LEGAL NOTICE INDEPENDENT AUDITOR’S REPORT
Honorable Mayor and Members of the
City Council City of Park City, Kentucky
Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, and each major fund, of the City of Park City, Kentucky, as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, as listed in the table of contents. Management’s Responsibility for the Financial Statements Management is responsbile for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit 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 City of Park City, Kentucky, as of June 30, 2015, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the budgetary comparision information on pages 18 through 19 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the 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 to provide any assurance. The City of Park City has elected to omit the Management Discussion and Analysis. 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 the financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Park City, Kentucky’s basic financial statements as a whole. The Supplemental information on pages 20 through 21 are presented for purposes of additional analysis and are not a required part of the financial statements.The supplemental information has not been subject to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 29, 2016, on our consideration of the City of Park City, Kentucky’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other mat-ters. 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 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 City of Park City, Kentucky’s internal over financial reporting and compliance.
/S/ Gilbert & Gilbert CPA’s February 29, 2016
CIT OF PARK CITY, KENTUCKY SCHEDULES OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-BUDGET TO ACTUAL GENERAL FUND YEAR ENDED JUNE 30, 2015
Budgetary Information Budget Policy and Practice: The Mayor submits an annual budget to the City Council in accordance with the City Charter and Kentucky Revised Statutes. The budget is presented to the City Council for review, and public hearings are held to address priorities and the allocation of resources. In May, the City Council adopts the annual fiscal year budget for the City operating funds. Once approved, the City Council may amend the legally adopted budget when unexpected modifications are required in estimated revenues and appropriations. Basis of Budgeting: The budget is prepared on a detailed line-item basis. Revenues are budgeted by source. Expenditures are budgeted by department and class. The mayor is authorized to transfer budgeted amounts between departments; however, any revisions that alter total fund expenditures must be approved by the City Commissioners. Total expenditures for a fund legally may not exceed the total appropriations. The budget was amended near year end. The budget is prepared on the cash basis of accounting; however, the fund financial statements are prepared on the modified accrual basis of accounting. A reconciliation to GAAP Basis is provided on the following page. The cemetery and fire department books are decentralized from the general fund of the city therefore are not included in the budget. See reconciliation for more detail.See independent auditor’s report.
Explanation of difference between budgetary revenues and expenditures and GAAP revenues and expenditures. Revenues: Actual amount (budgetary basis) “Total Revenues” from Budgetary Comparison Schedule. 292,843
Adjustments: The City budgets their revenues on a cash basis rather than the modified accrual basis. On the budgetary basis revenues are recognized when received and on GAAP basis revenues are recognized when measurable and available. This is the difference in revenues due to the changes in taxes receivable of ($4,472) The City budgets tourism revenues, however this revenue belongs to the Tourism Commission and the city is only the collection entity, therefore tourism revenue is not recognized on GAAP basis financial statements The City does not budget the cemetery actitivity but these activities are included in the financial statements in Adjustments: The City budgets their revenues on a cash basis rather than the modified accrual basis. On the budgetary basis revenues are recognized when received and on GAAP basis revenues are recognized when measurable and available. This is the difference in revenues due to the changes in taxes receivable of $7 and grants receivable ($4,472) The City budgets tourism revenues, however this revenue belongs to the Tourism Commission and the city is only the collection entity, therefore tourism revenue is not recognized on GAAP basis financial statements The City did not budget for note receivable related to the sale of capital assets. This is the amount of the note receivable. The City does not budget the cemetery actitivity but these activities are included in the financial statements in accordance with GAAP basis reporting Total Revenues as reported on the statement of revenues, expenditures, and changes in fund balance-governmental funds. Expenditures: Actual amount (Budgetary basis) "Total Expenditures" from Budgetary Comparison Schedule. 304,172
Adjustments: The City Budgets their expenditures on a cash basis rather than the modified accrual basis. On the budgetary basis expenditures are recognized when paid for and on GAAP basis they are recognized when incurred. This is the difference in expenditures due to the changes in accounts payable ($631), payroll taxes $656 accrued interest ($884) and prepaid insurance of $0. The expenditures associated with the cemetery was not budgeted, however GAAP reporting requires that all expenditures be included in the statement of revenues, expenditures and changes in fund balance. This is the amount of the cemetery expenditures. The city budgeted note principle and interest payments amd loan proceeds, however for GAAP reporting these expenditures are not included in total expenditures, but are reported as other financing sources/uses. This is the amount of loan payments $38,255 that exceeds loan proceeds $12,016 Total expenditures as reported on the statement of revenues, expenditures, and changes in fund balance-governmental funds. 403 1,848 (26,239) 280,184
See independent auditor’s report. A copy of the complete auditor’s report, including financial statements and supplemental information, are on file at Park City City Hall, and are available for public inspection during normal business hours. Any citizen may obtain from City Hall a copy of the complete auditor’s report, including financial statements and supplemental information. Copies of the financial statement prepared in accordance with KRS 424.220, when a financial statement is required by KRS 424.220, are available to the public at no cost at Park City City Hall, 41 Mammoth Cave Avenue, Park City, Kentucky. Citizens requesting a personal copy of the city audit report will be charged for duplication costs at a rate that shall not exceed twenty-five cents ($0.25) per page.