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Fiscal Year 2015MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT FINANCIAL STATEMENTS As of and for the Year Ended September 30, 2015 And Reports of Independent Auditor r� Cherry Bekaert' " CPAs 6 Advisors 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 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 - 21 Report of Independent Accountant on Compliance with Local Government Investment Policies, Article V Requirements and Depository Requirements of Sections 218.415, 28.35, 28.36 and 61.181, Florida Statutes------------------------------------------------------- 22 �� Cherry BekaertLLP CFAs & Advisors 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, 2015, 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, 2015, 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 each 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, 2015, 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 opinions are 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 April 12, 2016 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. u,--1 `�� L I- R Orlando, Florida April 12, 2016 FINANCIAL STATEMENTS MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2015 ASSETS Assets Cash and cash equivalents Due from Board of County Commissioners Due from other governmental agencies Due from others Due from other funds Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable and accrued liabilities Due to Board of County Commissioners Due to other governmental agencies Due to other funds Total liabilities Fund Balances: Restricted Total liabilities and fund balances Major Funds Court Records General Related Modernization Totals $ 386,461 $ 692,451 $ 2,615,796 $ 3,694,708 - 772 - 772 2,691 25,026 - 27,717 1,232 - - 1,232 38,071 35,901 13,937 87,909 $ 428,455 $ 754,150 $ 2,629,733 $ 3,812,338 $ 111,008 $ 193,473 $ - $ 304,481 281,546 261,424 - 542,970 - 247,245 - 247,245 35,901 52,008 - 87,909 428,455 754,150 - 1,182, 605 - - 2,629,733 2,629,733 $ 428,455 $ 754,150 $ 2,629,733 $ 3, 812, 338 See notes to financial statements. 3 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS YEAR ENDED SEPTEMBER 30, 2015 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 Court related Salaries and benefits Operating Capital outlay Total expenditures Excess of revenues over expenditures Other financing sources and (uses) Major Funds Court Records General Related Modernization Fund Fund Fund Totals $ 103,044 $ - $ - $ 103,044 55,817 1,024,161 - 1,079,978 2,866,790 650,141 - 3,516,931 802,089 1,046,743 284,014 2,132,846 - 1,393,268 197,097 1,590,365 12,771 9,127 6,264 28,162 9,461 4,775 - 14,236 3,849,972 4,128,215 487,375 8,465,562 2,358,372 - - 2,358,372 785,892 - - 785,892 - 2,999,807 - 2,999,807 - 668,991 - 668,991 478,860 27,640 - 506,500 3,623,124 3,696,438 - 7,319,562 226,848 431,777 487,375 1,146,000 Transfer to Board of County Commissioners (226,848) (179,178) - (406,026) Transfer to Florida Department of Revenue - (252,599) - (252,599) Total other financing sources and (uses) (226,848) (431,777) - (658,625) Excess of revenues and other financing sources over expenditures and other uses - - 487,375 487,375 Fund balances, beginning of year - - 2,142,358 2,142,358 Fund balances, end of year $ - $ - $ 2,629,733 $ 2,629,733 See notes to financial statements. 4 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT STATEMENT OF FIDUCIARY ASSETS AND LIABILITIES AGENCY FUND SEPTEMBER 30, 2015 Assets Cash and cash equivalents Due from others Due from other governmental agencies Total assets Liabilities Due to others Due to Board of County Commissioners Due to other governmental agencies Total liabilities $ 5,059,815 6,338 10,809 $ 5,076,962 $ 4,084,171 104,810 887,981 $ 5,076,962 See notes to financial statements. 5 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 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 used to account for all revenues and expenditures applicable to the general operations of the Clerk. 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. The Court related fund is a special revenue fund 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)(e). Pursuant to Florida Statutes 28.37, 10% of all court -related fines collected by the Clerk shall be deposited in the Clerk's Modernization Trust Fund for court -related operational needs and program enhancements. 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. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 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 Clerk's operations are segregated between court -related and non -court -related activities as defined in Article V. 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"). Fund Balances Presentation — The Records Modernization Fund balance of the governmental funds 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 -months ended September 30, 2015. The Clerk is not required to submit its non -court related activities budget for approval. 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 insured by the Federal Deposit Insurance Corporation ("FDIC") or covered by State of Florida collateral pool and cash on hand for operations. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 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, 2014 $ 422,849 Earned 424,134 Used 375,840 Balance, September 30, 2015 $ 471,143 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, 2015, the Clerk's cash and cash equivalents are held in demand deposits with a carrying amount of $8,753,023 and a bank balance of $9,056,780. The Clerk places its cash and cash equivalents on deposit with financial institutions in the United States. The Federal Deposit Insurance Corporation ("FDIC") which are insured by 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. Cash on hand amounted to $1,500. 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, and obligations of the U.S. Government and government agencies unconditionally guaranteed by the U.S. Government. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 Note 3—Interfund receivables and payables Interfund receivables and payables at September 30, 2015 consist of the following: General Fund Court Related Fund Records Modernization Fund Due from Due to Other Funds Other Funds 38,071 $ 35,901 35,901 52,008 13,937 - 87,909 $ 87,909 The amounts are due to the Records Modernization Fund from the Court Related Fund per Florida Statute requirements. The amounts are due to court related from the general fund due to a FY 16 court -related vendor invoice originally charged against the Clerk's general fund. The amounts are due to the General fund from the court related fund due to a transfer of BOCC intergovernmental revenues. 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 Public Records Court Technology 10% Court -Related Fines Restricted Fund Balances Note 5—Retirement system 809,857 609,580 1,210,296 2,629,733 Plan description — The Clerk's employees participate in the Florida Retirement System (FRS). As provided by Chapters 121 and 112, Florida Statutes, the FRS provides two cost sharing, multiple employer defined benefit plans administered by the Florida Department of Management Services, Division of Retirement, including the FRS Pension Plan ("Pension Plan") and the Retiree Health Insurance Subsidy ("HIS Plan"). Under Section 121.4501, Florida Statutes, the FRS also provides a defined contribution plan ("Investment Plan") alternative to the FRS Pension Plan, which is administered by the State Board of Administration. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 Note 5—Retirement system (continued) 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. The FRS provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by an act of the Florida Legislature. 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% (3.33% for judges and justices) 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 new 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 for these members is based on the eight highest years of salary. Funding Policy — All enrolled members of the FRS Pension Plan are required to contribute 3.0% 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, 2014 through June 30, 2015 and July 1, 2015 through September 30, 2015, respectively, were as follows: regular - 7.37% and 7.26%; county elected officers - 43.24% and 42.27%; senior management - 21.14% and 21.43%; and DROP participants - 12.28% and 12.88%. During the fiscal year ended September 30, 2015, the Clerk contributed to the plan an amount equal to 9.36% of covered payroll. The HIS Plan provides a monthly benefit to assist retirees in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. Eligible retirees and beneficiaries receive a monthly health insurance subsidy payment of $5 for each year of creditable service, with a minimum payment of $30 and a maximum payment of $150 per month. The HIS Plan is funded by required contributions from FRS participating employees as set forth by the Florida Legislature, based on a percentage of gross compensation for all active FRS members. In addition to the above benefits, the FRS administers a Deferred Retirement Option Program (DROP). This program allows eligible members 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. There are no required contributions by DROP participants. 10 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 Note 5—Retirement system (continued) For those members who elect participation in the Investment Plan, rather than the Pension Plan, vesting occurs at one year of service. These participants receive a contribution for self -direction in an investment product with a third party administrator selected by the State Board of Administration. Employer and employee contributions, including amounts contributed to individual member's accounts, are defined by law, but the ultimate benefit depends in part on the performance of investment funds. Benefit terms, including contribution requirements, for the Investment Plan are established and may be amended by the Florida Legislature. The Investment Plan is funded with the same employer and employee contribution rates that are based on salary and membership class (Regular Class, Elected County Officers, etc.), as the FRS defined benefit plan. Contributions are directed to individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. Costs of administering the plan, including the FRS Financial Guidance Program, are funded through an employer contribution of 0.04 percent of payroll and by forfeited benefits of plan members. The Clerk recognizes pension expenditures in an amount equal to amounts paid to the Pension Plan, the HIS Plan and the investment plan, amounting to $290,063, $46,160 and $41,876, respectively, for the fiscal year ended September 30, 2015. The Clerk's payments for the Pension Plan and the HIS Plan after June 30, 2015, the measurement date used to determine the net pension liability associated with the Pension Plan and HIS Plan, amounted to $71,800 and $14,016, respectively. The Clerk is not legally required to and does not accumulate expendable available resources to liquidate the retirement obligation related to its employees. Accordingly, the net pension liability and associated deferred outflows and deferred inflows are presented on the government -wide financial statements of the County, following requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions — an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date — an amendment of GASB Statement No. 68, effective October 1, 2014. 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. That report may be viewed on the Florida Department of Management Services website located at www.dms.mvflorida.com/workforce operations/retirement/publications. 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 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, 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 prior to October 1, 2001, have at least ten years of full-time service with the County, and meet the retirement criteria of the Florida Retirement 11 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2015 Note 6—Other postemployment benefit (OPEB) plan (continued) 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 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 is met. At that time, the retiree's cost of participation will be $5 for each year of creditable service with the FRS at 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 Sheriff 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 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 for Workers' Compensation, Group Insurance, and Risk Management Internal Service Funds. Under these programs, Workers' Compensation provides $500,000 coverage per claim for regular employees. Workers' Compensation claims in excess of the self -insured coverage are covered by an excess insurance policy. Risk Management has a $5,000,000 excess insurance policy for general liability claims with a $200,000 self -insured retention, and building property damage is covered for the actual value of the building with a deductible of $50,000. Deductibles for windstorm and flood vary by location. Monroe County purchases commercial insurance for claims in excess of coverage provided by the funds and for all other risks of loss. Settled claims have not exceeded this commercial coverage in any of the past three years. The Clerk makes payments to the Workers' 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 $58,401 for the year ended September 30, 2015. The following is a schedule of minimum future rent obligations under non -cancelable leases with terms in excess of one year: 2016 2017 Total Note 9—Litigation 7,889 2,959 $ 10,848 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 GENERALFUND YEAR ENDED SEPTEMBER 30, 2015 Revenues Taxes Intergovernmental - Other Intergovernmental - BOCC Charges for services Interest income Miscellaneous General Fund Variance Original Final Positive Budget Budget Actual (Negative) $ 238,495 $ 103,000 $ 103,044 $ 44 55,817 55,817 55,817 - 2,867,468 2,866,791 2,866,790 (1) 574,511 705,777 802,089 96,312 8,744 12,000 12,771 771 1,850 3,500 9,461 5,961 Total revenues 3,746,885 3,746,885 3,849,972 103,087 Expenditures Current General government Clerk recording 442,728 342,728 377,786 (35,058) Clerk information systems 584,838 1,104,838 1,095,478 9,360 Clerk finance 1,814,926 1,799,926 1,815,525 (15,599) Internal audit 321,403 201,403 176,030 25,373 Tourist tax audit 233,495 23,495 12,955 10,540 Non -court records management 159,495 84,495 145,350 (60,855) Total expenditures 3,556,885 3,556,885 3,623,124 (66,239) Excess of revenues over (under) expenditures (190,000) (190,000) 226,848 36,848 Other financing sources and uses Contingency 190,000 190,000 - 190,000 Transfer to Board of County Commissioners - - (226,848) (226,848) Total other financing sources and uses 190,000 190,000 (226,848) (36,848) 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, 2015 Revenues Intergovernmental - Other Intergovernmental - BOCC Charges for services Fines and forfeitures Interest Income Miscellaneous income Total revenues 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 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 Special Revenue Court Related Fund Variance Original Final Positive Budget Budget Actual (Negative) $ 1,234,389 $ 1,234,389 $ 1,024,161 $ (210,228) 650,141 650,141 650,141 - 907,500 907,500 1,046,743 139,243 1,154,900 1,154,900 1,393,268 238,368 1,500 1,500 9,127 7,627 - 4,775 4,775 3,948,430 3,948,430 4,128,215 179,785 600,170 600,170 398,486 201,684 246,775 246,775 310,262 (63,487) 174,015 174,015 112,481 61,534 690,544 690,544 721,158 (30,614) 490,812 490,812 416,386 74,426 140,948 140,948 246,040 (105,092) 125,190 125,190 140,450 (15,260) 77,550 77,550 60,036 17,514 93,478 93,478 102,183 (8,705) 543,806 543,806 540,647 3,159 146,900 146,900 205,799 (58,899) 618,242 618,242 442,510 175,732 3,948,430 3,948,430 3,696,438 251,992 - - 431,777 431,777 (179,178) (179,178) (252,599) (252,599) (431,777) (431,777) 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, 2015 Special Revenue Records Modernization Fund Variance Original Final Positive Budget Budget Actual (Negative) Revenues Charges for services $ 150,000 $ 150,000 $ 284,014 $ 134,014 Fines 100,000 100,000 197,097 97,097 Interest income 2,800 2,800 6,264 3,464 Total revenues 252,800 252,800 487,375 234,575 Expenditures Current Court related Modernization trust 732,700 732,700 732,700 Clerk fines 633,100 633,100 633,100 Total expenditures 1,365,800 1,365,800 1,365,800 Excess of revenues over (under) expenditures (1,113,000) (1,113,000) 487,375 1,600,375 Net change in fund balance (1,113,000) (1,113,000) 487,375 1,600,375 Fund balance, beginning of year 2,142,358 2,142,358 2,142,358 - Fund balance, end of year $ 1,029,358 $ 1,029,358 $ 2,629,733 $ 1,600,375 15 SUPPLEMENTARY INFORMATION MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND YEAR ENDED SEPTEMBER 30, 2015 Balance Balance October 1, September 30, 2014 Additions Deductions 2015 Assets Cash and cash equivalents $ 3,966,491 $ 5,355,267 $ 4,261,943 $ 5,059,815 Due from other governmental agencies 486,229 3,618 479,038 10,809 Due from others 11,980 6,338 11,980 6,338 Total assets $ 4,464,700 $ 5,365,223 $ 4,752,961 $ 5,076,962 Liabilities Due to others $ 3,864,433 $ 4,313,164 $ 4,093,426 $ 4,084,171 Due to Board of County Commissioners 253,168 104,810 253,168 104,810 Due to other governmental agencies 347,099 1,429,124 888,242 887,981 Total liabilities $ 4,464,700 $ 5,847,098 $ 5,234,836 $ 5,076,962 16 SUPPLEMENTARY 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 To the Honorable Amy Heavilin, Clerk of the Circuit Court of Monroe County, Florida: We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to the financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the 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, 2015, and the related notes to the financial statements, and have issued our report thereon dated April 12, 2016 for the purpose of compliance with Section 218.39(2), Florida Statutes and Chapter 10.550, Rules of the Auditor General -Local Governmental Entity Audits. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Clerk's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk's internal control. Accordingly, we do not express an opinion on the effectiveness of the Clerk's internal control. 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 financial statements will not be prevented, or detected and corrected on a timely basis. 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. Our consideration of the internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. 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. 17 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 April 12, 2016 18 �� Cherry Bekaert` CFAs & Advisors 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, 2015, and have issued our report thereon dated April 12, 2016. 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, Article V Requirements and Depository Requirements of Sections 218.415, 28.35, 28.36 and 61.181, Florida Statutes, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated April 12, 2016, 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. There were no recommendations made in the preceding audit report. 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. See Appendix A for our recommendation. We did not audit the Clerk's response to this matter, which is also provided in Appendix A, and, accordingly, we express no opinion on it. Section 10.554(1)(i)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. �- e Orlando, Florida April 12, 2016 19 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT MANAGEMENT LETTER COMMENTS (CURRENT YEAR)-APPENDIXA Finding 2015-001 SUBSEQUENT DISBURSEMENT Observation: The Court Related Fund assets were understated and operating expenditures were overstated by $35,901 due to an inadvertent yearend accrual which was a fiscal year 2016 expenditure. Management agreed and an adjusting journal entry was posted in order to correct this misstatement. Expenses and payables should be recorded to the fiscal year in which the expenses were incurred. Recommendation: We recommend that the process for accruing invoices at yearend be reevaluated to ensure systematic errors do not occur and that, although only one item was missed out of a large volume of transactions, diligence continue to be enforced in the review of invoices for accruals. Management Response: During year-end processing of payment transactions, a single processing error was made that was immediately corrected when it was discovered. The error was the result of inadvertent coding of a vendor transaction to the incorrect fiscal year. The expenditure was related to maintenance for the redaction project for the Clerk's case management system. The vendor contract for this complex automation project was executed in April 2015. Clerk management advised staff that the year-end vendor invoice would require careful review to determine which fiscal year to charge the expenditure. In response, staff reviewed the vendor contract and interpreted the contract language as stated in the maintenance agreement was effective upon an executed contract. Staff also attempted to confirm their understanding with the vendor but misinterpreted the vendor's technical response. As a result, staff coded the expenditure to the incorrect year. When staff was advised of the error, it was corrected immediately. Finance Department Management will continue to be diligent in performing monthly reconciliations and adjust, correct and resolve issues on a timely basis throughout the fiscal year. Finding 2015-002 - PRIOR YEAR ERROR Observation: Through current year reconciliation processes a prior year error was discovered by the Clerk staff which resulted in the overstatement of cash and revenue of $14,185 in the prior year and an understatement of revenue of $14,185 in the current year. Management deemed the effects of this error to be immaterial to the financial statements taken as a whole and has passed on posting this entry. Recommendation: We recommend the continued monitoring, reconciling and reviewing of accounts to reduce the risk of similar errors in the future. 20 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT MANAGEMENT LETTER COMMENTS (CURRENT YEAR)—APPENDIXA Management Response: As attested to by the auditor's observation, Clerk staff perform monthly reconciliations and reviews throughout the year which allow us to ensure accounts are accurately stated and errors are corrected in a timely manner. Through the reconciliation process, Clerk staff discovered revenue primarily relating to overpayments under $10 from the Clerk's recording function was not properly classified in the prior year. As allowed by F.S. 28.244, overpayments under $10 are retained by the Clerk's office and staff reclassified the prior year entry to ensure that this revenue was appropriately recorded. Finance Department Management will continue to be diligent in performing monthly reconciliations and adjust, correct and resolve issues on a timely basis throughout the fiscal year. 21 `� Cherry Bekaert"P CPAs & Advisors Report of Independent Accountant on Compliance With Local Government Investment Policies, Article V Requirements and Depository Requirements of Sections 218.415, 28.35, 28.36 and 61.181, Florida Statutes 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, Article V requirements of Sections 28.35 and 28.36, Florida Statutes, and depository requirements for alimony transactions, support, maintenance and support payments of Section 61.181, Florida Statutes, for the year ended September 30, 2015. 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, 2015. Orlando, Florida April 12, 2016 22