Loading...
Fiscal Year 2013MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SPECIAL-PURPOSE FINANCIAL STATEMENTS As of and for the Year Ended September 30, 2013 And Reports of Independent Auditor MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT TABLE OF CONTENTS REPORT OF INDEPENDENT AUDITOR SPECIAL-PURPOSE FINANCIAL STATEMENTS Special -Purpose Balance Sheet - Governmental Funds ....... Special -Purpose Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds____________ Special -Purpose Statement of Fiduciary Assets and Liabilities -Agency Fund________________________________ Notes to Special -Purpose Financial Statements__________________ 1-2 .......................................................... 3 •-•------------•-•----------------------•---------------- 4 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues and Expenditures - Budget to Actual - General Fund___ _____ ______________ Schedule of Revenues and Expenditures — Budget to Actual — Special Revenue Court Related Fund___________________________ Schedule of Revenues and Expenditures — Budget to Actual — Special Revenue Records Modernization Fund .............. SUPPLEMENTARY INFORMATION Statement of Changes in Assets and Liabilities - Agency Fund---------- --- ......................................... SUPPLEMENTARY INDEPENDENT AUDITOR'S REPORTS Report of Independent Auditor on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special -Purpose Financial Statements Performed In Accordance with Government Auditing Standards___________ ---------- Independent Auditors Management Letter______________ ------------------------ 5 6-12 13 14 15 16 Cherry Bekaert"P Report of Independent Auditor To the Honorable Amy Heavilin, Clerk of the Circuit Court of Monroe County, Florida: Report on the Financial Statements We have audited the accompanying special-purpose financial statements of each major fund and the aggregate remaining fund information of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk") as of and for the year ended September 30, 2013, and the related notes to the special-purpose financial statements as listed in the table of contents. Management's Responsibility for the Special -Purpose Financial Statements Management is responsible for the preparation and fair presentation of these special-purpose financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the special-purpose financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these special-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special-purpose financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the special-purpose financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Clerk's preparation and fair presentation of the special-purpose financial statements 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 Clerk's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the special-purpose financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects, the respective financial position of each major fund and the aggregate remaining fund information of the Clerk as of September 30, 2013, and the respective changes in financial position thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1, the accompanying special-purpose financial statements were prepared for the purpose of complying with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General -Local Governmental Entity Audits, and are not intended to be a complete presentation of the financial position and changes in financial position of the Clerk. Additionally, the special-purpose financial statements present only the Clerk and are not intended to present fairly the financial position and changes in financial position of Monroe County, Florida, taken as a whole. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Required Supplementary Information as listed in the table of contents be presented to supplement the special-purpose financial statements. Such information, although not a part of the special-purpose financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the special-purpose financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the special-purpose financial statements, and other knowledge we obtained during our audit of the special-purpose financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the special-purpose financial statements of the Clerk taken as a whole. The accompanying supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the special-purpose financial statements. The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the special-purpose financial statements. Such information has been subjected to the auditing procedures applied in the audit of the special-purpose financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the special-purpose financial statements or to the special-purpose financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the special-purpose financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated June 30, 2014 on our consideration of the Clerk's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is 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 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 Clerk's internal control over financial reporting and compliance. This report is intended solely for the information and use of the Clerk's management and the Florida Auditor General and is not intended to be and should not be used by anyone other than these specified parties. Orlando, Florida June 30, 2014 SPECIAL-PURPOSE FINANCIAL STATEMENTS MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SPECIAL-PURPOSE BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2013 ASSETS Assets Cash and cash equivalents Due from Board of County Commissioners Due from other governments Due from others Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable and accrued liabilities Due to Board of County Commissioners Due to other governments Unearned revenue Total liabilities Fund Balances: Restricted Total liabilities and fund balances Major Funds Court Records General Related Modernization Fund Fund Fund Totals $ 1,161,602 $ 1,086,993 $ 1,721,524 $ 3,970,119 16,546 42 - 16,588 72,220 15,706 - 87,926 757 - - 757 $ 1,251,125 $ 1,102,741 $ 1,721,524 $ 4,075,390 $ 164,736 $ 349,662 $ - $ 514,398 1,086,389 560,685 - 1,647,074 - 118,181 - 118,181 - 74,213 - 74,213 1,251,125 1,102,741 - 2,353,866 - - 1,721,524 1,721,524 $ 1,251,125 1,102,741 $ 1,721,524 $ 4,075,390 See notes to special-purpose financial statements. 3 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SPECIAL-PURPOSE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2013 Revenues Taxes Intergovernmental - Other Intergovernmental - BOCC Charges for services Fines and forfeitures Interest income Miscellaneous Total revenues Expenditures Current General government Salaries and benefits Operating expenditures Court related Salaries and benefits Operating expenditures Capital outlay Total expenditures Excess of revenues over expenditures Other financing sources and (uses) Transfer to Board of County Commissioners Transfer to Florida Department of Revenue Total other financing sources and (uses) Excess of revenues and other financing sources over expenditures and other uses Fund balances, beginning of year Fund balances, end of year Major Funds Court Records General Related Modernization Fund Fund Fund Totals $ 496,187 $ - $ - $ 496,187 75,340 2,738,905 - 2,814,245 2,764,544 578,563 - 3,343,107 787,819 314,960 283,598 1,386,377 - 453,457 171,919 625,376 11,802 350 11,290 23,442 2,497 - - 2,497 4,138,189 4,086,235 466,807 8,691,231 2,549,220 - - 2,549,220 507,805 - - 507,805 - 3,147,719 - 3,147,719 - 237,248 - 237,248 45,109 48,173 - 93,282 3,102,134 3,433,140 - 6,535,274 1,036,055 653,095 466,807 2,155,957 (1,036,055) (471,224) - (1,507,279) - (181,871) - (181,871) (1,036,055) (653,095) - (1,689,150) - ' - 466,807 466,807 - - 1,254,717 1,254,717 $ - $ - $ 1,721,524 $ 1,721,524 See notes to special-purpose financial statements. 4 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SPECIAL-PURPOSE STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUND SEPTEMBER 30, 2013 ASSETS Cash and cash equivalents Due from other governmental agencies Due from others Total assets LIABILITIES Due to others Due to Board of County Commissioners Due to other governmental agencies Total liabilities $ 3,943,496 448 8,574 $ 3,952,518 $ 3,169,906 100,528 682,084 $ 3,952,518 See notes to special-purpose financial statements. 5 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Note 1—Summary of significant accounting policies Reporting Entity - The Monroe County, Florida Clerk of the Circuit Court (the "Clerk") is a separately elected county official established pursuant to the Constitution of the State of Florida. The Clerk's special-purpose financial statements do not purport to reflect the financial position or the results of operations of Monroe County, Florida (the "County") taken as a whole. Entity status for financial reporting purposes is governed by Statement No. 14 as amended. Although the Clerk's Office is operationally autonomous from the County, it does not hold sufficient corporate powers of its own to be considered a legally separate entity for financial reporting purposes. Therefore, the Clerk is reported as a part of the primary government of Monroe County, Florida. Description of Funds - The accounting records are organized for reporting purposes as three governmental funds and a fiduciary fund. General Fund - The General Fund is a governmental fund used to account for and report all financial resources not accounted for and reported in another fund. Court Related Fund — A special revenue fund is used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. This special revenue fund was created to account for and report State and local funding restricted for the expenditure of court functions. .Any excess funding over actual expenditures is returned to either the Florida Department of Revenue or the Monroe County Board of County Commissioners (the "Board"), depending on where funding originated. Records Modernization Fund - The Records Modernization Fund is a special revenue fund used to account for and report recording fees restricted for records modernization and court technology as specified in Florida Statutes 28.24(12)(d) and 28.24(12)(e)1. Pursuant to Florida Statutes 28.37, this fund also receives 10% of all fines collected by the Clerk to be used for any court related purpose. Fiduciary Fund - The Fiduciary fund of the Clerk is an Agency Fund, which is used to account for assets held by the Clerk as agent. Financial Statement Presentation - The Clerk's special-purpose financial statements are prepared for the purpose of complying with Section 218.39(2); Florida Statutes, and Chapter 10.550, Rules of the Auditor General (the "Rules"), which require the Clerk to only present fund financial statements. In conformity with the Rules, the Clerk has not presented the government -wide financial statements, related disclosures or management's discussion and analysis, which are required to present a complete presentation of its financial position and changes in financial position. The Clerk reports the General Fund, Court Related Fund and the Records Modernization Fund as major governmental funds and the Agency Fund as a fiduciary fund type. The Agency Fund is custodial in nature and does not involve measurement of results of operations. The Clerk's operations are segregated between court related and non -court related activities as defined by Article V of the Florida Constitution. Any excess of state appropriations over court related expenditures is reflected as due back to the State. Any excess of local appropriations over non court -related expenditures is reflected as a liability to the Board. 59 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Note 1—Summary of significant accounting policies (continued) Effective July 1, 2004, as a result of Revision 7 to Article V of the Constitution of the State of Florida, the passage of Senate Bill 2962 and the revision of numerous Sections of Florida Statutes (collectively, Article V), the Clerk became an entirely fee -based Constitutional Officer. Effective July 1, 2009, as a result of the passage of Senate Bills 2108 and 1718, the Clerk became part of the state appropriation process, wherein the Clerk received a predetermined share of a statewide appropriation to all State of Florida Clerks of Court. This appropriation has been accounted for as intergovernmental revenue. Effective July 1, 2013, as a result of the passage of Senate Bill 1512, the Clerk returned to being an entirely fee -based Constitutional Officer. In accordance with this Bill, fee revenue began being recognized effective June 1, 2013. Measurement Focus and Basis of Accounting - The General Fund and the Special Revenue Funds are governmental funds which use the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Clerk considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, expenditures related to compensated absences and claims and judgments are recorded only when payment is due. Fund Balances - Governmental funds report fund balances either as non -spendable or spendable. Spendable balances are further classified as restricted, committed, assigned or unassigned, based on the extent to which there are external or internal constraints on the spending of these fund balances. The Clerk is not legally separate from the County, and does not commit or assign fund balance as the highest level of decision making authority for the County rests with the Board. Nonspendable Fund Balance — Amounts that are (a) not in spendable form or (b) legally or contractually required to be maintained intact. "Not in spendable form" includes items that are not expected to be converted to cash (such as inventories and prepaid amounts) and generally items such as long-term amounts of loans and notes receivable, as well as property acquired for resale. The corpus (or principal) of a permanent fund is an example of an amount that is legally or contractually required to be maintained intact. Spendable Fund Balance: Restricted Fund Balance — Amounts that can be spent only for specific purposes stipulated by (a) external resource providers such as creditors (by debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. Unassigned Fund Balance — Unassigned fund balance is the residual classification for the General Fund. This classification represents fund balance that is spendable and that has not been restricted, committed, or assigned to specific purposes within the General Fund. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted or committed for specific purposes. The Clerk spends restricted amounts first, when both restricted and unrestricted fund balance is available, unless prohibited by legal documents, grant agreements or contracts. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Note 1—Summary of significant accounting policies (continued) Budgetary Requirements - Expenditures are controlled by appropriations in accordance with the budget requirements set forth in the Florida Statutes. The budget is prepared on a basis consistent with accounting principles generally accepted in the United States of America. The Florida Clerks of Court Operations Corporation ("CCOC") approves the budget for the Clerk's court - related activities for the twelve-month period beginning July 1 through June 30 pursuant to Senate Bills 2108 and 1718 enacted in 2009. The Clerk's statutory fiscal year is from October 1 through September 30. The Clerk is not required to submit its non -court related activities budget for approval to the CCOC. The non -court related budget is the Clerk's General Fund budget. The Clerk is not required to submit its court related special revenue fund budgets for approval to the Board. Cash and Cash Equivalents — The Clerk's cash and cash equivalents consist of demand deposits and highly liquid investments with maturities of 90 days or less when purchased. Capital Assets - Tangible personal property used by the Clerk's operations are recorded in governmental fund types as expenditures at the time assets are received and a liability is incurred. Purchased assets are capitalized at historical cost in the government -wide financial statements of the County. In addition, the County provides administrative office space and certain other expenditures used by the Clerk at no charge. Compensated Absences - The Clerk permits employees to accumulate earned but unused vacation and sick pay benefits. The Clerk is not legally required to and does not accumulate expendable available resources to liquidate this obligation. The obligation for compensated absences is accrued in the government -wide financial statements of the County. A summary of activity for the Clerk's compensated absences obligation is as follows: Balance, October 1, 2012 $ 680,465 Additions 256,633 Deletions 469,269 Balance, September 30, 2013 $ 467,829 Use of Estimates - The preparation of special-purpose financial statements requires management to make use of estimates that affect reported amounts. Actual results could differ from estimates. Note 2—Deposits and investments As of September 30, 2013, the Clerk's cash and cash equivalents are held in demand deposits with a carrying amount of $7,913,615 and a bank balance of $8,605,534. The Clerk places its cash and cash equivalents on deposit with financial institutions in the United States. The Federal Deposit Insurance Corporation (FDIC) covers $250,000 for substantially all depository accounts. The Clerk from time to time may have amounts on deposit in excess of the insured limits and the remaining balances are insured 100% by the State of Florida collateral pool, a multiple financial institution pool with the ability to assess its members for collateral shortfalls if a member institution fails. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Note 2—Deposits and investments (continued) Florida Statutes authorize investments in certificates of deposit, savings accounts, the Local Government Surplus Funds Trust Fund administered by the Florida State Board of Administration, money market funds, direct obligations of the U.S. Treasury, and federal agencies and instrumentalities and Intergovernmental Investment Pools that are authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Section 163.01, Florida Statutes. The Local Government Surplus Funds Trust Fund's name was changed in 2009 to Florida PRIME. The Florida PRIME is rated by Standard and Poors. The current rating is AAAm. Note 3—Fund balance classification Fund Balances are presented in the following categories: restricted and unassigned. See Note 1 for a description of these categories. The restrictions placed on Clerk Records Modernization fund balance are described as follows: Public Records Modernization Trust — Florida Statute 28.24(12)(d) requires the collection of an additional service charge to be paid to the Clerk to be used exclusively for equipment, maintenance of equipment, personnel training, and technical assistance in modernizing the public records system of the Clerk's Office. Public Records Court Technology Trust — Florida Statute 28.24(12)(e)(1) requires the collection of an additional service charge to be paid to the Clerk to be used exclusively for the operation and support of an integrated computer system for the judicial agencies and to support the operations and maintenance of the state court system. 10% Court -Related Fines — Florida Statute 28.37(2) requires the retention of 10% of court -related fines collected by the Clerk's Office. The fines are to be used exclusively for additional Clerk court -related operational needs and program enhancements. Records Modernization restricted fund balances are as follows: Public Records Modernization Trust $ 664,925 Public Records Court Technology 214,651 10% Court -Related Fines 841,948 Restricted Fund Balances $ 1,721,524 Note 4—Retirement System Plan Description — The Clerk's employees participate in the Florida Retirement System ("FRS"), administered by the Florida Department of Management Services. Employees elect to participate in either the defined benefit plan ("Pension Plan"), a cost sharing, multiple -employer, defined retirement plan, or the defined contribution plan ("Investment Plan") under the FRS. As a general rule, membership in the FRS is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. FRS provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to Plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida Legislature. {7 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Note 4—Retirement System (continued) Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. For Pension Plan members enrolled before July 1, 2011, Regular class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation based on the five highest years of salary for each year of credited service. Vested members with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Senior Management Service class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 2.0% of their final average compensation based on the five highest years of salary for each year of credited service. Elected Officers' class members who retire at or after age 62 with at least six years of credited service or 30 years of service regardless of age are entitled to a retirement benefit payable monthly for life, equal to 3.0% of their final average compensation based on the five highest years of salary for each year of credited service. Substantial changes were made to the Pension Plan during fiscal year 2011 affecting members enrolled on or after July 1, 2011 by extending the vesting requirement to eight years of credited service and increasing normal retirement to age 65 with at least eight years of credited service or 33 years of service regardless of age. Also, the final average compensation of these members will be based on the eight highest years of salary. A post -employment health insurance subsidy is also provided to eligible retired members through the FRS in accordance with Florida Statutes. In addition to the above benefits, the FRS administers a Deferred Retirement Option Program ("DROP"). This program allows eligible employees to defer receipt of monthly retirement benefit payments while continuing employment with a FRS employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest. For employees electing to participate in the Investment Plan rather than the Pension Plan, vesting occurs at one year of service. These participants receive a contribution of self -direction in an investment product with a third -party administrator selected by the State Board of Administration. The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, PO Box 9000, Tallahassee, FL 32315-9000, or from the website www.dms.myflorida.com/retirement. Funding Policy — Effective July 1, 2011, all enrolled members of the FRS other than DROP participants are required to contribute 3% of their salary to the FRS. In addition to member contributions, governmental employers are required to make contributions to the FRS based on state-wide contribution rates. The employer contribution rates by job class for the periods from October 1, 2012 through June 30, 2013 and July 1, 2013 through September 30, 2013, respectively, were as follows: regular, 5.18% and 6.95%; county elected officers, 10.23% and 33.03%; senior management, 6.30% and 18.31 %; and DROP participants, 5.44% and 12.84%. During the fiscal year ended September 30, 2013, the Clerk contributed to the FRS an amount equal to 6.57% of covered payroll. Clerk contributions to the FRS for the fiscal years ended September 30, 2011 through 2013 were $410,000, $227,553 and $271,438, respectively, which were equal to the required contributions for each fiscal year. The Clerk has historically contributed amounts equal to required contributions and, therefore, does not have a pension asset or liability as determined in accordance with GASB Statement No. 27. 10 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Note 5—Other postemployment benefits (OPEB) The Monroe County Board of County Commissioners (BOCC) administers a single -employer defined benefits healthcare plan (the "Plan"). Florida Statutes 112.0801 requires the County to provide retirees and their eligible dependents with the option to participate in the Plan if the County provides health insurance to its active employees and their eligible dependents. The Plan provides medical coverage and prescription drug benefits to both active and eligible retired employees. The Plan does not issue a publicly available financial report. The BOCC may amend the plan design, with changes to the benefits, premiums and/or levels of participant contribution at any time. In an open session, on at least an annual basis and prior to the annual enrollment process, the BOCC approves the rates for the coming calendar year for the retiree and County contributions. Eligibility for post -employment participation in the Plan is limited to full time employees of the County, and the Constitutional Officers. Employees who retire as an active participant in the Plan and were hired on or after October 1, 2001 may continue to participate in the Plan by paying the monthly premium established annually by the BOCC. Employees who retire as an active participant in the plan, were hired before October 1, 2001, have at least ten years of full time service with the County, and meet the retirement criteria of the Florida Retirement System (FRS) may continue to participate in the Plan at a cost equal to the FRS Health Insurance Subsidy for ten years of service (currently $5 per month for each year of service credit at retirement or $50 per month). Retirees who have met the requirements for early retirement, have not achieved age 60 and whose age and years of service do not equal 70 (rule of 70) must pay the standard monthly premium until the age criteria or the rule of 70 is met. At that time, the retiree's cost of participation will be equal to the FRS Health Insurance Subsidy. Surviving spouses and dependents of participating retirees may continue in the plan if eligibility criteria specific to those classes are met. The BOCC engages an actuarial firm on a biannual basis to determine the County's actuarially determined annual required contribution and unfunded obligation. The Clerk has no responsibility to the Plan other than to make the periodic payments determined by the BOCC. Further information about the Plan is available in the County's Comprehensive Annual Financial Report which is published on the Clerk's website at www.clerk-of- the-court.com. Note 6—Risk management The Clerk is exposed to various risks of loss related to tort; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Clerk participates in the coverage provided by the Board for Workers' Compensation, Group Insurance, and Risk Management internal service funds. Under these programs, Workers' Compensation provides $500,000 coverage per claim for regular employees. Workers' Compensation claims in excess of the self -insured coverage are covered by an excess insurance policy. Risk Management has a $5,000,000 excess insurance policy for general liability claims with a $200,000 self -insured retention, and building property damage is covered for the actual value of the buildings with a deductible of $50,000. Deductibles for windstorm and flood vary by location. Monroe County purchases commercial insurance for claims in excess of coverage provided by the funds and for all other risks of loss. Settled claims have not exceeded this commercial coverage in any of the past three years. The Clerk makes payments to the Worker's Compensation, Group Insurance and Risk Management Funds based on estimates of the amounts needed to pay prior and current year claims. 11 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO SPECIAL-PURPOSE FINANCIAL STATEMENTS SEPTEMBER 30, 2013 Note 7—Lease commitments The Clerk leases various office equipment under cancelable arrangements accounted for as operating leases. Total lease expense was $48,598 for the year ended September 30, 2013. Note 8—Litigation The Clerk is a party from time to time in various lawsuits and other claims incidental to the ordinary course of its operation, some of which are covered by the.Board's self-insurance program. While the results of litigation cannot be predicted with certainty, management believes the final outcome of such litigation will not have a material adverse effect on the Clerk's financial position. 12 REQUIRED SUPPLEMENTARY INFORMATION MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET TO ACTUAL GENERAL FUND YEAR ENDED SEPTEMBER 30, 2013 General Fund Variance Original Final Positive Budget Budget Actual (Negative) Revenues Taxes $ 200,593 $ 200,593 $ 496,187 $ 295,594 Intergovernmental - Other 52,289 52,289 75,340 23,051 Intergovernmental - BOCC 2,770,986 2,770,986 2,764,544 (6,442) Charges for services 585,878 585,878 787,819 201,941 Interest income 9,224 9,224 11,802 2,578 Miscellaneous 2,609 2,609 2,497 (112) Total revenues 3,621,579 3,621,579 4,138,189 516,610 Expenditures Current General government Clerk recording Clerk information systems Clerk finance Internal audit Tourist tax audit Non -court administration Non -court records management Occupancy costs Total expenditures Excess of revenues over (under) expenditures Other financing sources and uses 423,845 423,845 394,627 29,218 675,933 635,933 570,614 65,319 1,642,807 1,682,807 1,659,516 23,291 231,067 226,067 131,571 94,496 200,593 200,593 175,829 24,764 105,862 105,862 66,733 39,129 151,472 151,472 99,162 52,310 - 5,000 4,082 918 3,431,579 3,431,579 3,102,134 329,445 190,000 190,000 1,036,055 846,055 Contingency (190,000) (190,000) 190,000 Transfer to Board of County Commissioners - (1,036,055) (1,036,055) Total other financing sources and uses (190,000) (190,000) (1,036,055) (846,055) Net change in fund balance Fund balance, beginning of year Fund balance, end of year $ $ - $ $ 13 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET TO ACTUAL SPECIAL REVENUE COURT RELATED FUND YEAR ENDED SEPTEMBER 30, 2013 Special Revenue Court Related Fund Variance Original Final Positive Budget Budget Actual (Negative) Revenues Intergovernmental - Other $ 3,290,430 $ 2,673,388 $ 2,738,905 $ 65,517 Intergovernmental - BOCC 835,897 835,897 578,563 (257,334) Charges for services - 260,215 314,960 54,745 Fines and forfeitures 388,844 453,457 64,613 Interest income - 1,027 350 (677) Total revenues 4,126,327 4,159,371 4,086,235 (73,136) Expenditures Current Court Related Clerk administration Clerk records management Clerk jury management Clerk circuit court criminal Clerk circuit court civil Clerk court information systems Clerk circuit court foreclosures Clerk circuit court family Clerk circuit court juvenile Clerk circuit court probate Clerk county court criminal Clerk county court civil Clerk county court traffic Total expenditures Excess of revenues over expenditures Other financing sources and uses Transfer from Clerk's Fines Transfer to Board of County Commissioners Transfer to Florida Department of Revenue Total other financing sources and uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year 276,818 280,397 205,962 74,435 404,748 404,748 221,543 183,205 174,016 174,016 165,155 8,861 690,581 690,581 653,979 36,602 490,812 491,154 478,727 12,427 132,161 132,198 102,742 29,456 - 24,956 23,623 1,333 125,189 125,189 113,895 11,294 77,549 77,549 74,916 2,633 93,479 93,479 91,981 1,498 543,805 543,805 527,327 16,478 155,650 155,650 153,805 1,845 614,111 618,241 619,485 (1,244) 3,778,919 3,811,963 3,433,140 378,823 347,408 347,408 653,095 305,687 99,477 99,477 - (99,477) (446,885) (446,885) (471,224) (24,339) (181,871) (181,871) (347,408) (347,408) (653,095) (305,687) 14 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SCHEDULE OF REVENUES AND EXPENDITURES - BUDGETTO ACTUAL SPECIAL REVENUE RECORDS MODERNIZATION FUND YEAR ENDED SEPTEMBER 30, 2013 Special Revenue Records Modernization Fund Variance Original Final Positive Budget Budget Actual (Negative) Revenues Charges for services $ 222,000 $ 222,000 $ 283,598 $ 61,598 Fines and forfeitures 93,523 93,523 171,919 78,396 Interest income 8,000 8,000 11,290 3,290 Total revenues 323,523 323,523 466,807 143,284 Expenditures Current Court related Modernization trust Clerk fines Total expenditures Excess of revenues over (under) expenditures Other financing uses Transfer to Court Related Fund Total other financing uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year 323,523 323,523 466,807 143,284 (99,477) (99,477) 99,477 (99,477) (99,477) - 99,477 224,046 224,046 466,807 242,761 921,000 921,000 1,254,717 333,717 $ 1,145,046 $ 1,145,046 $ 1,721,524 $ 576,478 15 SUPPLEMENTARY INFORMATION MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND YEAR ENDED SEPTEMBER 30, 2013 Balance Balance October 1, September 30, 2012 Additions Deductions 2013 ASSETS Cash and cash equivalents $ 3,615,605 $ 34,658,937 $ 34,331,046 $ 3,943,496 Due from other governmental agencies - 448 - 448 Due from others 4,641 72,315 68,382 8,574 Total assets $ 3,620,246 $ 34,731,700 $ 34,399,428 $ 3,952,518 LIABILITIES Due to others $ 2,464,149 $ 10,180,395 $ 9,474,638 $ 3,169,906 Due to other funds 348 - 348 - Due to Board of County Commissioners 102,489 1,257,993 1,259,954 100,528 Due to other governmental agencies 1,053,260 23,293,312 23,664,488 682,084 Total liabilities $ 3,620,246 $ 34,731,700 $ 34,399,428 $ 3,952,518 IN SUPPLEMENTARY INDEPENDENT AUDITOR'S REPORTS Cherry Bekaert' Report of Independent Auditor on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit Of Special -Purpose Financial Statements Performed in Accordance with Government Auditing Standards To the Honorable Amy Heavilin, Clerk of the Circuit Court of Monroe County, Florida: We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to the financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the special-purpose financial statements of each major fund and the aggregate remaining fund information of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk") as of and for the year ended September 30, 2013, and the related notes to the financial statements, and have issued our report thereon dated June 30, 2014 for the purpose of compliance with Section 218.39(2), Florida Statutes and Chapter 10.550, Rules of the Auditor General -Local Governmental Entity Audits. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Clerk's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the special-purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk's internal control. Accordingly, we do not express an opinion on the effectiveness of the Clerk's internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. However, as described below, we identified a deficiency in internal control that we consider to be a material weakness. 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 Clerk's special- purpose financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a 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. We consider the deficiency noted below to be a material weakness. Criteria: The Clerk should reconcile all accounts in a timely manner to ensure completeness and accuracy of the financial information and to allow for timely reporting. Condition: The Clerk's books and records were not finalized until five months after year end. Context: During our audit, we noted that: • The journal entries tested in the 131h month include transactions that were posted through February of 2014 for fiscal year end September 30, 2013 adjustments, • It took approximately five months to finalize the closing of the Clerk's books to include certain reconciliations with the Board. Effect: Lack of timely reconciliations of all accounts can result in reporting errors and difficulty in meeting reporting deadlines. Cause: The Clerk experienced high staff turnover after year end which resulted in a lack of qualified employees to perform the necessary year end closing procedures in a timely manner. 17 Recommendation: We recommend that the Clerk take steps to ensure that records can be maintained and reconciled in a timely fashion in order to provide accurate and relevant financial information. Management response; Hiring financial positions can be a challenge in the Keys. Management recognizes the need to be fully staffed and is actively recruiting qualified staff to fill a number of unanticipated vacancies that occurred within our Finance Department over the past year. Management has implemented several standard operating procedures for many of the routine financial tasks and responsibilities. In addition, we are developing appropriate training and cross -training programs with commitments from other Florida Clerk and Comptrollers Offices who use the same financial accounting software and have the same duties and responsibilities as Monroe. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk's special-purpose 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 determination of special-purpose financial statement amounts. 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 Govemment Auditing Standards. Clerk's Response to the Finding The Clerk's response to the finding identified in our audit is described above. The Clerk's response was not subjected to the auditing procedures applied in the audit of the financial statements and accordingly, we express no opinion on it. 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 Clerk's internal control or on compliance. This report is an integral pan; of an audit performed in accordance with Government Auditing Standards in considering the Clerk's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. u,,� '�� k- �_ R Orlando, Florida June 30, 2014 18 t,o% Cherry Bekaert"P Independent Auditor's Management Letter To the Honorable Amy Heavilin, Clerk of the Circuit Court of Monroe County, Florida: We have audited the special-purpose financial statements of each major fund and the aggregate remaining fund information of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk"), as of and for the year ended September 30, 2013, and have issued our Report Of Independent Auditor thereon dated June 30, 2014. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We have issued our Report of Independent Auditor on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special -Purpose Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in this report, dated June 30, 2014 should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor General — Local Governmental Entity Audits, which govern the conduct of local governmental entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditor's report: Section 10.554(1)(i)l., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial report. No recommendations were made in the preceding annual financial audit report. Section 10.554(1)(i)2., Rules of the Auditor General, requires our audit to include a review of the provisions of Section 218.415, Florida Statutes, regarding the investment of public funds. In connection with our audit of the special-purpose financial statements of the Clerk, nothing came to our attention that would cause us to believe that the Clerk was in noncompliance with Section 218.415 regarding the investment of public funds. Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. See Appendix A for our recommendation. We did not audit the Clerk's response to this matter, which is also provided in Appendix A, and, accordingly, we express no opinion on it. Section 10.554(1)(i)4., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements or abuse, that have occurred, or are likely to have occurred, that have an effect on the special-purpose financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Section 10.554(1)(i)5., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the special-purpose financial statements. The Clerk is a separately elected county official established pursuant to the Constitution of the State of Florida. There are no component units related to the Clerk. 19 Section 10.554(1)(i)7., Rules of the Auditor General, requires a statement as to whether or not the Clerk complied with the requirements of Sections 28.35 and 28.36, Florida Statutes. In connection with our audit, our testing did not indicate that the Clerk was in noncompliance with the requirements of Section 28.35 or 28.36, Florida Statutes. The purpose of this management letter is to communicate certain matters prescribed by Chapter 10.550, Rules of the Auditor General. Accordingly, this management letter is not suitable for any other purpose. Orlando, Florida June 30, 2014 20 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT MANAGEMENT LETTER COMMENTS (CURRENT YEAR) — APPENDIX A Tax Deed Applications Observation: Florida Statutes - Title XIV Taxation and Finance — Chapter 197 — Tax Collections, Sales and Liens Every year on or about June 1 s` the Tax Collector sells tax certificates on real property on which taxes have not been paid. The holder of the tax certificate may, at any time after 2 years have elapsed since April 1 of the year of issuance of the tax certificate, file an application for a tax deed. Once the tax deed application is received by the Tax Collector's office a title search is requested. Upon completion the Tax Collector delivers to the Clerk of Court files of these properties. Then the Clerk shall notify by certified mail the property owner and anyone who has a legal interest in the property such as a lienholder, mortgagee or vendee of record that an application for a tax deed has been made and that the property will be sold at public auction on a specific date if the back taxes are not paid. This notice shall be mailed at least 20 days prior to the date of the sale. At the same time the notifications are made the Clerk will publish a printed copy of the notifications in the newspaper and provide the Sheriff with copies to be served to the legal title holders of record of the properties on which tax certificates are outstanding. Then the Clerk will administer the sale of the properties. Delays have been encountered in this process resulting in a significant time lag from the time the Tax Collector sends the files of properties with tax deed applications to the Clerk and any action being taken on these properties. In some cases this delay is several months. As a result the property owner may accrue additional expenses as a new title search may be required prior to the property sale as well as interest costs on the tax certificate of 18%. Recommendation: We recommend that processes be put in place to ensure that the time between the Clerk receiving the files of tax deed applications and subsequently taking action be shortened in order to provide a more timely resolution for the property owner. Management Response. - Management has implemented several standard operating procedures for many of the financial tasks and responsibilities as well as "best practices". In addition, we are developing appropriate training and cross -training programs with commitments from other Florida Clerk & Comptroller's Offices who use the same financially accounting software and have the same duties and responsibilities as Monroe. 21