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Fiscal Year 2014COURT FINANCIAL STATEMENTS Year Ended September 30, 2014 And Reports of Independent Auditor n� Cherryoft e er ", MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT TABLE OF CONTENTS REPORT OF INDEPENDENT AUDITOR 1-2 FINANCIAL STATEMENTS: Balance Sheet - Governmental Funds 3 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds-------------------------------------------------------------------------------- 4 Statement of Fiduciary Assets and Liabilities- Agency Fund------------------------------------------------------------------------------------------------------------------- 5 Notes to Financial Statements ------------- 6 - 12 REQUIRED SUPPLEMENTARY INFORMATION: Schedule of Revenues and Expenditures - Budget to Actual - General Fund ------------------------------------------------------------------------------------------------------ 13 Schedule of Revenues and Expenditures — Budget to Actual — Special Revenue Court Related Fund ................................................................... 14 Schedule of Revenues and Expenditures — Budget to Actual — Special Revenue Records Modernization Fund----------------------------------------------------- 15 SUPPLEMENTARY INFORMATION: Statement of Changes in Assets and Liabilities - AgencyFund.-------------------------------------------------------------------------------------------------------------------- ------ 16 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 Financial Statements Performed In Accordance with Government Auditing Standards --------------------------------- 17 - 18 Independent Auditor's Management Letter ----------------------------------------------............ ---------------------------- 19 - 20 Report of Independent Accountant on Compliance with Local Government Investment Policies . 21 Cherry ekaer;_,, 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 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, 2014, and the related notes to the financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these 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 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 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the 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 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 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 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, 2014, 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. Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida. In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of the general fund of Monroe County, Florida that is attributable to the Clerk. They do not purport to, and do not, present fairly the financial position of Monroe County, Florida as of September 30, 2014, and the changes in its financial position for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. 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 financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the 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 financial statements, and other knowledge we obtained during our audit of the 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 financial statements that collectively comprise the Clerk's financial statements. 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 financial statements. The accompanying 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 financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the 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 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 March 27, 2015 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. Orlando, Florida March 27, 2015 2 FINANCIAL STATEMENTS MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2014 ASSETS Assets: Cash and cash equivalents Due from Board of County Commissioners Due from other governmental agencies Due from other funds Total assets LIABILITIES AND FUND BALANCES General Major Funds Court Related Records Modernization Fund Totals $ 1,253,843 $ 1,124,660 $ 1,898,793 $ 4,277,296 2,030 3,095 - 5,125 37,591 48,327 - 85,918 - - 243,565 243,565 $ 1,293,464 $ 1,176,082 $ 2,142,358 $ 4,611,904 Liabilities Accounts payable and accrued liabilities $ 167,964 $ 199,943 $ - $ 367,907 Due to Board of County Commissioners 1,117,610 504,139 - 1,621,749 Due to other funds - 243,565 - 243,565 Due to other governmental agencies 7,890 228,435 - 236,325 Total liabilities 1,293,464 1,176,082 - 2,469,546 Fund Balances: Restricted - - 2,142,358 2,142,358 Total liabilities and fund balances $ 1,293,464 $ 1,176,082 $ 2,142,358 $ 4,611,904 See notes to financial statements. 3 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2014 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 (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 Totals $ 529,439 $ - $ - $ 529,439 55,817 1,088, 998 1,144, 815 2,866,791 650,141 - 3,516,932 744,559 901,118 246,228 1,891,905 - 1,480,855 165,100 1,645,955 4,733 13,924 9,506 28,163 73 - - 73 4,201,412 4,135,036 420,834 8,757,282 2,382,947 - - 2,382,947 582,934 - - 582,934 - 3,364,504 - 3,364,504 - 220,599 - 220,599 145,751 - - 145,751 3,111,632 3,585,103 - 6,696,735 1,089,780 549,933 420,834 2,060,547 (1,089,780) (444,252) - (1,534,032) - (105,681) - (105,681) (1,089,780) (549,933) - (1,639,713) - - 420,834 420,834 - - 1,721,524 1,721,524 $ - $ - $ 2,142,358 $ 2,142,358 See notes to financial statements. 4 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUND SEPTEMBER 30, 2014 Assets Cash and cash equivalents $ 3,966,491 Due from others 11,980 Due from other governmental agencies 486,229 Total assets $ 4,464,700 Liabilities Due to others $ 3,864,433 Due to Board of County Commissioners 253,168 Due to other governmental agencies 347,099 Total liabilities $ 4,464,700 See notes to financial statements. 5 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 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 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. The financial statements of the Clerk have been prepared in accordance with the accounting principles and reporting guidelines established by the Governmental Accounting Standards Board ("GASB"). Entity status for financial reporting purposes is governed by Statement No. 14, as amended. Although the Clerk's Office is operationally autonomous and legally separate from the Board, it does not hold sufficient corporate powers of its own to be considered a legally separate entity for financial reporting purposes. Therefore, under GASB guidelines, 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)l. 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. Measurement focus, basis of accounting and financial statement presentation - The Clerk's 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. 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, to be available and thus recognizes them as revenues of the current year. 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. N MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 Note 1—Summary of significant accounting policies (continued) 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 court -related revenue over court -related expenditures as of September 30 each year is paid to the State of Florida Department of Revenue Clerks' Trust Fund ("DOR"). Any excess of non -court related revenue over non -court related expenditures is reflected as a liability to the Monroe County Board of County Commissioners (the "Board"). 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 receives a predetermined share of a statewide appropriation to all State of Florida Clerks of Court. This appropriation is 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. 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, to be available and thus recognizes them as revenues of the current year. 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 presentation — The Records Modernization Fund fund balance is classified as restricted. This classification includes amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditor, grantors, contributors or the laws or regulations of other governments. Budgetary Requirements - Expenditures are controlled by appropriations in accordance with the budgetary 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. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 Note 1—Summary of significant accounting policies (continued) 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 Board 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 financial 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, 2013 $ 467,829 Additions 275,473 Deletions 320,453 Balance, September 30, 2014 $ 422,849 Use of Estimates - The preparation of 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, 2014, the Clerk's cash and cash equivalents are held in demand deposits with a carrying amount of $8,243,787 and a bank balance of $8,933,489. The Clerk places its cash and cash equivalents on deposit with financial institutions in the United States, which are insured by the Federal Deposit Insurance Corporation (FDIC) or covered 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. The Clerk follows Florida Statutes for its investment policy, which authorizes investments in certificates of deposit, savings accounts, repurchase agreements, 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. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 Note 3—Interfund receivables and payables Interfund receivables and payables at September 30, 2014 consist of the following: Court Related Fund Records Modernization Trust Fund Due from Due to Other Fund Other Fund $ - $ 243,565 243,565 - $ 243,565 $ 243,565 The amounts are due to the Records Modernization Fund from the Court Related Fund per Florida Statute requirements. Note 4—Fund balance presentation 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 $ 733,487 Public Records Court Technology 397,606 10% Court -Related Fines 1,011,265 Restricted Fund Balances $ 2,142,358 0 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 Note 5—Retirement system Plan Description — The Clerk's employees participant 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 benefit 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 Pension 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. 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 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, P.O. Box 9000, Tallahassee, Florida 32315-9000, or from the website www.dms.mVflorida.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, 2013 through June 30, 2014 and July 1, 2014 through September 30, 2014, respectively, were as follows: regular, 6.95% and 7.37%; county elected officers, 33.03% and 43.24%; senior management, 18.31 % and 21.14%; and DROP participants, 12.84% and 12.28%. 10 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2014 Note 5—Retirement system (continued) The Clerk contributed to the plan an amount equal to 9.21% of covered payroll during the fiscal year ended September 30, 2014. The Clerk's contributions made during the years ended September 30, 2014, 2013, and 2012 were $418,263, $271,438 and $227,553, 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 6—Other postemployment benefit (OPEB) plan The Monroe County Board of County Commissioners (BOCC) administers a single -employer defined benefits healthcare plan (the "Plan"). Florida Statute 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 and life insurance 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 postemployment 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 maintain their group health insurance benefits with Monroe County following their retirement provided they contribute a premium of $5 per month for each year of creditable service with the (FRS) at the time of retirement with Monroe County and will pay at a minimum $50 per month up to the maximum of $150 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 (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 a premium of $5 per month for each year of creditable service with the FRS at the time of retirement with Monroe County and will pay at a minimum $50 per month up to the maximum of $150 per month. 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. 11 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2024 Note 7—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 8—Lease commitments Operating leases — The Clerk leases various office equipment under cancelable arrangements accounted for as operating leases. Total lease expenditures were $52,192 for the year ended September 30, 2014. The following is a schedule of minimum future rent obligations under non -cancelable leases with terms in excess of one year: 2015 $ 7,889 2016 7,889 2017 2,959 Total $ 18,737 Note 9—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, 2014 Revenues: Taxes Intergovernmental - Other Intergovernmental - BOCC Charges for services Interest income Miscellaneous income Total revenues Expenditures: Current General government Non -court recording Non -court information systems Non -court finance Non -court internal audit Tourist tax audit Non -court records management Occupancy costs Total expenditures Excess of revenues over (under) expenditures Other financing sources and uses General Fund Variance Original Final Positive $ 283,495 $ 283,495 $ 529,439 $ 245,944 55,817 55,817 55,817 - 2,863,249 2,863,249 2,866,791 3,542 583,730 583,730 744,559 160,829 8,744 8,744 4,733 (4,011) 1,850 1,850 73 (1,777) 3,796,885 3,796,885 4,201,412 404,527 442,728 402,728 400,398 2,330 584,838 749,838 731,800 18,038 1,814,926 1,831,327 1,538,475 292,852 321,403 171,403 170,167 1,236 283,495 336,953 159,017 177,936 159,495 109,495 107,659 1,836 - 5,141 4,116 1,025 3,606,885 3,606,885 3,111,632 495,253 190,000 190,000 1,089,780 899,780 Contingency (190,000) (190,000) - 190,000 Transfer to Board of County Commissioners - - (1,089,780) (1,089,780) Total other financing sources and uses (190,000) (190,000) (1,089,780) (899,780) 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, 2014 Special Revenue Court Related Fund Variance Original Final Positive Budget Budget Actual (Negative) Revenues Intergovernmental - Other $ 967,287 $ 967,287 $ 1,088,998 $ 121,711 Intergovernmental - BOCC 650,141 650,141 650,141 - Charges for services 907,500 907,500 901,118 (6,382) Fines and forfeitures 1,500,000 1,500,000 1,480,855 (19,145) Interest income 2,600 2,600 13,924 11,324 Total revenues 4,027,528 4,027,528 4,135,036 107,508 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 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 170,956 170,956 531,508 (360,552) 246,775 246,775 273,326 (26,551) 174,015 174,015 143,599 30,416 690,544 690,544 603,696 86,848 490,812 490,812 388,514 102,298 140,948 140,948 59,052 81,896 79,098 79,098 23,051 56,047 125,190 125,190 111,956 13,234 77,550 77,550 98,356 (20,806) 93,478 93,478 91,872 1,606 543,806 543,806 509,460 34,346 146,900 146,900 165,829 (18,929) 618,242 618,242 584,884 33,358 3,598,314 3,598,314 3,585,103 13,211 429,214 429,214 549,933 120,719 (429,214) (429,214) (444,252) (15,038) (105,681) (105,681) (429,214) (429,214) (549,933) (120,719) 14 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, 2014 Special Revenue Records Modernization Fund Original Final Budget Budget Revenues Charges for services $ 279,000 $ 279,000 Fines 180,000 180,000 Interest income 7,300 7,300 Total revenues 466,300 466,300 Expenditures Current Court related Modernization trust 281,246 281,246 Clerk fines 723,100 723,100 Total expenditures 1,004,346 1,004,346 Excess of revenues over (under) expenditures (538,046) (538,046) Other financing uses Contingency Total other financing uses Net change in fund balance Fund balance, beginning of year Fund balance, end of year Variance Positive Actual (Negative) $ 246,228 $ (32,772) 165,100 (14,900) 9,506 2,206 420,834 (45,466) 281,246 723,100 1,004,346 420,834 958,880 (202,000) (202,000) 202,000 (202,000) (202,000) 202,000 (740,046) (740,046) 420,834 1,160,880 1,145,046 1,145,046 1,721,524 576,478 $ 405,000 $ 405,000 $ 2,142,358 $ 1,737,358 15 SUPPLEMENTARY INFORMATION MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND YEAR ENDED SEPTEMBER 30, 2014 Balance Balance October 1, September 30, 2013 Additions Deductions 2014 Assets Cash and cash equivalents $ 3,943,496 $ 46,870,436 $ 46,847,441 $ 3,966,491 Due from other governmental agencies 448 485,781 - 486,229 Due from others 8,574 50,733 47,327 11,980 Total assets $ 3,952,518 $ 47,406,950 $ 46,894,768 $ 4,464,700 Liabilities Due to others $ 3,169,906 $ 46,247,678 $ 45,553,151 $ 3,864,433 Due to Board of County Commissioners 100,528 782,101 629,461 253,168 Due to other governmental agencies 682,084 329,844 664,829 347,099 Total liabilities $ 3,952,518 $ 47,359,623 $ 46,847,441 $ 4,464,700 16 SUPPLEMENTARY INDEPENDENT AUDITOR'S REPORTS Report of Independent Auditor on Internal Control Over Financial Reporting and on czmx"Ma &1:4�thzr-wratters Basel F 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 Amen ca a the standards applicable to the financial audits contained in Government Auditing Standards issued by t Comptroller General of the United States, the financial statements of each major fund and the aggrega remaining fund information of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk") as of and the year ended September 30, 2014, and the related notes to the financial statements, and have issued o report thereon dated March 27, 2015 for the purpose of compliance with Section 218.39(2), Florida Statutes a 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 ov Criteria, All accounts should be reconciled in a timely manner to ensure completeness and accuracy-m' the financial information and to allow for timely reporting. Adequate controls and segregation of duties should be in place over journal entries and adjustments. Conditioni The Clerk's books and records were not finalized until four months after year end. Certain journal entries did not have support and documentation. Context: During our audit, we noted that • The journal entries tested in the 13 th month include transactions that were posted througt. January of 2015 for fiscal year end September 30, 2014 adjustments. • It it approximately four months to finalize the closing of the Clerk's books to includ; cetaht recoiciljatio-tsud� tWe Bo�Kd. During our testing of journal entries, supporting documentation was unavailable for 2 out of 25 journal entries tested. Additionally 2 were not signed as approved, 1 was not signed by the originator or approver, 2 were not signed by the originator and 1 lacked documentation and approvals. M Effect: Lack of timely reconciliations of all accounts as well as lack of documentation and review of journal entries can result in reporting errors and difficulty in meeting reporting deadlines. Cause: The Clerk experienced finance staff turnover during the year end which resulted in a lack of qualified employees to perform the necessary year end closing procedures in a timely manner. 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: During FY14, management hired a CPA consultant. The Clerk also contracted with the Clerk's retired former Director of Administrative Service who has more than 16 years of direct Clerk financial experience to complete timely reconciliations and train current staff members. Effective Feb-15, all accounts have been reconciled and all reporting with outside entities have been submitted. A significant deficiency is a deficiency, or 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. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of 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. 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 part 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. Orlando, Florida March 27, 2015 18 Cherry Bekaert"' Independent Auditor's Management letter To the Honorable Amy Heavilin, Clerk of the Circuit Court of Monroe County, Florida: Report on the Financial Statements We have audited the financial statements of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk"), as of and for the year ended September 30, 2014, and have issued our report thereon dated March 27, 2015. Auditor's Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Other Reports 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 Financial Statements Performed in Accordance with Government Auditing Standards, and Report of Independent Accountant on Compliance with Local Government Investment Policies regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated March 27, 2015, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., 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 audit report. We have addressed the status of findings and recommendations made in the preceding annual financial report in Appendix A attached to this letter. Official Title and Legal Authority Section 10.554(1)(i)4., 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 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. Other Matters Section 10.554(1)(i)2., 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. Section 10.554(1)(i)3., 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 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. Purpose of This Letter 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 March 27, 2015 19 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT MANAGEMENT LETTER COMMENTS (PRIOR YEAR) — APPENDIX A Finding 2013-001 Tax Deed Applications Observation: Florida Statutes - Title XIV Taxation and Finance — Chapter 197 — Tax Collections, Sales and Liens Every year on or about June 1st 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%. 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. Current Year Follow-up: The Clerk has implemented several standard operating procedures for many of the financial tasks and responsibilities as well as "best practices". In additional, the Clerk has developed appropriate training and cross - training programs with commitments from other Florida Clerk & Comptroller's Offices who use the same financial accounting software and have the same duties and responsibilities as Monroe. This process is now current. 20 Cherry Bekaer `';' Report of Independent Accountant on Compliance with Local Government Investment Policies To the Honorable Amy Heavilin, Clerk of the Circuit Court of Monroe County, Florida: Report on Compliance We have examined the Monroe County, Florida Clerk of the Circuit Court's (the "Clerk's") compliance with the local government investment policy requirements of Section 218.415, Florida Statutes, during the year ended September 30, 2014. Management is responsible for the Clerk's compliance with those requirements. Our responsibility is to express an opinion on the Clerk's compliance based on our examination. Scope Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants and, accordingly, included examining, on a test basis, evidence about the Clerk's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Clerk's compliance with specified requirements. Opinion In our opinion, the Clerk complied, in all material respects, with the aforementioned requirements for the year ended September 30, 2014. Orlando, Florida March 27, 2015 21