Notes to SEFA
The Schedule of Expenditures of Federal Awards, State Financial Assistance, and Passenger Facility Charges Collected and Expended (the Schedule) summarizes the federal and state expenditures of the Metropolitan Knoxville Airport Authority (the Authority) under programs of the federal and state government for the year ended June 30, 2025 and Passenger Facility Charges (PFCs) collected and expended for the year ended June 30, 2025. These amounts were obtained from the Authority’s general ledger, which is prepared on the accrual basis. Because the Schedule presents only a selected portion of the operations of the Authority, it is not intended to and does not present the financial position, change in net position, and current revenues and expenditures of the Authority. For purposes of the Schedule, federal awards include federal financial assistance received directly from a federal awarding agency or indirectly from a pass-through entity. The awards are classified into major program categories in accordance with the provisions of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The Authority did not elect to apply the 10% de minimis indirect cost rate.
The objective of the Passenger Facility Charge program is to authorize public agencies controlling commercial service airports to impose a charge of $1 to $4.50 per enplaned passenger. The proceeds from such PFCs are to be used to finance approved, eligible airport-related projects that preserve or enhance safety, capacity, or security; reduce noise; or increase air carrier competition. PFCs are not considered to be federal financial assistance defined by the Uniform Guidance.
For purposes of the Schedule, expenditures for federal assistance programs and PFCs are recognized on the accrual basis of accounting. Federal expenditures are primarily for administering an Airport Improvement Program for the Authority. The Authority uses PFCs for various improvement project expansions of the airport facilities and payments for debt service on bonds incurred to carry out such projects.