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Fiscal Year 2009MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Financial Statements For the Year Ended September 30, 2009 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Contents Independent Auditors' Report_______________ BASIC FINANCIAL STATEMENTS Balance Sheet - Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds Statement of Fiduciary Assets and Liabilities - Agency Fund____________________ Notes to Financial Statements ---------------------------------------------------------------------- REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues and Expenditures - Budget to Actual - General Fund Schedule of Revenues and Expenditures — Budget to Actual — Special Revenue Court Related Fund Schedule of Revenues and Expenditures — Budget to Actual — Special Revenue Records Modernization Fund SUPPLEMENTARY INFORMATION Statement of Changes in Assets and Liabilities - Agency Fund_________________ SUPPLEMENTARY INDEPENDENT AUDITORS' REPORTS Independent Auditors' Report 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 Independent Auditors' Management Letter Page 2-3 4 14 15 16 17 - 18 19-20 INDEPENDENT AUDITORS' REPORT To the Honorable Danny L. Kolhage, Clerk of the Circuit Court of Monroe County, Florida: We have audited the accompanying financial statements of each major fund of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk") as of and for the year ended September 30, 2009, which collectively comprise the Clerk's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Clerk's management. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. As discussed in Note 1, the accompanying financial statements were prepared for the purpose of complying with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor Generai-Local Governmentai Entity Audits, and are not intended to be a complete presentation of the financial position of Monroe County, Florida, and the results of its operations and the cash flows of its proprietary funds in conformity with accounting principles generally accepted in the United States of America. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each of the major funds of the Clerk as of September 30, 2009, 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. In accordance with Government Auditing Standards, we have also issued our report dated February 21, 2010 on our consideration of the Clerk's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. 2 1 The budgetary comparison schedules on pages 13-15 are not a required part of the basic financial ' statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted primarily of inquiries of management regarding the methods of measurement and presentation of the required ' supplementary information. However, we did not audit the information and we express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Clerk's basic financial statements. The accompanying statement of changes in assets and liabilities - agency fund is presented for purposes of additional analysis and is not a required part of the basic financial statements. This statement has been subjected to the auditing procedures applied by us in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. ' CHERRY, BEKAERT & HOLLAND, L.L.P. ' Orlando, Florida February 21, 2010 I M BASIC FINANCIAL STATEMENTS MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Balance Sheet Governmental Funds September 30, 2009 General ASSETS Assets Cash and cash equivalents $ 619.183 Due from Board of County Commissioners 12,557 Due from other governments 36,259 Total assets $ 667,999 LIABILITIES AND FUND BALANCES Liabilities Accounts payable and accrued liabilities $ 43,854 Due to Board of County Commissioners 591,018 Deferred revenue - Deposits 33,127 Total liabilities 667,999 Fund balances - Total liabilities and fund balances $ 667,999 ajor Funds Court Records Related Modernization Fund Fund Totals $ 769,790 $ 689,433 $ 2,078,406 - - 12,557 35,143 - 71,402 $ 804,933 $ 689,433 $ 2,162,365 $ 119,346 $ - $ 163,200 622,835 1,213,853 62,752 62,752 - 33,127 804,933 - 1,472, 932 - 689,433 689,433 $ 804,933 $ 689,433 $ 2,162,365 The notes to the financial statements are an integral part of this statement. 4 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds Year Ended September 30, 2009 Major Funds Court Records General Related Modernization Fund Fund Fund Totals Revenues Taxes $ 273,077 $ - $ $ 273,077 Intergovernmental - 136,567 136,567 Charges for services 658,768 1,467,116 223,024 2,348,908 Fines and forfeitures - 783,072 56,857 839,929 Interest income 96,631 258 1,331 98,220 Miscellaneous 5,749 - - 5,749 Total revenues 1,034,225 2,387,013 281,212 3,702,450 Expenditures Current General government Salaries and benefits Operating expenditures Court related Salaries and benefits Operating expenditures Capital outlay Total expenditures Excess of revenues over (under) expenditures Other financing sources and (uses) Transfer from Board of County Commissioners Transfer to Board of County Commissioners Transfer from Florida Department of Revenue Transfer to Florida Department of Revenue Total other financing sources and (uses) Excess of expenditures and other financing uses over revenues and other uses Fund balances, beginning of year Fund balances, end of year 2,588,098 - 2,588,098 538,124 - - 538,124 - 3,539,668 13 3,539,681 - 213,993 176,765 390,758 3,048 1,356 46,764 51,168 3,129,270 3,755,017 223,542 7,107,829 (2,095,045) (1,368,004) 57,670 (3,405,379) 2,686,063 889,603 - 3,575,666 (591,018) (622,835) - (1,213,853) - 1,291,577 - 1,291,577 - (190,341) - (190,341) 2,095,045 1,368,004 - 3,463,049 - - 57,670 57,670 - - 631,763 631,763 $ - $ - $ 689,433 $ 689,433 The notes to the financial statements are an integral part of this statement. 5 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Fiduciary Assets and Liabilities Agency Fund September 30, 2009 Assets Cash and cash equivalents Due from others Total assets Liabilities Due to others Due to Board of County Commissioners Due to other governmental agencies Total liabilities The notes to the financial statements are an integral part of this statement. 6 $ 3,321,255 4,198 $ 3,325,453 $ 2,153,697 97,892 1,073,864 $ 3,325,453 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements Year Ended September 30, 2009 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. Entity status for financial reporting purposes is governed by Statement No. 14 and No. 39 of the Governmental Accounting Standards Board (GASB). Although the Clerk's Office is operationally autonomous from the County, it does not hold sufficient corporate powers of its own to be considered a legally separate entity for financial reporting purposes. Therefore, the Clerk is reported as a part of the primary government of the County. Description of Funds - The accounting records are organized for reporting purposes on the basis of three governmental funds and a fiduciary fund. General Fund - The General Fund is a governmental fund used to account for all revenues and expenditures applicable to the general operations of the Clerk that are not required legally or by accounting principles generally accepted in the United States of America to be accounted for in another fund. Court Related Fund — A special revenue fund is used to account for proceeds of specific ' revenue sources that are legally restricted or committed to expenditures for specified purposes. The Court Related Fund special revenue fund is used to account for revenues and expenditures of court functions. Any excess fees 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 the funds originated. Records Modernization Fund - The Records Modernization Fund is a special revenue fund used Lto account for recording fees restricted for records modernization pursuant to an act of the 1987 Florida Legislature. The proceeds are to be used exclusively for equipment, personnel training, and technical assistance in modernizing the official records system and to pay for equipment and start up costs necessitated by a state wide recording system. Effective July 1, 2009 this fund also receives 10% of all fines collected by the Clerk to be used for any court related purpose. ir 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. LMeasurement 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 -Local Governmental Entity Audits, 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. Expenditures generally are recorded when a 7 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT ' Notes to Financial Statements Year Ended September 30, 2009 ' NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) ' liability is incurred, as under accrual accounting. However, expenditures related to compensated absences and claims and judgments are recorded only when payment is due. 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 is reflected as either a liability or a deferred revenue. Any excess of non -court ' related revenue over non court -related expenditures is reflected as a liability to the Board. 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. All funds which had been considered court -related revenue ' are now recorded as a liability and remitted monthly to the State of Florida Department of Revenue Clerks of the Court Trust Fund. The Clerk now receives a predetermined share of a statewide appropriation to all State of Florida Clerks of Court. This appropriation is accounted for as another financing source in accordance with the State of Florida Department of Financial Services' Uniform Accounting System Chart of Accounts. ' Budgetary Requirements - Expenditures are controlled by appropriations in accordance with the budget requirements set forth in the Florida Statutes. The budget is prepared on a basis consistent with accounting principles generally accepted in the United States of America. The Florida Clerks of Court Operations Corporation ("CCOC") approved the budget for the Clerk's court -related activities for the nine months ended June 30, 2009 and for the twelve-month period beginning July 1, 2009 through June 30, 2010 to conform with statutory revisions in Senate Bills 2108 and 1718. The Clerk's statutory fiscal year is from October 1, 2008 through September 30, 2009. The Clerk is not required to submit its non -court -related activities budget for approval to the CCOC. The non court related budget is the Clerk's General Fund budget. The Clerk is not required to submit its court related special revenue fund budgets for approval to the Board. Cash and Cash Equivalents — The Clerk's cash and cash equivalents consist of demand deposits and highly liquid investments with maturities of 90 days or less when purchased. Capital Assets - Tangible personal property used by the Clerk's operations are recorded in governmental fund types as expenditures at the time assets are received and a liability is incurred. Purchased assets are capitalized at historical cost in the government -wide financial statements of the County. In addition, the County provides administrative office space and certain other expenditures used by the Clerk at no charge. Compensated Absences - The Clerk permits employees to accumulate earned but unused vacation and sick pay benefits. Related long-term obligations, amounting to $759,522 at September 30, 2009, are included in the government -wide financial statements of the County. n. ' MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT ' Notes to Financial Statements Year Ended September 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Balance, October 1, 2008 $ 715,678 Additions 380,608 Deletions (336,764) Balance, September 30, 2009 $ 759,522 Deferred Revenue — The Clerk reports as deferred revenue bond forfeitures that have not yet been recognized as revenue in accordance with Section 903.28, Florida Statutes. This Section requires the recognition of revenue over a two-year period. Amounts are reduced by any ' reinstatement of bond amounts by court order. Additionally, the Clerk reports as deferred revenue any excess of court -related appropriations from the State of Florida over expenditures. ' 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, 2009, the Clerk's cash and cash equivalents are held in demand deposits with ' a carrying amount of $5,399,661 and a bank balance of $5,476,214. Demand and time deposits are fully insured by the Federal Deposit Insurance Corporation or are covered by the State of Florida collateral pool, a multiple institution pool with the ability to assess its members for collateral if a member institution fails. Florida Statutes authorize investments in certificates of deposit, savings accounts, the Local Government Surplus Funds Trust Fund administered by the Florida State Board of Administration, money market funds, direct obligations of the U.S. Treasury, and federai 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 is not rated as to credit quality risks. NOTE 3 - RETIREMENT SYSTEM Plan Description — The Clerk's employees participate in the Florida Retirement System ("FRS"), administered by the Florida Department of Administration. 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. 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. i MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements Year Ended September 30, 2009 NOTE 3 — RETIREMENT SYSTEM (continued) Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. Regular class employees who retire at or after age 62 with 6 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 for each year of credited service. Vested employees with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Special risk class employees (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with 6 years of credited service, or with 25 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 for each year of credited service. Senior Management Service class employees who retire at or after age 62 with at least 6 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 for each year of credited service. Elected Officers' class employees who retire at or after age 62 with at least 6 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 for each year of credited service. A post -employment health insurance subsidy is also provided to eligible retired employees through the FRS in accordance with Florida Statutes. I 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 accessing their internet site at www.frs.state.fl.us. Funding Policy - The FRS is noncontributory for members. Governmental employers are required to make contributions to the FRS based on statewide contribution rates. The contribution rates by job class at September 30, 2009 were as follows: regular, 9.85%; special risk, 20.92%; special risk administrative support, 12.55%; county elected officers, 16.53%; senior management, 13.12%; and DROP participants, 10.91 %. During the fiscal year ended September 30, 2009, the Clerk contributed to the Plan an amount equal to 10.33% of covered payroll. Clerk contributions to the FRS for the fiscal years ended September 30, 2007 through 2009 were $473,712, $473,335, and $457,458, respectively, which were equal to the required contributions for each fiscal year. The Clerk has historically contributed amounts equal to required contributions and, therefore, does not have a pension asset or liability as determined in accordance with GASB Statement No. 27. 10 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements Year Ended September 30, 2009 NOTE 4 — OTHER POSTEMPLOYMENT BENEFITS (OPEB) The Monroe County Board of County Commissioners (BOCC) administers a single -employer defined benefit healthcare plan (the "Plan"). In accordance with Section 112.0801 of the Florida Statutes, the BOCC is required to provide retirees with the opportunity to participate in this Plan because Monroe County provides a medical plan to active County employees. The Plan provides health care benefits including medical coverage, prescription drug benefits, dental benefits and life insurance coverage 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. The BOCC approves the rates for the coming calendar year for the retiree and County contributions at an open session prior to the annual enrollment process. Eligibility for post employment participation in the Plan is limited to full time employees of the Board, the Constitutional Officers, the Land Authority, and retirees. Retirees hired after October 1, 2001 must contribute the premium determined by the BOCC for all participants prior to the annual enrollment process. Retirees hired before October 1, 2001, who retire from the County with 10 years of full-time service and are covered by the Florida Retirement System, must contribute $50 from each Florida Health Insurance Subsidy payment from the Florida Retirement System. Other conditions apply to employees hired before October 1, 2001 who have retired before the normal retirement date, have not reached age 60, and whose age and years of service to the County do not equal 70. In conjunction with the implementation of GASB Statement 45 during fiscal year 2008, the BOCC engaged an actuarial firm to determine the County's actuarially determined annual required contribution and unfunded obligation. The Clerk has no responsibility to the Plan other than to make the periodic payments determined by the BOCC. Further information about the Plan is available in the County's Comprehensive Annual Financial Report which is published on the Clerk's website at www. clerk-of-the-court.com. NOTE 5 - 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 provides $1,000,000 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 $100,000 self -insured retention, and building property damage is covered for the actual value of the building with a deductible between $100,000 and $250,000. 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. 11 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements Year Ended September 30, 2009 NOTE 6 - LEASE COMMITMENTS The Clerk leases various office equipment under cancelable arrangements accounted for as operating leases. Total lease expense was $46,873 for the year ended September 30, 2009. NOTE 7 - 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 County'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, 2009 Revenues Taxes Charges for services Interest income Miscellaneous income Total revenues Expenditures Current General government Clerk recording Clerk information systems Clerk finance Internal audit Tourist tax audit Non -court administration Non -court records management Total expenditures Excess of revenues over (under) expenditures Other financing sources and uses General Fund Variance Original Final Positive Budget Budget Actual (Negative) $ 197,624 $ 197,624 $ 273,077 $ 75,453 1,000,000 1,000,000 658,768 (341,232) - - 96,631 96,631 5,749 5,749 1,197,624 1,197,624 1,034,225 (163,399) 640,335 606,881 449,610 157,271 669,362 669,362 569,614 99,748 1,542,415 1,542,415 1,514,612 27,803 213,333 246,787 245,687 1,100 197,624 197,624 136,318 61,306 127,368 127,368 108,754 18,614 137,908 137,908 104,675 33,233 3,528,345 3,528,345 3,129,270 399,075 (2,330,721) (2,330,721) (2,095,045) 235,676 Contingency (355,704) (355,704) - 355,704 Transfer from Board of County Commissioners 2,686,425 2,686,425 2,686,063 (362) Transfer to Board of County Commissioners - - (591,018) (591,018) Total other financing sources and uses 2,330,721 2,330,721 2,095,045 (235,676) Net change In fund balance - Fund balance, beginning of year Fund balance, end of year $ $ $ $ 13 U 11 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, 2009 Revenues Intergovernmental Charges for services Fines and forfeitures Interest income Total revenues Expenditures Current Court Related Clerk administration Clerk records management Clerk jury management Clerk circuit court criminal Clerk circuit court civil 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 (under) expenditures Other financing sources and uses Contingency Transfer from Board of County Commissioners Transfer to Board of County Commissioners IL Transfer from Florida Department of Revenue 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) $ 110,000 $ 115,000 $ 136,567 $ 21,567 2,003,000 1,487,795 1,467,116 (20,679) 1,489,000 756,113 783,072 26,959 5,000 120 258 138 3,607,000 2,359,028 2,387,013 27,985 339,558 341,217 304,887 36,330 367,656 341,453 302,050 39,403 117,740 157,896 155,537 2,359 863,541 823,549 795,646 27,903 370,917 398,621 397,552 1,069 140,285 125,563 124,653 910 135,480 124,570 124,482 88 92,273 93,223 92,914 309 731,007 601,596 584,166 17,430 204,205 193,085 187,407 5,678 868,272 720,715 685,723 34,992 4,230,934 3,921,488 3,755,017 166,471 (623,934) (1,562,460) (1,368,004) 194,456 (440,628) (159,277) - 159,277 941,450 941,450 889,603 (51,847) (439,680) (439,680) (622,835) (183,155) 562,792 1,321,323 1,291,577 (29,746) - (101,356) (190,341) (88,985) 623,934 1,562,460 1,368,004 (194,456) 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, 2009 Original Budget _ Revenues Charges for services $ 256,000 $ Fines - Interest income - Total revenues 256,000 Special Revenue Records Modernization Fund Variance Final Positive Budget Actual (Negative) 256,000 $ 223,024 $ (32,976) - 56,857 56,857 - 1,331 1,331 256,000 281,212 25,212 Expenditures Current Court related Modernization trust 764,400 764,400 223,542 540,858 Total expenditures 764,400 764,400 223,542 540,858 Excess of revenues over (under) expenditures (508,400) (508,400) 57,670 566,070 Other financing uses Contingency (128,000) (128,000) - 128,000 Total other financing uses (128,000) (128,000) 128,000 Net change in fund balance (636,400) (636,400) 57,670 694,070 Fund balance, beginning of year 636,400 636,400 631,763 (4,637) Fund balan c s.. c 2, Zii� V� �Zai c - c W con eoo $ VVJ,IJJ 689,433 15 SUPPLEMENTARY INFORMATION MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Changes in Assets and Liabilities Agency Fund Year Ended September 30, 2009 Balance Balance October 1, September 30, 2008 Additions Deductions 2009 Assets Cash and cash equivalents $ 2,406,776 $ 20,825,682 $ 19,911,203 $ 3,321,255 Due from others 64,888 23,535 84,225 4,198 Total assets $ 2,471,664 $ 20,849,217 $ 19,995,428 $ 3,325,453 Liabilities Due to others $ 1,668,183 $ 2,536,278 $ 2,050,764 $ 2,153,697 Due to Board of County Commissioners 98,933 1,098,172 1,099,213 97,892 Due to other governmental agencies 704,548 17,214,767 16,845,451 1,073,864 Total liabilities $ 2,471,664 $ 20,849,217 $ 19,995,428 $ 3,325,453 m SUPPLEMENTARY INDEPENDENT AUDITORS' REPORTS 0 INDEPENDENT AUDITORS' REPORT 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 Danny L. Kolhage, Clerk of the Circuit Court of Monroe County, Florida: We have audited the financial statements of each major fund of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk") as of and for the year ended September 30, 2009, which collectively comprise the Clerk's basic financial statements, and have issued our report thereon dated February 21, 2010 for the purpose of compliance with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General -Local Governmental Entity Audits. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the Clerk's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Clerk's internal control over financial reporting. A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Clerk's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Clerk's financial statements that is more than inconsequential will not be prevented or detected by the Clerk's internal control. A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be presented or detected by the Clerk's internal control. 17 Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining assurance about whether the Clerk's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, and 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. This report is intended solely for the information of the Clerk, management, the Auditor General, and applicable state agencies, and is not intended to be and should not be used by anyone other than these specified parties. CHERRY, BEKAERT & HOLLAND, L.L.P. C `' , H, Lt.,. Orlando, Florida February 21, 2010 I 1 18 � I � I INDEPENDENT AUDITORS' MANAGEMENT LETTER To the Honorable Danny L. Kolhage, Clerk of the Circuit Court of Monroe County, Florida: We have audited the financial statements of each major fund of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk"), as of and for the year ended September 30, 2009, which collectively comprise the Clerk's basic financial statements, and have issued our report thereon dated February 21, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report, dated February 21, 2010 should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General -Local Governmental Entity Audits, which govern the conduct of local government entity audits performed in the State of Florida. This letter includes the ' following information, which is not included in the aforementioned auditors' report. The Rules of the Auditor General (Section 10.554(1)(i)1) require that we determine whether or ' not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. No recommendations were made in the preceding annual financial audit report. The Rules of the Auditor General (Section 10.554(1)(i)2) require our audit to include a review of the provisions of Section 218.145, Florida Statutes, regarding the investment of public funds. In connection with our audit of the financial statements of the Clerk, nothing came to our attention that could cause us to believe that the Clerk was in noncompliance with Section 218.415 regarding the investment of public funds. The Rules of the Auditor General (Section 10.554(1)(i)3) require 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. The Rules of the Auditor General (Section 10.554(1)(i)4) require that we address violations of provisions of contracts and grant agreements, or abuse, that have an effect on the financial statements that is less than material but more than inconsequential. In connection with our audit, we did not have any such findings. 19 The Rules of the Auditor General (Section 10.554(1)(i)5) provide that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of provisions of contracts or grant agreements, fraud, illegal acts, or abuse, and (2) control deficiencies that are not significant deficiencies. In connection with our audit, we did not have any such findings. The Rules of the Auditor General (Section 10.554(1)(i)6) require that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in the 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. The Rules of the Auditor General (Section 10.554(1)(i)8) require a statement as to whether or not the Clerk complied with the requirements of Sections 28.35 and 28.36, Florida Statutes. In connection with our audit of the financial statements of the Clerk, our testing did not indicate that the Clerk was in noncompliance with the requirements of Sections 28.35 or 28.36. Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America require us to indicate that this letter is intended solely for the information and use of management and the Florida Auditor General, and is not intended to be and should not be used by anyone other than these specified parties. CHERRY, BEKAERT & HOLLAND, L.L.P. Orlando, Florida February 21, 2010 20 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Financial Statements For the Year Ended September 30, 2009 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Contents Page Independent Auditors' Report................................................................................................. 2-3 BASIC FINANCIAL STATEMENTS Balance Sheet - Governmental Funds------•...................•--------------•------------...----------•-•-• 4 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds 5 Statement of Fiduciary Assets and Liabilities - Agency Fund ........................................ g Notes to Financial Statements___________________ 7 - 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 - Agency Fund .................................. SUPPLEMENTARY INDEPENDENT AUDITORS' REPORTS Independent Auditors' Report 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 Auditors' Management Letter INDEPENDENT AUDITORS' REPORT To the Honorable Danny L. Kolhage, Clerk of the Circuit Court of Monroe County, Florida: We have audited the accompanying financial statements of each major fund of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk") as of and for the year ended September 30, 2009, which collectively comprise the Clerk's basic financial statements as listed in the table of contents. These financial statements are the responsibility of the Clerk's management. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. As discussed in Note 1, the accompanying financial statements were prepared for the purpose of ' complying with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General -Local Governmental Entity Audits, and are not intended to be a complete presentation of the financial position of Monroe County, Florida, and the results of its operations and the cash flows ' of its proprietary funds in conformity with accounting principles generally accepted in the United States of America. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each of the major funds of the Clerk as of September 30, 2009, 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. In accordance with Government Auditing Standards, we have also issued our report dated February 21, 2010 on our consideration of the Clerk's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. K 1 The budgetary comparison schedules on pages 13-15 are not a required part of the basic financial ' statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted primarily of inquiries of management regarding the methods of measurement and presentation of the required I' supplementary information. However, we did not audit the information and we express no opinion on it. ' Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Clerk's basic financial statements. The accompanying statement of changes in assets and liabilities - agency fund is presented for purposes of additional analysis and ' is not a required part of the basic financial statements. This statement has been subjected to the auditing procedures applied by us in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. ' CHERRY, BEKAERT & HOLLAND, L.L.P. ' Orlando, Florida February 21, 2010 3 BASIC FINANCIAL STATEMENTS MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Balance Sheet Governmental Funds September 30, 2009 General ASSETS Assets Cash and cash equivalents $ 619,183 Due from Board of County Commissioners 12,557 Due from other governments 36,259 Total assets $ 667,999 LIABILITIES AND FUND BALANCES Liabilities Accounts payable and accrued liabilities $ 43,854 Due to Board of County Commissioners 591,018 Deferred revenue - Deposits 33,127 Total liabilities 667,999 Fund balances - Total liabilities and fund balances $ 667,999 ajor Funds Court Records Related Modernization Fund Fund Totals $ 769,790 $ 689,433 $ 2,078,406 - - 12,557 35,143 - 71,402 $ 804,933 $ 689,433 $ 2,162,365 $ 119,346 $ $ 163,200 622,835 1,213,853 62,752 62,752 - 33,127 804,933 - 1, 472, 932 - 689,433 689,433 $ 804,933 $ 689,433 $ 2,162,365 The notes to the financial statements are an integral part of this statement. 4 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds Year Ended September 30, 2009 Major Funds Court Records General Related Modernization Fund Fund Fund Totals Revenues Taxes $ 273,077 $ $ $ 273,077 Intergovernmental - 136,567 - 136,567 Charges for services 658,768 1,467,116 223,024 2,348,908 Fines and forfeitures 783,072 56,857 839,929 Interest income 96,631 258 1,331 98,220 Miscellaneous 5,749 - - 5,749 ' Total revenues 1,034,225 2,387,013 281,212 3,702,450 Expenditures Current General government Salaries and benefits 2,588,098 - - 2,588,098 Operating expenditures 538,124 - - 538,124 Court related Salaries and benefits - 3,539,668 13 3,539,681 Operating expenditures - 213,993 176,765 390,758 Capital outlay 3,048 1,356 46,764 51,168 Total expenditures 3,129,270 3,755,017 223,542 7,107,829 Excess of revenues over (under) expenditures (2,095,045) (1,368,004) 57,670 (3,405,379) Other financing sources and (uses) Transfer from Board of County Commissioners 2,686,063 889,603 3,575,666 Transfer to Board of County Commissioners (591,018) (622,835) - (1,213.853) Transfer from Florida Department of Revenue - 1,291,577 - 1,291,577 Transfer to Florida Department of Revenue - (190,341) (190,341) Total other financing sources and (uses) 2,095,045 1,368,004 - 3,463,049 Excess of expenditures and other financing uses over revenues and other uses - - 57,670 57,670 Fund balances, beginning of year - 631,763 631,763 Fund balances, end of year $ - $ - $ 689,433 $ 689,433 The notes to the financial statements are an integral part of this statement. 5 H MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Fiduciary Assets and Liabilities Agency Fund September 30, 2009 Assets Cash and cash equivalents $ 3,321,255 Due from others 4,198 Total assets $ 3,325,453 Liabilities Due to others $ 2,153,697 Due to Board of County Commissioners 97,892 Due to other governmental agencies 1,073,864 Total liabilities $ 3,325,453 The notes to the financial statements are an integral part of this statement. 6 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements Year Ended September 30, 2009 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. Entity status for financial reporting purposes is governed by Statement No. 14 and No. 39 of the Governmental Accounting Standards Board (GASB). Although the Clerk's Office is operationally autonomous from the County, it does not hold sufficient corporate powers of its own to be considered a legally separate entity for financial reporting purposes. Therefore, the Clerk is reported as a part of the primary government of the County. Description of Funds - The accounting records are organized for reporting purposes on the basis of three governmental funds and a fiduciary fund. General Fund - The General Fund is a governmental fund used to account for all revenues and expenditures applicable to the general operations of the Clerk that are not required legally or by accounting principles generally accepted in the United States of America to be accounted for in another fund. Court Related Fund — A special revenue fund is used to account for proceeds of specific revenue sources that are legally restricted or committed to expenditures for specified purposes. The Court Related Fund special revenue fund is used to account for revenues and expenditures K of court functions. Any excess fees 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 the funds originated. Records Modernization Fund - The Records Modernization Fund is a special revenue fund used to account for recording fees restricted for records modernization pursuant to an act of the 1987 Florida Legislature. The proceeds are to be used exclusively for equipment, personnel training, and technical assistance in modernizing the official records system and to pay for equipment ' and start up costs necessitated by a state wide recording system. Effective July 1, 2009 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 -Local Governmental Entity ' Audits, 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. Expenditures generally are recorded when a 7 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements Year Ended September 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) liability is incurred, as under accrual accounting. However, expenditures related to compensated absences and claims and judgments are recorded only when payment is due. The Clerk reports the General Fund, Court Related Fund and the Records Modernization Fund as 1 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 is reflected as either a liability or a deferred revenue. Any excess of non -court ' related revenue over non court -related expenditures is reflected as a liability to the Board. 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. All funds which had been considered court -related revenue ' are now recorded as a liability and remitted monthly to the State of Florida Department of Revenue Clerks of the Court Trust Fund. The Clerk now receives a predetermined share of a statewide appropriation to all State of Florida Clerks of Court. This appropriation is accounted for as another financing source in accordance with the State of Florida Department of Financial Services' Uniform Accounting System Chart of Accounts. Budgetary Requirements - Expenditures are controlled by appropriations in accordance with the budget requirements set forth in the Florida Statutes. The budget is prepared on a basis consistent with accounting principles generally accepted in the United States of America. The Florida Clerks of Court Operations Corporation ("CCOC") approved the budget for the Clerk's court -related activities for the nine months ended June 30, 2009 and for the twelve-month period beginning July 1, 2009 through June 30, 2010 to conform with statutory revisions in Senate Bills 2108 and 1718. The Clerk's statutory fiscal year is from October 1, 2008 through September 30, 2009. The Clerk is not required to submit its non -court -related activities budget for approval to the CCOC. The non court related budget is the Clerk's General Fund budget. The Clerk is not required ' to submit its court related special revenue fund budgets for approval to the Board. Cash and Cash Equivalents — The Clerk's cash and cash equivalents consist of demand deposits and highly liquid investments with maturities of 90 days or less when purchased. Capital Assets - Tangible personal property used by the Clerk's operations are recorded in governmental fund types as expenditures at the time assets are received and a liability is incurred. Purchased assets are capitalized at historical cost in the government -wide financial statements of the County. In addition, the County provides administrative office space and certain other expenditures used by the Clerk at no charge. Compensated Absences - The Clerk permits employees to accumulate earned but unused vacation and sick pay benefits. Related long-term obligations, amounting to $759,522 at September 30, 2009, are included in the government -wide financial statements of the County. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements Year Ended September 30, 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Balance, October 1, 2008 $ 715,678 Additions 380,608 Deletions (336,764) Balance, September 30, 2009 $ 759,522 Deferred Revenue — The Clerk reports as deferred revenue bond forfeitures that have not yet been recognized as revenue in accordance with Section 903.28, Florida Statutes. This Section requires the recognition of revenue over a two-year period. Amounts are reduced by any reinstatement of bond amounts by court order. Additionally, the Clerk reports as deferred revenue any excess of court -related appropriations from the State of Florida over expenditures. 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, 2009, the Clerk's cash and cash equivalents are held in demand deposits with a carrying amount of $5,399,661 and a bank balance of $5,476,214. Demand and time deposits are fully insured by the Federal Deposit Insurance Corporation or are covered by the State of Florida collateral pool, a multiple institution pool with the ability to assess its members for collateral if a member institution fails. Florida Statutes authorize investments in certificates of deposit, savings accounts, the Local Government Surplus Funds Trust Fund administered by the Florida State Board of Administration, money market funds, direct obligations of the U.S. Treasury, and federal agencies and instrumentalities and Intergovernmental Investment Pools that are authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Section 163.01, Florida Statutes. The Local Government Surplus Funds Trust Fund is not rated as to credit quality risks. NOTE 3 - RETIREMENT SYSTEM Plan Description — The Clerk's employees participate in the Florida Retirement System ("FRS"), administered by the Florida Department of Administration. 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. 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. 9 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements Year Ended September 30, 2009 NOTE 3 — RETIREMENT SYSTEM (continued) Benefits under the Pension Plan are computed on the basis of age, average final compensation, and service credit. Regular class employees who retire at or after age 62 with 6 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 for each year of credited service. Vested employees with less than 30 years of service may retire before age 62 and receive reduced retirement benefits. Special risk class employees (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with 6 years of credited service, or with 25 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 for each year of credited service. Senior Management Service class employees who retire at or after age 62 with at least 6 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 for each year of credited service. Elected Officers' class employees who retire at or after age 62 with at least 6 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 for each year of credited service. A post -employment health insurance subsidy is also provided to eligible retired employees 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 accessing their internet site at www.frs.state.fl.us. Funding Policy - The FRS is noncontributory for members. Governmental employers are required to make contributions to the FRS based on statewide contribution rates. The contribution rates by job class at September 30, 2009 were as follows: regular, 9.85%; special risk, 20.92%; special risk administrative support, 12.55%; county elected officers, 16.53%; senior management, 13.12%; and DROP participants, 10.91 %. During the fiscal year ended September 30, 2009, the Clerk contributed to the Plan an amount equal to 10.33% of covered payroll. Clerk contributions to the FRS for the fiscal years ended September 30, 2007 through 2009 were $473,712, $473,335, and $457,458, respectively, which were equal to the required contributions for each fiscal year. The Clerk has historically contributed amounts equal to required contributions and, therefore, does not have a pension asset or liability as determined in accordance with GASB Statement No. 27. 10 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements Year Ended September 30, 2009 NOTE 4 — OTHER POSTEMPLOYMENT BENEFITS (OPEB) The Monroe County Board of County Commissioners (BOCC) administers a single -employer defined benefit healthcare plan (the "Plan"). In accordance with Section 112.0801 of the Florida Statutes, the BOCC is required to provide retirees with the opportunity to participate in this Plan because Monroe County provides a medical plan to active County employees. The Plan provides health care benefits including medical coverage, prescription drug benefits, dental benefits and life insurance coverage 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. The BOCC approves the rates for the coming calendar year for the retiree and County contributions at an open session prior to the annual enrollment process. Eligibility for post employment participation in the Plan is limited to full time employees of the Board, the Constitutional Officers, the Land Authority, and retirees. Retirees hired after October 1, 2001 must contribute the premium determined by the BOCC for all participants prior to the annual enrollment process. Retirees hired before October 1, 2001, who retire from the County with 10 years of full-time service and are covered by the Florida Retirement System, must contribute $50 from each Florida Health Insurance Subsidy payment from the Florida Retirement System. Other conditions apply to employees hired before October 1, 2001 who have retired before the normal retirement date, have not reached age 60, and whose age and years of service to the County do not equal 70. In conjunction with the implementation of GASB Statement 45 during fiscal year 2008, the BOCC engaged an actuarial firm to determine the County's actuarially determined annual required contribution and unfunded obligation. The Clerk has no responsibility to the Plan other than to make the periodic payments determined by the BOCC. Further information about the Plan is ' available in the County's Comprehensive Annual Financial Report which is published on the Clerk's website at www. clerk-of-the-court.com. NOTE 5 - 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 provides $1,000,000 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 $100,000 self -insured retention, and building property damage is covered for the actual value of the building with a deductible between $100,000 and $250,000. 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. 11 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Financial Statements Year Ended September 30, 2009 NOTE 6 - LEASE COMMITMENTS The Clerk leases various office equipment under cancelable arrangements accounted for as operating leases. Total lease expense was $46,873 for the year ended September 30, 2009. NOTE 7 - 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 County'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, 2009 General Fund variance Original Final Positive Budget Budget Actual (Negative) Revenues Taxes $ 197,624 $ 197,624 $ 273,077 $ 75,453 Charges for services 1,000.000 1,000,000 658,768 (341,232) Interest income 96,631 96,631 Miscellaneous income - - 5,749 5,749 ' Total revenues 1,197,624 1,197,624 1,034,225 (163,399) Expenditures Current General government ' Clerk recording 640,335 606,881 449,610 157,271 Clerk information systems 669,362 669,362 569,614 99,748 Clerk finance 1,542,415 1,542,415 1,514,612 27,803 Internal audit 213,333 246,787 245,687 1,100 Tourist tax audit 197,624 197,624 136,318 61,306 Non -court administration 127,368 127,368 108,754 18,614 Non -court records management 137,908 137,908 104,675 33,233 Total expenditures 3,528,345 3,528,345 3,129,270 399,075 Excess of revenues over (under) expenditures (2,330,721) (2,330,721) (2,095,045) 235,676 Other financing sources and uses Contingency (355,704) (355,704) 355,704 Transfer from Board of County Commissioners 2,686,425 2,686,425 2,686,063 (362) Transfer to Board of County Commissioners - - (591,018) (591,018) Total other financing sources and uses 2,330,721 2,330.721 2,095,045 (235,676) Net change In fund balance - - - - Fund balance, beginning of year Fund balance, end of year $ $ $ $ - 13 U 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, 2009 Special Revenue Court Related Fund Variance Original Final Positive Budget Budget Actual (Negative) Revenues Intergovernmental $ 110,000 $ 115,000 $ 136,567 $ 21,567 Charges for services 2,003,000 1,487,795 1.467,116 (20,679) Fines and forfeitures 1,489,000 756.113 783,072 26,959 Interest income 5,000 120 258 138 Total revenues 3,607,000 2,359,028 2,387,013 27,985 Expenditures Current Court Related Clerk administration 339,558 341,217 304,887 36,330 Clerk records management 367,656 341,453 302,050 39,403 Clerk jury management 117,740 157,896 155,537 2,359 Clerk circuit court criminal 863,541 823,549 795,646 27,903 Clerk circuit court civil 370,917 398.621 397,552 1,069 Clerk circuit court family 140,285 125,563 124,653 910 Clerk circuit court juvenile 135,480 124,570 124,482 88 Clerk circuit court probate 92,273 93,223 92,914 309 Clerk county court criminal 731,007 601,596 584,166 17,430 Clerk county court civil 204,205 193,085 187,407 5,678 Clerk county court traffic 868,272 720,715 685,723 34,992 Total expenditures 4,230,934 3,921,488 3,755,017 166,471 Excess of revenues over (under) expenditures (623,934) (1,562,460) (1,368,004) 194,456 Other financing sources and uses Contingency (440,628) (159,277) - 159,277 Transfer from Board of County Commissioners 941,450 941,450 889,603 (51,847) Transfer to Board of County Commissioners (439,680) (439,680) (622,835) (183,155) Transfer from Florida Department of Revenue 562,792 1,321,323 1,291,577 (29,746) Transfer to Florida Department of Revenue - (101,356) (190,341) (88,985) Total other financing sources and uses 623,934 1,562,460 1,368,004 (194,456) Net change In fund balance - - - Fund balance, beginning of year Fund balance, end of year $ $ $ $ 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, 2009 Special Revenue Records Modernization Fund Variance Original Final Positive Budget Budget Actual (Negative) Revenues Charges for services $ 256,000 $ 256,000 $ 223,024 $ (32,976) Fines - - 56,857 56,857 Interest income - - 1,331 1,331 Total revenues 256,000 256,000 281,212 25,212 Expenditures Current Court related Modernization trust 764,400 764,400 223,542 540,858 Total expenditures 764,400 764,400 223,542 540,858 Excess of revenues over (under) expenditures (508,400) (508,400) 57,670 566,070 Other financing uses Contingency (128,000) (128,000) - 128,000 Total other financing uses (128,000) (128,000) 128,000 Net change in fund balance (636,400) (636,400) 57,670 694,070 Fund balance, beginning of year 636,400 636,400 631,763 (4,637) Fund balance, and of year $ - $ - $ 689,433 $ 689,433 15 SUPPLEMENTARY INFORMATION MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Changes in Assets and Liabilities Agency Fund Year Ended September 30, 2009 Balance Balance October 1, September 30, 2008 Additions Deductions 2009 Assets Cash and cash equivalents $ 2,406,776 $ 20,825,682 $ 19,911,203 $ 3,321,255 Due from others 64,888 23,535 84,225 4,198 Total assets $ 2,471,664 $ 20,849,217 $ 19,995,428 $ 3,325,453 Liabilities Due to others $ 1,668,183 $ 2,536,278 $ 2,050,764 $ 2,153,697 Due to Board of County Commissioners 98,933 1,098,172 1,099,213 97,892 Due to other governmental agencies 704,548 17,214,767 16,845,451 1,073,864 Total liabilities $ 2,471,664 $ 20,849,217 $ 19,995,428 $ 3,325,453 16 SUPPLEMENTARY INDEPENDENT AUDITORS' REPORTS INDEPENDENT AUDITORS' REPORT 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 Danny L. Kolhage, Clerk of the Circuit Court of Monroe County, Florida: ' We have audited the financial statements of each major fund of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk") as of and for the year ended September 30, 2009, which collectively comprise the Clerk's basic financial statements, and have issued our report thereon dated February 21, 2010 for the purpose of compliance with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General -Local Governmental Entity Audits. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control over Financial Reporting In planning and performing our audit, we considered the Clerk's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Clerk's internal control over financial reporting. A control deficiency 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 misstatements on a timely basis. A significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the Clerk's ability to initiate, authorize, record, process, or report financial data reliably in accordance with generally t accepted accounting principles such that there is more than a remote likelihood that a misstatement of the Clerk's financial statements that is more than inconsequential will not be prevented or detected by the Clerk's internal control. ' A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial statements will not be presented or detected by the Clerk's internal control. 17 Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and would not necessarily identify all deficiencies r in internal control that might be significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. Compliance and Other Matters As part of obtaining assurance about whether the Clerk's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, and 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. This report is intended solely for the information of the Clerk, management, the Auditor General, and applicable state agencies, and is not intended to be and should not be used by anyone other than these specified parties. CHERRY, BEKAERT & HOLLAND, L.L.P. Orlando, Florida February 21, 2010 18 INDEPENDENT AUDITORS' MANAGEMENT LETTER To the Honorable Danny L. Kolhage, Clerk of the Circuit Court of Monroe County, Florida: We have audited the financial statements of each major fund of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk"), as of and for the year ended September 30, 2009, which collectively comprise the Clerk's basic financial statements, and have issued our report thereon dated February 21, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. We have issued our Independent Auditors' Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards. Disclosures in that report, dated February 21, 2010 should be considered in conjunction with this management letter. Additionally, our audit was conducted in accordance with the provisions of Chapter 10.550, Rules of the Auditor General -Local Governmental Entity Audits, which govern the conduct of local government entity audits performed in the State of Florida. This letter includes the following information, which is not included in the aforementioned auditors' report. The Rules of the Auditor General (Section 10.554(1)(i)1) require that we determine whether or not corrective actions have been taken to address significant findings and recommendations made in the preceding annual financial audit report. No recommendations were made in the preceding annual financial audit report. The Rules of the Auditor General (Section 10.554(1)(i)2) require our audit to include a review of the provisions of Section 218.145, Florida Statutes, regarding the investment of public funds. In connection with our audit of the financial statements of the Clerk, nothing came to our attention that could cause us to believe that the Clerk was in noncompliance with Section 218.415 regarding the investment of public funds. The Rules of the Auditor General (Section 10.554(1)(i)3) require 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. The Rules of the Auditor General (Section 10.554(1)(i)4) require that we address violations of provisions of contracts and grant agreements, or abuse, that have an effect on the financial statements that is less than material but more than inconsequential. In connection with our audit, we did not have any such findings. 19 The Rules of the Auditor General (Section 10.554(1)(i)5) provide that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of r provisions of contracts or grant agreements, fraud, illegal acts, or abuse, and (2) control i deficiencies that are not significant deficiencies. In connection with our audit, we did not have any such findings. The Rules of the Auditor General (Section 10.554(1)(i)6) require that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in the 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. The Rules of the Auditor General (Section 10.554(1)(i)8) require a statement as to whether or ' not the Clerk complied with the requirements of Sections 28.35 and 28.36, Florida Statutes. In connection with our audit of the financial statements of the Clerk, our testing did not indicate that the Clerk was in noncompliance with the requirements of Sections 28.35 or 28.36. ' Pursuant to Chapter 119, Florida Statutes, this management letter is a public record and its distribution is not limited. Auditing standards generally accepted in the United States of America require us to indicate that this letter is intended solely for the information and use of management and the Florida Auditor General, and is not intended to be and should not be used by anyone other than these specified parties. ' CHERRY, BEKAERT & HOLLAND, L.L.P. Orlando, Florida February 21, 2010 20