2019 BBNC Annual Report | Page 73

(15) CONTINGENCIES In the normal course of business, the Corporation may be a participant in legal proceedings related to the conduct of its businesses that will result in contingent liabilities or contingent assets that are not reflected in the accompanying consolidated financial statements. In the opinion of management, the financial position, results of operations or liquidity of the Corporation will not be materially affected by any such current legal proceeding. The Corporation has entered into contracts to provide services to commercial and government agencies. The majority of these contracts are subject to audits and potential adjustments by the respective customer. At this time, there are no pending audits or audit adjustments on the government contracts. Management believes that any adjustments that could potentially be made under the contract will not have significant impact on the Corporation’s financial position, results of operations, or liquidity. (16) CREDIT RISK The Corporation maintains its cash in accounts with third-party financial institutions which, at times, may exceed federally insured limits. The Corporation has not experienced any losses in such accounts. (17) CONCENTRATION OF REVENUE AND RECEIVABLES During fiscal year 2019, 93% of the Corporation’s Government Services and Construction revenues were derived from contracts with U.S. government agencies. A significant portion of these contracts were granted under the Small Business Administration (SBA) 8(a) program that exempts U.S. government granting agencies from certain federal procurement regulations when awarding contracts to 8(a) participants. The SBA further exempts awarding agencies from certain contract size limitations when awarding contracts to 8(a) participants owned by Alaska Native Corporations. Changes in U.S. government spending, the 8(a) program, or both, could have a significant positive or negative impact on the liquidity, results of financial operations, and financial condition of the Corporation. As of March 31, 2019, 43% of trade accounts receivable are due from government agencies. (18) SUBSEQUENT EVENTS On May 24, 2019, the Board of Directors of the Corporation approved a resolution for the contribution of $6,511,000 to the BBNC Settlement Trust. The Corporation has evaluated subsequent events from the consolidated balance sheet date through June 7, 2019, the date at which the consolidated financial statements were available to be issued, and determined there are no other items to disclose. M anagement ' s D iscussion and A nalysis 71