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PENINSULA AIRPORT COMMISSION
SCHEDULE OF FINDINGS AND RESPONSES (CONTINUED)
YEAR ENDED JUNE 30, 2023
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B. Findings Relating to the Financial Statements Reported in Accordance with Government
Auditing Standards (continued)
Views of Responsible Officials and Planned Corrective Actions: Related to construction invoice
management and related federal grant revenue, the following remediation steps have been initiated and
completed. During the year ended June 30, 2023, further staff reductions were necessary in light of budget
and other funding constraints. Significant redistribution of control processes and accounting activity
assignments were required as part of the staff reductions. With management’s endorsement and support,
many accounting transaction processing tasks have been turned over to staff not directly involved in the
finance department. The processing time formerly required by the finance department staff is now available
for review and document management related to construction projects. A side benefit found from this new
structure is the staff members not formerly associated with finance activities proved to have knowledge of
airport operations which is directly beneficial to understanding the financial transactions. The time burden for
these other staff members ended up being less than predicted. The time allotted to the executive management
team for construction cost allocation and document management has made the process more efficient by
having those with direct knowledge of the issues actually handling the most difficult parts of the task. The
new responsibilities are considered a good control procedure for these transactions as more staff are now
involved leading to natural separations of duties and additional independent sets of eyes on the final reporting.
By having more staff involved it was determined no incompatible process assignments related to accounts
payable approval or cash disbursement are now an issue.
With respect to Net Pension Asset recording, this is an annual account adjustment process only. As such it is
not practical to assign and train multiple staff members to be involved in the process. As a remediation step,
upper management of the commission has reached out to designated contacts at the VRS assigned to our
organization and found these resources to be of significant assistance. The VRS did have readily available
reports tailored to the reporting requirement of Newport News Airport. This is a new system provided by the
VRS related to a new actuary contractor being used. Using the new reporting available from an independent
and reliable source this area is now no longer an issue.
2023-002 – Significant Deficiency – Segregation of Duties
Criteria: Yearly, the Commission’s Finance Department oversees the preparation, processing, and
recordation of thousands of financial transactions that ultimately will be reported externally through its financial
statements. The efficient, effective, and timely preparation of the financial statement depends heavily on
finance personnel to monthly close the Commission’s general ledger, performing appropriate financial
analyses and reconciliations of financial activity, and accumulating the required data for reporting and to
ensure Federal Aviation Administration compliance. To verify the transactions are fairly presented, procedures
must be in place and functioning effectively to ensure the financial and operational information is complete,
accurate, and in accordance with U.S. GAAP. Key to effectively functioning procedures is the segregation of
duties throughout the performance of said procedures to reduce the risk of misstatement due to fraud or error.
Condition: As of June 30, 2023, the Commission does not have adequate segregation of duties over initiating,
recording, and reconciling transactions involving key financial cycles. Although the size of the Commission’s
accounting department limits the extent of separation of duties, we believe certain steps could be taken to
separate duties performed by members of the accounting function. The basic premise is that no one employee
or individual should have access to both physical assets and the related accounting records or to all phases
of a transaction. Specifically, we noted the following examples lacking a segregation of duties:
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