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Fiscal Year 2005 MONROE COUNTY, FLORIDA TAX COLLECTOR Financial Statements For the Year Ended September 30, 2005 MONROE COUNTY, FLORIDA TAX COLLECTOR Table of Contents Page IndependentAuditors' Report.................................................................................................... 2 - 3 BASIC FINANCIAL STATEMENTS Balance Sheet - General Fund 4 Statement of Revenues, Expenditures and Changes in Fund Balance - General Fund 5 Statement of Fiduciary Assets and Liabilities - Agency Funds......................................... 6 Notes to Financial Statements 7 - 10 REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues and Expenditures - Budget and Actual - General Fund 11 OTHER SUPPLEMENTARY INFORMATION Agency Fund Descriptions.................................................................................................... 12 Combining Statement of Changes in Assets and Liabilities - All Agency Funds......................................................................................... 13 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...................................................................................14 - 15 Independent Auditors' Management Letter.........................................................................16 - 17 CERTIFIED PUBLIC ACCOUNTANTS& INDEPENDENT AUDITORS' REPORT To the Honorable Danise D. Henriquez, Tax Collector of Monroe County, Florida- We have audited the accompanying financial statements of the major fund and the aggregate remaining fund information of the Monroe County, Florida Tax Collector, (the uTax Collector") a of and forte year ended September 30, 2005, which collectively cornprlse the Tax ollector's ,sic financial statements as listed in the tableof contents. These financial statements are the responsibility of the Tax Collector°s management. Our responsibility is to express opinions o 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 byte Comptroller General of the United States. Those standards require that we plan and perform audit to obtain reasonable assurance about whether the financial statements are free of material. misstatement„ An auditincludes examining„ on a test basis„ evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used n significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. s discussed in Note 1, the accompanying financial statements were prepared for the purpose of complying with Section 21839(2), Florida Statutes„ and Chapter 10.550„ Rules of the Auditor General-Local Govemment rrttty Audits, and arenot 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 funs in conformity with accounting principles generally accepted in the United States of America. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the major fund andaggregate remaining fund Information of the Tax Collector as of September 30, 2005, and the respective changes in financial position thereof for the year then ended, in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we havealso issued our report dated February 1, 2006 on our consideration of the Tax Coliectores 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 In accordance with Government Auditing Standards, we have also issued our report dated February 1, 2006 on our consideration of the Tax Collector'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. 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. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Tax Collector's basic financial statements. The accompanying combining statement of changes in assets and liabilities — all agency funds is presented for purposes of additional analysis and is not a required part of the basic financial statements. This combining statement has been subjected to the auditing procedures applied by us in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. 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. West Palm Beach, Florida February 1, 2006 3 BASIC FINANCIAL STATEMENTS MONROE COUNTY, FLORIDA TAX COLLECTOR Balance Sheet - General Fund Year Ended September 30, 2005 ASSETS Cash and cash equivalents $ 2,968,967 Due from other governments 10,086 Total assets $ 2,979,053 - -------------- Liabilities and Fund Balances LIABILITIES Accounts payable $ 13,474 Accrued wages and benefits payable 102,803 Due to Board of County Commissioners 2,585,746 Due to other governmental units 277,030 Total liabilities 2,979,053 Fund Balance - Total liabilitiesand Fund balance 2,979,053 The notes to the financial statements 4 are an integral part of this statement. MONROE COUNTY, FLORIDA TAX COLLECTOR Statement of revenues, Expenditures and Changes in Fund Balance General Fund Year Ended September 30, 2005 Revenues: Charges for services 5,932,818 Total revenues 5r932m6118 Expenditures: Current: General government- Personnel services 2,448,619 Operating expenditures 598,207 Capital outlay 17,230 Debt Service- Principal 5,986 Total expenditures 3,070,042 Excess of revenues over expenditures 2u362p776 Other financing sources (uses): Transfer to Board of County Commissioners (2,585,746) Transfer-to other governmental units 277,030 Total other financing uses (2u5621,776) Excess of revenues over expenditures and other financing uses Fund balance at the beginning of the year Fund balance at the end of the year The notes to the financial statements 5 are an integral part of this statement. MONROE COUNTY, FLORIDA TAX COLLECTOR Statement of Fiduciary Assets and Liabilities Agency Funds Year Ended September 30, 2005 Assets Cash and cash equivalents $ 3,987,336 Due from individuals 2,812 Total assets $ 3,990,148 Liabilities Undistributed collections $ 3,979,767 Due to individuals 10,381 Total liabilities $ 3,990,148 The notes to the financial statements 6 are an integral part of this statement. MONROE COUNTY, FLORIDA TAX COLLECTOR Notes to Financial Statements Year Ended September 30, 2005 to I - Summary of significant accounting policies ReporWng Entity — The Monroe County, Florida Tax Collector (the "Tax Collector') is a separately elected county official established pursuant to the Constitution of the State of Florida. The Tax Collector'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 39 of the Governmental Accounting Standards Board (GASB). Although the Tax Collector'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 Tax Collector is reported as a part of the primary government of the County. Description of Funds - The accounting records are organized for reporting purposes on the basis of a governmental fund and fiduciary funds. General Fund— The General Fund is used to account for all revenues and expenditures applicable to the general operations of the Tax Collector and not required legally or by accounting standards generally accepted in the United States of America to be reported elsewhere. Fiduciary Funds — Fiduciary funds of the Tax Collector are Agency Funds, which are used to account for assets held by the Tax Collector as an agent. Measurement focus, basis of accounting, and financial statement presentation —The Tax Collector's financial statements are prepared for the purpose of complying with Section 218.39(2), Florida Statutes, and Chapter 10.550, Rules of the Auditor General-Local Governmental Entity Audits, which require the Tax Collector to only present fund financial statements. The General Fund is a governmental fund which 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 government 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 General Fund expenditures is reflected as transfers out and as liabilities to the Monroe County Board of County Commissioners (the "BOCC") and to other governmental agencies in the same proportions as the fees paid by each governmental unit to total fees earned by the Tax Collector. 7 MONROE COUNTY, FLORIDA TAX COLLECTOR Notes to Financial Statements Year Ended September 30, 2005 Note 1 a Summary of significant accounting policies (continued) The Tax Collector reports the General Fund as a major governmental fund and agency funds fiduciary fund types. Agency funds arecustodial in nature and do not involve measurement of results and operations, udgetary® Requirements — Expenditures are controlled by budget appropriations in accordance with the budget requirements set forth in the Florida Statutes. The budget is prepared on a basis consistent with accounting principles generally accepted in the United) States of America. Cash and Cash Equivalents ® The Tax Collector"s cash and cash equivalents consist of demand deposits and highly liquid investments with maturities of 90 days or less when purchased. All investments are reported at fair valued Capital Assets — Tangible personal property used in the Tax Collector'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 administrative office space used by the Tax Collector at no charge. Compensated Absences — The Tax Collector permits employees to accumulate earned but unused vacation and sick pay benefits, Related long-term obligations, amounting to $85,554 a September 30, 2005# 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. Deposits and Investments As of September 30, 2005, the Tax Collector has the following deposits and investments: Demand deposits 466,20 Repurchase agreements 6„4 0,096 Total cash and cash equivalents 6,956,303 Florida Statutes and the Tax Collectors investment policy authorize investments in certificates of deposit, savings accounts, repurchase agreements, Local Government Surplus Funds Trust Funds, and obligations of the U.S. Government and government agencies unconditionally guaranteed by the U.S. Government. MONROE COUNTY, FLORIDA TAX COLLECTOR Motes to Financial Statements Year Ended September 30, 200 Note 3—Retirement system Plan Description—The Tax Collector°s employees participate in the Florida Retirement system ("FRS"), a multiple-employer cost-sharing defined benefit retirement plan administered by the Florida Department of Administration. 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 StateFloridan The FRS provides retirement and disability benefits„ annual cost-of living adjustments, and deathbenefits to plan members and beneficiaries. Benefits are established by Chapter 121, Florida Statutes„ and Chapter 60S, Florida Administrative Cade. Amendments -to the law can be made only by an act of the Florida Legislature. Benefits 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 areentitled to a retirement benefit payable monthly for life, equal to 1.6% of their final average compensation for each year of credited service,. 'bested employees with less than 30 years of serviice may retire before age 62 and receive reduced retirement benefits. Special risk class employees (sworn law enforcement officers, firefighters, and correctional officers) who retire at or after age 55 with 6 years of credited service„ or with 25 years of service regardless of age, are entitled to a retirement benefit payable monthly for life, equal to 3% 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, Effective July 1, 1998, the Legislature established a Deferred Retirement Option Program ("DROP").P"). This program allows eligible employees to defer receipt of monthly retirement benefit payments while continuing employment with a Florida Retirement System employer for a period not to exceed 60 months after electing to participate. Deferred monthly benefits are held in the Florida Retirement System Trust Fund and accrue interest.. The State of Florida annually issues a publicly mailable financial report that includes financial statements and required supplementary information for the FRS. The latest mailable report may be obtained by writing 'to the State of Florida Division of Retirement, Department of Management Services„ 2639 ortMonroe Street, Buildings C, Tallahassee„ Florida 32299-1560 or accessing their interest site at www.frs.state,fi.us. Funding Poffcy — The FIRS is noncontributory for members. Governmental employers are required to make contributions tote FRS based on state mide contribution rates. The contribution rates by job class at September 30, 2005 were as follows. reguilar, 7.63%, special risk, 16.53%; special risk administrative support, 9.92%/ county elected) officers, 15.23%," senior management, 10.45%; and DROP participants, 9,33%. During the fiscal year ended September 30, 2005, the Tax Collector contributed to the Flan an amount equal to 6. 1% o covered payroll. Tax Collector contributions to the FRS for the fiscal years ended September 30, 2003 through 2005 were126,716, $151,873 and $169,139 respectively, which re equal to the required contributions for each fiscal year. The Tax Collector has historically contributed amounts equal to required contributions and, therefore„ does not have a pension asset or liability as determined in accordance with LASS Statement No. 27. 9 MONROE COUNTY, FLORIDA TAX COLLECTOR Notes to Financial Statements Year Ended September 30, 2005 Note 4— Risk management The Tax Collector 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 Tax Collector participates in the coverage provided by the Board of County Commissioners for Worker's Compensation, Group Insurance, and Risk Management internal service funds. Under these programs, Worker's 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 value of the buildings with a deductible between $100,000 and $250,000. Deductibles for windstorm and flood vary by location. The County purchases commercial insurance for claims in excess of coverage provided by the funds and for all other risks of loss. Settled claims have not exceeded this commercial coverage in any of the past three years. The Tax Collector makes payments to the Worker's Compensation and Group Insurance Funds based on estimates of the amounts needed to pay prior and current year claims. Note 5— Commitments Note Payable— The Tax Collector borrowed $29,929 for a vehicle purchase during fiscal 2004 under a non-interest bearing note payable, due in monthly installments of$499 through October 2008. The note payable balance of $19,454 at September 30, 2005 is included as a long-term obligation in the government wide financial statements of the County. Operadng Leases— The Tax Collector leases office space under operating lease agreements. Total lease payments made in 2005 were $87,815. The following is a schedule by years of loan payments and future minimum rentals under noncancelable operating leases as of September 30, 2005: Year Ending Lease Loan September 30, Payments Payments 2006 $ 63,240 $ 5,988 2007 63,621 5,988 2008 55,529 5,988 2009 52,788 1,490 2010 112,816 Total $ 347,994 $ 19,454 10 REQUIRED SUPPLEMENTARY INFORMATION MONROE COUNTY, FLORIDA TAX COLLECTOR Schedule of Revenues and Expenditures-Budget and Actual General Fund Year ended September 3O.2OU5 General Fund Variance with Final Budget Budget Positive Original Final Actual Revenues: Charges for services Total revenues 4908340 4.990.340 5932818 930478 Expenditures: Current: General government: Personnel services 2.563.390 2.586.617 2.448.619 137.998 Operating expenditures 770.461 764.061 598.207 166.454 Capital outlay 5.986 23.210 17.230 5.980 Qebtaen,ioe-Phnoipa| - - 598 Total expenditures 3330837 3374494 3070042 30A'A 52 Other financing sources (uses): Transfer Vn Board of County Commissioners (1.656.503) (1.021.846) (2.585.740) (983.900) Transfer to other governmental units - ' Total other financing sources(ueee) ------------ Exueesmfrevenues over expenditures $ - $ - OTHER SUPPLEMENTARY INFORMATION MONROE COUNTY, FLORIDA TAX COLLECTOR Agency Fund Descriptions The Combining Statement of Changes in Assets and Liabilities—All Agency Funds is presented on the following page. The purpose of each fund shown on this statement is described below. Property Tax Agency Fund— To account for the collection and distribution of local property tax funds. Licenses Agency Fund — To account for the collection and distribution of funds generated from the sale of miscellaneous state licenses. 12 MONROE COUNTY, FLORIDA TAX COLLECTOR Combining Statement of Changes in Assets and Liabilities All Agency Funds Year Ended September 30, 2005 Balance Balance September 30, September 30, 2004 Additions Deletions 2006 Property Tax Agency Assets: Cash and cash equivalents $ 3,626,910 $213,561,856 $213,395,687 $ 3,793,079 Due from individuals 282 - 257 25 $ 3,627,192 $213,561,856 $213,395,944 $ 3,793,104 Liabilities: Undistributed c6lections $ 3,620,877 $208,630,357 $208,467,412 $ 3,783,822 Due to individuals ............��1315� 4,9311,499 4,928,532 9,,282 $ 3,627,192 $213,561,856 $213,395,944 $ 3,793,104 Licenses Agency Fund: Assets: Cash and cash equivalents $ 286,642 $ 12,081,497 $ 12,173,882 $ 194,257 Due from individuals 2,080 707 - 2,787 $ 288,722 $ 12,082,204 $ 12,173,882 $ 197,044 Liabilities: Undistributed collections $ 286,605 $ 12,057,748 $ 12,148,408 $ 195,945 Due to individuals 2,117 24,456 25,474 1,099 $ 288,722 $ 12,082,204 $ 12,173,882 $ '197,044 Total -All Agency Funds Assets: Cash and cash equivalents $ 3,913,552 $225,643,353 $225,569,569 $ 3,987,336 Due from indi0duals 2,362 707 257 2,8112 $ 3,915,914 $225,64,060 $225,569,826 $ 3,990,148 .............. Liabilities: Undistributed c6lections $ 3,907,482 $220,688,105 $220,615,820 $ 3,979,767 Due to indlvidLWIS 8,4432 4,955,955 4,954,006 10,381 $ 3,915,914 $225,CA4,060 $225,569,826 $ 3,990,148 13 SUPPLEMENTARY INDEPENDENT AUDITORS' REPORTS 10 INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS RASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Danise D. Hendque „ Tax Collector of Monroe County, Florida: e have audited the financial statements of the major fund andaggregate remaining fun information of the Monroe County, Florida Tax Collector (the "Tax Collector") as of and for the year ended September 30, 2005, which collectively comprise the Tax Collector's basic financial statements, and have issued our report thereon dated February 1, 2006 for the purpose o compliance with Section 216.3 (2), Florida Statutes, and Chapter 10.5510, Rules of the Auditor General-Local Governmental E17tity 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 Generai of the United States. Internal Control over Financial Reporting In planning and performing our audit considered the Tax Collector's internal control over financial reporting in order to determine our auditing procedures forte purpose of expressing our opinions 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 to 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 functiionsw 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 Tax Collector's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, and contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts, However, providinig an opinion on compliance with thoseprovisions was riot an objective of our audit, and accordiingly, o not express such an opinion„ The results of our tests disclosed no instances of noncompliance or other matters that arerequired to be reported under Govemment Auditing Standards, 14 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. West Palm Beach, Florida February 1, 2006 15 INDEPENDENT AUDITORS' MANAGEMENT LETTER To the Honorable Danise D. Idenriquez& Tax Collector of Monroe County„ Florida. We have audited the financial statements of the major fund and the aggregate remaining fund information of the Monroe County, Florida 'Tax Collector (the "TaxCollector"), as of and for the year ended September 30, 2005„ which collectively comprise the Tax Collectors basic financial statements„ and have issued our report thereon dated February 1, 2006 forte purpose of compliance with Section 218,,39(2)U Florida Statutes„ and Chapter 10„550, Rules of the Auditor enerat-vocal Governmental Entity Audits. e 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 Compliance and Other flatters Eased on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards„ dated February '1„ 2006„ and it should be considered in conjunction with this management letter. Additionally„ our audit was conducted) in accordance with Chapter 101.550„ Rules of the Auditor General. Those rules (Section 10a554(1)(h)l) require that we address in the management letter whether of riot corrective actions have been taken to address significant find'inigs and recommendations made in the preceding annual financial audit report, No recommendations were made irm the preceding annual financial audit report. The Ruies of the Auditor General (Section 10a554(1)(h)2) state that a management letter shall have a statement as to whether or not the Tax Collector complied with Section 218.415, Florida Statutes„ regarding the investment of public funds. In connection with our audit of the finanicial statements of the Tax Collector„ the results of our tests did not 'indicate that the Tax Collector was in noncompliance with Section 218.415 regarding the investment of public fiends. The Rules of the Auditor General (Section 10.554(1)(h)3) require disclosure in the management letter of any recommendations to improve the Tax Collector's financial management„ accounting procedures„ and internal controls. 'There were no recommendations in connection with the fiscal 2005 financial statement audit. 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„ report on compliance and internal controls. (1) violations of laws, rules„ regulations, and contractual provisions that have occurred„ or are likely to have occurred; ( ) 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 n ( ) other inaccuracies„ shortages„ defalcations, and instances of frauddiscovered by, or that come to the attention of, the auditor. There were no such matters noted.. 1 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 Tax Collector is a separately elected county official established pursuant to the Constitution of the State of Florida. There are no component units related to the Tax Collector. This management letter 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. Moa-�' West Palm Beach, Florida February 1, 2006 17