Financial Audit of the Stadium AuthorityPosted on Dec 17, 2021 in Summary
Financial Statements, Fiscal Year Ended June 30, 2021
THE PRIMARY PURPOSE of the audit was to form an opinion on the fairness of the presentation of the financial statements for the Stadium Authority, as of and for the fiscal year ended June 30, 2021. The audit was conducted by N&K CPAs, Inc.
FOR THE FISCAL YEAR ended June 30, 2021, the Authority reported total revenues of $2.9 million and total expenses of $6.7 million, resulting in an operating net loss of $3.8 million. Revenues consisted of (1) $2.6 million from rentals from attractions, (2) $100,000 in parking fees, and (3) $200,000 in advertising and other revenues. The Authority’s net loss was partially offset by $9 million in capital contributions, which represents the portion of Aloha Stadium capital improvement costs that were paid by the State of Hawai‘i. However, the Authority also reported an extraordinary item for an impairment loss of $73.3 million related to the existing stadium structure resulting in a decrease in net position of $68.1 million.
Expenses consisted of (1) $200,000 for depreciation, (2) $4.4 million for personnel services, (3) $900,000 for utilities, and (4) $300,000 for repairs and maintenance. Additional expenses totaled $900,000 and included state central services assessments as well as security, professional services, and other costs.
As of June 30, 2021, total assets and deferred outflows of resources exceeded total liabilities and deferred inflows of resources, resulting in a net position of $18.6 million. Of this amount, $30.2 million was invested in capital assets and there is an unrestricted net deficit of $11.6 million. The agency reported total assets and deferred outflows of resources of $34.4 million, comprised of (1) cash of $2.4 million, (2) receivables, other assets, and deferred outflows of resources of $1.8 million, and (3) net capital assets of $30.2 million. The agency reported total liabilities and deferred inflows of resources of $15.8 million, comprised of (1) net pension liability of $6.9 million, (2) vacation and other retirement payables of $6.7 million, and (3) other liabilities and deferred inflows of resources of $2.2 million.
In fiscal year 2021, partly due to the COVID-19 pandemic, the Authority determined that the existing stadium structure experienced a significant and unexpected decline in service utility and determined it will no longer be used for its originally intended purpose of serving as a gathering place for the people of Hawai‘i. Accordingly, the Authority recorded an impairment loss of approximately $73.3 million as of June 30, 2021, which is reported as an extraordinary item in the financial statements and there is no carrying value remaining on the statement of net position for the stadium structure.
THE AUTHORITY RECEIVED AN UNMODIFIED OPINION that the financial statements were presented fairly, in all material respects, in accordance with generally accepted accounting principles.
THERE WERE NO SIGNIFICANT DEFICIENCIES in internal control over financial reporting that were considered to be material weaknesses and no instances of noncompliance or other matters required to be reported under Government Auditing Standards.
|About the Authority
The Stadium Authority (Authority) was established in 1970 and is responsible for the operation, management, and maintenance of Aloha Stadium, located in Honolulu, Hawai‘i. The Authority functions under the direction of a nine-member board, appointed by the Governor. In addition, the president of the University of Hawai‘i and the state superintendent of education are nonvoting ex-officio members of the board. For administrative purposes, the Authority is placed within the State of Hawai‘i’s Department of Accounting and General Services.