Fiscal Year 2006 MONROE COUNTY, FLORIDA
PROPERTY APPRAISER
Financial Statements
For the Year Ended
September 30, 2006
MONROE COUNTY, FLORIDA
PROPERTY APPRAISER
Contents
Page
Independent Auditors' Report_____________ 2 - 3
BASIC FINANCIAL STATEMENTS
Balance Sheet—General Fund 4
Statement of Revenues, Expenditures and Changes in
Fund Balances - General Fund 5
Notes to Financial Statements 6 — 10
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REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues and Expenditures - Budget and Actual 11-
General Fund
- -------------------------------
SUPPLEMENTARY INDEPENDENT AUDITORS' REPORTS
Independent Auditors' Report on Internal Control over
Financial Reporting and on Compliance and Other Matters
Based on an Audit of Financial Statements Performed
in Accordance with Government Auditing Standards______ _______________ _______________________ 12 - 13
Independent Auditors' Management Letter--------------------------------------------------------------------- 14 - 15
i
CVRT)V1LD PUBLIC
ACCOUNTANTS
CONSULTANTS
INDEPENDENT AUDITOR'S REPORT
To the Honorable Ervin A. Higgs,
Property Appraiser of Monroe County, Florida:
We have audited the accompanying financial statements of the major fund of the Monroe
County, Florida Property Appraiser (the "Property Appraiser"), as of and for the year ended
September 30, 2006, which comprise the Property Appraiser's basic financial statements as
listed in the table of contents. These financial statements are the responsibility of the Property
Appraiser's management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
As discussed in Note 1, the accompanying financial statements were prepared for the purpose
of complying with Section 218.39(2), Florida Statutes, and Chapter 10,550, Rules of the Auditor
General-Local Governmental Entity Audits, and are not intended to be a complete presentation
of the financial position of Monroe County, Florida, and the results of its operations and the cash
flows of its proprietary funds in conformity with accounting principles generally accepted in the
United States of America.
In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the major fund of the Property Appraiser as of September 30, 2006, and
the changes in its financial position thereof for the year then ended, in conformity with
accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated
January 18, 2007 on our consideration of the Property Appraiser's internal control over financial
reporting and our tests of its compliance with certain provisions of laws, regulations, contracts,
and grant agreements and other matters. The purpose of that report is to describe the scope of
our testing of internal control over financial reporting and compliance and the results of that
testing, and not to provide an opinion on the internal control over financial reporting or on
compliance. . That report is an integral part of an audit performed in accordance with
Government Auditing Standards and should be considered in assessing the results of our audit.
2
The budgetary comparison schedule on page 11 is not a required part of the basic financial
statements but is supplementary information required by the Governmental Accounting
Standards Board. We have applied certain limited procedures, which consisted primarily of
inquiries of management regarding the methods of measurement and presentation of the
required supplementary information. However, we did not audit the information and we express
no opinion on it.
This report is intended solely for the information and use of management and applicable state
agencies, and is not intended to be and should not be used by anyone other than these
specified parties.
Orlando, Florida
January 18, 2007
3
BASIC FINANCIAL STATEMENTS
MONROE COUNTY, FLORIDA
PROPERTY APPRAISER
Balance Sheet
General Fund
September 30, 2006
Assets
Cash and cash equivalents $ 649,578
Total assets $ 649,578
Liabilities and Fund Balance
Liabilities:
Accounts payable $ 7,277
Accrued wages and benefits payable 56,283
Due to Board of County Commissioners 504,295
Due to other governmental units 81,723
Total liabilities 649,578
Fund balance -
Total liabilities and fund balance $ 649,578
The notes to the financial statements
are an integral part of this statement. 4
MONROE COUNTY, FLORIDA
PROPERTY APPRAISER
Statement of Revenues, Expenditures and Changes in Fund Balances
General Fund
Year Ended September 30, 2006
Revenues:
Charges for services
Board of County Commisioners $ 2,861,962
Other taxing districts 755,298
Investment income 26,285
Miscellaneous 7,053
Total revenues 3,650,598
Expenditures:
Current:
Personnel services 2,401,076
Operating expenditures 586,751
Capital outlay 76,753
Total expenditures 3,064,580
Other financing uses:
Transfers to Board of County Commissioners (504,295)
Transfers to other governmental units (81,723)
Total other financing uses (586,018)
Excess of revenues over expenditures -
Fund balance, beginning of year -
Fund balance, end of year $ -
The notes to the financial statements
are an integral part of this statement. 5
MONROE COUNTY, FLORIDA
PROPERTY APPRAISER
Notes to Financial Statements
Year Ended September 30, 2006
Note 1 —Summary of significant accounting policies
Reporting Entity— The Monroe County, Florida Property Appraiser (the "Property Appraiser")
is a separately elected county official established pursuant to the Constitution of the State of
Florida. The Property Appraiser's financial statements do not purport to reflect the financial
position or the results of operations of Monroe County, Florida (the"County)taken as a whole.
Entity status for financial reporting purposes is governed by Statements No. 14 and No. 39 of
the Governmental Accounting Standards Board (GASB). Although the Property Appraiser's
Office is operationally autonomous, it does not hold sufficient corporate powers of its own to be
considered a legally separate entity for financial reporting purposes. Therefore, the Property
Appraiser is reported as a part of the primary government of the County.
Measurement focus, basis of accounting, and financial statement presentation - The o
Supervisor of Elections' financial statements are prepared for the purpose of complying with z
Section Florida Statutes, and Chapter Rules of the Auditor General-Local
Governmental Entity Audits, which require the Property Appraiser to only present fund financial
statements. The General Fund is used to account for all revenues and expenditures applicable
to the general operations of the Property Appraiser. This fund is presented as a major
governmental fund and uses 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
Property Appraiser 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.
The extent to which General Fund revenues exceed expenditures is reflected as transfers out
and as liabilities to the Monroe County Board of County Commissioners (the "Board") and other
governmental agencies in the same proportion as fees paid by each governmental unit to total
fees earned by the Property Appraiser.
Budgetary Requirements — Expenditures are controlled by budget appropriations in
accordance with the 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.
Cash and Cash Equivalents and Investments — The Property Appraiser's presents as cash
and cash equivalents all demand deposits and other highly liquid investments with maturities of
90 days or less when purchased. Cash and cash equivalents consist of cash on hand and
demand deposits.
6
' MONROE COUNTY, FLORIDA
PROPERTY APPRAISER
Notes to Financial Statements
Year Ended September 30, 2006
Note 1 —Summary of significant accounting policies (continued)
Capital Assets — Tangible personal property used in the Property Appraiser's operations are
recorded as expenditures in the General Fund at the time assets are received and a liability is
incurred. Purchased assets are capitalized at historical cost in the government-wide financial
statements of the County. In addition, the Board provides office space used by the Property
Appraiser at no charge.
Compensated Absences — The Property-Appraiser permits employees to accumulate earned
but unused vacation and sick pay benefits. Related long-term obligations amounting to
$183,134 at September 30, 2006, are included in the government-wide financial statements of
the County.
Use of Estimates- The preparation of financial statements requires management to make use
of estimates that affect reported amounts. Actual results could differ from estimates.
Note 2— Deposits and Investments
As of September 30, 2006, the Property Appraiser has demand deposits of$649,578.
Demand and time deposits are fully insured by the Federal Deposit Insurance Corporation or
are covered by the State of Florida collateral pool, a multiple institution pool with the ability to
assess its members for collateral if a member institution fails.
Florida Statutes and the Property Appraiser's investment policy authorize investments in
certificates of deposit, savings accounts, repurchase agreements, 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.
Note 3— Retirement system
Plan Description — The Property Appraiser's employees participate in the Florida Retirement
System ("FRS"), administered by the Florida Department of Administration. Employees elect to
participate in either the defined benefit plan ("Pension Plan"), a cost sharing, multiple-employer,
defined benefit retirement plan, or the defined contribution plan (Investment Plan) under the
FRS. As a general rule, membership in the FRS is compulsory for all employees working in a
regularly established position for a state agency, county government, district school board, state
university, community college, or a participating city or special district within the State of Florida.
The FRS provides retirement and disability benefits, annual cost-of living adjustments, and
death benefits to Plan members and beneficiaries. Benefits are established by Chapter 121,
Florida Statutes, and Chapter 60S, Florida Administrative Code. Amendments to the law can be
made only by an act of the Florida Legislature.
7
I`
MONROE COUNTY, FLORIDA
PROPERTY APPRAISER
Notes to Financial Statements
Year Ended September 30, 2006
Note 3— Retirement system (continued)
Benefits under the Pension Plan are computed on the basis of age, average final compensation,
and service credit. Regular class employees who retire at or after age 62 with 6 years of
credited service or 30 years of service regardless of age are entitled to a retirement benefit
payable monthly for life, equal to 1.6% of their final average compensation for each year of
credited service. Vested employees with less than 30 years of service may retire before age 62
and receive reduced retirement benefits. Special risk class employees (swom law enforcement
officers, firefighters, and correctional officers) who retire at or after age 56 with 6 years of
credited service, or with 25 years of service regardless of age, are entitled to a retirement
benefit payable monthly for life equal.to 3.0% of their final average compensation for each year
of credited service. Senior Management Service class employees who retire at or after age 62
with at least 6 years of credited service or 30 years of service regardless of age are entitled to a
retirement benefit payable monthly for life, equal to 2.0% of their final average compensation for
each year of credited service. Elected Officers' class employees who retire at or after age 62
with at least 6 years of credited service or 30 years of service regardless of age are entitled to a
retirement benefit payable monthly for life, equal to 3.0% (3.33% for judges and justices) of their
final average compensation for each year of credited service. A post-employment health
insurance subsidy is also provided to eligible retired employees through the FRS in accordance
with Florida Statutes.
In addition to the above benefits, the FRS administers a Deferred Retirement Option Program
("DROP"). This program allows eligible employees to defer receipt of monthly retirement benefit
payments while continuing employment with a FRS employer for a period not to exceed
60 months after electing to participate. Deferred monthly benefits are held in the FRS Trust
Fund and accrue interest.
For employees electing to participate in the Investment Plan rather than the Pension Plan,
vesting occurs at one year of service. These participants receive a contribution of self-direction
in an investment product with a third party administrator selected by the State Board of
Administration.
The State of Florida annually issues a publicly available financial report that includes financial
statements and required supplementary information for the FRS. The latest available report may
be obtained by writing to the State of Florida Division of Retirement, Department of
Management Services, 2639 North Monroe Street, Building C, Tallahassee, Florida 32299-1560
or accessing their internet site at www.frs.state.fl.us.
B
MONROE COUNTY, FLORIDA
PROPERTY APPRAISER
Notes to Financial Statements
Year Ended September 30, 2006
Note 3— Retirement system (continued)
Funding Policy -- The FRS is noncontributory for members. Governmental employers are
required to make contributions to the FRS based on statewide contribution rates. The
contribution rates by job class at September 30, 2006 were as follows: regular, 9.85%; special
risk, 20.92%; special risk administrative support, 12,55%; county elected officers, 16.53%;
senior management, 13.12%; and DROP participants, 10.91%. These rates, which became
effective on July 1, 2006, represented a significant increase for all job classes, as compared to
the rates that were in effect for the first nine months of the 2006 fiscal year. During the fiscal
year ended September 30, 2006, the Property Appraiser contributed to the Plan an amount
equal to 8.96% of covered payroll. Property Appraiser contributions to the FRS for the fiscal
years ended September 30, 2004 through 2006 were $136,035, $152,603 and $182,655,
respectively, which were equal to the required contributions for each fiscal year. The Property
Appraiser has historically contributed amounts equal to required contributions and, therefore,
does not have a pension asset or liability as determined in accordance with GASS Statement
No. 27.
Note 4— Risk management
The Property Appraiser 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 Property Appraiser 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 $1,000,000 coverage per claim for regular
employees. Risk Management has a $5,000,000 excess insurance policy for general liability
claims with a $100,000 self insured retention, and building property damage is covered for the
actual cost of the buildings with a deductible between $100,000 and $250,000. 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 Property
Appraiser 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 5- Commitments
Operating Leases — The Property Appraiser has entered into noncancelable lease
commitments for office equipment. Total lease expenditures amounted to $28,409 during the
year ended September 30, 2006. The following is a schedule by years of minimum future
obligations under the leases:
2007 $ 10,896
2008 7,518
2009 3,570
Total $ 21,984
9
MONROE COUNTY, FLORIDA
PROPERTY APPRAISER
Notes to Financial Statements
Year Ended September 30, 2006
Note 6— Litigation
The Property Appraiser is a parry 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 Property Appraiser's financial position.
10
REQUIRED SUPPLEMENTARY INFORMATION
MONROE COUNTY,FLORIDA
PROPERTY APPRAISER
Schedule of Revenues and Expenditures
Budget and Actual-General Fund
Year Ended September 30,2006
General Fund
Variance with
Final Budget
Original Final Positive
Budget Budget Actual (Negative)
Revenues:
Charges for services:
Board of County Commissioners $ 2,856,881 $ 2,861,962 $ 2,861,962 $
Other taxing districts 755,298 755,298 755,298 -
Investment income - - 26,285 26,285
Miscellaneous - 7,053 7,053
Total revenues 3,612,179 3,617,260 3,650,598 33,338
Expenditures:
Current:
Personnel services 2,684,581 2,689,662 2,401,076 298,586
Operating expenditures 686,528 686,528 586,751 99,777
Capital outlay 241,070 241,070 76,753 164,317
Total expenditures 3,612,179 3,617,260 3,064,580 552,680
Other financing uses:
Transfers to Board of County Commissioners - - (504,295) (504,295)
Transfers to other governmental units - - (81,723) (81,723)
Total other financing uses - - (586,018) (586,018)
Excess of revenues over expenditures - - - -
Fund balance,beginning of year - - -
Fund balance,end of year $ - $ $ - $
11
SUPPLEMENTARY INDEPENDENT
AUDITORS' REPORTS
CONSUETANIS
INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Ervin A. Higgs,
Property Appraiser of Monroe County, Florida:
We have audited the financial statements of the major fund of the Monroe County, Florida
Property Appraiser (the "Property Appraiser") as of and for the year ended September 30, 2006,
which collectively comprise the Property Appraiser's basic financial statements, and have
issued our report thereon dated January 18, 2007 for the purpose of compliance with Section
218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General-Local
Governmental Entity Audits.. We conducted our audit in accordance with auditing standards
generally accepted in the United States of America and the standards applicable to financial
audits contained in Government Auditing Standards, issued by the Comptroller General of the
United States.
Internal Control over Financial Reporting
In planning and performing our audit, we considered the Property Appraiser's internal control
over financial reporting in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and not to provide assurance on the internal
control over financial reporting. Our consideration of the internal control over financial reporting
would not necessarily disclose all matters in the internal control over financial reporting that
might be material weaknesses. A material weakness is a reportable condition in which the
design or operation of one or more of the internal control components does not reduce to a
relatively low level the risk that misstatements caused by error or fraud in amounts that would
be material in relation to the financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of performing their assigned functions.
We noted no matters involving the internal control over financial reporting and its operations that
we consider to be material weaknesses.
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Property Appraiser'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.
12
This report is intended solely for the information and use of management and applicable state
agencies, and is not intended to be and should not be used by anyone other than these
specified parties.
Orlando, Florida
,January 18, 2007
13
CKRTIFIED PUBLIC
INDEPENDENT AUDITORS' MANAGEMENT LETTER
To the Honorable Ervin A. Higgs,
Property Appraiser of Monroe County, Florida:
We have audited the financial statements of the Monroe County, Florida Property Appraiser(the
"Property Appraiser"), as of and for the year ended September 30, 2006, which collectively
comprise the Property Appraiser's basic financial statements, and have issued our report
thereon dated January 18, 2007 for the purpose of compliance with Section 218.39(2), Florida
Statutes, and Chapter 10.550, Rules of the Auditor General-Local Governmental Entity Audits.
We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. We have issued
our Independent Auditors' Report on Internal Control Over Financial Reporting and on
Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards, dated January 18, 2007, and it should be
considered in conjunction with this management letter.
Additionally, our audit was conducted in accordance with Chapter 10.550, Rules of the Auditor
General. Those rules (Section 10.554(1)(h)l) require that we address in the management letter,
if not already addressed in the auditors' report on internal control over financial reporting,
compliance and other matters, whether or not corrective actions have been taken to address
significant findings and recommendations made in the preceding annual financial audit report.
There were no recommendations in the preceding year's annual financial audit report.
The Rules of the Auditor General (Section 10.554(1)(h)2) state that a management letter shall
have a statement as to whether or not the Property Appraiser complied with Section 218.415,
Florida Statutes, regarding the investment of public funds. In connection with our audit of the
financial statements of the Property Appraiser, the results of our tests did not indicate that the
Property Appraiser was in noncompliance with Section 218.415 regarding the investment of
public funds.
The Rules of the Auditor General (Section 10.554(1)(h)3) require disclosure in the management
letter of any recommendations to improve the Property Appraiser's financial management,
accounting procedures and internal controls. There were no recommendations in connection
with the fiscal 2006 financial statement audit.
14
h
The Rules of the Auditor General (Section 10.554(1)(h)4) require disclosure in the management
letter of the following matters if not already addressed in the auditors' reports on compliance
and internal controls: (1) violations of laws, rules, regulations, and contractual provisions that
have occurred, or are likely to have occurred; (2) improper or illegal expenditures; (3) improper
or inadequate accounting procedures (e.g., the omission of required disclosures from the
financial statements); (4) failures to properly record financial transactions; and (5) other
inaccuracies, shortages, defalcations, and instances of fraud discovered by, or that come to the
attention of, the auditor. There were no such matters noted.
The Rules of the Auditor General (Section 10.554(1)(h)5) also require that the name or official
title and legal authority for the primary government and each component unit of the reporting
entity be disclosed in the management letter, unless disclosed in the notes to the financial
statements. The Property Appraiser is a separately elected county official established pursuant
to the Constitution of the State of Florida. There are no component units related to the Property
Appraiser.
This report is intended solely for the information and use of management, the State of Florida
Office of the Auditor General, and applicable state agencies, and is not intended to be and
should not be used by anyone other than these specified parties.
Orlando, Florida
January 18, 2007
15
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F ti� v y MONROE COUNTY PROPERTY APPRAISER
fi
1►J .�*•� y� COUNTY COURTHOUSE P.O. BOX 1176
°01"` KEY WEST, FLORIDA 33041
CFA PHONE (305) 292-3420
ERVIN A. HIGGS, CY A.-CRA
March 20, 2007
Department of Financial Services
Bureau of Local Government Finance
Room 1001 Capitol Building
Tallahassee, Florida 32399-0350
RE: Management Audit Response
Dear Sir:
In response to the Auditors Report on internal control for fiscal year 2005-2006,please
find the following:
There were no findings for the fiscal year 2005-2006
If you require any further information,please feel free to contact our office-
Sincerely,
a
ERVIN A. HIGGS, C.F.A.-C
MONROE COUNTY PROPERTY APPRAISER
EAHJlk
MEMBER
PROFESSIONAL APPRAISERS ASSOCIATION OF FLORIDA
FLORIDA ASSOCIATION OF PROPERTY APPRAISERS-•INTERNATIONAL ASSOCIATION OF ASSESSING OFFICERS
NATIONAL ASSOCIATION OF REVIEW APPRAISERS