HomeMy WebLinkAboutCONVENTION & VISITORS BUREAU 2007-2008 FINANCIAL AUDIT
Port Artha~r convention-and
T'otarist Association
AnnGaf Financiai Report
September, 30 2008.
Financial Statements
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Where Oil and Water Do Mix. Beautifully.
Pon. Arthur Convention $ Visitors Bureau I 3401 Cultural Center Drive ~ Port Arthur, TX 77842
409.985.7822 ~ 1.800.235.7822 ~ Fax 409.985.5584 ~ www.portarthurtexas.com ~ pacvb@portarthurtexas.com
February 19, 2009
Mr. Steve Fitzgibbons, City Manager
City of Port Arthur
P. O. Box 1089
Port Arthur, Texas 77641-1089
Dear Mr. Fitzgibbons,
The Fiscal Year 2007-2008 financial audit of the Port Arthur Convention and
Visitors Bureau has been completed by Brammer, Begnaud and Lattimore and has
been copied to your office as well as the office of Rebecca Underhill. Please note
that this audit is the frrst 12 month audit since the CVB change to a fiscal year.
The last audit was the short 9 month audit to allow the transition from calendar
to fiscal. Therefore, there is no comparison year in this audit Next year, there
will be a comparison as we will have completed two full years of a fiscal budget.
You will find the audit is favorable and that the Bureau remains in compliance
with the rules and regulations that govern our office as well as being fiscally
responsible.
The Port Arthur Convention and Visitors Bureau Board of Directors reviewed and
accepted the audit delivered by Mr. Larry Begnaud. CPA at the regular board
meeting of the CVB held on February 18, 2009. If any questions arise when
reviewing the audit, please call me. The Chairman of the Convention and Visitors
Board during this fiscal year of 2007/2008 was Mr. Volney Pinder or Mr. Larry
Begnaud would also be available should questions arise. Thank you for your
ongoing support of tourism.
Sincerely,
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Tammy Kotara-Kotzu
Executive Director
cc: Rebecca Underhill, City Finance Officer
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Brammer, Begnaud & Lattimore
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yl 3025 PLAZA CIRCLE PORT ARTHUR. TX 77642
TEL. 409-983.1669 FAX. 409.983.5828 WWW.BBLCPA.GOM
February 11, 2009
Board of Directors
Port Arthur Convention
and Tourist Association
Port Arthur, Texas
In planning and performing our audit of the financial statements of the Port Arthur Convention and
Tourist Association for the twelve months ended September 30, 2008 we considered the Association's
intemal control in order to determine our auditing procedures for the purpose of expressing an opinion on
the financial statements and not to provide assurance on internal. control.
However, during our audit, we noted certain matters involving the intemal control structure and other
operational matters that aze presented for your consideration. This letter does not affect our report dated
February 11, 2009 on the fmancial statements of the Port Arthur Convention and Tourist Association.
We will review the status of these comments during our next audit engagement. Our comments and
recommendations, all of which have been discussed with appropriate members of management, aze
intended to improve the intemal control structure or result in other operating efficiencies. We will be
pleased to discuss these comments in fiuther detail at your convenience, to perform any additional study
of these matters, or to assist you in implementing the recommendations. Our comments are summarized
as follows:
Oreanizational Structure
The size of the Association's accounting and administrative staff precludes certain intemal controls that
would be preferred if the office staff were large enough to provide optimum segregation of duties. The
monthly review of expenditures and comparison to budget is an excellent alternative control that has been
implemented by the boazd. The reduction in revenue, due to the amended contract with the City and the
Association's mission to increase tourism would indicate more emphasis on internal controls. This
situation dictates that the Board of Directors remains involved in the finances of the Association to
provide oversight and independent review functions.
Budget and Review
Management and board review of the budget and financial statements monthly is an added oversight
control necessary to manage the operations and cash flow of the association in a timely manner. We
recommend that these actions aze continued. It is imperative for the continued success of the Association
that the revenues and expenses are cazefully monitored to ensure that budget matches projected revenues.
Management Letter
Page 2
February 11, 2009
We wish to thank the Director and her staff for their support and assistance during the audit.
This report is intended solely for the infonnation and use of the Board of Directors, management and
others within the Association and is not intended to be and should not be used by anyone other than these
specified parties.
i~~2~~~G
Brammer, Begnaud & La amore
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PORT ARTHUR CONVENTION AND TOLRIST ASSOCIATION
PORT ARTHUR, TEXAS
ANNUAL FINANCIAL REPORT
TWELVE MONTHS ENDED SEPTEMBER 30, 2008
BOARD OF DIRECTORS
Volney Pinder
Arthur Guidry
Bonnie Wilkinson
Debra Asbwy
Carol Hebert
Ronnie Hicks
Johnnye Williamson
Phyllis Montis
Katie Pitre
Tammy Kotzur
Chairman
Vice-Chairman
Secretary-Treasurer
Director
Director
Director
Director
Director
Director
Executive Director
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Brammer, Beqnaud & Lattimore
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' 3025 PLAZA CIRCLE PORT ARTHUR, TX 77642
TEL. 409.983.1669 FAX. 409.983.5828 WWW.BBLCPA.COM
INDEPENDENT AUDITORS REPORT
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i February 11, 2009
t Boazd of Directors
Port Arthur Convention and Tourist Association
' Port Arthur, Texas
We have audited the accompanying statements of financial position of the Port Arthur
' Convention and Tourist Association (a non-profit organization) as of September 3Q 2008,
and the related statements of activities and cash flows for the twelve months then ended.
These financial statements aze the responsibility of the Association's management. Our
' responsibility is to express an opinion on these fmancial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the
' United States of America. Those standazds require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements aze free of material
misstatement. An audit includes examuung, on a test basis, evidence supporting the
' amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall fmancial statement presentation. We believe that our audit provides a
' reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material
' respects, the financial position of the Port Arthur Convention and Tourist Association, as of
September 30, 2008, and the changes in its net assets and cash flows for the hvelve months
then ended in confomvty with accounting principles generally accepted in the United States
' o~fjAmerica. (l /~
' BRAMMER, BEGI~'AUDV&`-L-A-T-T~TMORE
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EXHIBIT "A.,
PORT ARTHUR CONVENTION AND TOURIST ASSOCIATION
PORT ARTHUR. TEXAS
STATEMENTS OF FINANCIAL POSITION
SEPTEMBER 30, 2008
Assets 2008
Current Assets
Cash in bank (including money market funds) $ 145,960.16
Accrued Interest Receivable 90.03
Prepaid expenses-insurance 4,481.01
Prepaid expenses-advertising 1,597.30
Prepaid expenses-grant expenditures 2,615.00
Total Current Assets $ 154,743.50
Pronertv and Equipment Note 1
Furniture and equipment $ 38,427.54
Less: accumulated depreciation (29,903.42)
Net property and equipment $ 8,524.12
Total Assets $ 163,267.62
Liabilities and Net Assets
Current Liabilities
Accounts payable $ 7,436.41
Total Liabilities-All Current $ 7,436.41
Deferred Revenue -Grant Proceeds $ 8.648.96
Net Assets
Unrestricted Net Assets $ 147,182.25
Total Liabilities and Net Assets $ 163 267 62
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The accompanying notes are an integral part of these financial statements
' PORT ARTHUR CONVENTION AND TOURIST ASSOCIATION
PORT ARTHUR, TEXAS
STATEMENT OF ACTNITIES
' TWELVE MONTHS ENDED SEPTEMBER 30, 2008
' UNRESTRICTED NET ASSETS
t Public Support
City of Port Arthur hotel occupancy taxes
Total Public Support
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Revenues
Donated Use of Facilities
County Hotel Occupancy Tax Grants
County Joint HOT Grant
Donation Income Redfish Tournament
Im~estment income
Total Revenues
Total Support and Revenue
Expenses
Program services:
Convention attendance and promotion
Tour receptions and promotion
Public information-printing and postage
Direct advertising
General tourism promotion
Special Project -Joint County
Salary-marketing dsector
Salary--convention sales director
Payroll tax expense
Employee benefits
Total Program Service Expenses
Supporting services:
Auditing and advisory services
Depreciation
Employee benefits
Insurance
Miscellaneous
Office supplies and expense
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EXHIBIT "B"
2008
$ 450,000.00
$ 450.000.00
$ 7,056.00
43,575.69
80,759.80
1,175.00
1.415.89
$ 133,982.38
$ 583.982.38
$ 50,868.50
25,821.20
35,924.33
28,696.00
118,398.61
80,759.80
36,533.04
36,533.04
5,719.60
18.966.00
$ 438,220.12
$ 7,441.70
2,253.52
16,646.20
1,899.26
1,149.00
3,532.39
' The accompanying notes are an integral part of these financial statements
EXHIBIT "B" (Continued)
PORT ARTHUR CONVENTION AND TOT JRIST ASSOCIATION
PORT ARTHUR, TEXAS
STATEMENT OF ACTIVITIES
TWELVE MONTHS ENDED SEPTEMBER 30, 2008
Supporting services: (continued) 2008
Rental equipment and facilities $ 9,812.47
Repairs and maintenance contract 596.00
Salary-executive director 48,483.96
Salary-office manager 28,031.12
Salary~ourier 3114.00
Taxes-payroll 6,249.55
Telephone 2,249.65
Utilities cost sharing 6,000.00
Total Supporting Services $ 137 458.82
Total Expenses $ 575,678.94
Increase (Decreasel in Unrestricted
Net Assets $ 8,303.44
Unrestricted Net Assets-Beginning 138,878.81
Unrestricted Net Assets-Endine $ 147.182.25
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The accompanying notes are an integral part of these financial statements
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EXHIBIT "C"
PORT ARTHUR COPNENTION AND TOJRSST ASSOCIATION
PORT ARTHUR, TEXAS
STATEMENT OF CASH FLOWS
TWELVE MONTHS ENDED SEPTEMBER 30, 2008
Cash Flows From Operating Activities 2008
Increase (Decrease) in net assets $ 8,303.44
Adjustments to reconcile change in net assets
to net cash provided by operating activities:
Depreciation 2,253.52
(Increase) Decrease in:
Accounts Receivable 70.57
Prepaid expenses (1,559.70)
Increase (Decrease) in:
Accounts payable 51.54
Deferred Revenue -Grant Proceeds 3,486.67
Net Cash Provided (Usedl By O~eratinQ Activities $ 12,606.04
Cash Flows from Investing Activities
Purchase of equipment $ (635.73)
Net Cash (Used) By Investing Activities $ (635.73)
Net Increase (Decrease) In Cash And Cash Equivalents $ 11,970.31
Cash and Cash Equivalents-beginning of year 133,989.85
Cash and Cash Equivalents-end of year ~ 145 960 16
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The accompanying notes are an integral part of these financial statements
' PORT ARTHUR CONVENTION AND TOURIST ASSOCIATION
' PORT ARTHUR, TEXAS
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2008
' The Port Arthur Convention and Tourist Association is an non-profit organization, founded May 24,
1976 under Section 501(c)(6) of the Internal Revenue Code as an un-incorporated trade association. The
' association was formed for the purpose of promoting tourism and conventions in the City of Port Arthur
and vicinity. The Associations board of directors are appointed by the Board and approved by a majority
t vote. Funds for associations operations are provided through a contractual agreement with the City of
Port Arthur.
' Note 1--Summary of Significant Accounting Policies
(A) Accounting Policies
The financial statements of the Port Arthur Convention and Tourist Association have been
prepazed utilizing the accrual basis of accounting.
1 (B) Cash and Cash Equivalents
' For purposes of the statements of cash flows, the Association considers all highly liquid
investments available for current use with an initial maturity of three months or less to be cash
equivalents.
' (C) Donated Office Space and Services
' Office space provided by the City of Port Arthur has been reflected in the financial
statements based on estimated rental market values totaling $7,056.00 for twelve months.
During the twelve months ended September 30, 2008, the value of contributed volunteer
services, meeting the requirements for recognition in the financial statements, was not
' material and has not been recorded. The value of the contributed services for 2008 was
$538.51. In addition, many individuals volunteer their time as volunteer step-on tour guides,
hospitality workers and office clerical help, but these services do not meet the criteria for
' recognition as contributed services.
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' PORT ARTHUR CONVENTION AND TOURIST ASSOCIATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2008
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' (D) Property and Equipment
It is the association' s policy to capitalize the property and equipment over $500.00. Lesser
amounts are expensed. Furniture, fixtures and equipment are stated at cost. Depreciation is
computed on a straight-line basis over an estimated useful life of seven to ten years for
' furniture and fixtures, and five yeazs for computer equipment and peripherals. Additions to
furniture and equipment are reviewed and approved by board action.
' (E) Income Tax Status
The Association is anot-for-profit organization and is exempt from federal income tax under
' Section 501(c) (6) of the Internal Revenue Code. Contributions to the Association are not
deductible for tax purposes by the donor as chazitable contributions. The Association is not a
private foundation.
(F) Financial Statement Presentation
' The Association is requued to report information regarding its financial position and activities
according to three classes of net assets: unrestricted net assets, temporarily restricted net
assets, and permanently restricted net assets. As permitted by SFAS Statement 117, [he
Association does not use fund accounting.
' (G) Estimates
The prepazation of fmancial statements in conformity with U.S. generally accepted accounting
' principles requires management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ from those estimates.
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PORT ARTHUR CONVENTION AND TOURIST ASSOCIATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2008
Note 2~ity of Port Arthur Occupancy Tax Revenue
The Association has agreed to an amendment to the contract where the City will allocate Hotel-
Motel occupancy tax funds for the Association each year based on a review of the Associations
performance and the effectiveness of the marketing efforts of the to Association and its value to
tourism in Port Arthur. These funds will be remitted to the Association each month during the
period. For the 2007-2008 budget yeaz (October 2007 through September 2008) the City has
allocated $450,000.00.
Note 3~ounty Grant Revenue
These special grants aze applied for and then approved by the Jefferson County Tourism
Commission after meeting certain criteria dealing with the promotion of the area. An amount of
$55,094.25 was received by the Port Arthur Convention and Tourist Association for vazious
promotional expenditures. In addition, $80,759.80 was received as a joint grant between the
Beaumont and Port Arthur Conventions and Visitor' s Bureaus for the publication of a county
wide tourism and promotional magazine completed this fiscal year.
Note 4--Employee Benefits
Employee benefits provided by the Association include medical and dental insurance benefits
paid for employees. The Association provides no pension or post-retirement benefits.
Compensated absences are provided on a calendar year for employee sick leave, extended
disability leaves and vacation. After a six-month probationazy period of employment,
employees aze eligible for vacation leave as follows:
' Years of Employment
1 to 4 years
5 to 9 yeass
' 10 to 19 yeass
20 to 24 years
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Paid Vacation Davs
10 days
15 days
20 days
25 days
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PORT ARTHUR CONVENTION AND TOURIST ASSOCIATION
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30 2008
Note 4 -- EmQloyee Benefits (continued)
With the approval of the dtrector, vacation may be postponed after earned for a maximum period
of 12 calendar months after the calendar year ends. All vacation leave expires after this period.
Accrued vacation time payable but not recorded at September 30, 2008 is $13,230.87.
Sick leave is granted after the probationary period for 10 working days each calendar year.
Unused sick leave may be accumulated up to a maximum of 30 days, accrued one day per
month. Sick leave may not be paid as termination or additional pay. Extended disability leave,
after sick leave and vacation leave are exhausted, is allowed as follows:
Half Pam
Yeazs of Em~loyment Disability Leave
1 to 4 years No Pay
5 to 9 yeazs 30 Working Days
10 to 15 years 40 Working Days
15 to 20 years 60 Working Days
Holiday leave is granted for the same official holidays as granted to City of Port Arthur, Texas
employees. These are considered paid legal holidays.
Note 5-- Concentration of Risk
Program activity and revenues for the association are directly related to the hotel motel business
in and around the City of Port Arthur, Texas. Since the City has amended the contract, the
association is guaranteed certain revenues each year. However those revenues are based on
hotel motel occupancy taxes and an evaluation of the results of the associations' impact nn
influencing the levels of occupancy of the local hotels and motels for the next year' s revenue.
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PORT ARTHUR CONVENTION AND TOURIST ASSOCIATION
' NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2008
Note 6~iscal Year Change
' Effective the fiscal year beginning October 1, 2007, Port Arthur Convention and Tourist
Association will change from a calendaz year end to a fiscal year end of September 30. A nine
' month fiscal transition period from January 1, 2007 through September 30, 2007, precedes the
start of the new fiscal-year cycle.
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