Troy Industrial Development Authority

Board Members Chair Josh Chiappone Justin Nadeau Susan Farrell Elbert Watson Executive Director Hon. Jim Gulli Steven Strichman Stephanie Fitch Latasha Gardner AUDIT & FINANCE COMMITTEE MEETING APRIL 1, 2022 10:00 A.M. I. Approval of March 26, 2021 Audit & Finance Committee meeting minutes. II. 2021 Audit Presentation – Wojeski & Co., CPAs III. Adjournment City Hall – 433 River Street, Suite 5001, Troy, New York 12180 Phone: 518.279.7166  March 26, 2021 10:00 AM Audit and Finance Committee Meeting This meeting was held via Zoom Present: Justin Nadeau, Rich Nolan, Susan Farrell, Elbert Watson, Stephanie Fitch, Hon. Jim Gulli, Latasha Gardner and Josh Chiappone. Absent: Hon. Anasha Cummings Also in attendance: Steven Strichman, Justin Miller Esq, MaryEllen Flores, Dylan Turek, Chris Stephens, Sharon Martin and Denee Zeigler. A joint audit and finance committee meeting was called to order at 10:00 a.m. and was a combined meeting of the IDA and CRC committees. Mr. Strichman noted that this meeting is T being held via conference call and online due to the Governor’s Executive Order No. 202.1. I. IDA Audit & Finance Committee Meeting Minutes II. AF Susan Farrell made a motion to approve the February 19, 2021 IDA Audit & Finance Committee meeting minutes. Stephanie Fitch seconded the motion, motion carried. CRC Audit & Finance Committee Meeting Minutes III. DR Susan Farrell made a motion to approve the February 19, 2021 CRC Audit & Finance Committee meeting minutes. Stephanie Fitch seconded the motion, motion carried. IDA Final Audit Presentation - Wojeski Chris Stephens of Wojeski & Co. went through the report to the board for the Troy IDA. He advised that this report outlines the main audit findings throughout the year. Mr. Stephen reviewed the Qualitative Aspects of Accounting Practices. He noted that the financial statements do include estimates; noting the estimate of land held for development. Due to restrictions, the audit had to be done remotely and there were no issues. Overall, he noted no difficulties conducting the audit, any misstatements have been identified and corrected and no disagreements arose during the audit. Mr. Stephens noted any adjustments were done and were explained in the notes section. He added no issues with management and will be requesting a management representation letter. Mr. Stephens explained the management’s discussion and analysis information has been omitted; the basic financial statements is not affected by this missing information. The supplemental schedules are included and highlights the information in the PARIS report and tax information. Mr. Stephens discussed the audit financial statements. He noted that the financial statements are presented fairly and the board has received an unmodified opinion. Mr. Stephens presented an overview of the year end financial statements with the 1  board members. He advised there are notes at the end of the report to explain items in the financials in more detail. Mr. Stephens went over notes a – f. He also went over the report on internal controls and noted no issues. He advised no issues with compliance. Mr. Stephens discussed the IDA project information and the bond details submitted to the PARIS report. Mr. Watson asked what the management discussion and analysis is. Mr. Stephens explained that it explains the organization and different funds in greater detail. It also allows the management to give their opinion. He noted that it is usually applicable to much larger organizations with multiple financial accounts. Stephanie Fitch made a motion to approve the IDA audited financial statements as presented. Elbert Watson seconded the motion, motion carried. IV. CRC Final Audit Presentation - Wojeski Chris Stephens of Wojeski & Co. went through the report to the board for the Troy IDA. He advised that this report outlines the main audit findings throughout the year. Mr. Stephen reviewed the Qualitative Aspects of Accounting Practices. He advised that they did not encounter any issues while completing the audit and no misstatements. Mr. Stephens advised that there were no disagreements with management and noted that like the IDA, there is no management’s discussion and T analysis included. Mr. Stephens advised that the bond information was reviewed as part of the PARIS report that is to be submitted. Mr. Stephens went over the audited financial statements with the CRC board AF members. He noted that the financial statements are presented fairly and the board has received an unmodified opinion. Mr. Stephens noted that there was an increase in project fees and grants. He went over notes a – c. He also went over the report on internal controls and noted no issues. He advised no issues with compliance. Mr. Stephens discussed the CRC bond details submitted to the PARIS report. V. DR Elbert Watson made a motion to accept the CRC audited financial statements as presented. Susan Farrell seconded the motion, motion carried. Adjournment With no additional business to discuss, the IDA and CRC audit and finance committee meetings were adjourned at 10:35 a.m. Stephanie Fitch made a motion to adjourn the joint IDA/CRC Audit & Finance Committee meeting at 10:35. Josh Chiappone seconded the motion, motion carried. 2  TROY INDUSTRIAL DEVELOPMENT AUTHORITY Financial Statements, Supplementary Information, and Independent Auditors Report T December 31, 2021 and 2020 AF DR TROY INDUSTRIAL DEVELOPMENT AUTHORITY December 31, 2021 and 2020 Financial Statements Independent Auditor’s Report .............................................................................. 1 Statements of Net Position .................................................................................. 4 Statements of Revenues, Expenses and Change in Net Position ................................ 5 Statements of Cash Flows ................................................................................... 6 Notes to Financial Statements .............................................................................. 7 Compliance Report Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an T Audit of Financial Statements Performed in Accordance with Government Auditing Standards ....................................................................... 13 Supplementary Information AF Schedule I – Schedule of Indebtedness ................................................................ Schedule II – Schedule of Supplemental Information – Bonds/Notes ........................ Schedule III – Schedule of Supplemental Information – Straight Leases ................... 15 16 17 DR  INDEPENDENT AUDITOR’S REPORT To the Board of Directors Troy Industrial Development Authority Troy, New York Report on the Audit of the Financial Statements Opinion We have audited the accompanying financial statements of Troy Industrial Development T Authority (the "Authority") as of and for the years ending December 31, 2021 and 2020, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents. AF In our opinion, the accompanying financial statements referred to above present fairly, in all material respects, the financial position of the Authority as of December 31, 2021 and 2020, and the changes in financial position and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion D We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in R Governmental Auditing Standards issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management 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, and for 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. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for twelve months beyond the financial 1 statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Governmental Auditing Standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  T Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to  AF those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Obtain an understanding of internal control relevant to the audit 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 the Authority’s internal control. Accordingly, no such opinion is expressed.   D Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall R presentation of the financial statements. Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, amount other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control related matters that we identified during the audit. Required Supplementary Information Management has omitted the Management’s Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not part of the basic financial statements, is required by the Government Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. 2 Supplementary Information Our audit was conducted for the purpose of forming an opinion on the basic financial statements as a whole. The supplementary information listed in the table of contents is presented for the purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with GAAS. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the Annual Report of the Authority as defined by Section 2800 of the New York State Public Authorities Law, Annual Reports by Authorities, but does not include T the basic financial statements and our auditor’s report thereon. Our opinion on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. AF In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. D Other Reporting Required by Government Auditing Standards R In accordance with Government Auditing Standards, we have also issued our report dated DATE on our consideration of the Authority's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and 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 the Authority’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 the Authority's internal control over financial reporting and compliance. Albany, New York DATE 3 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Statements of Net Position December 31, 2021 2020 ASSETS CURRENT ASSETS Cash and cash equivalents $ 130,601 $ 277,993 Accounts receivable 2,422 99,536 Prepaid expenses 1,151 1,138 TOTAL CURRENT ASSETS 134,174 378,667 NONCURRENT ASSETS Land held for sale or development T 287,000 287,000 LIABILITIES CURRENT LIABILITIES Accounts payable AF TOTAL ASSETS 421,174 2,193 665,667 10,044 D Due to other governments R LONG-TERM LIABILITIES TOTAL CURRENT LIABILITIES Land purchase option 2,422 4,615 117,301 100,042 110,086 117,301 NET POSITION Unrestricted 299,258 438,280 TOTAL NET POSITION $ 299,258 $ 438,280 See accompanying notes to financial statements. 4 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Statements of Revenues, Expenses and Change in Net Position For the Year Ended December 31, 2021 2020 OPERATING REVENUES Administrative fees $ 30,622 $ 147,448 OPERATING EXPENSES Administrative support 100,000 100,000 Professional fees 64,886 34,841 Dues and memberships 2,522 6,010 Insurance 2,289 2,239 Economic development - 247,896 Other expenses TOTAL OPERATING EXPENSEST 257 169,954 3,529 394,515 NON-OPERATING REVENUE Interest income AF OPERATING LOSS TOTAL NON-OPERATING REVENUE (139,332) 310 310 (247,067) 2,879 2,879 D CHANGE IN NET POSITION R NET POSITION, beginning of year NET POSITION, end of year $ (139,022) 438,280 299,258 $ (244,188) 682,468 438,280 See accompanying notes to financial statements. 5 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Statements of Cash Flows For the Year Ended December 31, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES Proceeds from administrative fees $ 127,736 $ 47,912 Payments to vendors (275,438) (287,966) NET CASH USED IN OPERATING ACTIVITIES (147,702) (240,054) CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from interest income 310 2,879 NET CASH PROVIDED BY INVESTING ACTIVITIES T NET DECREASE IN CASH 310 2,879 AF AND CASH EQUIVALENTS Cash and cash equivalents at beginning of year CASH AND CASH EQUIVALENTS AT END OF YEAR $ (147,392) 277,993 130,601 $ (237,175) 515,168 277,993 D RECONCILIATION OF OPERATING LOSS TO NET R CASH USED IN OPERATING ACTIVITIES Operating loss Changes in operating assets and liabilities: Accounts receivable Prepaid expenses $ (139,332) 97,114 (13) $ (247,067) (99,536) (37) Accounts payable (7,851) 6,544 Due to other governments (97,620) 100,042 NET CASH USED IN OPERATING ACTIVITIES $ (147,702) $ (240,054) See accompanying notes to financial statements. 6 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements December 31, 2021 and 2020 NOTE A--AUTHORITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Troy Industrial Development Authority (the "Authority") was created in 1967 by the New York State Legislature under the provisions of Chapter 759 of the 1967 Laws of New York State for the purpose of encouraging economic growth in the City of Troy, New York (the “City”). The Authority, although established by the State Legislature, is a separate public benefit authority and operates independently of the City. The Authority’s function is to authorize the issuance of industrial revenue bonds for industrial development projects and to assist businesses in acquiring or constructing various facilities in order to provide job opportunities and increase economic welfare. In return for its efforts, the Authority receives application and closing fees related to this business financing. Basis of Presentation T The Authority’s financial statements are prepared using the accrual basis in accordance with AF accounting principles generally accepted in the United States of America (U.S. GAAP). The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The accounting and financial reporting treatment applied to the Authority is determined by its measurement focus. The transactions of the Authority are accounted for on a flow of economic resources measurement focus. With this measurement focus, all assets and liabilities D associated with the operations are included on the statement of net position with revenues recorded when earned and expenses recorded when incurred. Net position is classified into three components – net investment in capital assets; restricted and unrestricted. These R classifications are defined as follows: Net investment in capital assets: This component of net position consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of bonds, notes, and other borrowings that are attributable to the acquisition, construction, or improvement of those assets. If there are unspent debt proceeds at year end, the portion of the debt attributable to the unspent proceeds is not included in the calculation of investment in capital assets, net of related debt. Rather that portion of the debt is included in restricted net position. Restricted net position: This component of net position represents external restrictions on net position imposed by creditors, grantors, contributors, laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted net position: This component represents net position that does not meet the definition of "restricted". 7 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements--Continued NOTE A--AUTHORITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-- Continued When both restricted and unrestricted resources are available for use, it is the Authority’s policy to use restricted resources first, then unrestricted resources as needed. The Authority distinguishes operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with the Authority's principal on-going operations. All revenues and expenses that do not meet this definition are reported as non-operating revenues and expenses. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. T Accordingly, actual results could differ from those estimates. Cash and Cash Equivalents AF The Authority considers as cash all demand deposits and all highly liquid investments which are readily convertible to cash. Accounts Receivable Accounts receivable are non-interest bearing and are carried at their estimated collectible amounts. Accounts receivable are periodically evaluated for collectability based on a review of outstanding receivables, historical collection information and current economic conditions. D In the opinion of Authority management, all receivable balances are considered collectible; accordingly, no allowance for doubtful accounts has been recorded. R Capital Assets Acquisitions of property and equipment and expenditures which materially change the capacities or extend the useful lives are capitalized and recorded at historical cost. Routine maintenance and repairs and minor replacement costs are charged to expense as incurred. When an asset is sold, or retired, the cost and accumulated depreciation are removed from their respective accounts and the resulting gain or loss is included in the change in net position. Depreciation expense is recorded using the straight-line method over the estimated useful lives of the related assets, generally ranging from 5 to 40 years. Land Held for Sale or Development Land held for sale or development is recorded at cost and is carried at the lower of cost or fair value. Major additions, renewals, and betterments are capitalized, whereas remediation, maintenance, and repair costs are expensed as incurred. When land held for development or resale is sold or otherwise disposed of, the appropriate accounts are relieved of costs and any resultant gain or loss is credited or charged to the change in net position. 8 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements--Continued NOTE A--AUTHORITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-- Continued Land Held for Development and Resale--Continued Recognition of impairment of land held for development and resale is required when events and circumstances indicate that an entity will not be able to recover the carrying amount of these assets. The Authority recognizes an impairment loss, equal to the amount by which the carrying amount of an asset exceeds its fair value, if the carrying amount of the asset is not recoverable. Financing Activities Certain industrial development revenue bonds issued by the Authority are collateralized by property that is leased to companies and is returned by lease payments. The bonds are not obligations of the Authority or the State of New York. The Authority does not record the T assets or liabilities resulting from completed bond transactions in its accounts since its primary function is to arrange financing between borrowing companies and bond holders, and funds arising from those transactions are controlled by trustees or banks acting as fiscal agents. AF For providing this service, the Authority receives project administration fees from the borrowing companies. Such administrative fee income is recognized immediately upon issuance of bonds. The outstanding balances of the bonds issued totaled $0 and $25,000,000 at December 31, 2021 and 2020, respectively. Payment in Lieu of Taxes (PILOT) The Authority enters into and administers PILOT agreements for various unrelated business D entities located in the City. Under the terms of the PILOT agreements, title to property owned by the unrelated business entity is transferred to the Authority for a certain period of time. During the period in which the Authority holds title, the business entity pays a PILOT to the R Authority based on a calculation defined by the specific agreement. The PILOTs allow the companies to make payments that are less than the property taxes that would be paid on the related property’s assessed value. Once the PILOT is received, the Authority remits the PILOT to the respective taxing authorities. Certain requirements, as defined by each agreement, are to be met by the company to be able to maintain its PILOT. These requirements, as stated in the PILOT agreement, can be comprised of reaching and maintaining certain employment goals and paying its PILOT in a timely fashion. At the completion of the PILOT, title to the property is transferred back to the third-party business owner, and the property goes back on the tax rolls. PILOT receipts and PILOT payments are accounted for as pass- through transactions and are not included in the revenues or expenses of the Authority. The Authority is responsible for collecting and remitting the funds. However, the taxing authorities bear the risk of loss if the PILOT payments are not paid to the Authority by the respective companies. Total pass-through PILOT payments were approximately $2,262,000 and $2,025,000 for the years ended December 31, 2021 and 2020, respectively. Income Taxes The Authority is exempt from Federal, State and Local income taxes. 9 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements--Continued NOTE A--AUTHORITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-- Continued Subsequent Events The Authority evaluates transactions that occur subsequent to year end for potential recognition or disclosure in the financial statements through the date on which the financial statements are available to be issued. The financial statements were available to be issued on DATE. NOTE B--CASH AND CASH EQUIVALENTS The Authority’s investment policies are governed by New York State statutes and its own written investment policy. The Authority is authorized to use demand deposit accounts, T money market accounts, and certificates of deposit. Permissible investments include obligations of the U.S. Treasury and those of New York State and its municipalities and school districts. AF All cash of the Authority is maintained in accounts covered by the Federal Deposit Insurance Corporation (FDIC). In accordance with state law, collateral is required for demand deposits and certificates of deposit not covered by FDIC insurance. The Authority’s uninsured deposits are collateralized by accounts held by the pledging financial institution agent in the Authority’s name. There were no uninsured deposits for the year ended December 31, 2021. D NOTE C--LAND HELD FOR SALE OR DEVELOPMENT R In January 2015, the Authority entered into a series of agreements related to a proposed park improvement project. The agreements allowed the Authority to undertake development activities and included a two-year option to purchase a parcel of land to support the same project. During 2017, the Authority exercised the option and purchased the land. As of December 31, 2021 management does not consider the land to be impaired, and accordingly, the Authority has not recorded an impairment loss for the years ended December 31, 2021 and 2020. Land held for resale or development activity is as follows for the period January 1, 2020 through December 31, 2021: Beginning Ending Balance Additions Subtractions Balance $ 287,000 $ - $ - $ 287,000 10 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements--Continued NOTE D--LAND PURCHASE OPTION In April 2017, the Authority entered into an exclusive option agreement to sell a 1.4-acre parcel of land to a developer of an IDA project for an exercise price of $100,000. The option agreement has a 7-year term and requires annual lease payments of $10,000 to be paid to the Authority by the developer during the option term. In exchange for the option the developer paid the Authority $107,000 during the year ended December 31, 2017. The total purchase price of the land under this agreement was $207,000. The land purchase option will be recognized as revenue when the developer exercises the option, or the option expires. In August 2020, the Authority amended this agreement. Under the amended agreement, the Authority agreed to provide the developer assistance for qualified project expenditures in an amount of up to $250,000. In exchange for this assistance, the purchase price of the land was increased to $457,000. In addition, the option date was amended to be the earlier of T the developer’s closing date on permanent financing or April 28, 2024. Total assistance provided to the developer under the amended agreement totaled $247,740 for the year ended December 31, 2020 and is included in the financial statement line “Economic Development” AF on the accompanying statement of revenues, expenses and change in net position. The total balance of the land purchase option consists of the following as of December 31: Option price Lease payments received to be credited to exercise price $ 2021 107,000 10,301 $ 2020 107,000 10,301 DR NOTE E--BOARD DESGINATED NET POSITION $ 117,301 $ 117,301 During 2018, the Board approved and designated funds up to $61,700 for design services related to the Troy Wayfinding System project that will help assist with parking, visitors and overall connectivity in the City of Troy. As of December 31, 2021, these funds have not been expended. NOTE F--RELATED PARTY TRANSACTIONS City of Troy In accordance with an agreement between the Authority and the City, the Authority reimburses the City annually for services and support personnel provided to the Authority during the year. The annual charge for these services was $100,000 for the years ended December 31, 2021 and 2020. 11 TROY INDUSTRIAL DEVELOPMENT AUTHORITY Notes to Financial Statements--Continued NOTE F--RELATED PARTY TRANSACTIONS--Continued Troy Capital Resource Corporation The Authority’s current Board of Directors is the same as that of the Troy Capital Resource Corporation (Troy CRC). In 2021, The Authority received a loan from the Troy CRC in the amount of $10,000 that was secured by an Authority Preservation Bond in the same amount. The loan had a maturity date of June 1, 2022 and was non-interest bearing. In December 2021, the Authority repaid the loan in full and the bond was retired. Troy Local Development Corporation The Authority and the Troy Local Development Corporation (TLDC) have entered into a fee sharing agreement. Under the agreement, the IDA will provide TLDC a portion of the T administration fee for board approved projects that include TLDC involvement. There were no administration fees paid to TLDC pursuant to this agreement during the years ended December 31, 2021 and 2020. AF DR 12  COMPLIANCE REPORT T AF DR  INDEPENDENT AUDITORS' 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 To the Board of Directors Troy Industrial Development Authority Troy, New York We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government T Auditing Standards issued by the Comptroller General of the United States, the financial statements of Troy Industrial Development Authority (the "Authority"), which comprise the statement of net position as of December 31, 2021, and the related statements of revenues, AF expenses, and changes in net position and cash flows for the year ended, and the related notes to the financial statements, and have issued our report thereon dated DATE. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Agency's internal control over financial reporting (internal control) as a basis for designing audit D procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Agency's internal control. Accordingly, we do not express an opinion on R the effectiveness of the Agency's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. 13 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the Agency's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Albany, New York T DATE AF DR 14  SUPPLEMENTARY INFORMATION T AF DR TROY INDUSTRIAL DEVELOPMENT AUTHORITY Schedule I -Schedule of Supplementary Information - Indebtedness For the Year Ended December 31, 2021 Original Original Current Outstanding Paid or Outstanding Final Issuance Bond Interest Beginning of Issued During Refunded Durring End of Maturity Project Date Issued Rate Fiscal Year Fiscal Year Fiscal Year Fiscal Year Date Rensselaer Polytechnic Institute 05/02 $ 218,875,000 4.99% $ 25,000,000 $ - $ 25,000,000 $ - 07/31 $ 218,875,000 $ 25,000,000 $ - $ 25,000,000 $ - T AF R D See independent auditor's report 15  TROY INDUSTRIAL DEVELOPMENT AUTHORITY Report to the Board For the Year Ended December 31, 2021 T AF DR DATE To the Board of Troy Industrial Development Authority We have audited the financial statements of Troy Industrial Development Authority (the "Authority") for the year ended December 31, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated February 15, 2022. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Matters Qualitative Aspects of Accounting Practices T AF Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Authority are described in Note A to the financial statements. No new accounting policies were adopted, and the application of existing policies was not changed during 2021. We noted no transactions entered into by the Authority during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. D Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are R particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting the Authority’s financial statements was management’s estimate of the market value of land held for development or resale.  Management’s estimate of land held for development or resale is based on the exercise price of a land purchase option and an appraisal prepared by a third-party appraiser. We evaluated the key factors and assumptions used to develop the accounting estimate in determining that it is reasonable in relation to the financial statements taken as a whole. The financial statement disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. 1 Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of our audit procedures and corrected by management were material, either individually or in the aggregate, to the financial statements taken as a whole. Disagreements with Management For the purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated DATE. T Management Consultation with Other Independent Accountants AF In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the Authority’s financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. D Other Audit Findings or Issues R We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Authority's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters Management has omitted the management’s discussion and analysis information that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. We were engaged to report on the Schedule of Indebtedness which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from 2 the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records and other records used to prepare the financial statements or to the financial statements themselves. We were not engaged to report on the Agency’s annual report that is defined by Section 2800 of the New York State Public Authorities Law, Annual Reports by Authorities. Our responsibility under professional standards is to consider whether a material inconsistency exits between the annual report and the audited financial statements that includes our report thereon. The annual report has not been subjected to the auditing procedures applied to the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it. Restriction on Use This information is intended solely for the information and use of the Board of Directors and management of the Authority and is not intended to be, and should not be, used by anyone other than these specified parties. T AF DR 3 Client: 005512.AUD - Troy Industrial Development Authority Engagement: 21 AUD - Troy Industrial Development Authority Trial Balance: 3000.01 - TB Workpaper: 3700.01 - Adjusting Journal Entries Report Account Description W/P Ref Debit Credit Adjusting Journal Entries JE # 1 5100.04 To record accrue a liability for the invoice paid in February 2022 for December services 409.5 Architectural/Engineering 2,193.00 600 Accounts Payable 2,193.00 Total 2,193.00 2,193.00 T AF DR 1 of 3