TELLURIDE REGIONAL AIRPORT

Type of Finding: Material Weakness in Internal Control over Financial Reporting Criteria or Specific Requirement: To align with the Authority’s policy of accounting for expenditure-driven grants, as well as to comply with generally accepted accounting principles, revenue should be recognized when the qualified expenditure has been incurred and all other grant requirements are met. Conditions: The Authority did not accrue revenue totaling $1,092,801 to match corresponding reimbursement grant expenditures incurred in 2025. Causes: The Authority received major capital grants from both the FAA and from state sources in 2025 for construction projects. Tracking the capital projects and related grant requests presented a significant challenge for the Authority’s small finance team, who needed to manage and track all grant activity on top of managing daily operations. Because of this, the Authority was delayed in submitting reimbursement requests for FAA grants and did not accrue revenue for expenditures incurred in 2025 but not submitted for reimbursement until 2026. Repeat Findings: Not applicable Recommendations: Auditor recommends that the Authority’s finance staff closely review ongoing grant projects which include reimbursable funding to ensure grant expenditures are reviewed at year-end to determine if grant revenue should be accrued to match expenditures. Auditor additionally recommends that the Authority’s finance staff implement procedures to submit grant reimbursement requests in a timely manner. View of Responsible Officials: There is no disagreement with the audit finding.