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Fiscal Year 2012Apr ..� •- �: . . -M. 11"WWOUN 0 , 5 A IN 0 a 1.4 IAC a I; I am 1 ;00] 1 RAL9111 A Special -Purpose Financial Statements, Required Supplementary Information, Other Supplementary Information and Independent Auditor's Reports Fort a Year Ended September 30, 2012 Contents Page Independent Auditor's Report..........._ ------------------------------------------------------------- 2-3 SPECIAL-PURPOSE FINANCIAL STATEMENTS Special -Purpose Balance Sheet - Governmental Funds ........... 4 Special -Purpose Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds 5 Special -Purpose Statement of Fiduciary Assets and Liabilities -Agency Fund ............................................................................................. 6 Notes to Special -Purpose Financial Statements ............................................................. 7-14 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues and Expenditures - Budget to Actual - General Fund ............................................... 15 Schedule of Revenues and Expenditures — Budget to Actual — Special Revenue Court Related Fund ..................... 16 Schedule of Revenues and Expenditures — Budget to Actual — Special Revenue Records Modernization Fund 17 SUPPLEMENTARY INFORMATION Statement of Changes in Assets and Liabilities -, AgencyFund ............................... _ .............................................................................. 18 SUPPLEMENTARY INDEPENDENT AUDITOR'S REPORTS Independent Auditor's Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Special -Purpose Financial Statements Performed In Accordance with Government Auditing Standards_______________________________________________ 19-20 Independent Auditor's Management Letter ------------ ............... -------------------------------------- 21-22 �J JCherry F LLP To the Honorable Amy Heavilin, Clerk of the Circuit Court of Monroe County, Florida. We have audited the accompanying special-purpose financial statements of each major fund and the aggregate remaining fund information of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk") as of and for the year ended September 30, 2012, as listed in the table of contents. These special-purpose financial statements are the responsibility of the Clerk's management. Our responsibility is to express opinions on these special-purpose financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the special-purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the special- purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall special- purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. As discussed in Note 1, the accompanying special-purpose financial statements were prepared for the purpose of complying with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General -Local Governmental Entity Audits, and are not intended to be a complete presentation of the financial position and changes in financial position of the Clerk. Additionally, the special-purpose financial statements present only the Clerk and are not intended to present fairly the financial position and changes in financial position of Monroe County, Florida, taken as a whole. In our opinion, the special-purpose financial statements referred to above present fairly, in all material respects, the respective financial position of each major fund and the aggregate remaining fund information of the Clerk as of September 30, 2012, and the respective changes in financial position thereof for the year then ended, in conformity with accounting principles generally accepted in the United States of America. 2 In accordance with Govemment Auditing Standards, we have also issued our report dated March 31, 2013 on our consideration of the Clerk's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. Accounting principles generally accepted in the United States of America require that the Required Supplementary Information as listed in the table of contents be presented to supplement the special-purpose financial statements. Such information, although not a part of the special-purpose financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the special-purpose financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the special-purpose financial statements, and other knowledge we obtained during our audit of the special-purpose financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the special-purpose financial statements of the Clerk taken as a whole. The accompanying supplementary information is presented for purposes of additional analysis and is not a required part of the special-purpose financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the special-purpose financial statements. The information has been subjected to the auditing procedures applied in the audit of the special-purpose financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the special-purpose financial statements or to the special-purpose financial statements themselves, and other additional procedures in accordance with accounting standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the special-purpose financial statements as a whole. This report is intended solely for the information and use of the Clerk, management, and the Florida Auditor General, and is not intended to be and should not be used by anyone other than these specified parties. Orlando, Florida March 31, 2013 l3 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Balance Sheet Governmental Funds September 30, 2012 Major Funds Court Records General Related Modernization Fund Farad Fund -01 Cash and cash equivalents $ 891,668 Due from Board of County Commissioners 14,578 Due from other governments 67,363 Due from other funds 348 Total assets $ 973„957 LIABILITIES AND FUND BALANCES Liabilities Accounts payable and accrued liabilities $ 70,761 Due to Board of County Commissioners 862.873 Deposits 40,323 Total liabilities 973,957 Fund Balances: Restricted - Total liabilities and fund balances $ 973,957 $ 831,441 $ 1,281,736 $ 3.004,845 14,578 20,060 87,423 348 ---------------------- $ 851,501 $ 1,2811,736 $ 3,107,194 $ 254,061 $ 27,019 $ 351,841 597,440 1,460, 313 _.................................................... 40,323 851,601 27,019 1,6521,477 - ® 1,254,717 1,254,717 $ 851,501 $ 1,287,736 $ 3,107,194 The notes to the financial statements are an integral part of this statement. I MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds Year Ended September 30, 2012 Revenues Taxes Intergovernmental - Other Intergovernmental - BOCC Charges for services Fines and forfeitures Interest income Miscellaneous Total revenues Expenditures Current General government Salaries and benefits Operating expenditures Court related Salaries and benefits Operating expenditures Capital outlay Total expenditures Excess of revenues over expenditures Other financing sources and (uses) Major Funds Court Records General Related Modernization .Fund .Fund Fund Totals $ 458,886 $ 61,751 3,334,507 2,763,701 581,600 679,623 11,880 3,82 - $ $ 458,886 3,396,258 3,345,301 240,158 919,781 191,260 191,260 10,536 22,416 3,1382 2,807,347 - 2,807,347 286,805 286,805 2,971,562 2,971,562 - 224,349 326,780 551,129 22,026 2,904 38,72 63,202 3,116,178 3,198,815 365,052 6,680,045 862,745 717,292 76,902 1,656,939 Transfer to Board of County Commissioners (862,745) (524,903) _ (1,387,648) Transfer to Florida Department of Revenue (192,389) w (192,389) Total other financing sources and (uses) (862,74) (717,292) - (1,580,037) Excess of revenues and other financing sources over expenditures and other uses 76,902 76,902 Fund balances, beginning of year Fund balances, end of year w $ 1,254,717 $ 1,254,717 The notes to the financial statements are an integral part of this statement. R COUNTY,MONROE FLORIDA CLERKTHE CIRCUIT Statement of Fiduciary Assets and Liabilities Agency Fund September 30, 2012 Assets Cash and cash equivalents Due from others Liabilities Due to others Due to other funds Due to Board of County Commissioners Due to other governmental agencies $ 3,615,605 4,641 $ 3,620,246 $ 2,464,149 348 102,489 1,053,260 3,620,246 The notes to the financial statements are an integral part of this statement. 6 1hONROE COUNTY,- • MVIGe.-• - - Year Ended September 30, 2012 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity - The Monroe County, Florida Clerk of the Circuit Court (the "Clerk") is a separately elected county official established pursuant to the Constitution of the State of Florida. The Clerk's special-purpose financial statements do not purport to reflect the financial position or the results of operations of Monroe County, Florida (the "County") taken as a whole. Entity status for financial reporting purposes is governed by Statement No. 14, as amended by Statement No. 39, of the Governmental Accounting Standards Board (GASB). Although the Clerk's Office is operationally autonomous from the County, it does not hold sufficient corporate powers of its own to be considered a legally separate entity for financial reporting purposes. Therefore, the Clerk is reported as a part of the primary government of the County. Description of Funds - The accounting records are organized for reporting purposes as three governmental funds and a fiduciary fund. General Fund - The General Fund is a governmental fund used to account for and report all financial resources not accounted for and reported in another fund. Court Related Fund — A special revenue fund is used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. This special revenue fund was created to account for and report State and local funding restricted for the expenditure of court functions. Any excess funding over actual expenditures is returned to either the Florida Department of Revenue or the Monroe County Board of County Commissioners (the "Board"), depending on where funding originated. Records Modernization Fund - The Records Modernization Fund is a special revenue fund used to account for and report recording fees restricted for records modernization and court technology as specified in Florida Statutes 28.24(12)(d) and 28.24(12)(e)l. Pursuant to Florida Statutes 28.37, this fund also receives 10% of all fines collected by the Clerk to be used for any court related purpose. Fiduciary Fund - The Fiduciary fund of the Clerk is an Agency Fund, which is used to account for assets held by the Clerk as agent. Financial Statement Presentation - The Clerk's special-purpose financial statements are prepared for the purpose of complying with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General (the "Rules"), which require the Clerk to only present fund financial statements. In conformity with the Rules, the Clerk has not presented the government -wide financial statements, related disclosures or management's discussion and analysis, which are required to present a complete presentation of its financial position and changes in financial position. The Clerk reports the General Fund, Court Related Fund and the Records Modernization Fund as major governmental funds and the Agency Fund as a fiduciary fund type. The Agency Fund is custodial in nature and does not involve measurement of results of operations. 7 MONROE COUNTY, FLORIDA CLERK OF gi�.. ■' - NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The Clerk's operations are segregated between court related and non -court related activities as defined by Article V of the Florida Constitution. Any excess of state appropriations over court related expenditures is reflected as a liability or deferred revenue. Any excess of local appropriations over non court -related expenditures is reflected as a liability to the Board. Pursuant to an act of the 2009 Florida Legislature the Clerk is part of the state appropriation process. All court -related revenue is recorded as a liability in the Clerk's trust and agency fund and remitted monthly to the State of Florida Department of Revenue Clerks of the Court Trust Fund. The Clerk's court related fund receives a predetermined share of a statewide appropriation to all State of Florida Clerks of Court. This appropriation is accounted for as another financing source in accordance with the State of Florida Department of Financial Services' Uniform Accounting System Chart of Accounts. Measurement Focus and Basis of Accounting - The General Fund and the Special Revenue Funds are governmental funds which use the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Clerk considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, expenditures related to compensated absences and claims and judgments are recorded only when payment is due. Fund Balances - Governmental funds report fund balances either as non -spendable or spendable. Spendable balances are further classified as restricted, committed, assigned or unassigned, based on the extent to which there are external or internal constraints on the spending of these fund balances. The Clerk is not legally separate from the County, and does not commit or assign fund balance as the highest level of decision making authority for the County rests with the Board. Nonspendable Fund Balance — Amounts that are (a) not in spendable form or (b) legally or contractually required to be maintained intact. "Not in spendable form" includes items that are not expected to be converted to cash (such as inventories and prepaid amounts) and generally items such as long-term amounts of loans and notes receivable, as well as property acquired for resale. The corpus (or principal) of a permanent fund is an example of an amount that is legally or contractually required to be maintained intact. Spendable Fund Balance: Restricted Fund Balance — Amounts that can be spent only for specific purposes stipulated by (a) external resource providers such as creditors (by debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation. !✓ MONROE COUNTY,FLORIDA CLERK OF • - @, . e. Year Ended September 30, 2012 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Unassigned Fund Balance — Unassigned fund balance is the residual classification for the General Fund. This classification represents fund balance that is spendable and that has not been restricted, committed, or assigned to specific purposes within the General Fund. Unassigned fund balance may also include negative balances for any governmental fund if expenditures exceed amounts restricted or committed for specific purposes. The Clerk spends restricted amounts first, when both restricted and unrestricted fund balance is available, unless prohibited by legal documents, grant agreements or contracts. Budgetary Requirements - Expenditures are controlled by appropriations in accordance with the budget requirements set forth in the Florida Statutes. The budget is prepared on a basis consistent with accounting principles generally accepted in the United States of America. The Florida Clerks of Court Operations Corporation ("CCOC") approves the budget for the Clerk's court -related activities for the twelve-month period beginning July 1 through June 30 pursuant to Senate Bills 2108 and 1718 enacted in 2009. The Clerk's statutory fiscal year is from October 1 through September 30. The Clerk is not required to submit its non -court -related activities budget for approval to the CCOC. The non court related budget is the Clerk's General Fund budget. The Clerk is not required to submit its court related special revenue fund budgets for approval to the Board. Cash and Cash Equivalents — The Clerk's cash and cash equivalents consist of demand deposits and highly liquid investments with maturities of 90 days or less when purchased. Capital Assets - Tangible personal property used by the Clerk's operations are recorded in governmental fund types as expenditures at the time assets are received and a liability is incurred. Purchased assets are capitalized at historical cost in the government -wide financial statements of the County. In addition, the County provides administrative office space and certain other expenditures used by the Clerk at no charge. Compensated Absences - The Clerk permits employees to accumulate earned but unused vacation and sick pay benefits. The Clerk is not legally required to and does not accumulate expendable available resources to liquidate this obligation. The obligation for compensated absences is accrued in the government -wide financial statements of the County. A summary of activity for the Clerk's compensated absences obligation is as follows: Balance, October 1, 2011 $ 618,525 Additions 391,048 Deletions (329,108) Balance, September 30, 2012 $ 680,465 Deferred Revenue — The Clerk reports as deferred revenue any excess of court -related appropriations from the State of Florida over expenditures and court -related appropriations received in advance of the designated period. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Year Ended September 30, 2012 Use of Estimates - The preparation of special-purpose financial statements requires management to make use of estimates that affect reported amounts. Actual results could differ from estimates. NOTE 2 — DEPOSITS AND INVESTMENTS As of September 30, 2012, the Clerk's cash and cash equivalents are held in demand deposits with a carrying amount of $6,620,450 and a bank balance of $6,771,554. The Clerk places its cash and cash equivalents on deposit with financial, institutions in the United States. The Federal Deposit Insurance Corporation (FDIC) covers $250,000 for substantially all depository accounts. The Clerk from time to time may have amounts on deposit in excess of the insured limits and the remaining balances are insured 100% by the State of Florida collateral pool, a multiple financial institution pool with the ability to assess its members for collateral shortfalls if a member institution fails. Florida Statutes authorize investments in certificates of deposit, savings accounts, the Local Government Surplus Funds Trust Fund administered by the Florida State Board of Administration, money market funds, direct obligations of the U.S. Treasury, and federal agencies and instrumentalities and Intergovernmental Investment Pools that are authorized pursuant to the Florida Interlocal Cooperation Act, as provided in Section 163.01, Florida Statutes. The Local Government Surplus Funds Trust Fund's name was changed in 2009 to Florida PRIME. The Florida PRIME is rated by Standard and Poors. The current rating is AAAm. ki 0 1 AF ; . Fund Balances are presented in the following categories: restricted and unassigned. See Note 1 for a description of these categories. The restrictions placed on Clerk Records Modernization fund balance are described as follows: Public Records Modernization Trust -- Florida Statute 28.24(12)(d) requires the collection of an additional service charge to be paid to the Clerk to be used exclusively for equipment, maintenance of equipment, personnel training, and technical assistance in modernizing the public records system of the Clerk's Office. Public Records Court Technology Trust— Florida Statute 28.24(12)(e)(1) requires the collection of an additional service charge to be paid to the Clerk to be used exclusively for the operation and support of an integrated computer system for the judicial agencies and to support the operations and maintenance of the state court system. 10 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT L T Year Ended September 30, 2012 NOTE 3 — FUND BALANCE CLASSIFICATION (continued) 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 $ 590,758 Public Records Court Technology - 10% Court -Related Fines 6,959 Restricted Fund Balances 1,2,717 NOTE 4 - RETIREMENT SYSTEM Plan Description — Substantially all full-time clerk employees are participants in the Florida Retirement System, (FRS), administered by the Florida Department of Management Services. Employees elect to participate in either the defined benefit plan ("Pension Plan"), a multiple - employer; cost -sharing public employee defined benefit retirement, plan, or the defined contribution plan (Investment Plan) under the FRS. FRS provides retirement benefits, disability benefits, annual cost -of -living adjustments, and death benefits to Pension Plan members and beneficiaries of various governmental units within the State of Florida. Benefits are established by Chapter 121, Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be made only by Act of the Florida legislature. For employees hired before July 1, 2012 and enrolled in the Pension Plan, the FRS provides for vesting of benefits after 6 years of credited service. Normal Pension Plan retirement benefits are available to employees who retire at or after age 62 with 6 or more years of service or after 30 years if under age 62. Benefits are also based on the 5 highest state fiscal years of compensation earned during covered employment. For employees hired July 1, 2012 and thereafter enrolled in the Pension Plan, the FRS provides for vesting of benefits after 8 years of credited service. Normal retirement benefits are available to employees who retire at or after age 65 with 8 or more years of service or after 33 years if under age 65. Benefits are also based on the 8 highest state fiscal years of compensation earned during covered employment. Pension Plan retirement benefits for all employees are based on age, average compensation and years -of -service credit. Early retirement is available after 6 years of service with a 5% reduction in benefits for each year prior to the normal retirement age. 11 • "• COUNT', FLORIDA CLERK OF • - § '• _ *nvmke Year Ended September 30, 2012 NOTE 4 - RETIREMENT SYSTEM (continued) 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 who elect to participate in the Investment Plan rather than the Pension Plan, vesting occurs at one year of service. These participants receive a contribution of self -direction in an investment product with a third party administrator selected by the State Board of Administration. Investment accounts may be withdrawn by the employee 90 days after termination or retirement. The Florida Division of Retirement issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, PO Box 9000, Tallahassee, FL 32315-9000, or from the website www.dms.myflorida.com/retirement. 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. Funding Policy -- The FRS was noncontributory for Pension Plan and investment Plan members until June 30, 2012. As of July 1, 2012 all members, with the exception of Deferred Retirement Option Program (DROP) members and re-employed retirees, contribute 3% of their eligible wages. Participating employer contributions are based upon state-wide rates established by the State of Florida on an annual basis effective each July 1. The rates applied to employee salaries effective as of July 1, 2012 are as follows: regular employees, 5.18%, special risk employees, 14.90%, special risk administrative support 5.91 %; elected officials, 10.23%, senior management 6.30%, and DROP participants 5.44%.The Clerk contributed to the plan an amount equal to 5.25% of covered payroll during the fiscal year ended September 30, 2012. The Clerk's contributions made during the years ended September 30, 2012, 2011, and 2010 were $227,553, $410,000, and $462,007, respectively, equal to the required contributions for each year. The Clerk has historically contributed amounts equal to required contributions and, therefore, does not have a pension asset or liability as determined in accordance with GASB Statement No. 27- — OTHER POSTEMPLOYMENT BENEFITS( ) The Monroe County Board of County Commissioners (BOCC) administers a single -employer defined benefits healthcare plan (the "Plan"). Florida Statutes 112.0801 requires the County to provide retirees and their eligible dependents with the option to participate in the Plan if the County provides health insurance to its active employees and their eligible dependents. The Plan provides medical coverage and prescription drug benefits to both active and eligible retired employees. The Plan does not issue a publicly available financial report. 12 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Notes to Special -Purpose Financial Statemert.-� Year Ended September 30, 2012 The BOCC may amend the plan design, with changes to the benefits, premiums and/or levels of participant contribution at any time. In an open session, on at least an annual basis and prior to the annual enrollment process, the BOCC approves the rates for the coming calendar year for the retiree and County contributions. Eligibility for post employment participation in the Plan is limited to full time employees of the County, and the Constitutional Officers. Employees who retire as an active participant in the Plan and were hired on or after October 1, 2001 may continue to participate in the Plan by paying the monthly premium established annually by the BOCC. Employees who retire as an active participant in the plan, were hired before October 1, 2001, have at least ten years of full time service with the County, and meet the retirement criteria of the Florida Retirement System (FRS) may continue to participate in the Plan at a cost equal to the FRS Health Insurance Subsidy for ten years of service (currently $5 per month for each year of service credit at retirement or $50 per month). Retirees who have met the requirements for early retirement, have not achieved age 60 and whose age and years of service do not equal 70 (rule of 70) must pay the standard monthly premium until the age criteria or the rule of 70 is met. At that time, the retiree's cost of participation will be equal to the FRS Health Insurance Subsidy. Surviving spouses and dependents of participating retirees may continue in the plan if eligibility criteria specific to those classes are met. The BOCC engages an actuarial firm on a biannual basis to determine the County's actuarially determined annual required contribution and unfunded obligation. The Clerk has no responsibility to the Plan other than to make the periodic payments determined by the BOCC. Further information about the Plan is available in the County's Comprehensive Annual Financial Report which is published on the Clerk's website at www.clerk-of-the-court.com. NOTE 6 - RISK MANAGEMENT The Clerk is exposed to various risks of loss related to tort; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Clerk participates in the coverage provided by the Board of County Commissioners of Monroe County Workers' Compensation, Group Insurance, and Risk Management Internal Service Funds. Under these programs, the Worker's Compensation Fund has self -insured coverage up to $500,000 per claim for regular employees. Workers' Compensation claims in excess of the self -insured coverage are covered by an excess insurance policy. Risk Management has a $5,000,000 excess insurance policy for general liability claims with a $200,000 self -insured retention, and building property damage is covered for the actual value of the building with a deductible of $50,000. Deductibles for windstorm and flood vary by location. The County purchases commercial insurance for claims in excess of coverage provided by the funds and for all other risks of loss. Settled claims have not exceeded this commercial coverage in any of the past three years. The Clerk makes payments to the Worker's Compensation, Group Insurance and Risk Management Funds based on estimates of the amounts needed to pay prior and current year claims. 13 MONROE COUNTY,FLORIDA COURTCLERK OF THE CIRCUIT EndedYear September1 The Clerk leases various office equipment under cancelable arrangements accounted for as operating leases. Total lease expense was $50,203 for the year ended September 30, 2012. NOTE 8 - LITIGATION The Clerk is a party from time to time in various lawsuits and other claims incidental to the ordinary course of its operation, some of which are covered by the Board's self-insurance program. While the results of litigation cannot be predicted with certainty, management believes the final outcome of such litigation will not have a material adverse effect on the Clerk's financial position. In 2011, the Clerk of the Circuit Court, Danny Kolhage, announced his decision to retire after serving the public for more than 38 years; 29 of those years were as the Clerk. Shortly thereafter, he announced his intention to run for the open County Commissioner, District 1 position. During the 2012 election process, Amy Heavilin, CPA was elected as Clerk of the Circuit Court & Comptroller and Mr. Kolhage was elected as the County's next District 1 Commissioner. The transition between the Honorable Amy Heavilin and the Honorable Danny Kolhage occurred on November 20, 2012. Mr. Kolhage was officially sworn in as newly -elected District 1 County Commissioner and Ms. Amy Heavilin was sworn in as Clerk Ad -Interim. The Clerk Ad -Interim term ended on January 7, 2013 and on January 8, 2013 she was sworn in to serve her elected four-year term as the Clerk of the Circuit Court and Comptroller for Monroe County. Management has evaluated subsequent events through March 31, 2013, in connection with the preparation of these financial statements, which is the date the financial statements were available to be issued. 14 a F /i :: MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Schedule of Revenues and Expenditures - Budget to Actual General Fund Year Ended September 30, 2012 General Fund Variance Original Final Positive Budget ___R�et Actual (Negat!jLo)_ Revenues - Taxes $ 200,276 $ 200,276 $ 458,886 $ 258,610 Intergovernmental - Other - 61,751 61,751 Intergovernmental - BOCC 2,769,150 2,769,150 2,763,701 (5,449) Charges for services 600,969 600,969 679,623 78.654 Interest income 21,352 21,352 11,880 (9,472) Miscellaneous income 2,879 2,679 3,082 403 Total revenues 3,594,426® 3,694,426 3,978,923 384,4_97 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 432,886 432,886 379,063 53,823 679,008 679,008 532,084 146,924 1,621,242 1,621,242 1,612,058 9,184 230,667 230,667 216,469 14,198 200,255 200,255 179,363 20,892 108,896 108,896 90,300 18,696 131,472 131,472 106,841 24,631 3,404,426 3,404,426 3,116,178 288,248 190,000 190,000 862,745 672,745 Contingency (190,000) (190'000) 190,000 Transfer to Board of County Commissioners (862,745) (862,745) Total other financing sources and uses _ (190,000), .745) 672,745) Not change in fund balance . . ......... . ................ Fund balance, beginning of year ............ - - ----- . .. . ......... . ............. Fund balance, end of year $ - $ $ $ 15 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, 2012 Revenues intergovernmental - Other Intergovernmental - SOCC 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 Contingency Transfer from Clerk's Fines Transfer to Board of County Commissioners Transfer to Florida Department of Revenue Total other financing sources and uses Net change in fund balance Fund balance, beginning of year Fund balance, and of year Variance Original Final Positive Budget Budget Actual (Negative) $ 3,367,662 $ 3,359,607 $ 3,334,507 $ (25,100) 821,968 821,968 581,600 (240,368) 4,189,630 4,181,575 3,916,107 (265,468) 290,855 270,855 161,903 108,952 351,154 316,154 176,782 139,372 176,224 176,075 161,000 15,075 725,304 672,033 620,337 51,696 499,490 494,469 481,727 12,742 35,237 23,530 11,707 131,667 129,938 121,263 8,675 114,003 109,806 83,583 26,223 95,972 95,227 92,202 3,025 562,262 552,522 511,642 40,880 204,775 163,913 142,198 21,715 636,940 634,362 622,648 11,714 3,788,646 3,60,591 3,18,815 451,776 400,984 530,984 717,292 186,308 (70,984) (70,984) 70,984 130,000 - (460,000) (460,000) (524,903) (64,903) - (192,389) (192,389) 1 9 16 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Schedule of Revenues and Expenditures - Budget to Actual Special Revenue Records Modernization Fund Year Ended September 30, 2012 Special Revenue Records Modernization Fund Variance Original Final Positive Budget Budget Actual (Negative) Revenues - Charges for services $ 223,000 $ 223,000 $ 240,158 $ 17,158 Fines 222,000 222,000 191,260 (30,740) Interest Income 6,600 6,600 10,536 3,936 Total revenues 451,600 451,00 441,954 (9,646) Expenditures Current Court related Modernization trust 579,600 579,600 365,052 214,548 Clerk Fines 494,000 494,000 - 494,000 Total expenditures 1,073,600 1,073,600 365,052 708,548 Excess of revenues over (under) expenditures (622,000) (622,000) 76,902 698,902 Other financing uses Contingency (152,000) (152,000) 152,000 Total other financing uses (152,000) (152,000) 152,000 Net change in fund balance (774,000) (774,000) 76,902 850,902 Fund balance, beginning of year 1,079,000 1,079,000 1,177,815 98815 Fund balance, end of year $ 305,000 $ 305,000 $ 1,254,717 $ 949,717 17 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT Statement of Changes in Assets and Liabilities Agency Fund Year Ended September 30, 2012 Balance Balance October 1, September 30, 2011 Additions Deductions 2012 Assets Cash and cash equivalents $ 1,983,145 $ 29,135,530 $ 27,503,070 $ 3,615,605 Due from others 3,901 20,662 '19,922 4,641 Total assets $ 1,987,046 $ 29,156,192 $ 27,522,992 $ 3,620,246 Liabilities Due to others $ 978,406 $ 6,137,984 $ 4,652,241 $ 2,464,149 Due to other funds 348 - 348 Due to Board of County Commissioners 119,038 1,321,118 1,337,667 102,489 Due to other governmental agencies 889,602 21,696,742 211,533,084 1,053,260 Total liabilities $ 1,987,046 $ 29,156,192 $ 27,522,992 $ 3,620,246 18 W�M�MaljID agg ■ # iffffi� L 11 Cherry - Independent Auditor's Report on Internal Control Over Financial Reporting and on Compliance d Other Matters Based on anAudit of Special -Purpose • • � � 14 � 1 � 1 1 ! o' 1 To the Honorable Amy Heavilin, Clerk of the Circuit Court of Monroe County, Florida: We have audited the special-purpose financial statements of each major fund and the aggregate remaining fund information of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk") as of and for the year ended September 30, 2012, which collectively comprise the Clerk's special-purpose financial statements, and have issued our report thereon dated March 31, 2013 for the purpose of compliance with Section 218.39(2), Florida Statutes and Chapter 10.550, Rules of the Auditor General -Local Govemmental Entity Audits. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. internal Control over Financial Reporting Management of the Clerk is responsible for establishing and maintaining effective internal control over financial reporting. In planning and performing our audit, we considered the Clerk's internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the special-purpose financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Clerk's internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Clerk's special-purpose financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. 19 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk's special-purpose financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of special-purpose financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. This report is intended solely for the information and use of the Clerk, management, and the Florida Auditor General, and is not intended to be and should not be used by anyone other than these specified parties. Orlando, Florida March 31, 2013 W Section 10.554(1)(i)5, Kules of the Auditor General, provides that the auditor may, based on professional judgment, report the following matters that have an inconsequential effect on financial statements, considering both quantitative and qualitative factors: (1) violations of provisions of contracts or grant agreements, fraud, illegal acts, or abuse, and (2) deficiencies in internal control that are not significant deficiencies. In connection with our audit, we did not have any such findings. Section 10.554(1)(i)6, Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the special-purpose financial statements. The Clerk is a separately elected county official established pursuant to the Constitution of the State of Florida. There are no component units related to the Clerk. Section 10.554(1)(i)8, Rules of the Auditor General, requires a statement as to whether or not the Clerk complied with the requirements of Sections 28.35 and 28.36, Florida Statutes. In connection with our audit of the special-purpose financial statements of the Clerk, our testing did not indicate that the Clerk was in noncompliance with such requirements. Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies, and applicable management and is not intended to be and should not be used by anyone other than these specified parties. Orlando, Florida March 31, 2013 W