Financial Statements

[Pages:10]Financial Statements

EAST TENNESSEE PUBLIC COMMUNICATIONS CORPORATION

Years Ended June 30, 2017 and 2016

TABLE OF CONTENTS

INDEPENDENT ACCOUNTANTS' AUDIT REPORT FINANCIAL STATEMENTS

Statements of Financial Position Statements of Activities Statements of Cash Flows Notes to the Financial Statements SUPPLEMENTARY INFORMATION Statements of Functional Expenses Grant Expenditures Principal Officials INTERNAL CONTROL AND COMPLIANCE Independent Accountants' Report on Internal Control

Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Prior Year Findings and Questioned Costs

Page Nos. 1-2

3-4 5-6 7 8-14

15-18 19-20

21

22-23 24

MEH M E & H P C ITCHELL MERT

ILL, . .

CERTIFIED PUBLIC ACCOUNTANTS

INDEPENDENT ACCOUNTANTS' AUDIT REPORT

Board of Trustees East Tennessee Public Communications Corporation Knoxville, Tennessee

Report on the Financial Statements

We have audited the accompanying financial statements of East Tennessee Public Communications Corporation which comprise the statements of financial position as of June 30, 2017 and 2016 and the related statements of activities and the statements of cash flows for the years then ended, and the related notes to the financial statements.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of the 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.

Auditors' Responsibility

Our responsibility is to express an opinion on the financial statements based on our audits. We conducted our audits 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 audits to obtain reasonable assurance about whether the financial statements are free from 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 auditors' 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 auditors consider internal control relevant to the 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 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.

416 Erin Drive ? Knoxville, Tennessee 37919 ? (865) 522-2396 ? Fax (865) 523-6318

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements referred to in the first paragraph present fairly, in all material respects, the financial position of East Tennessee Public Communications Corporation as of June 30, 201 7 and 2016 and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Other Information

Our audits were conducted for the purpose of forming an opinion on the financial statements that collectively comprise East Tennessee Public Communications Corporation's financial statements as a whole. The accompanying financial information listed in the table of contents as supplementary information is presented for purposes of additional analysis and is not a required part of the financial statements. The statements of functional expenses and grant expenditures are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audits of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

The schedule of principal officials has not been subjected to the auditing procedures applied in the audit of the financial statement and, accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Governmental Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated November 14, 2017 on our consideration of East Tennessee Public Communications Corporation's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is solely 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 the effectiveness of East Tennessee Public Communications Corporation's 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 East Tennessee Public Communications Corporation's internal control over financial reporting and compliance.

November 14, 2017

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EAST TENNESSEE PUBLIC COMMUNICATIONS CORPORATION STATEMENTS OF FINANCIAL POSITION June 30, 2017 and 2016

2017

2016

ASSETS

CURRENT ASSETS Cash - operating Savings and investments Pledges receivable Accounts receivable Works of art Prepaid expenses

$ 305,349 959,369 141,379 0 4,835 500

$ 285,450 948,708 98,308 27,523 4,835 38,956

TOTAL CURRENT ASSETS

1,411,431

1,403,781

PROPERTY AND EQUIPMENT Land Buildings Broadcast equipment Furniture and fixtures Vehicles Leasehold improvements

Accumulated depreciation

32,500 734,735 6,182,335 166,026

55,498 103,651 7,274,746 {5,407,363) 1,867,382

32,500 734,735 6,177,999 159,945

66,247 103,651 7,275,077 {5,031,384) 2,243,693

DEFERRED CHARGES Station license

29,412

31,632

$ 3,308,226 $ 3,679,105

See the accompanying notes to the financial statements. 3

EAST TENNESSEE PUBLIC COMMUNICATIONS CORPORATION

STATEMENTS OF FINANCIAL POSITION (continued)

June 30, 2017 and 2016

2017

2016

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES Accounts payable Accrued vacation payable

$

35, 182 $

0

64,412

57,454

TOTAL CURRENT LIABILITIES

99,594

57,454

NET ASSETS Temporarily restricted: Property and equipment Station license Unexpended grant

Unrestricted

1,867,382 29,412

697,362 2,594,156

614,476 3,208,632

2,243,693 31,632

758,822 3,034,147

587,505 3,621,652

$ 3,308,226 $ 3,679,105

4

EAST TENNESSEE PUBLIC COMMUNICATIONS CORPORATION STATEMENTS OF ACTIVITIES Years Ended June 30, 2017 and 2016

Unrestricted

2017

2016

SUPPORT AND REVENUE Contributions Production and telecasting Underwriting Grants: Corporation for Public Broadcasting Tennessee Department of Education Donated materials and services Investment income Gain(loss) on sale of equipment Miscellaneous

Net assets released from restriction

$ 1,039,485 $ 23,740

243,640

994,447 25,455

297,084

0 0 81,686 16,691 5,600 23,805 1,434,648 1,862,142 3,296,790

0 0 83,139 13,166 (2,712) 26,898 1,437,477 1,592,510 3,029,987

EXPENSES Programming Production Programming and production Broadcast and engineering Fundraising Management and general

970,639 434,418

0 1,017,446

540,909 306,406 3,269,818

0 0 1,518,647 982,300 508,496 302,719 3,312,162

CHANGE IN NET ASSETS

26,971

(282,175)

NET ASSETS AT THE BEGINNING OF THE YEAR

587,505

869,680

NET ASSETS AT THE END OF THE YEAR $

614,476 $ 587,505

See the accompanying notes to the financial statements. 5

Temporarily Restricted

2017

2016

Totals

2017

2016

$

0 $

0 $ 1,039,485 $ 994,447

0

0

23,740

25,455

0

0

243,640

297,084

783,386 638,765

0 0 0 0 1,422,151 (1,862, 142) (439,991)

772,738 632,835

0 0 0 0 1,405,573 (1,592,510) (186,937)

783,386 638,765

81,686 16,691 5,600 23,805 2,856,799

0 2,856,799

772,738 632,835

83,139 13,166 (2,712) 26,898 2,843,050

0 2,843,050

0 0 0 0 0 0 0

(439,991)

0 0 0 0 0 0 0

(186,937)

970,639 434,418

0 1,017,446

540,909 306,406 3,269,818

(413,020)

0 0 1,518,647 982,300 508,496 302,719 3,312,162

(469,112)

3,034,147

3,221,083

3,621,652

4,090,764

$ 2,594,156 $ 3,034,147 $ 3,208,632 $ 3,621,652

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