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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)
Our review of the general journal entries revealed that manual entries lack secondary review and approval
by someone other than the preparer. We recommend the adoption of a policy whereby all journal entries
are approved by a designated member of management of the Commission, separate of the preparer. All
entries should be initialed, or electronically signed, by the preparer and the individual approving them in
order to attribute responsibility to the appropriate individuals.
Our review of bank reconciliations indicated there was no review function in place over these schedules.
It is always a best practice that a preparer has a designated, knowledgeable reviewer to ensure the
accuracy and completeness of accounting transactions.
Our review of parking lot month reports indicated there was no review function in place over these
schedules. It is always a best practice that a preparer has a designated, knowledgeable reviewer to
ensure the accuracy and completeness of accounting transactions.
Cause: Turnover in finance related positions without additional hiring and other Commission personnel cross
trained to fill the segregation void.
Effect: Lack of a segregation of duties increases the potential for inaccurate financial reporting and ineffective
finance management.
Recommendation: The Commission should review the 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.
Views of Responsible Officials and Planned Corrective Actions: During the initial time period of
COVID-19, federal and state travel and other economic activity restrictions necessitated a severe reduction
in staffing. Anticipation of air travel recovery is being constantly reviewed so staffing plans can be properly
structured to achieve the numbers, task assignments and knowledge necessary to ensure compliance. The
national health emergency was anticipated to be temporary. The accommodations and responses to it
resulting in staffing deficiency were expected to be reversed in a pattern consistent with overall air travel
recovery. The recovery has proven to be lopsided and on the lower end of the spectrum with respect to all
smaller airports. A key driver in the smaller airport recovery is the industry wide recognized shortage in pilots.
Especially hard hit is the category of regional commuter jet service designed to feed the central main line
Airline hub terminals. The Peninsula Airport Commission is no exception and has been significantly impacted
by this macro-economic slowdown condition. Airline allocation of their reduced available capacity now appears
will be a main driver of continuing staffing decisions. Measures to match operating costs with passenger
activity revenue will be required. 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 training of non-finance department associates. 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 new responsibilities are considered a good
control procedure for these accounting control reconciliations and reviews. Having more airport staff involved
leads to a natural separation of duties and additional independent sets of eyes on the process. By having
more staff involved it was determined no incompatible process assignments related to journal entry posting
or accounting reconciliation controls will be an issue once the plan is fully implemented.
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