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Fiscal Year 2011MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Special -Purpose Financial Statements For the Year Ended September 30, 2011 am MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Special -Purpose Financial Statements, Required Supplementary Information, Other Supplementary Information and Independent Auditors' Reports For the Year Ended September 30, 2011 Contents IndependentAuditors' Report ................................................................................................. 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............................................................. 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 - AgencyFund---------------------------------------------------------------------------------• .......................... SUPPLEMENTARY INDEPENDENT AUDITORS' REPORTS Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special -Purpose Financial Statements Performed Page 2-3 4 5 6 7-14 15 17 18 In Accordance with Government Auditing Standards ............................................... 19 - 20 Independent Auditors' Management Letter ...................................................................... 21 - 22 INDEPENDENT AUDITORS' REPORT To the Honorable Danny L. Kolhage, Clerk of the Circuit Court of Monroe County, Florida: 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, 2011, as listed in the table of contents. These special-purpose financial statements are the responsibility of the Clerk's management. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the special- purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall special- purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. 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. 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, 2011, and the respective changes in financial position thereof for the year then ended, in conformity with accounting principles generally accepted in the United States of America. 2 In accordance with Government Auditing Standards, we have also issued our report dated February 2, 2012 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 and should be considered in assessing the results of our audit. The budgetary comparison schedules on pages 15-17 are not a required part of the special- ,,,, purpose financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted primarily of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and we express no opinion on it. Pursuant to Chapter 119, Florida Statutes, this report is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America requires us to indicate that this report is intended solely for the information and use of the Clerk, management, others within the organization, applicable state agencies, and the Florida Auditor General, and is not intended to be and should not be used by anyone other than these specified parties. IN Orlando, Florida February 2, 2012 � I � I I I I I 3 n 11 11 11 11 I 11 11 II SPECIAL-PURPOSE FINANCIAL STATEMENTS 11 I I MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Balance Sheet Governmental Funds September 30, 2011 Major Funds Court General Related ASSETS Assets Cash and cash equivalents $ 1,176,621 $ 775,988 Due from Board of County Commissioners 13,893 683 Due from other governments 53,818 7,362 Accounts Receivable - 15 Total assets $ 1,244,332 $ 784,048 LIABILITIES AND FUND BALANCES Liabilities Accounts payable and accrued liabilities $ 97,221 Due to Board of County Commissioners 1,114,043 Due to Other Governments 825 Deferred revenue - Deposits 32,243 Total liabilities 1,244,332 Fund Balances: Restricted - Total liabilities and fund balances $ 1,244,332 $ 167,504 561,843 2,750 51,951 784,048 $ 784,048 Records Modernization Fund $ 1,196,880 $ 1,196,880 $ 19,065 19,065 1,177,815 $ 1,196,880 Totals $ 3,149,489 14,576 61,180 15 $ 3,225,260 $ 283,790 1,675,886 3,575 51,951 32,243 1,177,815 $ 3,225,260 The notes to the financial statements are an integral part of this statement. 4 ir. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds Year Ended September 30, 2011 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 $ 418,230 $ - $ - 391,514 3,334,431 - 2,832,936 748,528 - 646,473 - 217,833 - 213,694 23,314 - 9,866 5,005 115 - 4,317,472 4,083,074 441,393 Totals $ 418,230 3,725,945 3,581,464 864,306 213,694 33,180 5,120 8,841,939 2,653,264 - - 2,653,264 506,882 - - 506,882 - 3,320,366 - 3,320,366 - 225,178 141,769 366,947 43,351 4,970 73,450 121,771 3,203,497 3,550,514 215,219 6,969,230 1,113,975 532,560 226,174 1,872,709 (1,113,975) (489,873) - (1,603,848) - (42,687) - (42,687) (1,113,975) (532,560) - (1,646,535) - - 226,174 226,174 - - 951,641 951,641 $ - $ - $ 1,177,815 $ 1,177,815 The notes to the financial statements are an integral part of this statement. 5 r MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Fiduciary Assets and Liabilities Agency Fund September 30, 2011 Assets Cash and cash equivalents Due from others .. Total assets Liabilities Due to others Due to Board of County Commissioners Due to other governmental agencies Total liabilities The notes to the financial statements are an integral part of this statement. 6 $ 1,983,145 3,901 $ 1,987,046 $ 978,406 119,038 889,602 $ 1,987,046 .. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT in Notes to Special -Purpose Financial Statements Year Ended September 30, 2011 r NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES r 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 by tStatement No. 39, of the Governmental Accounting Standards Board (GASB). 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 the County. 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. 7 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Special -Purpose Financial Statements Year Ended September 30, 2011 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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 a liability or deferred revenue. Any excess of local appropriations over non court -related expenditures is reflected as a liability to the Board. Pursuant to an act of the 2009 Florida Legislature the Clerk is part of the state appropriation process. All court -related revenue is recorded as a liability in the Clerk's trust and agency fund and remitted monthly to the State of Florida Department of Revenue Clerks of the Court Trust Fund. The Clerk's court related fund receives a predetermined share of a statewide appropriation to all State of Florida Clerks of Court. This appropriation is accounted for as another financing source in accordance with the State of Florida Department of Financial Services' Uniform Accounting System Chart of Accounts. 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. Non -spendable 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. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Special -Purpose Financial Statements Year Ended September 30, 2011 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 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. 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, 2010 $ 712,121 Additions 358,471 Deletions (452,067) Balance, September 30, 2011 $ 618,525 Deferred Revenue — The Clerk reports as deferred revenue any excess of court -related appropriations from the State of Florida over expenditures and court -related appropriations received in advance of the designated period. 0 am M MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Special -Purpose Financial Statements Year Ended September 30, 2011 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) "' 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. Implementation of Governmental Accounting Standards Statements — The Clerk implemented GASB Statement No. 54, "Fund Balance Reporting and Governmental Fund Type Definitions," during the fiscal year ended September 30, 2011. The requirements of this statement became effective for financial statement periods beginning after June 15, 2010. This GASB statement clarifies governmental fund balance classifications and fund type definitions. It bases the divisions of fund balance on the types of constraints which limit the use of the resources reported in .. governmental funds. NOTE 2 — DEPOSITS AND INVESTMENTS As of September 30, 2011, the Clerk's cash and cash equivalents are held in demand deposits with a carrying amount of $5,132,634 and a bank balance of $5,399,222. 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. 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. r 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 10 W No ft MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Special -Purpose Financial Statements Year Ended September 30, 2011 NOTE 3 — FUND BALANCE CLASSIFICATION (continued) 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 $ 654,165 Public Records Court Technology 55,801 10% Court -Related Fines 467,849 Restricted Fund Balances $ 1,177,815 NOTE 4 - RETIREMENT SYSTEM Plan Description — Substantially all full-time Clerk employees are participants 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 multiple - employer; cost -sharing public employee defined benefit retirement plan, or the defined contribution plan (Investment Plan) under the FRS. FRS provides retirement benefits, disability benefits, annual cost -of -living adjustments, and death benefits to Pension Plan members and beneficiaries of various governmental units within the State of Florida. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by Act of the Florida legislature. For employees hired before July 1, 2011 and enrolled in the Pension Plan, the FRS provides for vesting of benefits after 6 years of credited service. Normal Pension Plan retirement benefits are available to employees who retire at or after age 62 with 6 or more years of service or after 30 years if under age 62. Benefits are also based on the 5 highest state fiscal years of compensation earned during covered employment. For employees hired July 1, 2011 and thereafter enrolled in the Pension Plan, the FRS provides for vesting of benefits after 8 years of credited service. Normal retirement benefits are available to employees who retire at or after age 65 with 8 or more years of service or after 33 years if under age 65. Benefits are also based on the 8 highest state fiscal years of compensation earned during covered employment. Pension Plan retirement benefits for all employees are based on age, average compensation and years -of -service credit. Early retirement is available after 6 years of service with a 5% reduction in benefits for each year prior to the normal retirement age. 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 11 M MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Special -Purpose Financial Statements Year Ended September 30, 2011 NOTE 4 - RETIREMENT SYSTEM (continued) 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 who elect 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 lir investment product with a third party administrator selected by the State Board of Administration Investment accounts may be withdrawn by the employee 90 days after termination or retirement. The Florida Division of Retirement issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The report may be obtained by writing to Florida Division of Retirement, P.O. Box 9000, Tallahassee, FL 32315-9000, or from the website www.frs.state.fl.us. Funding Policy — The FRS was noncontributory for Pension Plan and Investment Plan members until June 30, 2011. As of July 1, 2011 all members, with the exception of Deferred Retirement Option Program (DROP) members and re-employed retirees, contribute 3% of their eligible wages. Participating employer contributions are based upon state-wide rates established by the State of Florida on an annual basis effective each July 1. The rates applied to employee salaries effective as of July 1, 2011 are as follows: regular employees, 4.91 %, special risk employees, 14.10%, special risk administrative support 6.04%; elected officials, 11.14%, senior management 6.27%, and DROP participants 4.42%.The Clerk contributed to the plan an amount equal to 9.50% of covered payroll during the fiscal year ended September 30, 2011. The Clerk's contributions made during the years ended September 30, 2011, 2010, and 2009 were $410,000, $462,007, and $457,458, respectively, equal to the required contributions for each 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. 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. 12 t fto MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Special -Purpose Financial Statements Year Ended September 30, 2011 af, NOTE 5 — OTHER POSTEMPLOYMENT BENEFITS (OPEB) (continued) 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 Ok-' 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 of County Commissioners of Monroe County Workers' Compensation, Group Insurance, and Risk Management Internal Service Funds. Under these programs, the Worker's Compensation Fund has self insured coverage up to $500,000 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 building with a deductible of $50,000. Deductibles for windstorm and flood vary by location. The 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. NOTE 7 - LEASE COMMITMENTS The Clerk leases various office equipment under cancelable arrangements accounted for as operating leases. Total lease expense was $50,718 for the year ended September 30, 2011. an 13 40 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Special -Purpose Financial Statements Year Ended September 30, 2011 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. 14 1 11 r 1 REQUIRED SUPPLEMENTARY INFORMATION I J 1 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT 1 Schedule of Revenues and Expenditures - Budget to Actual General Fund Year Ended September 30, 2011 11 Revenues Taxes Intergovernmental - Other ' Intergovernmental - BOCC Charges for services Interest income Miscellaneous income Total revenues ' Expenditures Current General government Clerk recording Clerk information systems Clerk finance Internal audit Tourist tax audit Non -court administration Non -court records management Total expenditures ' Excess of revenues over (under) expenditures Other financing sources and uses Contingency Transfer to Board of County Commissioners ' Total other financing sources and uses Net change in fund balance ' Fund balance, beginning of year Fund balance, end of year 11 11 11 11 11 General Fund Variance Original Final Positive Budget Budget Actual (Negative) $ 157,640 $ 157,640 $ 418,230 $ 260,590 313,018 391,514 78,496 2,834,839 2,834,839 2,832,936 (1,903) 585,165 585,165 646,473 61,308 34,272 34,272 23,314 (10,958) 563 563 5,005 4,442 3,612,479 3,925,497 4,317,472 391,975 436,706 436,706 395,363 41,343 680,215 680,215 602,912 77,303 1,625,084 1,625,084 1,613,047 12,037 275,116 232,002 220,900 11,102 157,640 200,754 181,594 19,160 107,319 111,882 92,264 19,618 130,399 130,399 97,417 32,982 3,412,479 3,417,042 3,203,497 213,545 200,000 508,455 1,113,975 605,520 (200,000) (200,000) - 200,000 (308,455) (1,113,975) (805,520) (200,000) (508,455) (1,113,975) (605,520) 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, 2011 Special Revenue Court Related Fund variance Original Final Positive Budget Budget Actual (Negative) Revenues Intergovernmental - Other $ 3,514,979 $ 3,437,417 $ 3,334,431 $ (102,986) Intergovernmental -BOCC 801,128 801,128 748,528 (52,600) Miscellaneous - - 115 115 Total revenues 4,316,107 4,238,545 4,083,074 (155,471) Expenditures Current Court Related Clerk administration 290,500 290,500 247,109 43,391 Clerk records management 352,976 352,616 281,834 70,782 Clerk jury management 175,625 174,415 158,049 16,366 Clerk circuit court criminal 725,613 710,233 704,703 5,530 Clerk circuit court civil 494,302 484,862 448,859 36,003 Clerk circuit court foreclosure 31,042 32,275 25,337 6,938 Clerk circuit court family 127,047 126,247 123,913 2,334 Clerk circuit court juvenile 118,230 117,093 103,813 13,280 Clerk circuit court probate 92,451 92,377 91,750 627 Clerk county court criminal 547,864 552,296 552,269 27 Clerk county court civil 256,368 209,255 196,747 12,508 Clerk county court traffic 624,504 616,791 616,131 660 Total expenditures 3,836,522 3,758,960 3,550,514 208,446 Excess of revenues over expenditures 479,585 479,585 532,560 52,975 Other financing sources and uses Contingency (35,405) (35,405) 35,405 Transfer to Board of County Commissioners (444,180) (444,180) (489,873) (45,693) Transfer to Florida Department of Revenue (42,687) (42,687) Total other financing sources and uses (479,585) (479,585) (532,560) (52,975) Net change in fund balance Fund balance, beginning of year ' Fund balance, end of year $ $ $ $ 16 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Schedule of Revenues and Expenditures - Budget to Actual Special Revenue Records Modernization Fund Year Ended September 30, 2011 Special Revenue Records Modernization Fund Variance Original Final Positive Budget Budget Actual (Negative) Revenues Charges for services $ 212,000 $ 212,000 $ 217,833 $ 5,833 Fines 190,000 190,000 213,694 23,694 Interest Income 7,500 7,500 9,866 2,366 Total revenues 409,500 409,500 441,393 31,893 Expenditures •r Current Court related Modernization trust 595,100 595,100 215,219 379,881 Clerk Fines 308,700 308,700 - 308,700 iNM Total expenditures 903,800 903,800 215,219 688,581 Excess of revenues over (under) expenditures (494,300) (494,300) 226,174 720,474 Other financing uses Contingency (129,000) (129,000) - 129,000 Total other financing uses (129,000) (129,000) - 129,000 Net change in fund balance (623,300) (623,300) 226,174 849,474 ■r Fund balance, beginning of year 880,500 880,500 951,641 71,141 Fund balance, end of year $ 257,200 $ 257,200 $ 1,177,815 $ 920,615 17 SUPPLEMENTARY INFORMATION MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Changes in Assets and Liabilities Agency Fund Year Ended September 30, 2011 Balance October 1, 2010 Assets Balance September 30, Additions Deductions 2011 Cash and cash equivalents $ 2,446,132 $ 26,648,381 $ 27,111,368 $ 1,983,145 Due from others 4,579 17,295 17,973 3,901 Total assets $ 2,450,711 $ 26,665,676 $ 27,129,341 $ 1,987,046 Liabilities Due to others $ 1,393,561 $ 3,804,565 $ 4,219,720 $ 978,406 Due to Board of County Commissioners 115,952 1,393,380 1,390,294 119,038 Due to other governmental agencies 941,198 21,467,731 21,519,327 889,602 Total liabilities $ 2,450,711 $ 26,665,676 $ 27,129,341 $ 1,987,046 18 SUPPLEMENTARY INDEPENDENT AUDITORS' REPORTS INDEPENDENT AUDITORS' REPORT 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 Danny L. Kolhage, 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, 2011, which collectively comprise the Clerk's special-purpose financial statements, and have issued our report thereon dated February 2, 2012 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. 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. Internal Control over Financial Reporting Management of the Clerk is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Clerk's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the special-purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Clerk's internal control over financial reporting. 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. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 19 J Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk's special-purpose financial statements are free of 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 Government Auditing Standards. Pursuant to Chapter 119, Florida Statutes, this report is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America requires us to indicate that this report is intended solely for the information and use of the Clerk, management, others within the organization, applicable state agencies, 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 February 2, 2012 20 Y. INDEPENDENT AUDITORS' MANAGEMENT LETTER To the Honorable Danny L. Kolhage, 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, 2011, and have issued our report thereon dated February 2, 2012. 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 Independent Auditors' Report 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 February 2, 2012, 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 government entity audits performed in the State of Florida. This letter includes the following information, which is " not included in the aforementioned auditors' 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 y connection with our audit of the special-purpose financial statements of the Clerk, nothing came to our attention that could 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. In connection with our audit, we did not have any such recommendations. P Section 10.554(1)(i)4, Rules of the Auditor General, requires that we address violations of 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 more than inconsequential. In connection with our audit, we did not have any such findings. 21 0 Section 10.554(1)(i)5, Rules of the Auditor General, provides that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of provisions of contracts or grant agreements, fraud, illegal acts, or abuse, and (2) deficiencies in internal control that are not significant deficiencies. In connection with our audit, we did not have any such findings. Section 10.554(1)(i)6, 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. Section 10.554(1)(i)8, 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 of the special-purpose financial statements of the Clerk, our testing did not indicate that the Clerk was in noncompliance with such requirements. Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America " requires us to indicate that this letter is intended solely for the information and use of the Clerk, management, others within the organization, applicable state agencies, and the Florida Auditor General, and is not intended to be and should not be used by anyone other than these specified parties. e- Orlando, Florida February 2, 2012 22