense (602,305)
(471,928)
Debt proceeds provide current financial resources to governmental funds, but
issuing debt increases long-term liabilities in the Statement of Net Position.
Repayment of debt principal is an expenditure in the governmental funds, but
the repayment reduces long-term liabilities in the Statement of Net Position.
Issuance of long-term debt - bond anticipation note (699,000)
Issuance of long-term debt - refunding bonds (1,138,000)
Principal payments on long-term debt - bond anticipation note 849,000
Principal payments on long-term debt - bonds 175,000
Payment to refunded bond escrow agent 1,200,000
387,000
Some expenses reported in the Statement of Activities do not require the
use of current financial resources and, therefore, are not reported as
expenditures in governmental funds, including the change in
Compensated absences 54,091
Accrued interest 2,078
Pension liability 30,217
Other post-employment benefits liability 10,580
Difference in the treatment of insurance expense 9,629
106,595
Change in Net Position of Governmental Activities $ (420,092)
The notes to the financial statements are an integral part of this statement.
16
Fishers Island Ferry District
Notes to Financial Statements
December 31, 2015
1. Summary of Significant Accounting Policies
The Fishers Island Ferry District (the "District") was created in 1947 by a special act of legislation
within the State of New York, known as the Ferry District Enabling Act. As a district, much like a
school district or fire district, the District is allowed to levy and collect taxes in addition to collecting
fares, in order to offset its expenses. The tax levy is assigned to the property owners of Fishers
Island and the collections are kept separate from Southold Town funds. Although the District's
income and expenses are handled separately from the town's general fund, the Southold Town
Supervisor is the fiscal officer of the District and along with the Town Board, reviews, approves and
executes all of the District's financial obligations, including payroll.
The District is controlled by a five member Board of Commissioners. Each Commissioner is elected
independently from the populace of Fishers Island and serves a five year term. A chairman is
elected on an annual basis. It is the duty of the Commission to oversee the operational, fiscal and
administrative matters of the District. As the governing body of the District, all final decisions are
resolved by the Board.
The accounting policies conform to generally accepted accounting principles as applicable to
governmental units. The Governmental Accounting Standards Board ("GASB") is the accepted
standard setting body for establishing governmental accounting and financial reporting principles. The
following is a summary of the District's more significant accounting policies:
A. Financial Reporting Entity
The financial reporting entity consists of: a) the primary government; b) organizations for which the
primary government is financially accountable and c) other organizations for which the nature and
significance of their relationship with the primary government are such that exclusion would cause
the reporting entity's financial statements to be misleading or incomplete as set forth by GASB.
In evaluating how to define the financial reporting entity, for financial reporting purposes,
management has considered all potential component units. The decision to include a potential
component unit in this reporting entity was made by applying the criteria set forth by GASB,
including legal standing, fiscal dependency and financial accountability. The criterion has been
considered and there are no agencies or entities which should be presented with this
government, although, the Fishers Island Ferry District is a component unit of the Town of
Southold, New York.
B. Government-Wide Financial Statements
The government-wide financial statements (i.e., the Statement of Net Position and the Statement of
Activities) report information on all non-fiduciary activities of the primary government as a whole.
For the most part, the effect of interfund activity has been removed from these statements, except
for interfund services provided and used. Governmental activities, which normally are supported by
taxes and intergovernmental revenues, are reported separately from business-type activities (if
any), which rely to a significant extent on fees and charges for support.
17
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
1. Summary of Significant Accounting Policies (Continued)
The Statement of Net Position presents the financial position of the District at the end of its fiscal
year. The Statement of Activities demonstrates the degree to which direct expenses of a given
function or segment are offset by program revenues. Direct expenses are those that are clearly
identifiable with a specific function or segment. When an expense is incurred for purposes for which
both restricted and unrestricted resources are available, the District's policy is to use its restricted
resources first. Program revenues include (1) charges to customers or applicants who purchase,
use or directly benefit from goods or services, or privileges provided by a given function or segment,
(2) grants and contributions that are restricted to meeting the operational or capital requirements of
a particular function or segment and (3) interest earned on grants that is required to be used to
support a particular program. Taxes and other items not identified as program revenues are
reported as general revenues.
C. Fund Financial Statements
The accounts of the District is organized and operated on the basis of funds. A fund is an
independent fiscal and accounting entity with a self-balancing set of accounts which comprise its
assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balances,
revenues and expenditures. Fund accounting segregates funds according to their intended purpose
and is used to aid management in demonstrating compliance with finance related legal and
contractual provisions. The District maintains the minimum number of funds consistent with legal
and managerial requirements. The focus of governmental fund financial statements is on major
funds as that term is defined in professional pronouncements. Each major fund is to be presented
in a separate column, with non-major funds, if any, aggregated and presented in a single column.
Since the governmental fund statements are presented on a different measurement focus and basis
of accounting than the government-wide statements' governmental activities column, a
reconciliation is presented on the pages following, which briefly explains the adjustments necessary
to transform the fund based financial statements into the governmental activities column of the
government-wide presentation.
Separate financial statements are provided for governmental funds. Major individual governmental
funds are reported as separate columns in the fund financial statements.
The District's resources are reflected in the fund financial statements in one broad fund categories,
in accordance with generally accepted accounting principles as follows:
Fund Categories
a. Governmental Funds - Governmental funds are those through which most general government
functions are financed. The acquisition, use and balances of expendable financial resources
and the related liabilities are accounted for through governmental funds. The following is the
District's major governmental fund:
General Fund — The General Fund constitutes the primary operating fund of the District and is
used to account for and report all financial resources not accounted for and reported in another
fund.
18
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
1. Summary of Significant Accounting Policies (Continued)
D. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The accounting and financial reporting treatment is determined by the applicable measurement
focus and basis of accounting. Measurement focus indicates the type of resources being measured
such as current financial resources (current assets less current liabilities) or economic resources (all
assets and liabilities). The basis of accounting indicates the timing of transactions or events for
recognition in the financial statements.
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when earned and
expenses are recorded when a liability is incurred, regardless of the timing of related cash flows.
Property taxes are recognized as revenues in the year for which they are levied. Grants and similar
items are recognized as revenue as soon as all eligibility requirements imposed by the provider
have been met.
Governmental fund financial statements are reported using the current financial resources
measurement focus and the modified accrual basis of accounting. Revenues are recognized as
soon as they are both measurable and available. Revenues are considered to be available when
they are collectible within the current period or soon enough thereafter to pay liabilities of the current
period.
Property taxes and certain other revenues are considered to be available if collected within sixty
days of the fiscal year end. Property taxes associated with the current fiscal period, as well as
charges for services and intergovernmental revenues are considered to be susceptible to accrual
and have been recognized as revenues of the current fiscal period. Fees and other similar
revenues are not susceptible to accrual because generally they are not measurable until received in
cash. If expenditures are the prime factor for determining eligibility, revenues from Federal and
State grants are accrued when the expenditure is made.
Expenditures generally are recorded when a liability is incurred, as under accrual accounting.
However, debt service expenditures, as well as expenditures, when applicable, related to early
retirement incentives, compensated absences, capital leases, post-closure landfill costs, pollution
remediation obligations, other post employment benefit obligations, certain pension obligations and
certain claims payable are recorded only when payment is due. General capital asset acquisitions
are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions
under capital leases are reported as other financing sources.
19
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
1. Summary of Significant Accounting Policies (Continued)
E. Assets, Liabilities, Deferred Outflows/Inflows of Resources and Net Position or Fund
Balances
Deposits, Investments and Risk Disclosure
Cash and Equivalents - The Ferry District's cash and cash equivalents are considered to
be cash on hand, demand deposits, and short-term investments with original maturities of
three months or less from the date of acquisition. Investments for the Ferry District, if any,
are generally reported at fair value.
Custodial Credit Risk— Custodial credit risk is the risk that, in the event of a bank failure,
the Ferry District's deposits may not be returned to it. The Ferry District's policy for
custodial credit risk is to invest in obligations allowable under the New York General
Municipal Law Article 10. In general this includes deposits in Federal Deposit Insurance
Corporation "FDIC" insured commercial banks or trust companies located within the State.
The Fishers Island Ferry District is authorized to use demand deposit accounts, time
deposit accounts and certificates of deposit. Permissible investments include obligations
of the U.S. Treasury, U.S. Agencies, repurchase agreements and obligations of New York
State or its political subdivisions.
Collateral is required for demand deposit accounts, time deposit accounts and certificates
of deposit at a minimum of 100% of all deposits not covered by Federal deposit insurance.
The Ferry District has entered into custodial agreements with the various banks which hold
their deposits. These agreements authorize the obligations that may be pledged as
collateral. Such obligations include, among other instruments, obligations of the United
States and its agencies and obligations of the State and its municipal and school district
subdivisions. The Ferry District's aggregate bank balances that were not covered by
depository insurance were not exposed to custodial credit risk at December 31, 2015
because of these custodial agreements
Interest Rate Risk - Interest rate risk is the risk that the government will incur losses in
fair value caused by changing interest rates. The District does not have a formal
investment policy that limits investment maturities as a means of managing its exposure to
fair value losses arising from changing interest rates.
Custodial Credit Risk— Custodial credit risk is the risk that, in the event of a bank failure,
the District's deposits may not be returned to it. The District does not have a formal
custodial credit risk policy.
Credit Risk — Credit risk is the risk that an issuer or other counterparty will not fulfill its
specific obligation even without the entity's complete failure. The District does not have a
formal credit risk policy.
Concentration of Credit Risk — Concentration of credit risk is the risk attributed to the
magnitude of a government's investments in a single issuer. The District does not have a
formal credit risk policy.
20
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
1. Summary of Significant Accounting Policies (Continued)
Taxes Receivable - Property taxes are assessed on property values as of July 1St. The tax levy
is divided into two billings; the following December 1 St and May 31 St. This is used to finance the
calendar year. The billings are considered due on those dates; however, the actual due date for
each respective billing is January 10th and May 31St. After this, the bill becomes delinquent and
the applicable property is subject to lien, penalties and interest.
The Town of Southold, New York is responsible for the billing and collection of the taxes through
May, at which time collection responsibility is transferred to the County. At May 31St, the county
pays any unpaid taxes to the Town tax receiver and continues the collections process in the
individual accounts.
Taxes collected in advance of the calendar year that they are levied to finance are considered
unearned until that year starts and are reported on the balance sheet as such.
All receivables are shown net of an allowance for uncollectibles. The allowance is calculated
using a formula based on prior experience.
Other Receivables - Other receivables include amounts due from other governments and
individuals for services provided by the District. Receivables are recorded and revenues recognized
as earned or as specific program expenditures/expenses are incurred. Allowances are recorded
when appropriate.
Prepaid Expenses/Expenditures - Certain payments to vendors reflect costs applicable to future
accounting periods, and are recorded as prepaid items using the consumption method in both the
government-wide and fund financial statements. Reported amounts are equally offset by
nonspendable fund balance, in the fund financial statements, which indicates that these amounts do
not constitute "available spendable resources" even though they are a component of current assets.
Capital Assets - Capital assets, which include property, plant, equipment, and infrastructure
assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable
governmental columns in the government-wide financial statements. Capital assets are defined
by the District as assets with an initial, individual cost of more than the capitalization threshold for
that asset type and an estimated useful life in excess of two years. Such assets are recorded at
historical cost or estimated historical cost if purchased or constructed. Donated capital assets
are recorded at estimated fair market value at the date of donation.
21
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
1. Summary of Significant Accounting Policies (Continued)
Intangible assets lack physical substance, are nonfinancial in nature and their useful lives extend
beyond a single reporting period. These are reported at historical cost if identifiable. Intangible
assets with no legal, contractual, regulatory, technological or other factors limiting their useful life
are considered to have an indefinite useful life and are not amortized.
The costs of normal maintenance and repairs that do not add to the value of the asset or
materially extend assets lives are not capitalized. Major outlays for capital assets and
improvements are capitalized as projects are constructed.
Land is considered inexhaustible and, therefore, is not depreciated. Construction in progress has
not been placed in service and, therefore, is not deprecated. Property, plant, and equipment of
the District is depreciated or amortized using the straight line method over the following estimated
useful lives:
Capitalization
Assets Years Threshold
Land N/A $ 5,000
Construction in progress N/A $ 5,000
Buildings and systems 20 to 40 $ 5,000
Machinery and equipment 5 to 40 $ 5,000
Infrastructure 20 $ 5,000
Intangible assets Varies $ 5,000
Deferred Outflows/Inflows of Resources - In addition to assets, the statement of financial
position will sometimes report a separate section for deferred outflows of resources. This
separate financial statement element represents a consumption of net position that applies to a
future period and so will not be recognized as an outflow of resources (expense/expenditure) until
then.
In addition to liabilities, the statement of financial position will sometimes report a separate
section for deferred inflows of resources. This separate financial statement element represents
an acquisition of net position that applies to a future period and so will not be recognized as an
inflow of resources (revenue) until that time.
Also, deferred revenues in the fund financial statements are those where asset recognition criteria
have been met, but for which revenue recognition criteria have not been met. Such amounts in the
fund financial statements have been deemed to be measurable but not "available" pursuant to
generally accepted accounting principles.
Long-Term Liabilities - In the government-wide financial statements long-term debt and other
long-term obligations are reported as liabilities in the Statement of Net Position.
22
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
1. Summary of Significant Accounting Policies (Continued)
In the fund financial statements, governmental fund types recognize bond premiums and
discounts, as well as bond issuance costs, during the current period. The face amount of debt
issued is reported as other financing sources. Premiums received on debt issuances are
reported as other financing sources while discounts on debt issuances are reported as other
financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received,
and debt payments, are reported as debt service expenditures.
Compensated Absences - District employees accumulate vacation and sick leave hours for
subsequent use or for payment upon termination or retirement. Vacation and sick leave expenses
to be paid in future periods are accrued when incurred in the government-wide financial
statements. A liability for these amounts is reported in the governmental funds only if the liability
has matured through employee resignation or retirement.
Net Position - Net position represents the difference between assets, liabilities and deferred
outflows/inflows of resources. Net position is reported as restricted when there are limitations
imposed on their use either through the enabling legislation adopted by the District or through
external restrictions imposed by creditors, grantors, or laws or regulations of other governments.
Net position on the Statement of Net Position includes net investment in capital assets, and
restricted, if any. The balance is classified as unrestricted.
Fund Balance - Generally, fund balance represents the difference between current assets and
current liabilities. In the fund financial statements, governmental funds report fund classifications
that comprise a hierarchy based primarily on the extent to which the District is bound to honor
constraints on the specific purposes for which amounts in those funds can be spent. Under this
standard, the fund balance classifications are as follows:
• Nonspendable fund balance includes amounts that cannot be spent because they are either
not in spendable form (inventories, prepaid amounts, long-term receivables) or they are
legally or contractually required to be maintained intact (the corpus of a permanent fund).
• Restricted fund balance is to be reported when constraints placed on the use of the resources
are imposed by grantors, contributors, laws or regulations of other governments or imposed
by law through enabling legislation. Enabling legislation includes a legally enforceable
requirement that these resources be used only for the specific purposes as provided in the
legislation. This fund balance classification will be used to report funds that are restricted for
debt service obligations and for other items contained in the General Municipal Law of the
State of New York.
• Committed fund balance will be reported for amounts that can only be used for specific
purposes pursuant to formal action of the District's highest level of decision making authority.
The Town Supervisor is the highest level of decision making authority. These funds may only
be used for the purpose specified unless the entity removes or changes the purpose by taking
the same action that was used to establish the commitment. This classification includes
certain designations established and approved by the entity's governing boards.
23
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
1. Summary of Significant Accounting Policies (Continued)
• Assigned fund balance, in the General Fund, represents amounts constrained either by the
Town Supervisor or a person with delegated authority from the governing board to assign
amounts for a specific intended purpose including balancing the subsequent year's budget or
for encumbrances. Unlike commitments, assignments generally only exist temporarily, in that
additional action does not normally have to be taken for the removal of an assignment. An
assignment cannot result in a deficit in the unassigned fund balance in the General Fund.
Assigned fund balance in all funds except the General Fund includes all remaining amounts,
except for negative balances, that are not classified as nonspendable and are neither
restricted nor committed.
• Unassigned fund balance, in the General Fund, represents amounts not classified as
nonspendable, restricted, committed or assigned. The General Fund is the only fund that
would report a positive amount in unassigned fund balance. For all governmental funds other
than the General Fund, unassigned fund balance would necessarily be negative, since the
fund's liabilities, together with amounts already classified as nonspendable, restricted and
committed would exceed the fund's assets.
When both restricted and unrestricted amounts of fund balance are available for use for
expenditures incurred, it is the District's policy to use restricted amounts first and then
unrestricted amounts as they are needed. For unrestricted amounts of fund balance, the District
considers that committed amounts would be reduced first, followed by assigned amounts, and
then unassigned amounts when expenditures are incurred for purposes for which amounts in any
of these unrestricted fund balance classifications could be used.
F. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenditures/expenses during the reporting period. Actual results could differ
from those estimates.
G. Subsequent Events Evaluation by Management
Management has evaluated subsequent events for disclosure and/or recognition in the financial
statements through the date that the financial statements were available to be issued, which date is
June 24, 2016.
2. Stewardship, Compliance and Accountability
A. Budget Basis
A formal, legally approved, annual budget is adopted for the General Fund only. This budget is
adopted on a basis consistent with Generally Accepted Accounting Principles (modified accrual
basis) except revenues and expenditures from refunding or renewing long-term debt or issuing
lease financing are included in the budget as the net revenues or expenditures expected.
24
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
2. Stewardship, Compliance and Accountability(Continued)
B. Budget Calendar
The Board of Commissioners prepares detailed estimates of the revenues and expenditures for the
next calendar year. These estimates are reviewed at a public hearing held on or about August 2ptn
each year. After the public hearing, the Board of Commissioners meets to increase or decrease the
annual estimates and prepares final budget estimates.
The Fishers Island Ferry District's Board of Commissioners submits its budget estimates for the
subsequent calendar year to the Town of Southold, New York's Supervisor on or before September
20th. The Town Supervisor adds estimates of debt service and incorporates the Fishers Island
Ferry District budget into his Tentative Budget and files this with the Town of Southold, New York's
Town Clerk no later than September 30th. The Town Clerk presents the Tentative Budget to the
Town of Southold, New York's Town Board on or before October 5th. The Town Board makes
revisions and prepares a Preliminary Budget.
The Town Board holds a public hearing by the Thursday following the November election. The
Town Board then considers the estimates and any other matters brought to their attention at a
public meeting held subsequent to the public hearing and prior to the budget adoption. The Town
Board adopts the budget no later than November 2ptn
C. Budget Control
As a rule, no expenditure may be made, or any liability incurred, unless an amount has been
appropriated for the particular purpose. If, during the year, the Board of Commissioners or Town
Board determines that sufficient revenues will not be generated to finance the total appropriations
provided for in the original budget, the Board of Commissioners (subject to the approval of the
Town Board) generally may reduce appropriations to prevent making expenditures of money
available. An appropriation may not be reduced below the minimum amount required by law, nor
generally be reduced by more than the unexpended balance less the outstanding and unpaid
claims chargeable to it.
The Fishers Island Ferry District (subject to the approval of the Town Board) may make
supplemental appropriations These may be provided by transfer from the unexpended balance of
an appropriation, from the appropriation for contingencies within a fund (if any), or by borrowing
pursuant to the Local Finance Law. The expected unreserved fund balance at the end of the
current year may be utilized for this purpose. During the year no additional appropriations were
made.
D. Property Tax Limitation
The District is not limited as to the maximum amount of real property taxes which may be raised.
However, on June 24, 2011, the Governor signed Chapter 97 of the Laws of 2011 ("Tax Levy
Limitation Law"). This applies to all local governments.
The Tax Levy Limitation Law restricts the amount of real property taxes that may be levied by a
government in a particular year, beginning with the 2012 year. It expires on June 16, 2020.
25
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
2. Stewardship, Compliance and Accountability(Continued)
The following is a brief summary of certain relevant provisions of the Tax Levy Limitation Law. The
summary is not complete and the full text of the Tax Levy Limitation Law should be read in order to
understand the details and implementations thereof.
The Tax Levy Limitation Law imposes a limitation on increases in the real property tax levy, subject
to certain exceptions. The Tax Levy Limitation Law permits the government to increase its overall
real property tax levy over the tax levy of the prior year by no more than the "Allowable Levy Growth
Factor," which is the lesser of one and two-one hundredths or the sum of one plus the Inflation
Factor; provided, however that in no case shall the levy growth factor be less than one. The
"Inflation Factor" is the quotient of: (i) the average of the 20 National Consumer Price Indexes
determined by the United States Department of Labor for the twelve-month period ending six
months prior to the start of the coming fiscal year minus the average of the National Consumer
Price Indexes determined by the United States Department of Labor for the twelve-month period
ending six months prior to the start of the prior fiscal year, divided by (ii) the average of the National
Consumer Price Indexes determined by the United States with the result expressed as a decimal to
four places. The government is required to calculate its tax levy limit for the upcoming year in
accordance with the provision above and provide all relevant information to the New York State
Comptroller prior to adopting its budget. The Tax Levy Limitation Law sets forth certain exclusions
to the real property tax levy limitation of the government, including exclusions for certain portions of
the expenditures for retirement system contributions and tort judgments payable by the government.
The government may adopt a budget that exceeds the tax levy limit for the coming fiscal year, only if
the government first enacts, by a vote of at least sixty percent of the total voting power of the
government, a local law to override such limit for such coming fiscal year.
E. Application of Accounting Standards
For the year ended December 31, 2015, the District implemented:
• GASB Statement 68 -Accounting and Financial Reporting for Pensions—This statement, and
GASB Statement 67 applicable to pension plans, improves information provided by state and
local government employers for better decision making, accountability, interperiod equity, and
creating additional transparency.
• GASB Statement 69 — Government Combinations and Disposals of Government Operations -
This statement establishes accounting and financial reporting standards related to a variety of
transactions such as mergers, acquisitions, and transfers of operations.
• GASB Statement 71 — Pension Transition for Contributions Made Subsequent to the
Measurement Date —This statement is an amendment of GASB Statement 68 and should be
applied simultaneously with the provisions of Statement 68.
26
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
2. Stewardship, Compliance and Accountability(Continued)
F. Cumulative Effect of Change in Accounting Principle
For the year ended June 30, 2015, the Town implemented GASB Statement Nos. 68 Accounting and
Financial Reporting for Pensions and 71 Pension Transition for Contributions Made Subsequent to the
Measurement Date. These statements seek to improve accounting and financial reporting by state
and local governments for pensions by establishing standards for measuring and recognizing
liabilities, deferred outflows/inflows of resources and expenses/expenditures. These statements
also require the identification of the methods and assumptions that should be used to project benefit
payments, discount projected benefit payments to their actual present value and attribute that
present value to periods of employee service. As a result of adopting these standards, the
government-wide financial statements reflect a cumulative effect for the change in accounting
principle of$18,484.
3. Detailed Notes on All Funds
A. Cash, Cash Equivalents and Investments
Cash and investments of the District consist of the following at December 31, 2015:
Statement of Net Postion
Cash and equivalents $ 752,573
Cash and Cash Equivalents - As of December 31, 2015 the carrying amount of the District's
deposits with financial institutions was:
Cash and Cash Equivalents
Deposits with financial institutions $ 752,573
The bank balance of the deposits was $1,105,676 and was exposed to custodial credit risk as
follows:
Covered by Federal Depository Insurance $ 315,174
Collateralized by securities held in trust
In the Town's name 790,502
$ 1,105,676
B. Receivables, Deferred Revenue and Unearned Revenue
Governmental funds defer revenue recognition in connection with resources that have been received,
but not yet earned. Taxes collected in advance in the amount of $177,219 are recorded as deferred
inflows of resources at December 31, 2015.
C. Interfund Transactions
The outstanding balances between funds result mainly from the time lag between the dates that: 1)
interfund goods and services are provided or reimbursable expenditures occur; 2) transactions are
recorded in the accounting system; and 3) payments between funds are made. At December 31,
2015 there were no interfund balances.
27
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
3. Detailed Notes on All Funds (Continued)
Fund transfers are generally used to fund special projects with general fund revenues. There were
no transfers during the year ended December 31, 2015.
D. Capital Assets
Changes in the District's capital assets used in the governmental activities are as follows
Beginning Ending
Balance Increases Balance
Capital assets not being depreciated
Land $ 41,717 $ - $ 41,717
Capital assets being depreciated
Buildings and systems 12,583,229 - 12,583,229
Machinery and equipment 2,942,060 2,942,060
Infrastructure 3,118,404 130,377 3,248,781
18,643,693 130,377 18,774,070
Less accumulated depreciation (8,528,575) (602,305) (9,130,880)
$ 10,156,835 $ (471,928) $ 9,684,907
Depreciation expense was charged to functions/programs of the governmental activities as follows:
Ferry operations $ 602,305
E. Long-Term Liabilities
The following table summarizes changes in the District's long-term indebtedness for the year ending
December 31, 2015:
Beginning Ending Due Within Long-Term
Type and Note Balance Additions Reductions Balance One Year Portion
Bonds (3E1) $ 1,375,000 $ 1,138,000 $ 1,375,000 $ 1,138,000 $ 194,000 $ 944,000
BANS (3E2) 849,000 699,000 849,000 699,000 699,000 -
Comp abs(3E3) 213,432 - 54,092 159,340 39,835 119,505
Pension (4A) 179,481 45,303 134,178 - 134,178
OPEB(4C) 334,379 37,430 48,010 323,799 - 323,799
$ 2,951,292 $ 1,874,430 $ 2,371,405 $ 2,454,317 $ 932,835 $ 1,521,482
Each governmental funds liability is liquidated by the respective fund, primarily the General Fund.
Interest on these obligations is expensed to the respective fund, primarily the General Fund.
1) General Obligation Bonds
The District issues general obligation bonds to provide funds for the acquisition and construction of
major capital facilities. General obligation bonds are direct obligations of the District and pledge the
full faith and credit of the District. These bonds generally are issued as 20-year serial bonds with
equal amounts of principal maturing each year.
28
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
3. Detailed Notes on All Funds (Continued)
General obligation bonds and bond anticipation notes outstanding as of December 31, 2015
consisted of the following:
Year of Original Final Interest Amount
Purpose Issue Amount Maturity Rates Outstanding
New London Ferry Terminal/Wharf 2015 $ 250,000 2016 1.27% $ 250,000
North Ramp 2015 449,000 2016 1.27% 449,000
Refunding Bonds 2015 1,138,000 2021 2.00-4.76% 1,138,000
$ 1,837,000
Advance Refunding - During the 2015 fiscal year, the District issued $1,138,000 in serial bonds with
interest rates ranging from 2.00% to 4.76%, depending on maturity. The proceeds were used to
advance refund $1,200,000 of outstanding 2005 public improvement serial bonds bearing interest at
3.75%. The net proceeds of $1,215,270 (including $77,270 of issuance premium and after $15,270 in
underwriting fees and other issuance costs) were used to purchase U.S. Government securities.
Those securities were deposited in an irrevocable trust with an escrow agent to provide for all future
debt service payments on the bonds. As a result, the 2005 serial bonds are considered defeased and
the liability for those serial bonds has been removed from the Statement of Net Position. The District
advance refunded the 2005 serial bonds to reduce its total debt service payments over 6 years by
$101,236 and to obtain a net present value economic gain of $81,308. As of December 31, 2015,
$1,200,000 of the bonds are considered defeased.
Payments to maturity on the general obligation bonds and bond anticipation notes are as follows:
Year End Principal Interest Year End Principal Interest
2016 $ 893,000 $ 89,070 2019 $ 190,000 $ 42,249
2017 194,000 65,839 2020 185,000 28,099
2018 190,000 54,499 2021 185,000 12,399
$ 1,837,000 $ 292,155
Interest cost incurred and expensed on general obligation bonds and bond anticipation notes for the
year ended December 31, 2015 totaled $56,467.
2) Bond Anticipation Notes
The two bond anticipation notes due in 2016 were refinanced with $699,000 of new financing at an
interest rate of 1.27% per year. These are due in April 2017.
3) Compensated Absences
Compensated absences include vacation and compensatory time earned by employees and carried
over to the next calendar year. A maximum of 8 days is allowed to be carried into the next calendar
year. Compensated absences also include sick time that may be paid in cash when an employee
leaves. Employees hired prior to May 1, 2009 are eligible for payment on up to 120 days of
accumulated sick time. Employees hired after May 1, 2009 are eligible for payment on up to 40 days of
accumulated sick time. Each of these benefits is describe more fully in the Ferry District's Employee
Benefit Package. The value of all compensated absences has been reflected in the government-wide
financial statements.
29
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
3. Detailed Notes on All Funds (Continued)
4) Legal Debt Limit
The New York State Constitution sets debt limits for most classes of local government, and establishes
numerous other conditions related to the issuance and repayment of debt. In addition, the Local
Finance Law (LFL) regulates the issuance of debt by local governments. Under the LFL, a local
government, including the Fishers Island Ferry District, must authorize debt through a resolution of its
local board. The Town of Southold's Town Board must also authorize debt issued on behalf of the
District though a resolution of the Town Board, which is subject to permissive referendum at the District
level. Furthermore, a local government must comply with certain regulations and statutory provisions for
the private or public sale of its debt. Other provisions set limits on the use of bond proceeds, refunding
protocols, and the maximum number of years that certain projects, goods or services can be debt-
financed based upon probable useful life.
F. Net Position
The components of net position are detailed below:
Net Investment in Capital Assets - the component of net position that reports the difference between
capital assets less both the accumulated depreciation and the outstanding balance of debt, excluding
unexpended proceeds, that is directly attributable to the acquisition, construction or improvement of
those assets.
Unrestricted - all other amounts that do not meet the definition of "restricted" or "invested in capital
assets, net of related debt".
G. Fund Balances
As discussed in Note 1, governmental funds report fund classifications that comprise a hierarchy
based primarily on the extent to which the District is bound to honor constraints on the specific
purposes for which amounts in those funds can be spent. These are summarized below:
General
Fund
Nonspendable
Not in spendable form
Prepaid expenditures $ 49,964
30
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
4. Pension Plan and Other Post Retirement Plans
A. New York State and Local Retirement System
The District participates in the New York State and Local Employees' Retirement System
("System"). This is a cost-sharing multiple-employer defined benefit retirement plan. The System
provides retirement, death and disability benefits to plan members. The net position of the System is
held in the New York State Common Retirement Fund, which was established to hold all net assets
and record changes in plan net position. The Comptroller of the State of New York serves as sole
trustee and administrative head of the System. The Comptroller is an elected official determined in a
direct statewide election and serves a four year term. Obligations of employers and employees to
contribute and benefits to employees are governed by the New York State Retirement and Social
Security Law ("NYSRSSL"). Once a public employer elects to participate in the System, the election
is irrevocable. The New York State Constitution provides that pension membership is a contractual
relationship and plan benefits cannot be diminished or impaired. Benefits can be changed for future
members only by enactment of a State statute. The District also participates in the Public
Employees' Group Life Insurance Plan, which provides death benefits in the form of life insurance.
The System is included in the State's financial report as a pension trust fund. That report, including
information with regard to benefits provided may be found at
www.osc.state.ny.us/retire/publications/index.php or obtained by writing to the New York State and
Local Retirement System, 110 State Street, Albany, NY 12224.
The System is non-contributory except for employees who joined after July 27, 1976, who contribute
3% of their salary for the first ten years of inembership, and employees who joined on or after
January 1, 2010, who generally contribute between 3% and 6% of their salary for their entire length
of service. Under the authority of the NYSRSSL, the Comptroller annually certifies the actuarially
determined rates expressly used in computing the employers' contributions based on salaries paid
during the System's fiscal year ending March 31.
The District is not a separate employer under this plan. The District is included in the plan as a part
of the Town of Southold. There are no separate financial statistics available for the District. The
District contributes at an actuarially determined rate. The District's contributions made to the
System were equal to 100% of the contributions required for each year. The employer contribution
rates for the plan's year ending in 2015 are as follows:
Tier/Plan/Option Rate
Employee Retirement System 1 75i 41J 25.2 %
3 A14 41J 18.8
4 A15 41 J 18.8
5 A15 41 J 15.5
6 A15 41J1 10.5
6 A15 41J2 10.6
31
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
4. Pension and Other Post Retirement Plans (Continued)
At December 31, 2015, the District reported a liability of $134,178 for its proportionate share of
the net pension liability of the System. The net pension liability was measured as of March 31,
2015, and the total pension liability was determined by an actuarial valuation as of that date. The
District's proportion of the net pension liability was based on a computation of the actuarially
determined indexed present value of future compensation by employer relative to the total of all
participating members. At December 31, 2015, the District's proportion was 0.004%. For this first
year of implementation, the System reported no change in the allocation percentage measured
as of March 31, 2014.
For the year ended December 31, 2015, the District recognized pension expense in the
government-wide financial statements of $30,217. Pension expenditures of $176,063 were
recorded in the fund financial statements and were charged to the General Fund.
At December 31, 2015, the District reported deferred outflows of resources and deferred inflows
of resources related to pensions from the following sources:
Deferred Deferred
Outflows I nflows
of Resources of Resources
Differences between expected and actual experience $ 4,295 $ -
Net difference between projected and actual
earnings on pension plan investments 23,305 -
Changes in proportion and differences between
District contributions and proportionate share
of contributions - 2,310
District contributions subseqent to the
measurement date 120,621 -
$ 148,221 $ 2,310
The $120,621 reported as deferred outflows of resources resulting from the District's accrued
contributions subsequent to the measurement date will be recognized as a reduction of the net
position liability in the year ended March 31, 2016. Other amounts reported as deferred outflows
of resources and deferred inflows of resources will be recognized in pension expense as follows:
Year Ended
March 31,
2016 $ 6,323
2017 6,323
2018 6,323
2019 6,321
$ 25,290
32
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
4. Pension and Other Post Retirement Plans (Continued)
The total pension liability for the March 31, 2015 measurement date was determined by using an
actuarial valuation as of April 1, 2014, with update procedures used to roll forward the total
pension liabilities to March 31, 2015. The total pension liabilities for the March 31, 2014
measurement date were determined by using an actuarial valuation as of April 1, 2014.
Significant assumptions used in the April 1, 2014 valuation were as follows:
Actuarial cost method Entry Age Normal
Inflation 2.7%
Salary scale 4.9%
Investment rate of return 7.5% compounded annually, net of investment expenses,
including inflation
Cost of living adjustment 1.4% annually
Annuitant mortality rates are based on the April 1, 2005— March 31, 2010 System's experience with
adjustments for mortality improvements based on Society of Actuaries Scale MP-2014.
The actuarial assumptions used in the April 1, 2014 valuation are based on the results of an
actuarial experience study for the period April 1, 2005— March 31, 2010.
The long-term expected rate of return on pension plan investments was determined in accordance
with Actuarial Standard of Practice ("ASOP") No. 27 Selection of Economic Assumptions for
Measuring Pension Obligations. ASOP No. 27 provides guidance on the selection of an appropriate
assumed inflation investment rate of return. Consideration was given to expected future real rates of
return (expected returns, net of pension plan investment expense and inflation) for equities and
fixed income as well as historical investment data and plan performance. Best estimates of
arithmetic real rates of return for each major asset class included in the target asset allocation as of
March 31, 2015 and 2014 are summarized below.
Long-term
Expected
Target Real Rate
Asset Type Allocation of Return
Domestic Equity 38% 7.30%
International Equity 13% 8.55%
Private Equity 10% 11.00%
Real Estate 8% 8.25%
Absolute Return Strategies 3% 6.75%
Opportunistic Portfolio 3% 8.60%
Real Assets 3% 8.65%
Bonds and Mortgages 18% 4.00%
Cash 2% 2.25%
Inflation Indexed Bonds 2% 4.00%
100%
33
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
4. Pension and Other Post Retirement Plans (Continued)
The discount rate used to calculate the total pension liability was 7.5%. The projection of cash flows
used to determine the discount rate assumes that contributions from plan members will be made at
the current contribution rates and that contributions from employers will be made at statutorily
required rates, actuarially determined. Based upon those assumptions, the System's fiduciary net
position was projected to be available to make all projected future benefit payments of current plan
members. Therefore, the long-term expected rate of return on pension plan investments was
applied to all periods of projected benefit payments to determine the total pension liability.
The following presents the District's proportionate share of the net pension liability calculated using
the discount rate of 7.5%, as well as what the District's proportionate share of the net pension
liability (asset) would be if it were calculated using a discount rate that is 1 percentage point lower
(6.5%) or 1 percentage point higher(8.5%) than the current rate:
1% Current 1%
Decrease Discount Rate Increase
6.50% 7.50% 8.50%
District's proportionate share
of the net pension liability(asset) $ 894,352 $ 134,178 $ (507,598)
The components of the net pension liability as of the March 31, 2015 measurement date were as
fol lows:
Total pension liability $164,591,504,000
Fiduciary net position 161,213,259,000
Net pension liability $ 3,378,245,000
Fiduciary net position as a percentage of total pension liability 97.9%
Employer contributions to the System are paid annually and cover the period through the end of the
System's fiscal year, which is March 31St. Retirement contributions as of December 31, 2015
represent the employer contribution for the period of April 1, 2015 through December 31, 2015
based on prior year wages multiplied by the employer's contribution rate, by tier. Retirement
contributions for the nine months ended December 31, 2015 were $120,621.
B. Defined Contribution Plan
The District has a defined contribution plan for all eligible employees under Internal Revenue
Code ("IRS") 401(a). This is administered by Nationwide Retirement Solutions, Inc. Provisions are
made and amended as necessary by the District. Employees may contribute up to the IRS limits
through an IRS section 457 plan. The District does not match an eligible employee's contribution.
34
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
4. Pension Plan and Other Post Retirement Plans (Continued)
C. Other Post-Employment Benefits (OPEB)
From an accrual accounting perspective, the cost of post-employment health care benefits, like
the cost of pension benefits, generally should be associated with the periods in which the cost
occurs, rather than in the future year when it will be paid. The District recognizes the cost of
post-employment healthcare in the year when the employee services are received, reports the
accumulated liability from prior years, and provides information useful in assessing potential
demands on the District's future cash flows. The liability accumulated from the years prior to
adopting this accounting procedure will be phased in over 30 years.
Plan Description - The Fishers Island Ferry District Other Post Employment Benefit Program is a
single-employer defined benefit plan administered by the Fishers Island Ferry District. The
benefits have been established by the Board of Commissioners and can be amended by the
Board. The plan does not issue a separate financial statement and is unfunded.
Eligibility The district provides medical, prescription drug and behavioral health
to retirees and their covered dependents. The District pays up to
$3,000 of the cost for retirees, disabled retirees, spouses and
dependents. All active employees who retire or are disabled directly
from the District and meet the eligibility criteria will participate.
Eligibility criteria is age 55 and 10 years of service with the District (20
years if hired after July 1, 2003.)
Cost Sharing Retirees pay the balance of the premium over$3,000 per year.
Annual OPEB Cost ("AOC") and Net OPEB Obligation ("NOO")
Amortization Component:
Actuarial Accrued Liability as of January 1, 2015 $ 496,030
Assets at Market Value -
Unfunded Actuarial Accrued Liability("UAAL") $ 496,030
Funded Ratio 0.00%
Covered Payroll (Active plan members) $ 1,067,178
UAAL as a Percentage of Covered Payroll 46.48%
Annual Required Contribution $ 41,018
Interest on Net OPEB Obligation 12,640
Adjustment to Annual Required Contribution (18,905)
Annual OPEB Cost 34,753
Adjustment to Net OPEB Obligation 2,677
Contributions made (48,010)
Increase in net OPEB Obligation (10,580)
Net OPEB Obligation- Beginning of the year 334,379
Net OPEB Obligation- End of the year $ 323,799
35
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
4. Pension Plan and Other Post Retirement Plans (Continued)
Actuarial Methods and Significant Assumptions - The District's annual other postemployment
benefit cost (expense) is calculated based on the annual required contribution ("ARC"), an
amount actuarially determined in accordance with the parameters of GASB. GASB establishes
standards for the measurement, recognition and display of the expenses and liabilities for
retirees' medical insurance. As a result, reporting of expenses and liabilities is using a per capita
claims cost will be determined, which will be used to determine a "normal cost", an "actuarial
accrued liability", and ultimately the ARC. The ARC represents a level of funding that, if paid on
an ongoing basis, is projected to cover normal cost each year and amortize any unfunded
actuarial liabilities over a period not to exceed thirty years.
Actuarial valuations for OPEB plans involve estimates of the value of reported amounts and
assumptions about the probability of events far into the future. These amounts are subject to
continual revision as results are compared to past expectations and new estimates are made
about the future. Calculations are based on the OPEB benefits provided under the terms of the
substantive plan in effect at the time of each valuation and on the pattern of sharing of costs
between the employer and plan members to that point. In addition, the assumptions and
projections utilized do not explicitly incorporate the potential effects of legal or contractual funding
limitations on the pattern of cost sharing between the employer and plan members in the future.
The actuarial calculations of the OPEB plan reflect a long-term perspective.
The District is required to accrue on the government-wide financial statements the amounts
necessary to finance the plan as actuarially determined, which is equal to the balance not paid by
plan members.
Other actuarial methods and significant assumptions are summarized as follows:
Latest Actuarial Date January 1, 2015
Actuarial Cost Method Projected Unit Credit
Discount Rate 3.75%
Medical Inflation Initial rate of 9% grading down to an ultimate inflation rate of 4.75%
after 2020.
Amortization Method Level dollar of payroll
Remaining amortization 30 years, closed
Healthy Mortality Based on male and female pre-retirement mortality rates provided.
Turnover Based on male and female rates for age and years of service
provided.
Retirement Based on male and female rates for age and years of service
provided.
Disability Based on male and female rates for age and years of service
provided.
36
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
4. Pension Plan and Other Post Retirement Plans (Continued)
Three year trend information is as follows:
Fiscal Annual Actual Net OPEB
Year OPEB Cost Contributions Percentage Obligation
Ended (AOC) Made Contributed (N00)
12/31/2015 $ 34,753 $ 48,010 138.1% $ 323,799
12/31/2014 31,317 28,017 89.5% 334,379
12/31/2013 23,480 21,686 92.4% 331,079
Funding Progress
As of the last valuation date, January 1, 2015, the actuarial valuation of the plan assets was $0.
The actuarial accrued liability was $496,030. The schedule of funding progress immediately
following the notes to the financial statements presents multiyear trend information about whether
the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial
accrued liability for benefits. There is no requirement for funding and the plan has not been
funded.
5. Other Information
A. Litigation
The District is a defendant in various lawsuits. Although the outcome of these lawsuits is not
presently determinable, in the opinion of the District's counsel the resolution of these matters will
not have a material adverse effect on the financial condition of the District.
B. Contingencies
Grants - Amounts received or receivable from grant agencies are subject to audit and adjustment
by grantor agencies, principally the federal government. Any disallowed claims, including amounts
already collected, may constitute a liability of the applicable funds. The amount, if any, of
expenditures that may be disallowed by the grantor cannot be determined at this time, although the
Ferry District expects such amounts, if any, to be immaterial.
C. Risk Management
The District is exposed to various risks of loss related to torts; theft of, damage to, and
destruction of assets; errors and omissions; and natural disasters for which the District carries
commercial insurance. There have been no significant reductions in insurance coverage.
Settlement amounts have not exceeded insurance coverage for the current year or three prior
years.
D. GASB Pronouncements Issued, But Not Yet Effective
The Governmental Accounting Standards Board (GASB) is the standard setting board for
governmental entities. The following are statements which have been approved by GASB, but
are not yet effective:
37
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
5. Other Information (Continued)
• GASB Statement 72 — Fair Value Measurement and Application — This Statement, addresses
accounting and financial reporting issues related to fair value measurements. The definition of
fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. This statement
provides guidance for determining a fair value measurement for financial reporting purposes.
This Statement is effective for fiscal years beginning after June 15, 2015.
• GASB Statement 73 — Accounting and Financial Reporting for Pensions and Related Assets
that are not within the Scope of GASB 68 — This Statement establishes requirements for
defined benefit and contribution pensions that are not within the scope of Statement No. 68 as
well as for the assets accumulated for purposes of providing those pensions. This is effective
for fiscal years beginning after June 15, 2016.
• GASB Statement 74 — Financial Reporting for Postemployment Benefit Plans Other than
Pensions — This Statement establishes new accounting and financial reporting requirements
for governments whose employees are provided with Other Post-Employment Benefits
(OPEB), as well as for certain non-employer governments that have a legal obligation to
provide financial support for OPEB provided to the employees of other entities. This is
effective for fiscal years beginning after June 15, 2016.
• GASB Statement 75 — Accounting and Financial Reporting for Postemployment Benefits
(OPEB) Other than Pensions — This Statement establishes standards of accounting and
financial reporting for defined benefit OPEB and defined contribution OPEB that are provided
to the employees of state and local governmental employers through OPEB plans that are
administered through trusts or equivalent arrangements (hereafter jointly referred to as trusts)
and applies to all governments whose employees are provided with OPEB. The requirements
of this Statement are effective for fiscal years beginning after June 15, 2017.
• GASB Statement 76 — The Hierarchy of GenerallyAccepted Accounting Principles (GAAP) for
State and Local Governments—This statement identifies the current hierarchy of GAAP. The
requirements of this Statement are effective for financial statements for periods beginning
after June 15, 2015.
• GASB Statement 77 — Tax Abatement Disclosures— This Statement requires governments to
disclose information about their tax abatements and agreements and is effective for periods
beginning after December 15, 2015.
• GASB Statement 78 — Pensions Provided through Certain Multiple-Employer Defined Benefit
Pension Plans — This Statement amends the scope and applicability of Statement 68 to
exclude certain pensions provided through certain cost-sharing multiple-employer defined
benefit plan and is effective for periods beginning after December 15, 2015.
• GASB Statement 79 — Certain External Investment Poo/s and Pool Participants — This
Statement establishes criteria for an external investment pool to qualify for making the
election to measure all of its investments at amortized cost and is effective for periods
beginning after December 15, 2015.
38
Fishers Island Ferry District
Notes to Financial Statements (Continued)
December 31, 2015
5. Other Information (Continued)
• GASB Statement 80 — Blending Requirements for Certain Component Units—This Statement
amends the blending requirements of Statement 14 to require the blending of a component
unit incorporated as a not-for-profit corporation in which the primary government is the sole
corporate member and is effective for periods beginning after June 15, 2016.
• GASB Statement 81 — Irrevocable Split-Interest Agreements — This Statement provides
recognition and measurement guidance for situations in which a government is a beneficiary
of the agreement and is effective for periods beginning after December 15, 2016.
�����
39
Fishers Island Ferry District
Required Supplementary Information
December 31 , 2015
Fishers Island Ferry District RSI-1
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Budgetary Fund Balance
Budget and Actual(Budgetary Basis)-General Fund
For the Year Ended December 31,2015
Budgeted Amounts Variance
Appropriations Actual with
and Budgetary Final
Oriqinal Transfers Final Basis Budqet
REVENUES
Ferry Revenues
Ferry operations $ 2,773,840 $ - $ 2,773,840 $ 2,677,220 $ (96,620)
Charters 40,000 - 40,000 17,224 (22,776)
U.S.mail 28,000 - 28,000 28,284 284
Total Ferry Revenues 2,841,840 - 2,841,840 2,722,728 (119,112)
Property Tax Revenues
Property taxes 788,103 - 788,103 788,103 -
Interest and penalties-real estate taxes - - - 13 13
TotalPropertyTaxRevenues 788,103 - 788,103 788,116 13
Property Management Revenue
Service to other governments 70,000 - 70,000 88,405 18,405
Elizabeth Airport - - - 13,573 13,573
Theater 11,000 - 11,000 8,338 (2,662)
Total Property Management Revenue 81,000 - 81,000 110,316 29,316
GrantRevenues
Federal capital grant - - - 570 570
FEMA aid-transportation 337,148 - 337,148 962 (336,186)
Total Grant Revenues 337,148 - 337,148 1,532 (335,616)
Other Revenues
Interest earnings 500 - 500 476 (24)
Other - - - 2,415 2,415
Total Other Revenues 500 - 500 2,891 2,391
Total Revenues 4,048,591 - 4,048,591 3,625,583 (423,008)
EXPENDITURES
General Government
Accounting and finance 20,000 42,000 62,000 61,786 214
Legalfees 100,000 107,200 207,200 206,887 313
Insurance 83,300 23,632 106,932 101,884 5,048
Insurance claims 4,000 13,000 17,000 14,052 2,948
Property taxes 52,000 13,452 65,452 65,451 1
MTA payroll tax 4,000 (2,000) 2,000 1,311 689
Total General Government 263,300 197,284 460,584 451,371 9,213
Transportation
Elizabeth airport 433,287 (75,000) 358,287 35,041 323,246
Dock repairs,capital 181,200 39,000 220,200 201,480 18,720
Ferryoperations,personal services 1,292,498 77,400 1,369,898 1,366,332 3,566
Ferryoperations,equipment 574,600 (34,500) 540,100 518,924 21,176
Ferryoperations,contractual expense 779,000 (199,484) 579,516 541,844 37,672
Office expense,contractual expense 13,000 (2,300) 10,700 9,984 716
Commissioner fees 7,500 (3,800) 3,700 3,700 -
U.S.mail,contractual expense 9,600 - 9,600 9,600 -
Total Transportation 3,290,685 (198,684) 3,092,001 2,686,905 405,096
(Continued)
See Independent Auditors'Report
40
Fishers Island Ferry District RSI-1
Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Budgetary Fund Balance
Budget and Actual(Budgetary Basis)-General Fund
For the Year Ended December 31,2015
Budgeted Amounts Variance
Appropriations Actual with
and Budgetary Final
Original Transfers Final Basis Budget
Theater,contractual expense $ 9,000 $ 4,000 $ 13,000 $ 12,877 $ 123
Employee Benefits
NYS retirement 217,000 (40,000) 177,000 176,063 937
Social security 93,713 8,000 101,713 101,412 301
Unemployment insurance 3,000 2,500 5,500 4,571 929
Medical insurance 225,000 26,900 251,900 250,598 1,302
Total Employee Benefits 538,713 (2,600) 536,113 532,644 3,469
Total General Government Expenditures 4,101,698 - 4,101,698 3,683,797 417,901
Debt Service
Principal
Serial bond 175,000 - 175,000 175,000 -
Bond anticipation note 150,000 - 150,000 150,000 -
Interest
Serial bond 52,263 - 52,263 52,263 -
Bond anticipation note 6,500 - 6,500 6,282 218
Total Debt Service 383,763 - 383,763 383,545 218
Total Expenditures 4,485,461 - 4,485,461 4,067,342 418,119
Excess(deficiency)of revenues
over expenditures-Budgetary Basis $ (436,870) $ - $ (436,870) $ (441,759) $ (4,889)
Adjustments to Generally Accepted Accounting Principles(GAAP)
Bond fees (15,270)
Repayments to escrow agent (1,200,000)
Premium and accrued interest 77,270
Current refunding bond proceeds 1,138,000
Bond Anticipation Note proceeds netted with retirement of Bond Anticipation Note 699,000
Retirement of Bond Anticipation Note netted with Bond Anticipation Note proceeds (699,000)
Excess(deficiency)of revenues and other financing sources over
expenditures and other financing(uses)-GAAP basis $ (441,759)
Notes to Required Supplementary Information: A formal,legally approved,annual budget is adopted for the General Fund only.
This budget is adopted on a basis consistent with Generally Accepted Accounting Principles(modified accrual basis)with the
following exceptions:(1)Revenues and expenditures from refunding or renewing long-term debt or issuing lease financing are
included in the budget as the net revenues or expenditures expected.
See Independent Auditors'Report
41
Fishers Island Ferry District RSI-2a
Required Supplementary Information - Schedule of Funding Progress
Other Post Employment Benefits
Last Three Valuations
Unfunded
Unfunded Liability as a
Actuarial Actuarial Percentage of
Valuation Value of Accrued Accrued Funded Covered Covered
Date Assets Liability Liability Ratio Payroll Payroll
1/1/2015 $ - $ 496,030 $ 496,030 0.00% $ 1,067,178 46.48%
1/1/2014 - 440,133 440,133 0.00% 1,016,360 43.30%
1/1/2013 - 426,393 426,393 0.00% 1,017,116 41.92%
See Independent Auditors' Report
42
Fishers Island Ferry District RSI-2b
Required Supplementary Information - Schedule of Employer Contributions
Other Post Employment Benefits
Last Six Fiscal Years
Fiscal Annual
Year Required Actual Percentage
Ended Contribution Contribution Contributed
12/31/2015 $ 41,018 $ 48,010 117.05%
12/31/2014 37,471 28,017 74.77%
12/31/2013 29,601 21,686 73.26%
12/31/2012 29,154 21,918 75.18%
12/31/2011 28,373 10,639 37.50%
12/31/2010 126,611 17,011 13.44%
See Independent Auditors' Report
43
Fishers Island Ferry District RSI-3
Required Supplementary Information
New York State and Local Retirement System
December 31, 2015
Schedule of Changes in Net Pension Liability and Related Ratios
Last 10 Fiscal Years or Since Inception of GASB 68
2015
District's percentage of collective net pension liability 0.00397181%
District's portion net pension liability $ 134,178
District's covered payroll $ 1,036,238
District's portion net pension liability as a % of covered payroll 12. 5°
Plan Fiduciary net position as a % of total pension liability 7. 0°
The amounts presented for each fiscal year were determined as of the System's measurement date.
Schedule of Employer Contributions
Since Inception of GASB 68
District's statutorily required contribution $ 190,486
District's contributions in relation to the statutorily required contribution $ 190,486
District's contibution deficiency(excess) $ -
District's covered employee payroll $ 1,085,875
District's contributions as a percentage of covered employee payroll 17.54°
The amounts presented for each fiscal year were determined as of the fiscal year end.
Notes to Schedule
Changes in benefit term None
Changes in assumptions None
Actuarial cost method Aggregate cost method
Amortization method Percentage of projected pay
Remaining amortization period Remaining worker lifetimes of the valuation cohort
Asset valuation method 5 year smoothed market
Investement rate of return 7.5% net of investment expense, including inflation
See Independent Auditors' Report
44
Fishers Island Ferry District
Internal Control and Compliance Reports
December 31 , 2015
���
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ACCO4JNT�NTS,�N�ADV#S�RS
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 Auditors' Report
The Board of Commissioners
Fishers Island Ferry District
We have audited, 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, the financial statements of the governmental
activities of the Fishers Island Ferry District ("District") as of and for the year ended December 31,
2015, and the related notes to the financial statements, which collectively comprise the District's basic
financial statements, and have issued our report thereon dated June 24, 2016.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District's internal
control over financial reporting ("internal control") to determine the audit procedures that are appropriate
in the circumstances for the purpose of expressing our opinions on the financial statements, but not for
the purpose of expressing an opinion on the effectiveness of the District's internal control. Accordingly,
we do not express an opinion on the effectiveness of the District's internal control.
Our consideration of the internal control over financial reporting was for the limited purpose described in
the preceding paragraph and was not designed to identify all deficiencies in internal control that might
be material weaknesses or significant deficiencies and therefore, material weaknesses or significant
deficiencies may exist that were not identified. However, as described in the accompanying Schedule
of Findings, we identified certain deficiencies in internal control that that we consider to be material
weaknesses.
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
combination of deficiencies, in internal control, such that there is a reasonable possibility that a material
misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a
timely basis. We consider the deficiencies described in the accompanying Schedule of Findings as
items (identified as MW 10-1, 10-3, 10-7, 15-1 and 15-2) to be material weaknesses.
PKF O'CONNOR DAVIES,LLP
100 Great Meadow Road,Wethersfield,CT 06109 I Tel:860.257.1870 I Fax:860.257.1875 I www.pkfod.com
PKF 0'Connor Davies,LLP is a member firm of the PKF International Limited network of Iegally independent firms and does not accept any responsibility or Iiability for the
actions or inactions on the part of any other individual member firm or firms.
The Board of Commissioners
Fishers Island Ferry District
Page 2
Compliance 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 its 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 instances of noncompliance or other matters that are required to be
reported under Government Auditing Standards and which are described in the accompanying
Schedule of Findings as items NC 10-1, 15-1 and 15-2.
District's Response to Findings
The District's response to the findings identified in our audit is described in the accompanying Schedule
of Findings and Questioned Costs. The District's response was not subjected to the auditing
procedures applied in the audit of the financial statements and, accordingly, we express no opinion on
it.
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance, and the result of that testing, and not to provide an opinion on the effectiveness of the
District's internal control or on compliance. This report is an integral part of an audit performed in
accordance with Government Auditing Standards in considering the District's internal control and
compliance. Accordingly, this communication is not suitable for any other purposes.
����� � ��
June 24, 2016
Fishers Island Ferry District
Schedule of Findings
For the Year Ended December 31, 2015
Findinqs on Internal Controls
Each finding is numbered using the sequence XX-####-aaa where XX indicates whether it is a Material
Weakness (MW) in internal control, Significant Deficiency (SD) in internal controls, or Noncompliance
(NC) with rules and regulations. The #### indicates the year that the finding was first reported. Finally,
each finding in a year has a number assigned to it in case there are more than one. The aaa, refers to
the number of the finding in that year.
MW-2010-001 — Entity Level Controls
Condition: Internal controls are a coordinated set of policies and procedures that management
uses to achieve their objectives and meet their fundamental responsibilities for effectiveness,
efficiency, compliance and financial reporting. The literature recognizes five sections of internal
control published by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO Report) in Internal Control — Inteqrated Framework. These five interrelated components
include:
• Control Environment — A favorable control environment exists when management is
knowledgeable about controls (entity wide and specific), is committed to establishing
controls and communicates its support for internal controls to all individuals involved.
• Risk Assessment—This involves management's continual identification and assessment
of the potential risks that might prevent management from fulfilling its responsibilities and
achieving its objectives.
• Information and Communication Systems — These are the systems used to assure that
appropriate individuals have timely and accurate information to carry out their
responsibilities.
• Control Activities—These are management's response to the risks identified. These are
the specific policies and procedures that are put in place to alert management of
undesired actions in a timely manner.
• Monitoring — There is a responsibility of management to follow up on the controls that
have been put in place to assure that they continue to function and function properly,
effectively and efficiently.
The Fishers Island Ferry District does not have a framework established to deal with each of the
interrelated entity level controls over and above the specific control policies and procedures that
have been developed.
Recommendation: We recommend that as part of developing an accounting manual, the
Fishers Island Ferry District consider the entity wide controls as discussed above.
Management's Response: We have been working to develop a coordinated set of policies
and procedures. In July of 2016 the Board of Commissioners adopted policies on payroll and
paid time off accruals; and cash management. The accounting manual is in process and will be
reviewed by the Finance Committee as work progresses. The manual will reinforce District
policy on risk assessment, communication, control activities, and monitoring of these matters.
The Board of Commissioners will enact corresponding policies; and will approve the accounting
manual when it is complete.
47
Fishers Island Ferry District
Schedule of Findings
For the Year Ended December 31, 2015
MW-2010-003—Segregation of Duties - Revenues
Condition: The Ferry District does not maintain an adequate segregation of duties for proper
internal control over the financial transactions in certain areas. Proper internal control relies on
the following three aspects of processing transactions being performed by separate individuals:
authorizing transactions, custody of assets, and record keeping. This weakness in internal
controls could lead to funds being expended in a manner not consistent with the intentions of
management. These weaknesses were noted in the following areas:
• Ticket Sales — Sales that are "no charge" are authorized and recorded by the same
individual.
• Ticket Books — Ticket Books have the same individuals able to authorize the purchase,
have custody of the physical books and cash collected and do the record keeping for the
sale.
• Freight Sales — Freight is not always counted by the freight agent. This is not noted
and corrected at the other end. Cash payments are collected and recorded by the same
individual. Individuals are able to collect payment, record transactions and delete
transactions from the system.
• Recording Revenues — Individuals are able to collect payment, record transactions and
delete transactions from the system or write off transactions in the system.
Recommendation: The Ferry District should review the segregation of duties involved in all the
cash receipts functions. The duties of the individuals involved should be analyzed and
restructured as necessary to provide for a better system of checks and balances. A segregation
of duties is not the only tool used in internal controls, where a segregation of duties is not
possible, alternate internal control tools should be implemented. Once a better system has been
devised, it should be written, approved by the Board of Commissioners and distributed to the
individuals involved.
Management's Response: We have been working to develop a coordinated set of policies
and procedures. During the year ended December 31, 2015, the reconciliation function was
segregated from the custody and recording function. There is one staff person responsible for
accounts payable processing, one for payroll processing, and one for receivables recording and
invoicing. Multiple staff receive cash and create deposits; deposits are verified by the staff
member responsible for receivables.
We are eliminating the ticket books. All unsold ticket books will be shredded. Tickets from
previously sold ticket books will be accepted for passage.
In June 2016, we began working with a consulting CPA to update our policies and procedures,
including segregation of duties. Currently, the same individual may collect cash receipts and
record those payments. To segregate the collection function from the recording function, we
plan to install, in 2016, a cash register that will create numbered receipts.
A methodology for verifying that all freight received in New London is delivered on Fishers
Island is in process.
In conjunction with producing policies and procedures, we will create a process for management
approval of no-charge items, changes, deletions and transaction write-offs.
48
Fishers Island Ferry District
Schedule of Findings
For the Year Ended December 31, 2015
MW-2010-007— Documentation of the Components of Internal Control over Processes
Condition: The Fishers Island Ferry District has numerous internal controls in place over
significant processes and accounts. Not all of these controls are formally documented. It is
possible for controls to change over time or not be completely understood by the individuals
involved in the processes.
Recommendation: We recommend that the Fishers Island Ferry District make a listing of its
significant processes and accounts. Controls in each area should be documented in a
procedures manual. Each of the procedures should be reviewed to determine if controls are
adequate.
Management's Response: We have been working to develop a coordinated set of policies
and procedures. We will document our policies and procedures and communicate them to staff.
We are working with a consulting CPA, the Finance Committee, the Board of Commissioners
and the District's general counsel to update our policies and procedures and ensure that we
have instituted adequate controls.
MW-2015-001 — Internal Controls over Payroll
Condition: The Fishers Island Ferry District lacks controls over payroll. Time slips are required
to be signed by the employee but that is not always done. Time slips are not approved by the
employees' supervisor. The clerk's review of the time slips is not documented. The lack of
controls creates a situation in which it cannot be confirmed whether an employee actually
worked or that overtime worked was approved.
Recommendation: We recommend that the Fishers Island Ferry District tighten their controls
over payroll including requiring an employee signature and a supervisor signature. The clerk's
review of the time cards should also be documented.
Management's Response: In 2015 the Marine Operations Supervisor and the Maintenance
Mechanic established that the baseline paid time off (PTO) balances at the 2013 year end (as
manually recorded in a Red Book) were accurate. The balances were brought forward into
2014. PTO used was accurately and completely accounted for by using original documentation
(leave requests) and the requirements of the Employee Handbook and the Collective Bargaining
Agreement for Unused time carry-forward or loss. These balances were brought forward into
2015, and the same process was followed to establish carry-forwards, vacation hours eligible to
be paid out in December 2015, and time lost. These balances were brought forward into 2016.
In July of 2015, the Accounting Supervisor (Secretary) assumed the duties of calculating bi-
weekly payroll and retroactive payments and of reporting hours to the Town of Southold payroll
department for issuance of checks and related (withholding, medical premium share,
garnishments, etc.), payroll calculations and reporting.
The Accounting Supervisor emphasizes to employees the necessity for signing time sheets and
requires Managers to approve, on the timesheets, the hours of all employees. The Accounting
Supervisor works closely with the Marine Operations Supervisor to ensure that reported hours
are correct, complete, and comply with the assigned schedule for those employees scheduled
by the Marine Operations Supervisor and the Maintenance Mechanic (those employees
49
Fishers Island Ferry District
Schedule of Findings
For the Year Ended December 31, 2015
originating at the New London Terminal, except the Managers).
The Accounting Supervisor publishes the bi-weekly timesheets for employees originating in the
New London terminal and posts them for employee signature prior to submitting the hours to the
Town of Southold payroll department. In cases where the employee does not sign prior to
submission to the Town, the Accounting Supervisor and/or the Marine Operations Supervisor
will contact the employee and encourage them to sign the timesheet. The Business Manager or
the Accounting Supervisor publishes the bi-weekly timesheets for employees whose work
responsibilities are on Fishers Island. Where necessary, the Accounting Supervisor calculates
corrections to hours, which are paid or deducted retroactively.
Findinqs on Compliance
NC-2010-001 Non-collusion Statements
Section 103-d of the New York General Municipal Law requires a statement of non-collusion in
bids and proposals to political subdivision of the state. Currently, the Fishers Island Ferry
District does not have a policy to obtain, nor does it obtain any statements of non-collusion in its
bids and proposals.
Management's Response: In 2014, the Board of Commissioners approved an amendment to
the procurement policy to include a statement of non-collusion. As of July 2016, the Town of
Southold's non-collusion statement is included in bid documents and approved contracts as part
of the procurement process.
NC-2015-001 Bidding
Appropriate bidding was not advertised properly on the South Ramp Project. There is no
documentation of any bids besides the winning bid. The bill for this project was contested with
the Town of Southold because the bidding was not done appropriately.
Management's Response: Management is revising the procurement policy with oversight and
input from the District's general counsel. The procurement policy will be revised to conform to
the State Comptroller's guidelines.
50
Fishers Island Ferry District
Schedule of Findings
For the Year Ended December 31, 2015
NC-2015-002 Supervision of Employees
An agreement was approved by the Board of Commissioners whereby an employee's duties
were reassigned, except for performing special marine projects for the Manager. When the
Manager left, no one was assigned the duty to oversee the employee and provide special
projects to the employee. The employee continued to be paid a salary. It is unclear the amount
of services, if any, provided in return and if any deductions should have been taken from the
employee's leave time.
Management's Response: The Board approved the then Manager's recommendation in
January 2014 on realigning responsibilities between the Marine Operations Supervisor and the
Assistant Manager Marine Operations. Management is working with the consulting CPA to
review this situation and outside HR counsel is preparing the necessary documentation to seek
recovery of any over payment for leave accruals. Procedures will be developed to formalize all
employee separation benefits for Board approval.
51
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ACCOUNTANTS AND ADVISORS
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Fisher� Islancl Fer�°y District
� Report to the i4ud�t Cornrnittee
� Decerr�ber 31 , 2015
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August i, 2oi6
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Prepared by
Marcia L. Marien, CPA
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August 1, 2016
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Board of Commissioners
f Fishers Island Ferry District
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Fishers Island, NY
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We are in the process of completing our audit of the financial statements of Fishers Island Ferry
;
District as of and for the year ended December 31, 2015.
I Professional standards require us to communicate with you regarding audit matters that are, in our
�—� professional judgment, significant and relevant to those charged with governance ("TCWG") in
overseeing the financial reporting process. This communication is intended to provide you with
� �, these required communications as well as other findings and information regarding our audit.
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, . We are pleased to be of service to you and Fishers Island Ferry District and appreciate the
'- opportunity to present our audit findings to you. We are also pleased to discuss other matters
which may be of interest to you and to answer any questions you may have.
This information is intended solely for the information and use of TCWG and management of
Fishers Island Ferry District and is not intended to be and should not be used by anyone other than
these specified parties. ,
-- Very truly yours,
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� - PKF O'Connor Davies, LLP
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�-� Contents
( F Status of the Audit and Other Services 4
� , ...............................................................................................
Required Communications and Other Matters....................................................................................5
j Internal Control Over Financial Reporting...........................................................................................9
�_ On the Horizon..................................................................................................................................10
� Appendices
1 - Communication of Internal Control Matters
i
i � 2 - Management Representation Letter
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3- Financial Highlights
`-� 3-About PKF O'Connor Davies, LLP �
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- � Status of the Audit and Ot]her Services ,
i � Audit of Financial Statements
• Audit fieldwork is substantially complete. The scope of our fieldwork was substantially the
` same as described in our Audit Planning communications. �
�
�-- � The financial statements have been drafted and reviewed by management.
• We anticipate that we will be issuing an unmodified report on the financial statements upon �
completion of all outstanding audit related items/ issues and our internal review process. If
the nature of our report changes, we will notify you prior to issuance.
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�� Req�ired Co�mun�cations and Other 10�atters
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,- Auditor's responsibility We have communicated such information in our engagement
under professional letter to you dated January 1, 2016. Generally, these
standards ansi planned} responsibilities include: � y -�
, scope and timing of the` • Forming and expressing ari opinion on the financial
audit statements. , ,
' � �. ' � • Obtaining reasonable assurance the financiah statements
� are free of material misstatements, whether caused by
error or fraud. . •
. � . .s • Accumulating� and communicating uncorrected
' misstaternents to TCWG. �
• Maintaining professional skepticism. -
� ° � • Communicating audit related matters that .are, in our
� ' . professional judgment, significant to TCWG. �
Responsibili4ies of Management's responsibilities include:
management arad TCWG • The fair presentation of the finaricial statements,
' , including the selection of appropriate •accounting
policies. �
• Establishing and maintaining effective internal control.
. •. Complying wit'h laws, regulations, grants and contracts.
� • Providing the auditors with all financial records and
related information and a signed representation letter.
� TCWG are responsible for communicating.with the auditors and
overseeing the financial reporting process. �
. Both management and TCWG are responsible for:
. � • Setting the proper tone at the top. ' .
� � • Designing and implementing policies and controls to
. prevent and detect fraud.
5
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ACCOUNTANTS AND ADVISORS
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; Qualitative aspects,of f The significant accounting policies are,described in Note 1 to
-- accounting practices - , the financial statements. �
_ -Accounting Policies ' � .
, ' � - � As described�in Note 2 to the financial�statements; during the.
� year, the-Distric changed its metfiod of accounting by adopting,
Governmental Accounting Standards Board (GASB) Statements .
` . - - as follows: - ` � - �
- , : , GASB Statement 68 .- Accounting and Financial Reporting for
, � Pensions and 71 = Fension Transition for Contributions Made
� Subsequent to the Measurement Date — These statements�
� � � ', , statements seek to improve accounting and financial r.eporting by'
state and local governments for pensions by establishing
� � , � „ . � - standards for �measuring and recognizing �liabilities,, deferred
' ' � ' _ � outflows/inflows of resources and expenses/expenditures. � .
� • . � � � Accordingly, the"cumulative effect of the�accounting change as of�
. , the beginning of the year Fias been reported in the Statement of
., . ' Activiti'es. , � _. , .
� , These policies are appropriate and' comply with Accounting
, . � ` . '� Principle's Generally accepted in ;the United States of America
, _ - (US GAAP). . - � �
Qualitative aspects of No matters have come to our attention that would require us to
� accounting practices — inform you about the methods used to account for significant-
' Significant Unusual unusual transactions.
Transactions � � � , .
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� Qualitative as�ects.of Accounting estimates made by management are an integral part
�- accounting practices - of the financial statements and are based on management's
Accounting Estimates and knowledge and experience about_past and current events and
' �llar►agement's Judgrr�ent assumptions about future events. Actual results could differ from
those estimates.
° " Certain accounting estimates are particularly sensitive because
� of their significance to financial statements and their
, • , susceptibility to-change. The most.sensitive estimates affecting
the financial statements are:
� • � Depreciation Expense — Depreciation expense is intended to
allocate the cost of a long-term asset over its period of use.
� Management estimates depreciation expense based on the
, expected useful life and residual value of the underlying asse#s.
_ Management believes that the estimates used and assumptions
made are adequate based on the information currently
� available. We evaluated the key factors and assumptions used •
to develop the estimates in determining that they are reasonable
- in relation to the financial statements as a whole.
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4ualitative aspects of The financial statement disclosures are consistent and clear.
� ; accounting practices -
Financia/Statement
Disclosu"res
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Difficulties encountered in We encountered no, significant , difficulties in dealing with�
performing the audi# - .management relating to the performance of our audit.
Corrected and uncorrected Professional standards require us to accumulate all known and
misstatervients likely misstatements identified during the audit, other than those
, � � that we believe are trivial, and communicate them to the
appropriate level of management.
There were no significant audit adjustments.
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�-- Disagreements with ' For purposes of this communication, a disagreement with
management z management is a matter, whether or not resolved to our
f � � � ° satisfaction, concerning financial accounting, reporting, or
!_ - auditing, which could be significant to the financial statements or
- • . the auditors' report. No such disagreements arose during the
�' ' � course of the audit.
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� Management.� � We have,requested certain representations from management
� representations that are included in the management representation_,letter (see
� Appendix 2. �
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Management's � ' , In some cases, management may decide to consult with other
� , consultations with other accountants about auditing and accounting matters.
'- � ,accountants • Management informed us that, and to our ,knowledge, there
� ' were no such consultations with other accountants. '
;� . . , . '- ' - .
- Auditor independence We affirm that PKF O'Connor Davies,.LLP is independent with
+ � respect to the Organization• iri accord'ance . with relevant
' � - professional standards. _ . �
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Significant issues• � • _ We generally, discuss'�with •�management a variety of matters, -
discussed with including the application of accounting principles and auditing
; management prior to; _ . , standards; busi,ness conditions affecting the Organization.and
retention busiriess plans and strategies that may affect the risks of
� � � material misstatement.�None�of the matters discussed and.our
� � � • � � � . . responses thereto were�a condition to our-retention as auditors.
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�� . Internal Control Over Financial Reporting
! � In planning and performing our audit of the financial statements, we considered Fishers Island Ferry
�___ District's (the "Organization") internal control over financial reporting ("internal control") as a basis
for designing audit procedures that are appropriate in the circumstances 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 Organization's internal control. Accordingly, we express no such opinion.
ti -, Professional standards require that we communicate to you, in writing, all significant deficiencies
i and/or material weaknesses in internal control that we identify in performing our audit. For this
� purpose, deficiencies in internal control are categorized as follows:
', • 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 combination of deficiencies, in internal control,
, such that there is a reasonable possibility that a material misstatement of the entity's
� financial statements will not be prevented, or detected and corrected, on a timely basis.
I_ • A significant deficiency is a deficiency, or a combination of deficiencies, in internal control
� � that is less severe than a mat�rial weakness, yet important enough to merit attention by
-- those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph and
was not designed to identify all deficiencies in internal control that might be deficiencies, significant
, deficiencies, or material weaknesses and, therefore, there can be no assurance that all such
� deficiencies have been identified.�
We identified certain deficiencies in the Organization's internal control. These are described in
I--, Appendix 1.
i
— This communication is intended solely for the information and use of management and those
charged with governance and is not intended to be and should not be used by anyone other than
these specified parties.
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�� On the Horizon
f Proposeii Improverv�ents to OPE� Reportinq
�__ .
Recently the Government Accounting Standards Board ("GASB") proposed new standards for
reporting Other Post-Employment Benefits ("OPEB") in a government's financial statements. GASB
�_ believes that these would improve the financial reporting and transparency of the government. This
would be similar to the changes approved in GASB Statements No. 68 and 71 discussed above.
j In addition, governments have been allowed to slowly incorporate the OPEB liability into their
�- balance sheet. Because the current standard allows the OPEB liability to be phased in over 30
years, and we are less than 10 years into the current standards, most governments have only one-
� third or less of the total liability reported on their balance sheet. The new standard will require most
� of the liability to be reported on the balance sheet immediately or in a period not to exceed 5 years.
Chanqes to the Federal Sinqle Audit OMB Circular A-133
The following are some of the key areas of change from a client's perspective: '
� Single Audit Threshold tor Audit Proposed fo Increase fo $750,000— Entities that expend less
� than $750,000 in federal awards would not be subject to an A-133, or single, audit. This is an
° increase from the existing $500,000 threshold.
Reducfion in Types of Compliance Requirements to be Tesfed — The number of types of
� � compliance requirements to be tested will be reduced from the current 14 types to 6 types of
i_ ; compliance requirements. The 6 requirements include: (1) Activities Allowed or Unallowed and
Allowable Costs/Costs Principles; (2) Cash Management; (3) Eligibility; (4) Reporting; (5)
Subrecipient Monitoring; and (,6) Special Tests and Provisions. Federal agencies would be allowed
to request that certain of the types of compliance requirements being eliminated could be added to
� the Special Tests and Provisions requirement for programs where they could be considered
essential to the oversight of the program.
�- � Findings — More detail will be required to be reported in auditor findings. The questioned cost
threshold for reporting will be increased from $10,000 to $25,000.
� Sfreamlining of Related Circulars and Guidance — The Proposed Guidance streamlines eight
, existing OMB Circulars into one document including Circular A-133 and the various Cost Principles.
� The following OMB Circulars will be superseded:
' • A-21, Cost Princip/es for Educational lnstitutions ,
• A-87, Cost Princip/es for State, Local, and Indian Tribal Governments
• A-89, Federal Domestic Assistance Program information
{ • A-102, Awards and Cooperative Agreements with State and Loca/Governments
• A-110, Uniform Administrative Requirements for Awards and Other Agreements with
� , Institutions for Higher Educafion, Hospita/s and Other Nonprofit Organizations
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�PKF
O`CONNOR
� DAVIES
- ACCOUNTANTS AND ADVISORS
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��- Appendix 1
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� Cornmunication of Internal Control Matters
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�� Fishers Island Ferry District
Schedule of Findings
� For the Year Ended December 31, 2015
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Findinqs on Internal Controls
i Each finding is numbered using the sequence XX-####-aaa where XX indicates whether it is a Material
Weakness (MW) in internal control, Significant Deficiency (SD) in internal controls, or Noncompliance
-- (NC) with rules and regulations. The ####�indicates the year that the finding was first reported. Finally,
( each finding in a year has a number assigned to it in case there are more than one. The aaa, refers to
� the number of the finding in that year.
iMW-2010-001 — Entity Level Controls
Condition: Internal controls are a coordinated set of policies and procedures that management
� uses to achieve their objectives and meet their fundamental responsibilities for effectiveness,
i efficiency, compliance and financial reporting. The literature recognizes five sections of internal
control published by the Committee of Sponsoring Organizations of the Treadway Commission
i (COSO Report) in Internal Control — Inteqrated Framework. These five interrelated components
� include:
�_ ,
� � , • Control Environment — A favorable control environment exists when management is
� knowledgeable about controls (entity wide and specific), is committed to establishing
� controls and communicates its support for internal controls to all individuals involved.
� � • Risk Assessment—This involves management's continual identification and assessment
l� I of the potential risks that might prevent management from fulfilling its responsibilities and
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achieving its objectives.
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� -' • lnformation and Communication Systems— These are the systems used to assure that
appropriate individuals have timely and accurate information to carry out their
' responsibilities.
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• Control Activities—These are management's response to the risks identified. These are
i , the specific policies and procedures that are put in place to alert management of
'__ ' undesired actions in a timely manner.
i � • Monitoring — There is a responsibility of management to follow up on the controls that
�, , have been put in place to assure that they continue to function and function properly,
effectively and efficiently.
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' The Fishers Island Ferry District does not have a framework established to deal with each of the
` interrelated entity level controls over and above the specific control policies and procedures that
- have been developed.
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'- Recommendation: We recommend that as part of developing an accounting manual, the
t Fishers Island Ferry District consider the entity wide controls as discussed above.
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� Management's Response: We have been working to develop a coordinated set of policies
and procedures. In July of 2016 the Board of Commissioners adopted policies on payroll and
i, paid time off accruals; and cash management. The accounting manual is in process and will be
_ reviewed by the Finance Committee as work progresses. The manual will reinforce District
policy on risk assessment, communication, control activities, and monitoring of these matters.
The Board of Commissioners will enact corresponding policies; and will approve the accounting
�� manual when it is complete.
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L� Fishers Island Ferry District
Schedule of Findings
�; For the Year Ended December 31, 2015
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MW-2010-003-Segregation of Duties - Revenues ,
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� ; Condition: The Ferry District does not maintain an adequate segregation of duties for proper
internal control over the financial transactions in certain areas. Proper internal control relies on
�- the following three aspects of processing transactions being performed by separate individuals:
� " , authorizing transactions, custody of assets, and record keeping. This weakness in internal
� controls could lead to funds being expended in a manner not consistent with the intentions of
� management. These weaknesses were noted in the following areas:
� • Ticket Sales - Sales that are "no charge" are authorized and recorded by the same
individual.
1 � • Ticket Books-Ticket Books have the same individuals able to authorize the purchase,
L_i have custody of the physical books and cash collected and do the record keeping for the
sale.
; , • Freight Sales - Freight is not always counted by the freight agent. This is not noted
�_ � and corrected at the other end. Cash payments are collected and recorded by the same
individual. Individuals are able to collect payment, record transactions and delete
(� � transactions from the system.
i ;� • Recording Revenues - Individuals are able to collect payment, record transactions and
delete transactions from the system or write off transactions in the system.
� ; Recommendation: The Ferry District should review the segregation of duties involved in all the
- cas h receipts functions. T he duties o f t he in divi dua ls invo lve d s hou l d be ana lyze d an d
f � restructured as necessary to provide for a better system of checks and balances. A segregation
L � of duties is not the only tool used in internal controls, where a segregation of duties is not
possible, alternate internal control tools should be implemented. Once a better system has been
r devised, it should be written, approved by the Board of Commissioners and distributed to the
' individuals involved. ,
Managemen#'s Response: We have been working to develop a coordinated set of policies
� � and procedures. During the year ended December 31, 2015, the reconciliation function was
I__ ' segregated from the custody and recording function. There is one staff person responsible for
accounts payable processing, one for payroll processing, and one for receivables recording and
; invoicing. Multiple staff receive cash and create deposits; deposits are verified by the staff
� � member responsible for receivables.
( , We are eliminating the ticket books. All unsold ticket books will be shredded. Tickets from
i , previously sold ticket books will be accepted for passage.
In June 2016, we began working with a consulting CPA to update our policies and procedures,
including segregation of duties. Currently, the same individual may collect cash receipts and
' record those payments. To segregate the collection function from the recording function, we
__ plan to install, in 2016, a cash register that will create numbered receipts.
�
� A methodology for verifying that all freight received in New London is delivered on Fishers
Island is in process.
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�__� In conjunction with producing policies and procedures, we will create a process for management ,
approval of no-charge items, changes, deletions and transaction write-offs.
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Schedule of Findings
I , For the Year Ended December 31, 2015
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MW-2010-007— Documentation of the Components of Internal Control over Processes
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Condition: The Fishers Island Ferry District has numerous internal controls in place over
�- significant processes and accounts. Not all of these controls are formally documented. It is
1 ; possible for controls to change over time or not be completely understood by the individuals
�- ' involved in the processes.
� " Recommendation: We recommend that the Fishers Island Ferry District make a listing of its
�' � significant processes and accounts. Controls in each area should be documented in a
procedures manual. Each of the procedures should be reviewed to determine if controls are
) � adequate.
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Management's Response: We have been working to develop a coordinated set of policies
j`i and procedures. We will document our policies and procedures and communicate them to staff.
; � We are working with a consulting CPA, the Finance Committee, the Board of Commissioners
and the District's general counsel to update our policies and procedures and ensure that we
�---, have instituted adequate controls.
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; MW-2015-001 — Internal Controls over Payroll
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__ Condition: The Fishers Island Ferry District lacks controls over payroll. Time slips are required
i ; to be signed by the employee but that is not always done. Time slips are not approved by the
�- � employees' supervisor. The clerk's review of the time slips is not documented. The lack of
controls creates a situation in which it cannot be confirmed whether an employee actually
� ; worked or that overtime worked was approved.
Recommendation: We recommend that the Fishers Island Ferry District tighten their controls
^ , over payroll including requiring an employee signature and a supervisor�signature. The clerk's
' review of the time cards should also be documented.
�� Management's Response: In 2015 the Marine Operations Supervisor and the Maintenance
' ; Mechanic established that the baseline paid time off (PTO) balances at the 2013 year end (as
- manually recorded in a Red Book) were accurate. The balances were brought forward into
, 2014. PTO used was accurately and completely accounted for by using original documentation
� (leave requests) and the requirements of the Employee Handbook and the Collective Bargaining
'- � Agreement for Unused time carry-forward or loss. These balances were brought forward into
2015, and the same process was followed to establish carry-forwards, vacation hours eligible to
� � be paid out in December 2015, and time lost. These balances were brought forward into 2016.
In July of 2015, the Accounting Supervisor (Secretary) assumed the duties of calculating bi-
, weekly payroll and retroactive payments and of reporting hours to the Town of Southold payroll
�_ � department for issuance of checks and related (withholding, medical premium share,
garnishments, etc.), payroll calculations and reporting.
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� y The Accounting Supervisor emphasizes to employees the necessity for signing time sheets and
requires Managers to approve, on the timesheets, the hours of all employees. The Accounting
�--, Supervisor works closely with the Marine Operations Supervisor to ensure that reported hours
( � are correct, complete, and comply with the assigned schedule for those employees scheduled
`- by the Marine Operations Supervisor and the Maintenance Mechanic (those employees
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� _ Fishers island Ferry District
� Schedule of Findings
i � For the Year Ended December 31, 2015
� � _ _
originating at the New London Terminal, except the Managers). ,
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� The Accounting Supervisor publishes the bi-weekly timesheets for employees originating in the
` New London terminal and posts them for employee signature prior to submitting the hours to the
�-- Town of Southold payroll department. In cases where the employee does not sign prior to
� submission to the Town, the Accounting Supervisor and/or the Marine Operations Supervisor
- � will contact the employee and encourage them to sign the timesheet. The Business Manager or
the Accounting Supervisor publishes the bi-weekly timesheets for employees whose work
� � responsibilities are on Fishers Island. Where necessary, the Accounting Supervisor calculates
�- ' corrections to hours, which are paid or deducted retroactively.
�_� Findinqs on Compliance
�� � NC-2010-001 Non-collusion Statements
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--. Section 103-d of the New York General Municipal Law requires a statement of non-collusion in
'� , bids and proposals to political subdivision of the state. Currently, the Fishers Island Ferry
District does not have a policy to obtain, nor does it obtain any statements of non-collusion in its
�, bids and proposals.
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—' Management's Response: In 2014, the Board of Commissioners approved an amendment to
, _ the procurement policy to include a statement of non-collusion. As of�July 2016, the Town of
� Southold's non-collusion statement is included in bid documents and approved contracts as part
' - of the procurement process. .
� �� NC-2015-001 Bidding
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Appropriate bidding was not advertised properly on the South Ramp Project. There is no
; -; documentation of any bids besides the winning bid. The bill for this project was contested with
J� the Town of Southold because the bidding was not done appropriately.
Management's Response: Management is revising the procurement policy with oversight and
input from the District's general counsel. The procurement policy will be revised to conform to
the State Comptroller's guidelines.
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Schedule of Findings
i ', For the Year Ended December 31, 2015
� NC-2015-002 Supervision of Employees �
i • An agreement was approved by the Board of Commissioners whereby an employee's duties
`- were reassigned, except for performing special marine projects for the Manager. When the
-- Manager left, no one was assigned the duty to oversee the employee and provide special
projects to the employee. The employee continued to be paid a salary. It is unclear the amount
- of services, if any, provided in return and if any deductions should have been taken from the
_ employee's leave time.
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�---� Management's Response: The Board approved the then Manager's recommendation in
January 2014 on realigning responsibilities between the Marine Operations Supervisor and the
j ' , Assistant Manager Marine Operations. Management is working with the consulting CPA to
i_ ' review this situation and outside HR counsel is preparing the necessary documentation to seek
recovery of any over payment for leave accruals. Procedures will be developed to formalize all
� employee separation benefits for Board approval.
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O`CONNOR
� � _ DAVIES �
ACCOUNTANTS AND ADVISORS
�-� Appendix 2 �
Management Representation Letter
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- Management Representation Letter
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June 24, 2016
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PKF O'Connor Davies, LLP
�� , 100 Great Meadow Road
Wethersfield, CT 06109
� � This representation letter is provided in connection with your audit of the financial statements of the
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Fishers Island Ferry District ("District), which comprise the respective financial position of the
� governmental activities and each major fund as of December 31, 2015, and the respective changes in
financial position for the year then ended, and the related notes to the financial statements, for the
- - purpose of expressing opinions as to whether the financial statements are presented fairly, in all
_ material respects, in accordance with accounting principles generally accepted in the United States of
� America (U.S. GAAP).
�_
Certain representations in this letter are described as being limited to matters that are material. Items
�� are considered material, regardless of size, if they involve an omission or misstatement of accounting
—� information that, in light of surrounding circumstances, makes it probable that the judgment of a
reasonable person relying on the information would be changed or influenced by the omission or
� '; misstatement. An omission or misstatement that is monetarily small in amount could be considered
;_ ; material as a result of qualitative factors.
We confirm, to the best of our knowledge and belief, (having made such inquiries as we considered
necessary for the purpose of appropriately informing ourselves) as of the date of this letter, the
- following representations made to you during your audit.
Our Responsibilities
�._ 1) We acknowledge that we have fulfilled our responsibilities for:
� � a) The preparation and fair presentation of the financial statements in accordance with US GAAP
�- - and include all properly classified funds and other financial information of the primary
_ government and all component units required by generally accepted accounting principles to be
; included in the financial reporting entity.
�_ b) 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; and
i__i c) The design, implementation, and maintenance of internal control to prevent and detect fraud.
��- 2) We understand that the term "fraud" refers to intentional acts by one or more individuals among
� � management, those charged with governance, employees, or third parties, involving the use of
deception that results in a misstatement in financial statements. Two types of intentional
misstatements are relevant to your audit — misstatements resulting from fraudulent financial
�_i reporting and misstatements resulting from misappropriation of assets. Fraudulent financial
reporting involves intentional misstatements, including omissions of amounts or disclosures in
financial statements to deceive financial statement users. Niisappropriation of assets involves the
I � theft of an entity's assets.
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3) We are further responsible for reviewing, accepting and processing the standard, adjusting, or
' correcting journal entries that you proposed during the course of your engagement. We confirm that
__' we designated a suitably qualified individual who understands the nature and impact of the
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4 proposed entries to the financial statements, and we accept responsibility for the proposed entries
that we authorized and processed.
Financial Statements
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�_. 4) The financial statements referred to above are fairly presented in conformity with US GAAP and
include all disclosures necessary for such fair presentation. In that connection, we specifically
�' , confirm that:
__� a) The District's accounting policies, and the practices and methods followed in applying them, are
appropriate and are as disclosed in the financial statements. '
b) Except as disclosed in note 2 to the financial statements, there have been no changes during
� , the period audited in the District's accounting policies and practices.
c) All material transactions have been recorded in the accounting records and are reflected in the
�- financial statements.
l�- 5) Significant assumptions we used in making accounting estimates, including those measured at fair
� value, are reasonable.
- 6) The following, where they exist, have been appropriately disclosed to you and accounted for and/or
disclosed in the financial statements in accordance with the requirements of US GAAP:
� � a) The identity of all related parties and related party relationships and transactions including
� revenues, expenditures/expenses, loans, transfers, leasing arrangements, and guarantees, and
amounts receivable from or payable to related parties.
; b) Guarantees, whether written or oral, under which the District is contingently liable, if any.
,_, c) The effects of all known actual, possible, pending or threatened litigation, claims, and
assessments.
, , d) The identity of the District's related parties and all the related party relationships and
� transactions of which we are aware.
7) We have evaluated events subsequent to the date of the financial statements through the date of
this letter, and no such events have occurred which would require adjustment or disclosure in the
financial statements. No events, including instances of noncompliance, have occurred subsequent
to the balance sheet date and through the date of this letter that would require adjustment to or
disclosure in the aforementioned financial statements.
8) The effects of uncorrected misstatements are immaterial, both individually and in the aggregate, to
� the financial statements as a whole. We are in agreement with the adjusting journal entries you
' have proposed, and they have been posted to the District's accounts.
` Information Provided
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9) We have provided you with:
a) Access to all information, of which we are aware, that is relevant to the preparation and fair
I � presentation of the financial statements, such as records, documentation, and other matters and
� all audit or relevant monitoring reports, if any, received from funding sources. '
b) Communications from regulatory agencies concerning noncompliance with, or deficiencies in,
� financial reporting practices, if applicable.
- c) Additional information that you have requested from us for the purpose of the audit.
_, d) Unrestricted access to persons within the District from whom you determined it necessary to
obtain audit evidence.
-�' e) Completeness and availability of all minutes of the meetings of the Board of Commissioners or
summaries of actions of recent meetings for which minutes have not yet been prepared.
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- 10)We have disclosed to you the results of our assessment of the risk that the financial statements
! '� may be materially misstated as a result of fraud.
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11) Except as made known to you, There are no deficiencies in the design or operation of internal
I control over financial reporting that are reasonably likely to adversely affect the District's ability to
?-- initiate, authorize, record, process, and report financial data reliably in accordance with US GAAP.
� 12) Except as made known to you, we have no knowledge of any fraud or suspected fraud that affects
� the entity and involves:
a) Management,
b) Employees who have significant roles in internal control, or
� , c) Others where the fraud could have a material effect on the financial statements.
� 13) Except as made known to you and included in your Management Letter, we have no knowledge of
� any allegations of fraud or suspected fraud affecting the District's financial statements
�- communicated by employees, former employees, regulators, or others. These include the findings
- , from the State pension auditors. ,
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14)Except as made known to you, we have no knowledge of instances of noncompliance or suspected
_ noncompliance with provisions of laws, regulations, contracts, or grant agreements, or abuse,
� ; whose effects should be considered when preparing financial statements.
�� 15)We have disclosed to you all known actual or possible litigation, claims, and assessments whose
�� effects should be considered when preparing the financial statements.
i � 16)We have disclosed to you the identity of the District's related parties and all the related party
relationships and transactions of which we are aware.
Government—specific
17) Except as made known to you, there have been no communications from regulatory agencies
concerning noncompliance with, or deficiencies in, financial reporting practices.
�--; 18)We have a process to track the status of audit findings and recommendations.
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19)We have identified to you any previous audits, attestation engagements, and other studies related
,- to the audit objectives and whether related recommendations have been implemented.
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' 20)We have provided our views on reported findings, conclusions, and recommendations, as well as
our planned corrective actions, for the report.
�' � 21)The District has no plans or intentions that may materially affect the carrying value or classification
of assets, liabilities, or equity.
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22)We are responsible for compliance with the laws, regulations, and provisions of contracts and grant
agreements applicable to us, including tax or debt limits and debt contracts, and legal and
; contractual provisions for reporting specific activities in separate funds.
;
23)We have identified and disclosed to you all instances that have occurred or are likely to have
occurred, of fraud and noncompliance with provisions of laws and regulations that we believe have
� � a material effect on the financial statements or other financial data significant to the audit objectives,
_�� and any other instances that warrant the attention of those charged with governance.
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�__ 24)We have identified and disclosed to you all instances, which have occurred or are likely to have
� � occurred, of noncompliance with provisions of contracts and grant agreements that we believe have
— - a material effect on the determination of financial statement amounts or other financial data
significant to the audit objectives.
1 25)We have identified and disclosed to you all instances that have occurred or are likely to have
occurred, of abuse that could be quantitatively or qualitatively material to the financial statements or
� other financial data significant to the audit objectives.
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26)There are no violations or possible violations of budget ordinances, laws and regulations (including
those pertaining to adopting, approving, and amending budgets), provisions of contracts and grant
� agreements, tax or debt limits, and any related debt covenants whose effects should be considered
for disclosure in the financial statements, or as a basis for recording a loss contingency, or for
reporting on noncompliance.
�--� 27 As art of our audit ou assisted with re aration of the financial statements and related notes.
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- We acknowledge our responsibility as it relates to those nonaudit services, including that we
i �, assume all management responsibilities; oversee the services by designating an individual,
'- preferably with senior management, who possesses suitable skill, knowledge, or experience;
evaluate the adequacy and results of the services performed; and accept responsibility for the
' results of the services We have reviewed, approved, and accepted responsibility for those financial
4 statements and related notes. We also understand that as part of your audit, you prepared various
adjusting journal entries, both on the fund ,and entity-wide level, and acknowledge that we have
J ; reviewed and approved'those entries and accepted responsibility for them.
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28)The District has satisfactory title to all owned assets, and there are no liens or encumbrances on
such assets nor has any asset been pledged as collateral.
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29)The District has complied with all aspects of contractual agreements that would have a material
� effect on the financial statements in the event of noncompliance.
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� 30)We have followed all applicable laws and regulations in adopting, approving, and amending
budgets.
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' 31)The financial statements include all component units as well as joint ventures with an equity interest,
and properly disclose all other joint ventures and other related organizations.
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' 32)The financial statements properly classify all funds and activities in accordance with GASB
Statement No. 34.
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,_ � 33)All funds that meet the quantitative criteria in GASB Statement Nos. 34 and 37 for presentation as
major are identified and presented as such and all other funds that are presented as major are
�-, particularly important to financial statement users.
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34)Components of net position (net investment in capital assets; restricted; and unrestricted) and
� classifications of fund balance (nonspendable, restricted, committed, assigned, and unassigned)
�! are properly classified and, if�applicable, approved.
35) Receivables recorded in the financial statements represent valid claims against debtors for
�� transactions arising on or before the balance sheet date and have been reduced to their estimated
� - net realizable value.
+ 'i 36) Provisions for uncollectible receivables have been properly identified and recorded.
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37)Expenses have been appropriately classified in or allocated to functions and programs in the
� � statement of activities, and allocations have been made on a reasonable basis.
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38)We agree with the findings of specialists in evaluating the other postemployment benefit obligation ,
and have adequately considered the qualifications of the specialist in determining the amounts and
�__�� disclosures used in the financial statements and underlying accounting records. We did not give or
cause any instructions to be given to the specialist with respect to the values or amounts derived in
an attempt to bias their work, and we are not otherwise aware of any matters that have had an
impact on the independence or objectivity of the specialist.
�- ; 39)We believe that the actuarial assumptions and methods used to measure pension and OPEB
� � liabilities and costs for financial accounting purposes are appropriate in the circumstances.
f - 40)Revenues are appropriately classified in the statement of activities within program revenues,
� general revenues, contributions to term or permanent endowments, or contributions to permanent
-- fund principal.
� ' 41)Interfund, internal, and intra-entity activity and balances have been appropriately classified and
��- reported.
j 42)Deposits and investment securities are properly classified as to risk and are properly disclosed.
�
43)Capital assets, including infrastructure and intangible assets, are properly capitalized, reported, and,
j � if applicable, depreciated.
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44)Capital assets have been evaluated for impairment as a result of significant and unexpected decline
� in service utility. Impairment loss and insurance recoveries have been properly recorded.
45)We have appropriately disclosed the District's policy regarding whether to first apply restricted or
- ' unrestricted resources when an expense is incurred for purposes for which both restricted and
� � unrestricted net position is available and have determined that net position is properly recognized
� under the policy. '
� 46)We are following GASB Statement No. 54, paragraph 18, to determine the fund balance
classifications for financial reporting purposes.
, � 47)We acknowledge our responsibility for the required supplementary information (RSI). The RSI is
i__ , measured and presented within prescribed guidelines and the methods of ineasurement and
presentation have not changed from those used in the prior period. We have disclosed to you any
� , significant assumptions and interpretations underlying the measurement and presentation of the
� RSI.
48) Expenditures of federal awards were below the $750,000 threshold for the year ended December
! 31, 2015, and we were not required to have an audit in accordance with Title 2 U.S. Code of
Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles and Audit
Requirements for Federa/Awards("Uniform Guidance").
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_ Signature: Signature:
�-� Title: Title:
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` O�CONNOR
� DAVIES
��__
ACCOUNTANTS AND ADVISORS
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�- Appendix 3
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�- F�nancial Highlights
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� � - - � O`CONNOR
. DAVIES
ACCOUNTANTS AND ADVISORS
- - - � '--� - --� ---- � -- - ._._ _�-- ; -- - - --, ;--- - -- - i -- � �- -- -
'i.
.� .
5t ,
Y.
i
��� ����� ���� ������� �����
ASSETS
Cash and cash equivalents $ 752 573
�
Receivables 53,972
Due from primary govemment 177,2•19
Prepaid expenditures 49,964
Total Assets . $�I,033,728
LIABILITIES, DEFERRED INFLOlNS
OF RESOURCES, AND FUND,BALANCE
Liabilities
Accounts payable $ 299 746
Accrued payrofl 78,8'18
Security deposit �13,232
Total Li�bilities 391,796
Defetred inflows of resources
Deferred revenue 11,�I 33
Taxes paid in advance �177,219
Total Deferred Inflows of Resources 188,352
Fund balance
Nonspendable 49,964
Unassigned 403,616
Total Fund Balance 453,580 �pK�
Total Liabilities, Deferred Inflows �CONNOR
of Resources, and Fund Balance $�I,033,728
D�►VIES
ACCOUNTANTS AND ADVISOflS
-----� -'. �_ - - - -- -"-- � ' - - — - �_`--i -- -
e"�
�� .
Y
��
���������� ���� ������� ���� ����
Unassigned Fund Balance Over Time
�,000,000 General Fund Only �s.00�io
$3,500,000 16.00%
$3,000,000 14.00%
12.00%
$2,500,000
10.00%
$2,000,000
8.00%
$1,500,000
6.00%
$1,000,000
4.00%
$500,000 2.00%
$- 0.00%
2009 2010 2011 2012 2013 2014 2015
�General Fund Balance unassgned �PKF
�Revenue VC�I�I��R
�i�Total Unassigned General Fund Balance to General Fund Revenue DAVIES
ACCOUNTANTS AND ADVISORS
___ �--_ _ _ __ _.___ _�. -_ ___`� --1
_ �� _'._. __" _ I-r.`_ ,___ _ _ _ " " ___ I i � .
� �
�
���� ������� ���� ��� � �� �������
� va��a�e�C
Final Favorable
Budget Actaal (Unfavorable)
REVENUES
Ferry Revenues $ 2,841,840 $ 2,722,728 $ (119,112)
Property Tax Revenues 788,103 788,116 13
Property Management Revenues 81,000 110,316 29,316
Grant Revenues . 337,148 1,532 (335,616)
Other Revenues 5Q0 2,891 2,391
TOTa1L REVENUES 4,048,591 3,625,583 (423,008)
EXPENDITURES
General Government 460,584 451,371 9,213
Transportation 3,092,001 2,686,905 405,096
Theater, Contractual 13,000 12,877 123
Employee Benefits 536,113 532,644 3,469
Debt Service 383,763 383,545 218
TOTAL EXPENDETURES 4,485,461 4,067,342 418,119
EXCESS (DEFICIENCY) �F RE�/ENUES �P��
OVER EXPENDITURES $ (436,870) $ (441,759) $ (4�ggg� �CONNOR
DAVIES
ACCOUNTANTS AND AOVISORS
��� - �������� ���� ����
�
_______ ______ _____________ ________________ _____ �
3,000,000
Ferry Revenue by Cate.go�
2,500,000
2,000,000
1,500,000
1,000,000
500,000
2009 2010 2011 2012 Z013 2014 2015
C PKF
o Fer 0 Frei ht ■Fer 0 Traffic ■Fer 0 UPS o Fer 0 Charters �Fer 0 Other �CO�N��
rY P� 9 rY P, rY P� �Y P, rY P. DAV�E s
ACCOUNTANTS AND ADVISORS
---, - -- - -- — -- - - - - - i -- -- -_--
- -- t _ _ � _ -- - - � - - - _ � , - -
��
�° �
�� ��� ��� ������ ���� �� � �
z,000,000
�
Cost of Personnel Over Time
i,soo,000
1,600,000 _ ,
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
2009 2010 2011 2012 2013 2014 2015
C PKF
o Personnel �Medical insurance ■NYS Retirement o Social Security a Unemployment �c:�N�oR
DA1/IES
ACCOUNTANTS AND ADVISORS
-- � � - - --`-� ;----, r----- ,-- , - - -- - ----� , --- - --- --- r----i �----- ,- � �
- � - - -- - -- - - -- - - -- - - �--- -
� , --- --
�� ���� ����� �����
� �
Beginning Ending
Balance Increases Balance
Capita! assets not being depreciated
Land $ 41 ,717 $ - $ 41 ,717
Capita! assets being depreciated
� Buildings and systems 12,583,229 - 12,583,229
Machinery and equipment 2,942,060 2,942,060
�Infrastructure 3,118,404 130,377 �3,248,781
18,643,693 130,377 18,774,070
Less accumulated depreciation (8,528,575) (602,305) {9,130,880)
$ 10,156,835 $ (471,928) $ 9,684,907
�PKF
OrCOMIVOR
� DAVIES
ACCOUNTANTS AND ADVISORS
� . --- -- i---� - - - -- - ----i i----� - -----� i- ---, , --,
i , ` `
� .
��� ����� ���� �����
� �
Begir�ning Ending
Type and I��te �alance Additions Reductions Balance
Bonds (3E1 ) $ 1 ,375,��0� � 1 ,138,�00 � 1 ,375,00� $ 1 ,138,000
B�IVS (3�2} 84��,000 699,OOQ 849,000 699,000
Camp abs �3E3� 213,432 - 54,492 159,3�Q
Pension ,44A) 1�79,481 45,3�3 134,178
flPEB (4C) 334,379 37,430 48,010 323,799
. � 2,951 ,292 � 1 ,874,430 $ 2,371 ,405 $ 2,454,317
CPKF
OrCONNOR
DAVIES
ACCOUNTANTS AND ADVISORS
�----- --- - - -- ----- -- -- - -- -. -----
� j - i , .
��
���� ��� ���� ������� �����
Ay,t�,
�
C�sh and cash equ�valents S 752,573
Receivabl�s 53,972
D�ue from p�imary�ov�mt�eret 17�,299
Prepaid expe�eses 92,U08
Capfta�l ressets
�dandepreciable 41,7'�7
DepreciabEe,c��t o�accumvla4ed deprecasteon 9,643,190
Tota6 Assets 10,760,679
DEFERRED OU3FlOWS OF RESQURCES
�iffiereroce be3ween expacted o�d�ctual experience 4,295
Net di§�ercncz bet�veen projected and actuai earreir�gs 23,305
CmntaibutiQns afler the msasurereie�at date 120,623
Tota9 Deferred O�atft�ws off Resvurces 148,22�
lIABIl1TIES
Acco�nt�pc�yab�e 299,746
Accrued payrolf 78,818
Security deposit 13,232
Aecrueci interest payabte 19,794 ,
Noncurrent liabilities
Due vrit�in o�ee year 932,835
Due in more than as�e year 1,521,962
Totat L�abilities 2,865,907
DEFERRED IPJFLOWS OF RESOURCES
Changes in proportion , 2,310
T�ce�paid in advance 177,219
Total deferred irnflovrs of resources 179,529
NET POStT10N C PICF
Nat s�ves#ment in capita9 as,ets 7,847,907 �CONNOR
UnrEstr�cted �s,ss7 DIo►VIES
Tota6 Plet Position S 7�8�3�AE� ACCOUNTANTSANDADVISORS
-- --- -----, ----- --- -- - --- --- - - ----- -- -- - ---
-- � � - - , � - , ' �
�. .
���� ��� ���� ���o�� ����. ������
�
��t�����,ve�
Reven�e and
Ch�nge� in �let
P�ogc��i Rerrenu�s �osi�o�t
Charges Opsr�tira� .
fo� Grara�s art�d
Furtctioa�sd�rc�g�aans �x�e�szs Senaices Go¢�tr6bu�ons To#a1
Ga��e��mGr�t�J acti�v�ti�� '
Gene�a� gov�mr�zen4 � 363,44� $ - � - � (�63,�46j
Ferr��per�ti�nJ 3,��6r065 2�?22,�"�� �,�3? �q21,8�0�j
r�Eryao�t �5,041 ��3,5�3 - �?9,�68)
Theater 9�',8� 8,3�� - (4,53��
Rent�l ac��{iti� � 9��049 �8,�40� - ��,356
9nt�r��#�n �o�g-��rn� ��lak 56.467 - - 45�.�4G�1
Tot�l Govers�n�ent ' 4.1?''_9�S 2.833.�944 �.532 t9,288,365)
�en�r�l Re�rznues
(�rop�r�#ax�s, en�ere��ar�d�ie� 7'88,1�36
Intzrast�r�d inve�tn�ent ea�mings 47�
�ISC�I�c.�tl�l$S 79,68�
Ta��l ��n�ral'9�eti�enuzs 86�,277
�h��ge in N�t PQ�ati�r� �420,D9�)
?�J�t P�sitic�n- Be�innir�g of Year, ��r�poefed 6,302,fl4�0
�a�ngu@�tive Ebfec��f Ch�rtge in Acca���ti�g �ran�iple {��5,48�)
Net Pos�tior�- 8�ginr�i�� of Y�ar, as r�stat�d 8,283,556
�Jet Positi�a� - E�di�g � �,863,�464
- --- ---- -- -- -
-- � �-----, -- , , - , ,
;,
�
��� �������� ���� ����
History of IVet Position
$so,000,000
$$,000,000 . � � --�- ____. �- ---__--__��._ �_ _ ..-- ._ �. ___ _._.�.n__---
. ___�.�
. � � f
$6,000,000 �
$4,000,000 � .� . .
$z,000,000 .
� � � �
�_ � !
2009 2010 2011 2012 2013 2014 2015
$(2,000,000) J PKF
u Net investment in ca ital assets ■ Unrestricted v OrCONNOR
p DAVIES
ACCOUNTANTS AND ADVISORS
r--i �----� - - - - -- , ---- - - - - -- ---, ,--- �--� ,---� �---
- � - ' - � - ' '---
f
F � - �
CPKF
O�CONNOR
DAVIES
ACCOUNTANTS AND ADVISORS
--- ----� - —, - -- - - - —----- --- — — --, , -- --
� ,
:�
a �
��� ��� �������� ����� �
�
� Per�Form the audit under GAAS to achieve reasonable,
rather than absolute as�urance, the FS are free from
material misstaterr,ents
� Comr�unicate in writing deficiencies in internal control that
we believe to be significant deficiencie� or material
weaknesses ,
� Advise management of appropriateness of accounting
policies and their application
� Communicate any fraud or illegal acts that were noted
during the course of the audit, however our audit cannot be
relied on to identify all such acts
CPKF
ArCONNOR
DAVIES
ACCOUNTANTS AND ADVISOHS
W�
�s"
:a
���l������������� �� ����� ��l�1����J
. • �
- -- -- - - - - - --- - � - -- - - - - - - --- - - - - -- --- - -- -
; Internal Accounting Controls ___ j�Reviewed in the context of the audit !f
�—— --- J -- ----�
Management's Judgment and Estimates P�ppearAppropriate
, ---- -- ----- - - - - -- - ----- - --- - --- -- - --,�- - -------- - -- - _-_---- - - - --- ----- -__-__---- =----- --- --� �
; Difficulties encountered in audit ;j No unresolved matters/no disagreements �
L' '_'-_____-_-___'�'___ '--_-�____�---li__'_-_.- ,_ �___ -.1
Significant Accounting Policies � IVo changes
, - ------ -- =--=-- ----- --- - ---- ---- - ----- � - - --_
-- --- - -
- -_--- --__ -�---- ---_�__--_ ---,
; Planned Scope and Timing' �� Same as planned �
� -_J
Audit Adjustments - Made We made no significant adjustments
- __.--__. _- -- ----� :__: _�_-_-.-______��_-_�-_--__�__�. -.�_ �.�_._-�- �
,__ ____. .__-. --_-- __.. __--- ---.---- ---._-_- �._----_-___ _-_��_------ -
i Audit Adjustments - Not Made Waived adjustments were trivial �
�-- -- --- ------ ----- - '
Consultations with Other Auditors None
- - - - -- - - - - -- - -- - - -- - -- -- - -- ----- -
, - - --- - - -- -- --- -------- -- --- --- -----_-- ---- --, - - - ------ - --------- - ------- -
j Independence �� Not impaired �
_��_— __ -----��-- -----------------___ -�
CPKF
�CONNOR
DAVIES
ACCOUNTANTS AND AUVISORS
"_" _ 1 � _ " _ __ _ 1 _ _' ' _ "— __ '___— — ___„_I __`— ,_ —__ �I_ _ —I
\ • -
E
; �
G�
�� . ," �L-m�������� �� � � e!�V��hb����b@J-+
� Control Deficiencies exist when the design or operation of a
control does not allo�nr management or employees, in their norrnal
course of perforr�ing their assigned function�9 to prevent or
detect and correct rnisstatements on a timely basis
� Significant Deficiencie� —deficiencies in I/C that are less sever
than a material vveakness, yet irr�portant enough to rr�erit
attention by those charged with governance
� Material Weaknesses — deficiencies in I/C, such that there is a
reasonable possibility that a material r�isstaternent of the FS will
rrot be prevented, or detected and corrected on a timely basis
CP��
A�CONNOR
DAVIES
ACCOUN7ANT5 AND ADVISORS
�
�
_ ������� �����c������ ���������
� 10-1 : Entity Vi/ide Controls
• Documentation of Controls in Place
� Review of the Controls to Assess Risk
• I�lake Changes in fihe Control�, if needed
• Share the procedure� with all
� �/lonitor to see that they are followed
� 10-3: Segregation of Duties over Revenues
� 10-7: Documentation of Controls
� 15-1 : Controls over Payroll co�coNn�oR
DAVIES
ACCOUNTANTS AND ADVISORS
,` � ' ' - --� ' ---- v-- _ , - ' - ; - , � ,--- ---, r------
� . .
��� " �Il� � � ��� ������ - � �-----
�
� 10-1 : Section 103-d of the New York General Municipal Law requires a
statement of non-collusion in bids and proposals to political subdivision of
the state. Currently, the Fishers Island Ferry District does not have a
policy to obtain, nor does it obtain, any statements of non-collusion in its
bids and proposals. .
� 15-1 : Appropriate b.idding was not performed for the South Ramp Project.
There is no documentation of any bids beside� the winning bid. The bill for
this project was contested with the Town of Southold because the bidding
was not done appropriately.
� 15-2: An agreement was approved by the Board of Commissioners
whereby an employee's duties were reassigned, except for perForming
special marine projects for the Manager. When the Manager left, no one
was assigned the duty to oversee the employee and provide special
projects to the employee. The employee continued to be paid a salary. It i�
unclear the amount of services, if any, provided in return and if any
deductions should have been taken from the employee's leave time.
CPKF
OrCONNOR
DAVIES
ACCOUNTANTS AND ADVISORS
r'
�_ J PKF
�
r , O�CONNOR
� DAVIES
� ACCOUNTANTS AND ADVISORS
i
� Appendix 4
�
�
�
; About PKF O'Connor Davies, LLP
,
,
i � �
,, '
,
�_ ,�
; �
ii .
�
C�
i �
�_', 14
i- �
L ' ��1�!
�
� �COiVNOR
� DA�/IES
AGGOUNTANTS AND ADVISORS
i
- FI RNt OVERVI Eln/
� Founded in 1891, PKF O'Connor Davies has evolved from an ° i
�IIl11����IY°� �c�C���.lI1�Il��TIl �
accounting firm to a corps of high-caliber professionals that delivers, �
to a global and growing client base a complete range of audit, tax n Ranked26of"20'16'sTop100Firms" �
, , and advisory services as well as insights and expertise at the highest
level. As our business has grown, our commitment to active value —INSIDE Public Accounting, 2016 �
, creation has allowed us to connect our clients to sound business :
advice,key players and resources across diverse industries. °' Ranked 6 of the`Rop Firms �
' in the Mid-Atlantic" �
��J ����f�������� �j����� �[��s ��� —Accounting Today, 2015 `
Not only are we one of the nation's most rapidly growing �� "gest Full-Service
accounting and advisory firms,we are also the lead North American Alternative Investment �
firm in the growing PKF global network of independent accounting Practice"
and advisory firms.This enables us to provide clients with preferred _ Wealth and Finance International,2015
access to top-tier experts and firms in 440 cities and 150 countries
around the world. It also establishes us as the primary referral point
for intemational businesses with needs in North America, an � Rankedthellthlargest
advantage for our domestic clients seeking connections outside the accountirog firm in New York
U.S.
City
� —Crain's New York Business, 2015
� ' ���0�� ������� ����������� ���0�����
����������, ����� p Amongthe50"Best
+ Accounting Employers to
' � We have built strong relationships with our clients by being Workforin
proactive, thorough and efficient. Firm partners are involved in the
day-to-day management of engagements, ensuring a high degree of North America"
client service and cost effectiveness. Multi- disciplinary teams ensure — Vault, 2016
solutions are customized to address specific needs and integrated �
for greater efficiency. h Oneofthelargestaccounting
frms in the New York
� ������ �°�������e ������ ����0�� �etropolitan area
����� ����������� �� ������ ����� — Westchesterand Fairfield
, County Business Journals,
�������� 2014
� Our focus on value has driven our growth, propelling PKF O'Connor
; Davies to the Top 26 on INSIDE Public Accoaentin�s 2016 "Top 100 " A"Leader in Audit and Accounting"
Firms" list and gaining us acclaim as one of the country's fastest- —Accounring Today, 2014
, growing firms. With unmatched client focus, we unlock genuine
' value hidden at key connection points in every engagement within p One of the"Top 10 Fastest-
regional, national and international arenas. Through these Gro�nring Firms"
connections, our team of specialists continually drives efficiencies, —INSIDE Public Accounting, 2014
uncovers opportunities and manages risk — delivering value where
' ' others can't. � A"Pacesetter on Growth"
—Accounting Today, 2014
KNOW GRE�►TER VALIJETM 15
�PK�
��ONNOR
DA\/IES
ACGOUNTANTS AND ADVISORS
��nIlIl1�, I1�������Ilv����� ��n�IE�����nnIl�Il��n
Since our founding, PKF O'Connor Davies has maintained its commitment to gaining a deep understanding of each
client's operations and financial history in order to help meet their every challenge and objective. We fulfill this
mission by providing resources that match those of larger firms in scope - but with the agility only a mid-sized firm
such as ours can demonstrate...and yet,we still rank among them. Our services include:
�c�������g ��� ���s�� �����s
' ����°���� �����5 � Bankruptcy& Restructuring
�� Accounting Outsourcing � ManagementAdvisoryServices
�° Agreed-Upon Procedures (AUPs) n RiskAdvisoryServices
G Audits, Reviews and Compilations tl Specialty Industry Advisory Services
u Employee Benefit Plans -Employee Benefit Plan Services
� Government Entity Audits 8� Compliance -Entrepreneurial BusinessAdvisorySolutions
� International Financial Reporting -Government&PublicSectorAdvisoryServices
Standards (IFRS) -Healthcare Advisory Services
p IT Audit & Cybersecurity Reviews -HospitalityAdvisoryServices
p Public Company Accounting Oversight � Transaction & Financial Advisory Services
Board(PCAOB) � Wealth Services
7["�x ���������e �a�� ]�aa���y ���� �e��es
���g�ggIl�g� ,��g°�g��� p Accounting & Reporting
a Employee Benefit Planning&Tax Compliance V Advisory
p InternationalTauServices � Charitable Giving
n IRS Representation &Tax Controversies m Investment Monitoring & Oversight
n Personal Financial Planning n Lifestyle Support
n Private Foundation Services ° Personal Financial Management
p State and Local Tax(SALT) a Tax Planning
n Tax Compliance&Reporting n Wealth Planning
p Tax-Exempt Organizations
G Tax Research and Strategic Planning
n Trust and Estate Planning
; ' We o�er an exceptgorna�bxe�c���of a�vbsory s�rv�ces
' across c�iverse�n��stries and sec�ors.
16
r���
L ' �PKF
,�--, �CONNOR
�_ � DAVIES
ACCOUNTANTS AND ADVISORS
I�
; ' PKF 0'Connor Davies,LLP is a member firm of the PKF Intemational Limited network of legally independent firms and does
' � notacceptanyresponsibilityorliabdityfortheactionsorinactionsonthepartofanyotherindividualmemberfirmorfirms.
� ; ������9 N����m��� �n� ����� ��°e���ce
I � Our office locations include:
, , .
� Bethesda, MD
� � Cranford, NJ
{ �
� Harrison, NY
; � Livingston, NJ
� New York, NY
; _
' � Newburgh, NY
� � Paramus, NJ
'- � � Ridgewood, NJ
� Stamford, CT
� Wethersfield, CT
a
, +
I � �
r
� � 17