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PENINSULA AIRPORT COMMISSION
SCHEDULE OF FINDINGS AND RESPONSES
YEAR ENDED JUNE 30, 2023
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A. Summary of Auditor’s Results
1. The type of report issued on the basic financial statements: Unmodified opinion
2. Significant deficiencies in internal control disclosed by the audit of the financial statements: Yes,
Finding 2023-002
3. Material weaknesses in internal control disclosed by the audit of financial statements: Yes,
Finding 2023-01
4. Noncompliance, which is material to the financial statements: No
B. Findings Relating to the Financial Statements Reported in Accordance with Government
Auditing Standards
2023-001 – Material Weaknesses – Financial Reporting and Close Process
Criteria: Yearly, the Commission’s Finance Department must produce financial statements in accordance
with accounting principles generally accepted in the United States of America (“U.S. GAAP”). A sound
financial reporting and close process ensures proper recording of revenues and expenses in the proper fiscal
year. It should also include proper oversight and review of annual adjustments, such those related to pension.
Condition: As of June 30, 2023, the Commission does not have adequate controls over the financial reporting
and close process. Specifically, we noted the following journal entries required to report the Commission’s
financial statements in accordance with U.S. GAAP.
Deferred inflows and outflows related to Virginia Retirement System (“VRS”) pension and GLI plans were
not properly recorded in the fiscal year ended June 30, 2023. A $711,696 adjusting entry to the respective
deferred amounts was necessary.
Subscription-based IT arrangements were posted at net values in the fiscal year ended June 30, 2023. A
$336,436 adjusting entry was required to accurately report these balances.
The current portion of long-term debt was not properly recorded in the fiscal year ended June 30, 2023.
A $16,626 adjusting entry to the corresponding accounts was necessary.
The Commission did not accrue interest related to long-term debt in the fiscal year ended June 30, 2023,
resulting in an understatement of liabilities and expenses of $15,842.
Federal grant receivables were overstated by $24,284 in the fiscal year ended June 30, 2023. A $24,284
adjusting entry to accounts receivable – Federal Aviation Administration and federal grant revenues was
necessary.
Federal grant revenues were understated as the result of a prior year error in the amount of $33,604.
Cause: Turnover in finance related positions without additional hiring and other Commission personnel cross
trained to assist in the financial reporting and close process.
Effect: Lack of a sound financial reporting and close process increases the potential for inaccurate financial
reporting.
Recommendation: The Commission should review the current financial reporting and close process and
current level of finance personnel and responsibilities and address any identified deficiencies in number or
knowledge of personnel through additional hiring’s, re-assignment of responsibilities, and cross-training of
other Commission personnel to augment the finance control environment.
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