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Fiscal Year 2017MONROE COUNTY, FLORIDA REPORT ON SCHEDULE OF PASSENGER FACILITY CHARGES AND REPORTS ON COMPLIANCE AND INTERNAL CONTROL As of and for the Year Ended September 30, 2017 MONROE COUNTY, FLORIDA TABLE OF CONTENTS 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 ........................................... 1 - 2 Report of Independent Auditor on Compliance with Requirements Applicable to the Passenger Facility Charge Program and on Internal Control over Compliance in Accordance with the Passenger Facility Charge Program Audit Guide_______________________________________________ 3-4 Schedule of Findings and Questioned Costs Passenger Facility Charges-------------------------------------------------- 5-6 Schedule of Passenger Facility Charges---------------------------------------------------------------------------------------------------- 7 Summary Schedule of Prior Year Findings-------------------------------------------------------------------------------------------------- 8 01111131i e . ,; . Octal 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 Mayor and Board of County Commissioners of Monroe County, Florida We have audited, in accordance with the 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, the financial statements of the governmental activities, the business - type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of Monroe County, Florida (the "County"), as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the County's basic financial statements, and have issued our report thereon dated March 29, 2018 for the purpose of compliance with Section 281.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General -Local Government Entity Audits. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the County'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 County's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the County'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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the County'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 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. 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 County's 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 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. 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 result of that testing, and not to provide an opinion on the effectiveness of the County'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 County's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Orlando, Florida March 29, 2018 01111131i e . ,; . Octal Report of Independent Auditor on Compliance with Requirements Applicable to the Passenger Facility Charge Program and on Internal Control Over Compliance in Accordance With the Passenger Facility Charge Program Audit Guide To the Honorable Mayor and Board of County Commissioners of Monroe County, Florida Report on Compliance for the Passenger Facility Charge Program We have audited Monroe County, Florida (the "County") compliance with the types of compliance requirements described in the Passenger Facility Charge Audit Guide for Public Agencies, issued by the Federal Aviation Administration (the "Guide"), for its passenger facility charge program (the "Program") for the year ended September 30, 2017. Management's Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor's Responsibility Our responsibility is to express an opinion on compliance for the Program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance 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 the Guide. Those standards and the Guide require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on the Program occurred. An audit includes examining, on a test basis, evidence about the County's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for the Program. However, our audit does not provide a legal determination of the County's compliance. Opinion on the Passenger Facility Charge Program In our opinion, the County complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on the Program for the year ended September 30, 2017. Report on Internal Control Over Compliance Management of the County is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the County's internal control over compliance with the types of requirements that could have a direct and material effect on the Program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance and to test and report on internal control over compliance in accordance with the Guide, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the County's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of the Program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of the Program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of the Program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance 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 compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Schedule of Passenger Facility Charges We have audited the financial statements of the governmental activities, the business type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the County, as of and for the year ended September 30, 2017, and the related notes to the financial statements, which collectively comprise the County's basic financial statements. We issued our report thereon dated March 29, 2018, which contained unmodified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the County's basic financial statements. The accompanying schedule of passenger facility charges is presented for purposes of additional analysis as required by the Guide and is not a required part of the basic 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 basic financial statements. The 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 basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of passenger facility charges is fairly stated in all material respects in relation to the basic financial statements as a whole. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Guide. Accordingly, this report is not suitable for any other purpose. Orlando, Florida March 29, 2018 MONROE COUNTY, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS PASSENGER FACILITY CHARGES YEAR ENDED SEPTEMBER 30, 2017 Part I. Summary of Auditor's Results Financial Statements Type of auditor's report issued: Unmodified Internal control over financial reporting: • Material weakness identified? _ yes X no • Significant deficiency identified that is not considered to be material weakness _ yes X none reported Noncompliance material to financial statements noted _ yes X no Passenger Facility Charges Internal control over passenger facility charges: ■ Material weakness identified? _ yes X no ■ Significant deficiency identified that is not considered to be material weakness _ yes X none reported Noncompliance material to passenger facility charges _ yes X no Does noncompliance warrant qualifying audit opinion for the major program? _ yes X no Nonmaterial noncompliance _ yes X no Type of auditor's report issued on compliance for passenger facility charges: Unmodified 5 MONROE COUNTY, FLORIDA SCHEDULE OF FINDINGS AND QUESTIONED COSTS PASSENGER FACILITY CHARGES YEAR ENDED SEPTEMBER 30, 2017 Part II. Financial Statement Findings None reported Part III. Passenger Facility Charges Findings None reported MONROE COUNTY, FLORIDA KEY WEST INTERNATIONAL AIRPORT SCHEDULE OF PASSENGER FACILITY CHARGES YEAR ENDED SEPTEMBER 30, 2017 Passenger facility charge receipts available for approved projects, beginning of year $ 5,861,477 Amounts collected and includable on quarterly reports 1,519,096 Investment income 61,725 Total passenger facility charge receipts available 7,442,298 Disbursement made (517,413) Passenger facility charge receipts available for approved projects, end of year $ 6,924,885 NOTE 1—BASIS OF PRESENTATION The accompanying Schedule was prepared for the purpose of complying with the Rules and Regulations of the Federal Aviation Administration relative to the Passenger Facility Charge Program and is not intended to be a complete presentation of the County's airport revenues, receipts, expenditures, or expenses. The accompanying Schedule was prepared on the modified cash basis of accounting. Passenger Facility Charge revenue is recorded when received rather than when earned and expenses are recorded when paid rather than when the obligation is incurred. Investments and investment income are recorded on the modified accrual basis and investments are valued at amortized cost. MONROE COUNTY, FLORIDA SUMMARY SCHEDULE OF PRIOR YEAR FINDINGS YEAR ENDED SEPTEMBER 30, 2017 Part II. Financial Statement Findings Finding 2016-001 Corrected.