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Fiscal Year 2017MONROE FLORIDA COURT FINANCIAL STATEMENTS Year Ended September 30, 2017 And Reports of Independent Auditor Cherry Bekaert''" MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT TABLE OF CONTENTS SEPTEMBER 30, 2017 REPORT OF INDEPENDENT AUDITOR 1 - 2 FINANCIAL STATEMENTS: Balance Sheet - Governmental Funds 3 Statement of Revenues, Expenditures and Changes in Fund Balance - Governmental Funds------------------------------------------------------------------------------- 4 Statement of Fiduciary Net Position - AgencyFund .................................................................................................................................... 5 Notes to Financial Statements 6 - 13 ---------------------------------------------------------------------------------------------------------- REQUIRED SUPPLEMENTARY INFORMATION: Schedule of Revenues and Expenditures - Budget to Actual - General Fund ....................................................................................................... 14 Schedule of Revenues and Expenditures — Budget to Actual — Special Revenue Court Related Fund .................................................................... 15 Schedule of Revenues and Expenditures — Budget to Actual — Special Revenue Records Modernization Fund ...................................................... 16 SUPPLEMENTARY INFORMATION: Schedule of Changes in Assets and Liabilities - AgencyFund .................................................................................................................................... 17 SUPPLEMENTARY REPORTS: Report of Independent Auditor on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed In Accordance with Government Auditing Standards .................................. 18 - 19 Independent Auditor's Management Letter 20 - 22 Report of Independent Accountant on Compliance with Local Government Investment Policies, Article V Requirements and Depository Requirements of Sections 218.415, 28.35, 28.36 and 61.181, Florida Statutes-----------------------------------------------------------23 Report of Independent Auditor To the Honorable Kevin Madok Clerk of the Circuit Court of Monroe County, Florida Report on the Financial Statements We have audited the accompanying financial statements of each major fund and the aggregate remaining fund information of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk") as of and for the year ended September 30, 2017, and the related notes to the financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Clerk's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Clerk's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of each major fund and the aggregate remaining fund information of the Clerk as of September 30, 2017, and the respective changes in financial position thereof for the year then ended, in conformity with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida. In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of each fund of Monroe County, Florida that is attributable to the Clerk. They do not purport to, and do not, present fairly the financial position of Monroe County, Florida as of September 30, 2017, and the changes in its financial position for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Required Supplementary Information as listed in the table of contents be presented to supplement the financial statements. Such information, although not a part of the financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary and Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Clerk's financial statements. The accompanying supplementary information as listed in the table of contents is presented for purposes of additional analysis and is not a required part of the financial statements. The accompanying supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 15, 2018 on our consideration of the Clerk's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Clerk's internal control over financial reporting and compliance. Orlando, Florida March 15, 2018 FINANCIAL STATEMENTS MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT BALANCE SHEET GOVERNMENTAL FUNDS ASSETS Assets Cash and cash equivalents Due from other governmental agencies Due from Board of County Commissioners Due from other funds Total assets LIABILITIES AND FUND BALANCES Liabilities Accounts payable and accrued liabilities Due to other governmental agencies Due to Board of County Commissioners Due to other funds Total liabilities Deferred Inflows of Resources Unavailable Revenue Fund Balances: Restricted Total liabilities, deferred inflows of resources and fund balances SEPTEMBER 30, 2017 Major Funds Court Records General Related Modernization Fund Fund Fund Totals $ 1,624,184 $ 1,710,617 $ 2,459,577 $ 5,794,378 19,376 278,484 - 297,860 961 2,759 - 3,720 - 88,355 - 88,355 $ 1,644,521 $ 2,080,215 $ 2,459,577 $ 6,184,313 $ 210,173 $ 165,231 $ 3,338 $ 378,742 51,856 668,430 - 720,286 1,382,492 1,007,233 - 2,389,725 - - 88,355 88,355 1,644,521 1,840,894 91,693 3,577,108 - 239,321 - 239,321 - - 2,367,884 2,367,884 $ 1,644,521 $ 2,080,215 $ 2,459,577 $ 6,184,313 See notes to financial statements. 3 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2017 Revenues Intergovernmental - Other Intergovernmental - Board of County Commissioners Charges for services Fines and forfeitures Interest income Miscellaneous Total revenues Expenditures Current General government Salaries and benefits Operating Court related Salaries and benefits Operating Capital outlay Total expenditures Excess of revenues over (under) expenditures Other financing (uses) Transfer to Board of County Commissioners Net Change in Fund Balances Fund balances, beginning of year Fund balances, end of year Major Funds Court Records General Related Modernization Fund Fund Fund Totals $ 31,763 $ 638,372 $ - $ 670,135 3,290,658 982,703 - 4,273,361 779,343 850,596 301,756 1,931,695 - 1,311,092 130,152 1,441,244 18,451 10,154 26,386 54,991 4,182 17,867 - 22,049 4,124,397 3,810,784 458,294 8,393,475 2,406,129 - - 2,406,129 443,763 - - 443,763 - 2,630,946 266,182 2,897,128 - 321,151 261,142 582,293 1,350 - 28,587 29,937 2,851,242 2,952,097 555,911 6,359,250 1,273,155 858,687 (97,617) 2,034,225 (1,273,155) (858,687) - (2,131,842) - - (97,617) (97,617) - - 2,465,501 2,465,501 $ - $ - $ 2,367,884 $ 2,367,884 See notes to financial statements. 4 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT STATEMENT OF FIDUCIARY NET POSITION AGENCY FUND SEPTEMBER 30, 2017 Assets Cash and cash equivalents $ 5,409,315 Due from other governmental agencies 19,881 Due from others 4,862 Total assets $ 5,434,058 Liabilities Due to other governmental agencies $ 746,633 Due to others 4,538,453 Due to Board of County Commissioners 148,972 Total liabilities $ 5,434,058 See notes to financial statements. 5 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2017 Note 1—Summary of significant accounting policies Reporting Entity - The Monroe County, Florida Clerk of the Circuit Court (the "Clerk") is a separately elected county official established pursuant to the Constitution of the State of Florida. The Clerk's financial statements do not purport to reflect the financial position or the results of operations of Monroe County, Florida (the "County") taken as a whole. The financial statements of the Clerk have been prepared in accordance with the accounting principles and reporting guidelines established by the Governmental Accounting Standards Board (the "GASB"). Entity status for financial reporting purposes is governed by GASB Statement No. 14, as amended. Although the Clerk's Office is operationally autonomous and legally separate from the Board of County Commissioners (the "Board"), it does not hold sufficient corporate powers of its own to be considered a legally separate entity for financial reporting purposes. Therefore, under GASB guidelines, the Clerk is reported as a part of the primary government of the County. Description of Funds - The accounting records are organized for reporting purposes as three governmental funds and a fiduciary fund. General Fund - The General Fund is used to account for all revenues and expenditures applicable to the general operations of the Clerk. Court Related Fund — A Special Revenue Fund is used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. The Court Related Fund is a special revenue fund created to account for and report State and local funding restricted for the expenditure of court functions. Any excess funding over actual expenditures is returned to either the Florida Department of Revenue (the "DOR") or 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 Statute 28.24(12)(d)(e). Pursuant to Florida Statute 28.37(5), 10% of all court -related fines collected by the Clerk were deposited in the Clerk's Modernization Trust Fund for court -related operational needs and program enhancements through June 15, 2017. With the passage of Senate Bill 2506 by the Florida Legislature, effective June 16, 2017, 10% of all court -related fines collected by the Clerk shall be deposited into the Clerk's Court Related fund to be used exclusively for clerk court -related functions, as provided in Florida Statute 28.35(3)(a). 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 Florida Statute 218.39(2), and Chapter 10.550, Rules of the Auditor General, which require the Clerk to only present fund financial statements. The General Fund and the Special Revenue Funds are governmental funds which use the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized when measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Clerk considers revenues to be available if they are collected within 60 days of the end of the current fiscal period, to be available and thus recognizes them as revenues of the current year. Expenditures generally are recorded when MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2017 Note 1—Summary of significant accounting policies (continued) 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. The Clerk reports the General Fund, Court Related Fund and the Records Modernization Fund as major governmental funds and the Agency Fund as a fiduciary fund type. The Agency Fund is custodial in nature and does not involve measurement of results of operations. The Clerk's operations are segregated between court -related and non -court -related activities as defined by Article V of the Florida Constitution. Any excess of court -related revenue over court -related expenditures as of September 30 each year is paid to the DOR's Clerks' Trust Fund. Any excess of non -court related revenue over non -court related expenditures is reflected as a liability to the Board. Fund Balances Presentation — The Records Modernization Fund balance of the governmental funds is classified as restricted. This classification includes amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors or the laws or regulations of other governments. Budgetary Requirements - Expenditures are controlled by appropriations in accordance with the budgetary requirements set forth in the Florida Statutes. The budget is prepared on a basis consistent with generally accepted accounting principles. The Florida Clerks of Court Operations Corporation (the "CCOC") approves only the budget for the Clerk's court -related activities for the twelve -months ended September 30, 2017. The non -court -related budget is the Clerk's General Fund budget and is approved by the Board. Cash and Cash Equivalents — The Clerk's cash and cash equivalents consist of demand deposits insured by the Federal Deposit Insurance Corporation ("FDIC") and cash on hand for operations. 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 and reported in the County's CAFR's government -wide financial statements. The Clerk maintains custodial responsibility for the capital assets used by the Clerk's offices. In addition, the Board provides administrative office space and certain other expenditures used by the Clerk at no charge. Compensated Absences - The Clerk permits employees to accumulate earned but unused vacation and sick pay benefits. The Clerk is not legally required to and does not accumulate expendable available financial resources to liquidate this obligation. The obligation for compensated absences is accrued and reported in the County's CAFR's government -wide financial statements. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2017 Note 1—Summary of significant accounting policies (continued) A summary of activity for the Clerk's compensated absences obligation is as follows: Balance, October 1, 2016 $ 441,532 Earned 455,463 Used (390,612) Balance, September 30, 2017 $ 506,383 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. Subsequent Events - The Clerk has evaluated subsequent events through March 15, 2018, in connection with the preparation of these financial statements, which is the date the financial statements were available to be issued. Note 2—Deposits and investments The Clerk follows Florida Statutes for its investment policy, which authorizes investments in certificates of deposit, savings accounts, repurchase agreements, the Local Government Surplus Funds Trust Fund administered by the Florida State Board of Administration, and obligations of the U.S. Government and government agencies unconditionally guaranteed by the U.S. Government. The Clerk's deposits include $11,202,193 in interest -bearing and non -interest bearing demand deposits at September 30, 2017, which are insured by the Federal Deposit Insurance Corporation or covered by the State of Florida collateral pool, a multiple financial institution pool with the ability to assess its members for collateral shortfalls if a member institution fails. Cash on hand amounted to $1,500. Note 3—Interfund receivables and payables Interfund receivables and payables at September 30, 2017 consist of the following: Court Related Fund Records Modernization Fund Due From Due To Other Other Funds Funds $ - $ 88,355 88,355 - $ 88,355 $ 88,355 The amounts are due to the Records Modernization Fund from the Court Related Fund, as required by Florida Statutes. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2017 Note 4—Fund balance presentation The restrictions placed on Clerk Records Modernization fund balance are described as follows: Public Records Modernization Trust — Florida Statute 28.24(12)(d) requires the collection of an additional service charge to be paid to the Clerk to be used exclusively for equipment, maintenance of equipment, personnel training, and technical assistance in modernizing the public records system of the Clerk's Office. Public Records Court Technology Trust — Florida Statute 28.24(12)(e)(1) requires the collection of an additional service charge to be paid to the Clerk to be used exclusively for the operation and support of an integrated computer system for the judicial agencies and to support the operations and maintenance of the state court system. 10% Court -Related Fines — Through June 15, 2017, Florida Statute 28.37(5) required 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. With the passage by the Florida Legislature of Senate Bill 2506, effective June 16, 2017, 10% of all court -related fines collected by the Clerk shall be deposited into the Clerk's Court Related fund to be used exclusively for clerk court -related functions. Records Modernization restricted fund balances are as follows: Public Records Modernization Trust $ 974,914 Public Records Court Technology 1,061,650 10% Court -Related Fines 331,320 Restricted Fund Balance $2,367,884 Note 5—Retirement Plans Florida Retirement Svstem As a general rule, membership in the Florida Retirement System (the "FRS") is compulsory for all employees working in a regularly established position for a state agency, county government, district school board, state university, community college, or a participating city or special district within the State of Florida. FRS was created in Florida Statute Chapter 121. Amendments to all of the following retirement plans can only be made by an act of the Florida Legislature. Rules governing the operations and administration of the system may be found in Chapter 60S of the Florida Administrative Code (the "FAC"), except the Investment Plan for which rules may be found in Chapter 19, FAC. The FAC is maintained by the Department of State. Pension Plan Description — The FRS was created to provide public employees a cost sharing, multiple - employer defined benefit plan (the "Pension Plan"). The Pension Plan is administered by the Florida Department of Management Services, Division of Retirement. MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2017 Note 5—Retirement Plans (continued) Benefits - The Pension Plan provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members and beneficiaries. Retirement, disability and death benefits are based on age, average final compensation and years -of -service credit. Members enrolled in the Pension Plan before July 1, 2011, will be vested, or eligible to receive future benefits after 6 years of creditable service. Substantial changes were made to the Pension Plan during fiscal year 2011, affecting new members enrolled by extending the vesting requirement. Therefore, on or after July 1, 2011 members will be vested, or eligible to receive future benefits, after 8 years of creditable service. Regular class members, Senior Management Service class members and Elected Officers' class members enrolled before July 1, 2011 are eligible for normal retirement if they are vested and age 62 or if they have 30 years of creditable service regardless of age. They are entitled to a retirement benefit payable monthly for life, equal to 1.6%, 2% and 3.0%, respectively, (3.33% for judges and justices) of their final average compensation based on the five highest years of salary, for each year of credited service. On or after July 1, 2011 the normal age of retirement increased to 65 or 33 years of creditable service regardless of age. A regular class member may retire early if vested but under the required retirement age. However, the benefit will be reduced by 5 percent for each year between the age at retirement and the normal retirement age. Funding Policy - Governmental employers' contributions are based on state-wide contribution rates. The employer contribution rates by job class for the periods from October 1, 2016 through June 30, 2017 and July 1, 2017 through September 30, 2017, respectively, were as follows: regular members - 7.52% and 7.92%, senior management - 21.77% and 22.71 % and, county elected officers - 42.47% and 45.50%. During the fiscal year ended September 30, 2017, the Clerk contributed to the plan an amount equal to 10.09% of covered payroll. In addition to governmental employer contributions, all enrolled members of the Pension Plan are required to contribute 3.0% of their salary. Investment Plan Description - The Investment Plan, under Florida Statute 121.4501, provides an alternative to the Pension Plan. This is a defined contribution plan which is administered by the State Board of Administration. These participants receive a contribution for self -direction in an investment product, with a third party administrator selected by the State Board of Administration. All benefits payable under the Investment Plan shall be paid solely from the member's individual account within the Investment Plan Trust Fund. Benefits - The Investment Plan provides retirement, disability and death benefits to plan members and beneficiaries. Retirement, disability and death benefits are based on age, average final compensation and years -of -service credit. Members are vested, or eligible to receive future benefits at one year of service. 10 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2017 Note 5—Retirement Plans (continued) Retirement depends on your class of membership and the first date of hire. The same age and years -of -service credit applies as in the Pension Plan. Upon retirement, the member may rollover vested funds to another qualified plan, structure a periodic payment under the Investment Plan, receive a lump -sum distribution, leave the funds invested for future distribution, or any combination of these options. Disability coverage is provided to the member but must either transfer their investment account balance to the Pension Plan when approved for disability retirement in order to receive guaranteed lifetime monthly benefits under the Pension Plan or remain in the Investment Plan and rely upon the account balance for retirement income. Funding Policy - Governmental employers and class members are required to make contributions, using the blended contribution rate, to the FRS for investment to pay future benefits to members and beneficiaries. These contributions are transferred to the FRS Trust Fund individual member accounts, and the individual members allocate contributions and account balances among various approved investment choices. The ultimate benefit depends in part on the performance of investment funds. Deferred Retirement Option Program (the "DROP") Description — DROP is a voluntary retirement program that is available only to FRS Pension Plan members who qualify for normal retirement. Under Florida Statute 121.091, the FRS administers DROP, which is a program that allows members to retire without terminating their employment. Benefits - DROP allows eligible members to defer receipt of monthly retirement benefit payments while continuing employment with an FRS employer for a period not to exceed 60 months after electing to participate. While in DROP, employees simultaneously earn a salary while their monthly retirement benefits are held in the FRS Trust Fund and accrue interest. When employment terminates at the end of the approved DROP participation period, a DROP participant receives the DROP payout and begins receiving the monthly retirement benefit in the same amount determined at retirement, plus annual cost -of -living increases. Funding Policy - The employer contribution rates for the periods from October 1, 2016 through June 30, 2017 and July 1, 2017 through September 30, 2017 for DROP participants are 12.99% and 13.26%, respectively. There are no required contributions by DROP participants. Health Insurance Subsidy (the "HIS Plan") Description — Florida Statute Chapter 112, established the HIS Plan, a cost -sharing multiple - employer defined benefit plan, to assist retired members in paying the costs of health insurance. This monthly benefit is administered by the Florida Department of Management Services, Division of Retirement. Benefits - Eligible retirees and beneficiaries receive a monthly health insurance subsidy payment of $5 for each year of creditable service, with a minimum payment of $30 and a maximum payment of $150 per month. 11 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2017 Note 5—Retirement Plans (continued) Funding Policy - The HIS Plan is funded by required contributions from FRS participating employees as set forth by the Florida Legislature, based on a percentage of gross compensation for all active FRS members. The Clerk recognizes pension expenditures in an amount equal to amounts paid to the Pension Plan, the Investment Plan and the HIS Plan, amounting to $289,110, $31,387 and $52,469, respectively, for the fiscal year ended September 30, 2017. The Clerk's payments for the Pension Plan and the HIS Plan after June 30, 2017, the measurement date used to determine the net pension liability associated with the Pension Plan and HIS Plan, amounted to $72,214 and $14,417, respectively. The Clerk is not legally required to and does not accumulate expendable available resources to liquidate the retirement obligation related to its employees. Accordingly, the net pension liability and associated deferred outflows and deferred inflows are presented on the government -wide financial statements of the County, following requirements of GASB Statement No. 68, Accounting and Financial Reporting for Pensions — an amendment of GASB Statement No. 27, and GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date — an amendment of GASB Statement No. 68, effective October 1, 2014. The State of Florida annually issues a publicly available financial report that includes financial statements and required supplementary information for the FRS. The latest available report may be obtained by writing to the State of Florida Division of Retirement, Department of Management Services, P.O. Box 9000, Tallahassee, Florida 32315-9000. That report may be viewed on the Florida Department of Management Services website located at www.dms.Myflorida.com/workforce operations/retire ent/publications. Note 6—Other Postemployment Benefits Plan (the "OPEB Plan" The Board administers the OPEB plan, a single -employer defined benefits healthcare plan. Florida Statute 112.0801 requires the County to provide retirees and their eligible dependents with the option to participate in the OPEB Plan if the County provides health insurance to its active employees and their eligible dependents. The OPEB Plan provides medical coverage, prescription drug benefits, and life insurance to both active and eligible retired employees. The OPEB Plan does not issue a publicly available financial report. The Board may amend the OPEB Plan design, with changes to the benefits, premiums and/or levels of participant contribution at any time. On at least an annual basis, in an open session, and prior to the annual enrollment process, the Board approves the rates for the coming calendar year for the retiree and County contributions. Eligibility for postemployment participation in the OPEB Plan is limited to full-time employees of the County, and the Constitutional Officers. An employee who retires as an active participant in the OPEB Plan and was hired on or after October 1, 2001 may continue to participate in the OPEB Plan by paying the monthly premium established annually by the Board. An employee who retires as an active participant in the plan, was hired prior to October 1, 2001, has at least ten years of full-time service with the County, and meets the retirement criteria of the FRS, may maintain group health insurance benefits with Monroe County following retirement, provided the retiring employee contributes a premium of $5 per month for each year of creditable service with the FRS at time of retirement with Monroe County and will pay at a minimum $50 per month up to the maximum of $150 per month. Retirees who have met the requirements for early retirement, have not achieved age 60 and whose age and years of service do not equal 70 (rule of 70) must pay the standard monthly premium until the age criteria or the rule of 70 is met. At that time, the retiree's cost of participation will be $5 for each year of creditable service 12 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2017 Note 6—Other Postemployment Benefits Plan (continued) with the FRS at time of retirement with Monroe County and will pay at a minimum $50 per month up to the maximum of $150 per month. Surviving spouses and dependents of participating retirees may continue in the plan if eligibility criteria specific to those classes are met. The Board 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 OPEB Plan other than to make the periodic payments determined by the Board. Further information about the OPEB Plan is available in the County's CAFR which is published on the Clerk's website at www.clerk-of-the-court.com. Note 7—Risk management The Clerk is exposed to various risks of loss related to tort; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The Clerk participates in the coverage provided by the Board for Workers' Compensation, Group Insurance, and Risk Management Internal Service Funds. Under these programs, Workers' Compensation provides $500,000 coverage per claim for regular employees. Workers' Compensation claims in excess of the self -insured coverage are covered by an excess insurance policy. Risk Management has a $5,000,000 excess insurance policy for general liability claims with a $200,000 self -insured retention, and building property damage is covered for the actual value of the building with a deductible of $50,000. Deductibles for windstorm and flood vary by location. Monroe County purchases commercial insurance for claims in excess of coverage provided by the funds and for all other risks of loss. Settled claims have not exceeded this commercial coverage in any of the past three years. The Clerk makes payments to the Workers' Compensation, Group Insurance and Risk Management Funds based on estimates of the amounts needed to pay prior and current year claims. Note 8—Lease commitments The Clerk leases various office equipment under cancelable arrangements accounted for as operating leases. Total lease expenditures were $50,086 for the year ended September 30, 2017. The following is a schedule of minimum future rent obligations under non -cancelable leases with terms in excess of one year: 2018 $ 22,377 2019 8,304 2020 2,207 Total $ 32,888 Note 9—Litigation The Clerk is a party from time to time in various lawsuits and other claims incidental to the ordinary course of its operation, some of which are covered by the Board's self-insurance program. While the results of litigation cannot be predicted with certainty, management believes the final outcome of such litigation will not have a material adverse effect on the Clerk's financial position. 13 REQUIRED SUPPLEMENTARY INFORMATION MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET TO ACTUAL GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2017 Revenues Intergovernmental - Other Intergovernmental - Board of County Commissioners Charges for services Interest income Miscellaneous Total revenues Expenditures Current General government Clerk recording Clerk information systems Clerk finance Internal audit Non -court records management Total expenditures Excess of revenues over expenditures Other financing (uses) Transfer to Board of County Commissioners Fund balance, beginning of year Fund balance, end of year General Fund Variance Original Final Positive Budget Budget Actual (Negative) $ - $ - $ 31,763 $ 31,763 3,290,658 3,290,658 3,290,658 - 639,900 639,900 779,342 139,442 8,300 8,300 18,451 10,151 1,800 1,800 4,182 2,382 3,940,658 3,940,658 4,124,396 183,738 504,834 504,834 357,048 147,786 621,936 621,936 311,313 310,623 2,249,379 2,249,379 1,948,579 300,800 387,592 387,592 234,301 153,291 176,917 176,917 - 176,917 3,940,658 3,940,658 2,851,241 1,089,417 - - 1,273,155 1,273,155 (1,273,155) (1,273,155) 14 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET TO ACTUAL SPECIAL REVENUE COURT RELATED FUND FOR THE YEAR ENDED SEPTEMBER 30, 2017 Revenues Intergovernmental - Other Intergovernmental - Board of County Commissioners Charges for services Fines and forfeitures Interest Income Miscellaneous income Total revenues Expenditures Current Court Related Clerk administration Clerk records management Clerk jury management Clerk circuit court criminal Clerk circuit court civil Clerk court information systems Clerk circuit court family Clerk circuit court juvenile Clerk circuit court probate Clerk county court criminal Clerk county court civil Clerk county court traffic Total expenditures Excess of revenues over expenditures Other financing (uses) Transfer to Board of County Commissioners Fund balance, beginning of year Fund balance, end of year Special Revenue Court Related Fund Variance Original Final Positive Budget Budget Actual (Negative) $ 720,332 $ 720,332 $ 638,372 $ (81,960) 982,703 982,703 982,703 863,100 863,100 850,596 (12,504) 1,310,517 1,310,517 1,311,092 575 7,500 7,500 10,154 2,654 2,200 2,200 17,867 15,667 3,886,352 3,886,352 3,810,784 (75,568) 218,640 218,640 136,469 82,171 247,467 222,467 61,718 160,749 154,782 154,782 141,813 12,969 719,630 719,630 534,213 185,417 529,386 529,386 499,400 29,986 198,722 223,722 214,002 9,720 178,256 153,256 92,727 60,529 104,319 129,319 118,210 11,109 111,658 111,658 104,558 7,100 595,959 595,959 347,406 248,553 194,638 194,638 181,563 13,075 632,895 632,895 520,018 112,877 3,886,352 3,886,352 2,952,097 934,255 - - 858,687 858,687 (858,687) (858,687) 15 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SCHEDULE OF REVENUES AND EXPENDITURES - BUDGET TO ACTUAL SPECIAL REVENUE RECORDS MODERNIZATION FUND FOR THE YEAR ENDED SEPTEMBER 30, 2017 Special Revenue Records Modernization Fund Variance Original Final Positive Budget Budget Actual (Negative) Revenues Charges for services $ 245,000 $ 245,000 $ 301,756 $ 56,756 Fines 152,500 152,500 130,152 (22,348) Interest income 14,500 14,500 26,386 11,886 Total revenues 412,000 412,000 458,294 46,294 Expenditures Current Clerk fines 607,676 607,676 555,911 51,765 Total expenditures 607,676 607,676 555,911 51,765 Excess of revenues (under) expenditures (195,676) (195,676) (97,617) 98,059 Fund balance, beginning of year 2,465,501 2,465,501 2,465,501 - Fund balance, end of year $ 2,269,825 $ 2,269,825 $ 2,367,884 $ 98,059 16 SUPPLEMENTARY INFORMATION Assets Cash and cash equivalents Due from other governmental agencies Due from others Due from other funds Total assets Liabilities Due to other governmental agencies Due to others Due to Board of County Commissioners Total liabilities MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SCHEDULE OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUND FOR THE YEAR ENDED SEPTEMBER 30, 2017 Balance October 1, 2016 Additions Deductions Balance September 30, 2017 $ 4,548,453 $ 43,308,414 $ 42,447,552 $ 5,409,315 400 35,446 15,965 19,881 5,235 17,165 17,538 4,862 84 53,964 54,048 - $ 4,554,172 $ 43,414,989 $ 42,535,103 $ 5,434,058 $ 838,733 $ 40,672,774 $ 40,764,874 $ 746,633 3,612,885 2,592,229 1,666,661 4,538,453 102,554 149,986 103,568 148,972 $ 4,554,172 $ 43,414,989 $ 42,535,103 $ 5,434,058 17 SUPPLEMENTARY REPORTS kae ff . Report of Independent Auditor on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards To the Honorable Kevin Madok Clerk of the Circuit Court of Monroe County, Florida We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to the financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of each major fund and the aggregate remaining fund information of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk") as of and for the year ended September 30, 2017, and the related notes to the financial statements, and have issued our report thereon dated March 15, 2018 for the purpose of compliance with Section 218.39(2), Florida Statutes and Chapter 10.550, Rules of the Auditor General -Local Governmental Entity Audits. Internal Control over Financial Reporting In planning and performing our audit of the financial statements, we considered the Clerk's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Clerk's internal control. Accordingly, we do not express an opinion on the effectiveness of the Clerk's internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Clerk's financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of the internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Clerk's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. 18 Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Clerk's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Clerk's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Orlando, Florida March 15, 2018 19 kaertt . Independent Auditor's Management Letter To the Honorable Kevin Madok Clerk of the Circuit Court of Monroe County, Florida Report on the Financial Statements We have audited the financial statements of the Monroe County, Florida Clerk of the Circuit Court (the "Clerk"), as of and for the year ended September 30, 2017 and have issued our report thereon dated March 15, 2018. Auditor's Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter 10.550, Rules of the Auditor General. Other Reports We have issued our Report of Independent Auditor on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards, and Report of Independent Accountant on Compliance with Local Government Investment Policies, Article V Requirements and Depository Requirements of Sections 218.415, 28.35, 28.36, and 61.181, Florida Statutes, regarding compliance requirements in accordance with Chapter 10.550, Rules of the Auditor General. Disclosures in those reports, which are dated March 15, 2018, should be considered in conjunction with this management letter. Prior Audit Findings Section 10.554(1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. We have addressed the status of findings and recommendations made in the preceding annual financial report in AppendixA attached to this letter. Official Title and Legal Authority Section 10.554(1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. The Clerk is a separately elected county official established pursuant to the Constitution of the State of Florida. There are no component units related to the Clerk. Financial Matters Section 10.554(1)(i)2., Rules of the Auditor General, requires that we address in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such recommendations. Additional Matters Section 10.554(1)(i)3., Rules of the Auditor General, requires that we address noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. 20 Purpose of This Letter The purpose of this management letter is to communicate certain matters prescribed by Chapter 10.550, Rules of the Auditor General. Accordingly, this management letter is not suitable for any other purpose. Orlando, Florida March 15, 2018 21 MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT MANAGEMENT LETTER COMMENTS (PRIOR YEAR) — APPENDIX A Finding 2016-001 LATE SUBMISSION OF REPORTS Observation: During Article V testing for 2016, it was noted that the Q3 and Q4 Collections Rate Quarterly Reports were both submitted past the 20th business day of the following month deadline. Q3 report (quarter ending June 30, 2016) was submitted August 3, 2016. Q4 report (quarter ending September 30, 2016) was submitted November 3, 2016. Current Year Follow-up: This issue has been resolved. No late submissions were noted in the current year that were due to the fault of the County. 22 01101 Ear ekaert � Report of Independent Accountant on Compliance With Local Government Investment Policies, Article V Requirements and Depository Requirements of Sections 218.415, 28.35, 28.36 and 61.181, Florida Statutes To the Honorable Kevin Madok Clerk of the Circuit Court of Monroe County, Florida We have examined the Monroe County, Florida Clerk of the Circuit Court's (the "Clerk's") compliance with the local government investment policy requirements of Section 218.415, Florida Statutes, Article V requirements of Sections 28.35 and 28.36, Florida Statutes, requirements of Section 61.181, Florida Statutes, for the year ended September 30, 2017. Management is responsible for the Clerk's compliance with those requirements. Our responsibility is to express an opinion on the Clerk's compliance based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the Clerk complied, in all material respects, with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the Clerk complied with the specified requirements. The nature, timing and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the Clerk's compliance with the specified requirements. In our opinion, the Clerk complied, in all material respects, with the local investment policy requirements of Section 218.415, Florida Statutes, Article V requirements of Section 28.35 and 28.36, Florida Statutes and requirements of Section 61.181, Florida Statutes, during the year ended September 30, 2017. The purpose of this report is to comply with the audit requirements of Section 218.415, Florida Statutes, Article V requirements of Sections 28.35 and 28.36, Florida Statutes, requirements of Section 61.181, Florida Statutes, and Rules of the Auditor General. Orlando, Florida March 15, 2018 23