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Fiscal Year 2022 Monroe County, Florida Report on Passenger Facility Charge Program in Accordance with Passenger Facility Charge Audit Guide for Public Agencies Fiscal Year Ended September 30, 2022 Contents Independent auditor's report 1-2 Schedules of passenger facility charge program: Schedule of passenger facility charges receipts and disbursements 3 Notes to schedule of passenger facility charges receipts and disbursements 4 Report on internal control over financial reporting and on compliance and other matters based on an audit of the schedule of passenger facility charges receipts and disbursements performed in accordance with Government Auditing Standards 5-6 Report on compliance with requirements applicable to the passenger facility charge program and on internal control over compliance in accordance with the Passenger Facility Charge Guide for Public Agencies 7-9 Schedule of findings and questioned costs 10 Summary of prior audit findings 11 Illl�lll�� 1��111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 RSM RSM US q,,LP Independent Auditor's Report To the Honorable Board of County Commissioners Monroe County, Florida Report on the Audit of the Schedule of the Passenger Facility Charges Receipts and Disbursements We have audited the accompanying schedule of the Passenger Facility Charges Receipts and Disbursements (the Schedule)of Monroe County, Florida (the County)for the passenger facility charge program for the year ended September 30, 2022, and the related notes (the Schedule). In our opinion, the accompanying Schedule presents fairly, in all material respects, the passenger facility charges collected and expended by the County for the passenger facility charge program for the year ended September 30, 2022, in accordance with the cash basis of accounting described in Note 2. Basis for Opinion We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Schedule section of our report. We are required to be independent of the County and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Emphasis of Matter We draw attention to Note 2 of the Schedule, which describes the basis of accounting. The Schedule is prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Responsibilities of Management for the Schedule Management is responsible for the preparation and fair presentation of the Schedule in accordance with the cash basis of accounting described in Note 2, and for determining that the cash basis of accounting is an acceptable basis for the preparation of the Schedule in the circumstances. Management is also responsible for the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. /�JJI b� 1 1 WK I a_0f . L f l fI 4..11 1 zf':'-MWY Ii "_1.1„W" - „I.H h-,,Ax UH[a IWM'% 0 ,I-,I,al r�,�i .nP �i�f rf✓;m�r60 ✓siYimw�r, r Ak Ii h" Ian r;-ri ;arli Y;-ri:1l" Auditor's Responsibilities for the Audit of the Schedule Our objectives are to obtain reasonable assurance about whether the Schedule as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the Schedule. In performing an audit in accordance with GAAS and Government Auditing Standards, we • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the Schedule, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the Schedule. • Obtain an understanding of internal control relevant to the audit 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 County's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the Schedule. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control—related matters that we identified during the audit. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 14, 2023, on our consideration of the County's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is solely 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 effectiveness of the County's 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 County's internal control over financial reporting and compliance. Restriction on Use This report is intended solely for the information and use of the management of the County, the Board of County Commissioners and the Federal Aviation Administration, and is not intended to be and should not be used by anyone other than these specified parties. a)S Fort Lauderdale, Florida April 14, 2023 2 Monroe County,Florida Schedule of Passenger Facility Charges Receipts and Disbursements Year Ended September 30,2022 Quarter Ended Year Ended December 31, March 31, June 30, September 30, September 30, 2021 2022 2022 2022 2022 Receipts: Receipts' $ 645,298 $ 804,969 $ 784,845 $ 628,876 $ 2,863,988 Investment Income 3,137 3,569 8,005 24,420 39,131 Total Revenues 648,435 808,538 792,850 653,296 2,903,119 Disbursements: Application#17 Access Road-Design&Construction 284,886 224,721 330,065 501,396 1,341,068 Total Application#17 284,886 224,721 330,065 501,396 1,341,068 Application#18 Replace Airport Beacon-Design&Construction 8,676 - - - 8,676 Rehabilitate Taxiway A&Taxiway A Lighting- Design&Construction - 279,143 279,143 Total Application#18 8,676 - - 279,143 287,819 Application#19 New Concourse A Design - 710,147 1,291,949 697,905 2,700,001 PFC Administration-EYW Planning Studies - 28,333 - 28,333 Total Application#19 - 710,147 1,320,282 697,905 2,728,334 Total Disbursements 293,562 934,868 1,650,347 1,478,444 4,357,221 Net PFC Inflows(Outflows) $ 354,873 $ (126,330) $ (857,497) $ (825,148) $ (1,454,102) Receipts received and disbursements made on approved projects in the schedule above agree to the Passenger Facility Charge Quarterly Status Reports(PFC Reports)submitted by Monroe County to the Federal Aviation Administration(FAA). PFC Receipts are shown on this schedule when the cash is received(cash basis)and will therefore not agree with the annual financial statements. 3 Monroe County, Florida Notes to Schedule of Passenger Facility Charges Receipts and Disbursements For the Year Ended September 30,2022 Note 1. General The accompanying schedule of passenger facility charges receipts and disbursements (the schedule) presents the activity of the passenger facility charge program of the Monroe County, Florida, (the County), for the year ended September 30, 2022. All passenger facility charges receipts and disbursements are included in the accompanying schedule. Because the schedule presents only a select portion of the operations of the County, it is not intended to, and does not present, the financial position, change in net position or cash flows of the Key West International Airport or of Monroe County, Florida. The Passenger Facility Charge program authorizes public agencies controlling commercial service airports to impose a charge of$1, $2, $3 or$4.50 per enplaned passenger. The objective of such proceeds from such passenger facility charges (PFCs) is to finance approved, eligible airport-related projects that preserve or enhance safety or security of the national air transportation system, reduce noise or mitigate noise impacts resulting from an airport that is part of such system, or furnish opportunities for enhanced competition between or among air carriers. Note 2. Basis of Accounting The Schedule is prepared on the cash basis of accounting. Under the cash basis, expenses or disbursements are recognized when paid rather than when the obligation is incurred, and receipts are recorded when cash is received rather than when earned. However, the County's financial statements for the Key West International Airport major enterprise fund which includes the passenger facility charge program are prepared on the accrual basis of accounting and such transactions are recorded in the financial statements when revenue is earned, or expenses are incurred. The information in this Schedule is presented in accordance with the requirements of the Passenger Facility Charge Audit Guide for Public Agencies issued by the Federal Aviation Administration in September 2000. Therefore, some amounts presented in this Schedule may differ from amounts presented in, or used in the preparation of, the financial statements. 4 Illl�lll�� 1��111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 RSM RSM US q,,LP Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Schedule of Passenger Facility Charges Receipts and Disbursements Performed in Accordance with Government Auditing Standards Independent Auditor's Report The Honorable Board of County Commissioners 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 (Government Auditing Standards), the Schedule of Passenger Facility Charges Receipts and Disbursement (the Schedule)of Monroe County, Florida, (the County), for the passenger facility charge program for the year ended September 30, 2022, and the related notes to the Schedule and have issued our report thereon dated April 14, 2023. Report on 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)as a basis for designing the audit procedures that are appropriate in the circumstances for the purpose of expressing an opinion on the Schedule, but not for the purpose of expressing an opinion on the effectiveness of the County's internal control. Accordingly, we do not express an opinion on the effectiveness of the County'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 entity's Schedule 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 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 or significant deficiencies may exist that were not identified. Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the County's Schedule is 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 Schedule. 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. 71.1 E POVlnIE" 01' BE0t1 (3 UNDERS'I'04(Xii /�JJI b� 1 1 WK I a_0f . L f l fI 4..11 5 zf':'-MWY Ii "_1.1„W" - „I.H h-,,Ax UH[a IWM'% 0 ,I-,I,al r�,�i .nP �i�f rf✓;m�r60 ✓siYimw�r, r Ak Ii h" Ian r;-ri ;arli Y;-ri:1l" 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 results 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 entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose. a. Fort Lauderdale, Florida April 14, 2023 6 Illl�lll�� 1��111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111 RSM RSM US q,,LP Report on Compliance with Requirements Applicable to the Passenger Facility Charge Program and on Internal Control Over Compliance in Accordance With the Passenger Facility Charge Guide for Public Agencies Independent Auditor's Report The Honorable Board of County Commissioners Monroe County, Florida Report on Compliance Opinion on the Passenger Facility Charge Program We have audited Monroe County, Florida's (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)that could have a direct and material effect on its passenger facility charge (PFC) program for the year ended September 30, 2022. 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 its PFC program for the year ended September 30, 2022. Basis for Opinion on the Passenger Facility Charge Program We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (Government Auditing Standards); and the Guide. Our responsibilities under those standards and the Guide are further described in the Auditor's Responsibilities for the Audit of Compliance section of our report. We are required to be independent of the County and to meet our other ethical responsibilities, in accordance with relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on compliance for the PFC program. Our audit does not provide a legal determination of the County's compliance with the compliance requirements referred to above. Responsibilities of Management for Compliance Management is responsible for compliance with the requirements referred to above and for the design, implementation and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules and provisions of contracts or grant agreements applicable to the County's PFC program. /�JJI b� l l 1 X I a_0f . L f l fI 4..11 7 zf':'-MWY Ii "_1.f„W" - „I.H h-,,Ax UH[a IWM'% 0 ,I-,I,al r�,�i .nP �i�f rf✓;m�r60 ✓s,Wmw� �,m Ak Ii h" Ian r;-ri ;arli Y;-ri:1l" Auditor's Responsibilities for the Audit of Compliance Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express and opinion on the County's compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, and the Guide will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the County's compliance with the requirements referred to above. In performing an audit in accordance with GAAS, Government Auditing Standards, and the Guide, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the County's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the County's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances 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 the County's internal control over compliance. Accordingly, no such opinion is expressed. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. Report on 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 a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a 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 a federal 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 a federal 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 Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit, we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. 8 Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed. 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. Restriction on Use This report is intended solely for the information and use of management of the County, the County's Board of County Commissioners, and the Federal Aviation Administration and is not intended to be and should not be used by anyone other than these specified parties. *S as Fort Lauderdale, Florida April 14, 2023 9 Monroe County, Florida Schedule of Findings and Questioned Costs Year Ended September 30, 2022 1—Summary of Independent Auditor's Results Schedule Type of auditor's report issued: Unmodified Internal control over financial reporting: Material weakness(es) identified? Yes X No Significant deficiency(ies) identified that are not considered to be material weakness(es)? Yes X None Reported Noncompliance material to the Schedule noted? Yes X No Passenger Facility Charge Program Internal control over the program: Material weakness(es) identified? Yes X No Significant deficiency(ies) identified that are not considered to be material weakness(es)? Yes X None Reported Type of auditor's report issued on compliance for the program: Unmodified Any audit findings disclosed that are required to be reported in accordance with the Passenger Facility Charges Audit Guide for Public Agencies? Yes X No II —Financial Statements Findings No matters to report. III —Findings and Questioned Costs for the Program No matters to report. 10 Monroe County, Florida Summary of Prior Audit Findings Year Ended September 30, 2022 Finding # Program Finding Material Weakness in Internal Control over 2021-001 Construction-in-Progress Recognition Internal Control over Financial Reporting Corrective action has been taken 11