Fiscal Year 1983 MONROE COUNTY, FLORIDA
e 18 24
KEMP & IOSA Ct
OROE COUNTY, FLORIDA
FINANCIAL STATEMENTS
SEPTEMBER 30, 1983
KEW & ROSSC
CERTIFIED PUBLIC ACCOUNTANTS
CONTENTS
Pa
Independent Auditors' Opinion 1
General Purpose Financial Statements:
Combined Balance Sheet - All Fund Types and Account Groups 2-
Combined Statement of Revenues, Expenditures, and Changes
in Fund Balances - All Governmental Fund Types 4
Combined Statement of Revenues, Expenditures, and Changes
in Fund Balances - Budget and Actual - General and
Special Revenue Fund Types 5
Combined Statement of Revenues, Expenses, and Changes in
Fund Equity - All Proprietary Fund Types 6
Combined Statement of Changes in Financial Position - All
Proprietary Fund Types 7
Notes to Combined Financial Statements 8-17
Supplemental Statements:
Clerk of the Circuit Court:
Balance Sheet 18
Statements of Revenues and Expenditures -
Governmental Fund Type and Receipts and Disbursements
Fiduciary Fund Type 19
Property Appraiser:
Balance Sheet 20
Statement of Revenues and Expenditures 21
Supervisor of Elections:
Statement of Revenues and Expenditures 22
Sheriff:
Balance Sheets - All Fund Types and Account Group 23
Statements of Revenues and Expenditures - Governmental
Fund Types and Receipts and Disbursements - Fiduciary
Fund Types 24
Tax Collector:
Balance Sheets - All Fund Types 25
Statements of Revenues and Expenditures - Governmental
Fund Type and Receipts and Disbursements - Fiduciary
Fund Types 26
Management Letters 27-49
KEMP !& ROSASCO
Certified Public Accountants
ORVIS M. KEMP, C.P.A. 1438 KENNEDY DR. MEMBER OF AMERICAN INSTITUTE
WM. O. KEMP, C.P.A. #12 LUANI PLAZA 0 P. 0. BOX 309 AND FLORIDA INSTITUTE OF
(305)
PETER L. ROSASCO, Jr., C.P.A. KEY WEST, FL294-2581 33041-0309 CERTIFIED PUBLIC ACCOUNTANTS
MAA E. GREEN, C.P.A.
Honorable Members of the
and of County Commissioners
Monroe County, Florida:
We have examined the general purpose financial statements of Monroe County
(the "County") as of September 30, 1983 and for the year then ended, listed in
the accompanying table of contents. Our examination was made in accordance
with generally accepted auditing standards and, accordingly, included such
tests of the accounting records and such other auditing procedures as we con-
sidered necessary in the circumstances®
In our opinion, such general purpose financial statements present fairly the
financial position of the combined funds and account groups of the County at
September 30, 1983 and the results of operations of such combined funds and
changes in financial position of the proprietary fund types for the year then
ended in conformity with generally accepted accounting principles applied on a
basis consistent with that of the preceding year.
Our examination was made for the purpose of forming an opinion on the general
purpose financial statements taken as a whole. The supplemental statements
listed in the accompanying table of contents are presented for purposes of
additional analysis and are not a required part of the general purpose finan-
cial statements. Such information has been subjected to the auditing proce-
dures applied in the examination of the general purpose financial statements
and, in our opinion, is fairly stated in all material respects in relation to
the general purpose financial statements taken as a whole.
x-f A0zV--
Kemp & Rosasco
Certified Public Accountants
February 10, 1984
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KRINLDOE r,oilKITY P1 ORIDA
NOTES ro COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1983
NOTE I ® GENERAL INFORMATION
Description ® Monroe County (the "County" ) is a non-chartered political
subdivision of the State of Florida and is authorized the power of self-
government by the Constitution of the State of Florida and Florida
Statutes. The Board of County Commissioners (the "Board") is the
legislative and governing body of the County. A County Administrator is
appointed by the Board and is responsible for administrative and budge-
tary control of the resources of the County maintained in the funds and
account groups listed below.
The Constitution of the State of Florida also provides for five
Constitutional Officers with specific duties and reporting respon-
sibilities prescribed by the Statute. The Officers are:
Clerk of the Circuit Court
County Property Appraiser
Supervisor of Elections
County Sheriff
County Tax Collector
Annual operating budgets of these Officers are submitted to the Board for
approval . Funding for the operations of these Officers is provided pri -
marily from general revenues of the County and supplemented by fees
charged by the Officers pursuant to Statute.
The financial statements included in this Annual Report represent all of
the funds and account groups of the County as a single unit of local
government over which the Board exercises fiscal control .
Basis of Presentation - The County 's accounting system Is organized and
operated on a fund and account group basis. A fund is defined as a
fiscal and accounting entity with a self-balancing set of accounts which
is segregated for the purpose of carrying on specific activities or
attaining certain objectives. Account groups are used to establish
accounting control and accountability for the County's general fixed
assets and the unmatured principal of its general long-term debt.
Under Statutes of the State of Florida, the five Constitutional Officers
report their annual receipts and disbursements to the appropriate divi-
sion of State Government. For reporting purposes herein, the operations
of the Constitutional Officers have been combined with the appropriate
funds and account groups and the individual operations and financial
positions of the Clerk of the Circuit Court, the Supervisor of Elections,
the County Property Appraiser, County Sheriff and Tax Collector have been
reflected in separate supplemental statements to the financial state-
ments.
-8-
MONROE COUNTY, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1983
NOTE I - GENERAL INFORMATION (Continued)
The accounting policies of the County conform to generally accepted
accounting principles as applicable to governmental units. This report,
the accounting systems and classification of accounts conform to stan-
dards of the National Council on Governmental Accounting (NCGA) and the
Municipal Finance Officers Association of the United States and Canada,
(MFOA) , published in "Statement 1 , Governmental Accounting, Auditing and
Financial Reporting Principles" which is a restatement of "Governmental
Accounting and Financial Reporting" (GAAFR) .
The County maintains the three categories of fund types and certain
account groups recommended in Statement 1 as described below:
Governmental Fund Types:
General Fun-' - Used to account for general operations of the County
and all transactions which are not accounted for in other funds or
account groups. The General Fund includes the operations of the
five Constitutional Officers.
Special Revenue Funds - Used to account for the proceeds of specific
revenue sources (other than special assessments) or to finance spe-
cified activities as required by law.
Debt Service Funds - Used to account for the payment of interest and
principal on outstanding general obligation debt. Debt of the
Enterprise Funds are reported under that fund heading.
Special Assessment Funds - Used to account for the construction of
improvements or provision of services which are to be paid for
wholly or in part from special assessments levied against benefited
property.
Capital Project Funds - Used to account for the purchase or
'7 construction of major capital facilities which are not financed by
proprietary funds.
Proprietary Fund Types:
Enterprise Funds - Used to account for the financing services to the
general public where all or most of the costs involved are paid in
the form of charges to users of such services. Enterprise opera-
tions of the County are the operations of the Card Sound Road and
Bridge Toll Facility (the "Bridge") and the Municipal Services
District (the 'IMSDII) .
-9-
MONROE COUNTY, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1983
NOTE I ® GENERAL INFORMATION (Continued)
Internal Service Fund ® Used to account for services and commodities fur-
nished by a designated activity of the County to other departments of the
County® Internal service operations are those of the County's Workmen's
Compensation Self-Insurance Fund.
Fiduciary Fund Types:
Agency Funds ® Used to account for assets held in a trustee or agency
capacity for other funds, governmental units and individuals. These funds
include certain fiduciary operations of the Clerk of the Circuit Court,
Tax Collector, and Sheriff®
A summary of the cash transactions of such fiduciary operations for the
year is as follows:
Collections pending future distribution:
Taxes $ 38,254,479
Bonds and other 1 ,827,953
Collections pursuant to court order 1,655,739
Fines and forfeits 1,029,779
Charges for services 567,926
Licenses 468,030
State jury & witness fees 90,858
Interest 85,928
Total Collections 43,980,692
Distribution of collections 43,722,525
Net Collections 258,167
Cash and certificates of
of deposit, October 1 , 1982 1,915,697
Cash and certificates of
of deposit, September 30, 1983 2, 173,864
Account Groups:
General Fixed Assets Group of Accounts Used to account for fixed assets
owned by the County which are not accounted for in the enterprise funds®
General Lon L of Account�,22q7T M Debt Group s - Used to account for the long-_ —
term indebtness of the County other than those which are obligations of
the enterprise or special assessment Funds®
_10-
MONROE COUNTY, FLORIDA
NOTES TO C'OMB 1 OKI'ED FINANCIAL STATEMENTS
SEPTEMBER 30, 1983
NOTE I - GENERAL INFORMATION (Continued)
Budget Requirements ® Pursuant to Florida Statutes, the County is required
to establish budgetary systems and approve annual budgets® The County's
budgeting process, which complies with State Statutes, Is based on estima-
tes of cash receipts, cash disbursements and encumbrances which are
approved by the Board. Beginning funds, available for financing current
appropriations, are considered in the budgetary process but are not
Included in the financial statements of the governmental fund types as
budgeted revenues. Adjustments necessary to convert the estimated cash
receipts and disbursements basis of budgeting to the accrual or modified
accrual basis of accounting are Immaterial and have not been reflected In
the budget amounts in the accompanying financial statements® Unencumbered
appropriations lapse at year end®
For comparative purposes, portions of the budget in the financial state-
ments have been reclassified to conform with reporting classifications of
actual revenues and expenditures®
NOTE 2 ® SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting - The governmental fund and fiduciary fund types use
the modified accrual basis of accounting. Under the modified accrual
basis, revenues are recorded as received in cash except for revenues
susceptible to accrual and revenues of a material amount that have not
been received at the normal time of receipt® Expenditures are recorded
when obligations are incurred or when benefits are received, except for
interest on general obligation bonds which is recorded in the accounting
period in which payment becomes due®
The proprietary fund types use the accrual basis of accounting whereby
revenues are recorded when earned and expenditures are recorded when obli-
gations are incurred or when benefits are received.
The County does not accrue vacation pay benefits in accordance with NCGA
Statement 4, Accounting and Financial Reporting Principles for Claims and
Judgments and Compensated Absences as such amounts are not material to the
County as a whole. The liability for vacation pay as of September 30,
1983 was $ 316,064 for all fund types® Costs of such benefits are
reported as expenditures in the accounting period In which vacation bene-
fits are paid®
Investments - The County 's investments include certificates of deposit,
U.S. Treasury bills and U.S. Government obligations® Investments are
recorded at cost or amortized cost which approximates market value.
_11-
KAIAMUC'
MV111X%JE COUNTY, FLOH'IDA
NOTES TO COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1983
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Restricted Assets and Reserves - Assets required to be segregated pursuant
to a bond indenture are identified as restricted assets. Off-setting
reserves are established by charges to retained earnings.
Grants from Government Agencies - Certain grants under various Federal and
State programs are included in the General Fund. Grant monies received
are disbursed for goods and services as prescribed under the respective
grant program or transferred to other County funds or government entities
for ultimate distribution under the terms of the grants.
In addition, the County receives certain monies under revenue sharing and
other Federal and State programs. These programs, as well as those grant
programs discussed above, are dependent on financial assistance by the
Federal and State Government.
Pension Costs - The County participates in the noncontributory Florida
Retirement System (the "System") which covers substantially all of the
County's full-time employees, without contribution from them. The County's
rate of contribution, based upon total salaries, is defined by the System
and pension costs are recorded in the period that salaries are earned.
See Note 6.
Property_and_Depreciation - All property of the County is recorded in the
General Fixed Assets Group of Accounts, with the exception of property of
the enterprise funds which are recorded in those funds' accounts.
Improvements, other than buildings, including roads, bridges, curbs, gut-
ters, streets and sidewalks are not reported in the General Fixed Assets
Group of Accounts since these assets are normally immovable and of value
only to the County.
Property is recorded at cost, except for contributed property which is
recorded at fair market value at the date of contribution. Expenditures
for maintenance, repairs and minor renewals and betterments are expensed
as incurred. Major renewals and betterments are treated as property
acquisitions.
Depreciation and depletion expense is provided on property and sanitary
landfill sites recorded in the enterprise funds using the straight-line
method over the estimated useful lives of the assets. Depreciation is not
provided on the General Fixed Assets Group of Accounts. Ranges of depre-
ciable lives are as follows:
Years
Sanitary landfill sites '1__10
Buildings and other improvements 10-20
Bridges and improvements other than buildings 50
Machinery and equipment 3-10
-12-
MONROE COUNTY, FLORIDA
NOTES TO COMBINED—FINANCIAL STATEMENTS
SEPT EMBER 30, 1983
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Upon the disposition of property, the related cost and accumulated depre-
ciation is removed from the accounts with a gain or loss on disposition
reflected in net income.
Property balances for the year ended September 30, 1983 are as follows:
General
Fixed
Enterprise Assets Group
Funds of Accounts
Land $ 173,700 $ 6,356, 168
Buildings & other
Improvements 154, 181 11,754,842
Roads & bridges 2,512,491 -
Equipment 9,074,543 8,063,666
Total Property 11 ,914,915 26, 174,676
Less accumulated depreciation 2,324,062 -
Net Property $ 9, 590,853 $ 26, 174,676
Discounts on Bonds Payable - Discounts on bonds payable are amortized
using the straight-line method over the maturities of the related bonds.
Combined Financial Information - Total columns in combined financial sta-
tements which are noted "Memorandum Only" aggregate the columnar amounts
presented by fund type and account group. These total columns do not pre-
sent consolidated financial information.
NOTE 3 - LONG-TERM DEBT
Long-term debt consists of the following:
Payable from restricted assets:
Revenue Bonds, secured by revenues of the Bridge
which are obligations solely of that fund, payable
September 1 , 1997, bearing interest at 5.75% pay-
able semi -annually $ 1 ,380,000
Less unamortized discount 19,646
Balance Brought Forward 1,360,354
-13-
OROE COUNTY, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS
SEPTEMBER 30, 1983
NOTE 3 - LONG-TERM DEBT (Continued)
Balance Brought Forward 1 ,360,354
Improvement Bonds, secured by revenues of MSD which
are obligations solely of that fund, payable in In-
stallments of various amounts each October 1 until
2001, the remainder due October 1 , 2011, bearing in-
terest at 9,80 to 11.25%, payable semi-annually 7,960,000
Less unamortized discount 182,999
7,777,001
Total payable from restricted assets 9,137,355
Other long-term debt:
General Obligation Bonds, secured by tax levies
which represent obligations of the County as
a whole and not Its Individual constituent funds,
payable In Installments of various amounts each
September 1 until 1995, bearing interest at rates
from 3.50 to 4.25% payable semiannually 740,000
Refunding improvements Revenue Bonds, secured by
Race Track and Jai Alai Fronton Revenues re-
ceived by the County under Florida Statutes,
payable in installments of various amounts from
July 1 , 1984 until July 1 , 2011 , bearing interest
at rates from 7,40 to 9.25% payable semiannually 2, 155,000
Lease obligations, secured by equipment
with purchase costs of $ 413,498, payable
In monthly installments totalling
10,45, including Interest imputed at
rates from 10.75 to 9. 3% 170,976
Total other long-term debt 3,065,976
Balance Brought Forward 12,203,331
-14-
MONROE COUNTY, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS
SEPT EMBER 30, 1983
NOTE 3 - LONG-TERM DEBT (Continued)
Balance Brought Forward $ 12,203,331
Tax anticipation notes:
Note payable to bank, secured by tax anti-
cipation warrant, payable on or before
February 22, 1984 from general and
special revenue funds, bearing interest
at 8.25% 1 ,500,000
Note payable to bank, secured by tax anti-
cipation warrant, payable in installments
of $ 20,000 due September 12, 1984 - 1993
from special assessment funds, bearing in-
terest at 7% 200,000
Total tax anticipation notes 1 ,700,000
Total long-term debt, net of
related discounts 13,903,331
The various types of long-term debt mature as follows:
Payable from
September Restricted Tax Antici-
30 Total Assets Other pation Notes
1984 $ 1 ,769,502 $ 45,000 $ 204,502 1,520,000
1985 186,474 50,000 116,474 20,000
1986 155,000 55,000 80,000 20,000
1987 165,000 65,000 80,000 20,000
1988 175,000 70,000 85,000 20,000
Thereafter 11,655,000 9,055,000 2,500,000 100,000
14, 105,976 $ 9,340,000 $ 3,065,976 1 ,700,000
Under the terms of the Bridge revenue bond issue, the Card Sound Bridge Is
required among other things, to establish rates and collect fees and
charges which will be sufficient at all times to pay the cost of main-
taining and operating related assets, pay the principal and interest
requirements of the outstanding revenue bonds and create and maintain spe-
cified reserves for such purposes.
-15-
OROE COUNTY, FLORIDA
NOTES TO CO BIED FINANCIAL_ STATEMENTS
SPTBR 30, 1983
NOTE 4 - LOSS ON ADVANCE REFUNDING OF LONG-TERM DEBT
By resolution adopted May 17, 1983, the County provided for the advance
refunding of its Improvement Revenue Bonds, Series 191 outstanding in the
principal amount of $ 1 , 35,000 by the sale of Refunding Improvement
Revenue Bonds, Series 1983. All of the principal amount of Refunding
Improvement Revenue Bonds sold on June 22, 1983 was used to advance refund
the refunded bonds.
From the refunding proceeds of the revenue bonds monies were invested in
United States obligations In an Irrevocable Deposit Trust Fund. Such
United States obligations will mature at such times and in such amounts so
s to provide sufficient funds for the payment of interest and maturing
principal of the refunded bonds. The refunded bonds are considered
extinguished debt in the accompanying financial statements in accordance
with the defesnce provisions of the refunding bonds. As a result of the
advance refunding, a foss was recognized as follows:
Refunded Debt - Improvement Revenue Bonds,
Series 1981 $ 1 ,835,000
Investment in Refunding:
Refunding Bonds Issued 2, 155,000
Less Financing Costs:
Discount 53,722
Issue Costs 71,222
Cash in escrow 15, 5
Net reacquisition price 2,014,800
Loss on Advance Refunding of Long-Term Debt $ 179, 00
NOTE 5 - SELF INSURANCE PROGRAM
The County is self-insured for Workmen's Compensation claims up to
$ 150,000 for each occurence, and maintains coverage for claims in excess
of those amounts to a limit of $ 1 ,000,000 per occurence with independent
insurance carriers. The liability for Workmen's Compensation claims,
which is considered adequate by management, represents the estimate for
all claims.
-16-
MONROE COUNTY, FLORIDA
NOTES TO COMBINED FINANCIAL STATEMENTS
SEPT DER 30, 1983
NOTE 6 - PENSION PLAN
The County participates in the Florida Retirement System (the "System")
which covers substantially all of the County's full-time employees.
Presently, the System does not require contributions from covered
employees. Pension costs for County employees for the year ended
September 30, 1983, as required and defined by the System, approximated
$ 1 ,232,437.
Contributions of all participating agencies throughout the State of
Florida are pooled to fund accrued benefits under the System. System
officials have reported that the System has an actuarially computed
unfunded past service liability of approximately $4.3 billion as of July
1 , 1980, the latest valuation date of the plan. (A plan valuation is per-
formed every three years) . This amount represents an obligation of the
System and not of the participating agencies. The most recent actuarial
study indicates that, if certain actuarial assumptions are realized and
certain increases to the contribution rates are made, this unfunded past
service liability will be liquidated within 30 years.
NOTE 7 - CONTINGENCIES AND COMMITMENTS
All expenditures financed by Federal and State of Florida grants are sub-
ject to audit by the granting agencies to determine if such expenditures
comply with conditions of the grant. The County believes that no material
liability will arise from any such audits.
A number of claims and lawsuits are pending against the County. However,
based on knowledge of facts and advice of the County attorney and outside
counsel , County officials believe that the outcome of these actions will
not have a material adverse effect on the County's financial position or
results of operations.
-17-
MONROE COUNTY, FLORIDA
CLERK OF THE CIRCUIT COURT
SUPPLEMENTAL BALANCE SHEET - AGENCY FUND
SEPTEMBER 30, 1983
Assets:
Cash $ 1 ,074,879
Accounts receivable 12,799
Total Assets $ 1 ,087,678
Liabilities®
Due to Board of County Commissioners $ 110,651
Due to other governments 245,684
Due to others 731,343
Total Liabilities $ 1 ,087,678
-18-
OROE COUNTY, FLORIDA
CLERK OF THE CIRCUIT COURT
SUPPLEMENTAL STATEMENTS OF REVENUES/RECEIPTS AND EXPENDITURES/DISBURSEMENTS
FOR THE YEAR ENDED SETE BER 30, 193
GOVERNMENTAL FIDUCIARY
FUND TYPE FUND TYPE
TRUST AND
GENERAL AGENCY
Revenues/Receipts:
State of Florida $ - $ 90, 57
Board of County Commissioners 1 ,511 , 95 -
Taxes - 2,822,988
Licenses - 21,010
Fines and forfeitures - 1 ,020,96
Charges for services - 521, 73
Other - 2,56,853
Total Revenues/Receipts 1 ,511 , 95 7,02 , 15
Expenditures/Disbursements:
Personal services 1 , 109, 116 -
Equipment rental 41, 52 -
Orting expenditures 183, 196 -
Capital outlay 177,61 -
Trust and agency disbursements - 6,595,873
Total Expenditures/Disbursements 1 ,511, 95 6,595, 73
Excess of Revenues/Receipts over
Expenditures/Disbursements $ -0- $ 428,272
-19-
O RUE COUNTY, FLORIDA
PROPERTY APPRAISER
SUPPLEMENTAL BALANCE SHEET - GENERAL FUND
SEPT EMBER 30, 193
Assets - Cash31 , 166
Liabilities And Fund Balance:
Liabilities - Due to other governments $ 9,253
Fund balance 21 ,913
Total Liabilities and Fund Balance $ 31, 166
- 0-
MONROE COUNTY, FLORID-
PROPERTY APPRAISER
SUPPLEMENTAL STATEMENT OF REVENUES AND EXPENDITURES GENERAL FUND
FOR THE YEAR ENDED CCUTEMBER 30, 1983
Revenues:
Board of County Commissioners $ 645, 132
Other taxing districts 184,217
Total Revenues 829,349
Expenditures:
Personal services 632,928
Data processing services 67,090
Rental 3,895
Operating expenditures 115,877
Capital outlay 8,336
Total Expenditures 828, 126
Excess Of Revenues Over Expenditures 1,223
-21-
MONROE COUNTY, FLORIDA
SNAPERVISOR OF ELECTIONS
ur-t-f\V I OW1
SUPPLEMENTAL STATEMENT OF REVENUES AND EXPENDITURES - GENERAL FUND
FOR THE YEAR ENDED SEPTEMBER 30, 1983
Revenues - board of County Commissioners $ 190,633
Expenditures:
Personal services 151 ,726
Operating expenditures 32,638
Capital outlay 6,269
Total Expenditures 190,633
Excess of Revenues Over (Under) Expenditures $ -
NOTE: All assets and liabilities are accounted for by the Board of
County Commissioners within the General Fund. Accordingly, a
balance sheet is not presented.
-22-
MONROE COUNTY FLORIDA
SHERIFF
SUPPLEMENTAL BALANCE SHEETS
SEPTEMBER 30 1983
FIDUCIARY
FUND ACCOUNT
GOVERNMENTAL FUND TYPES TYPES GROUPS
TRUST GENERAL
SPECIAL AND FIXED
GENERAL REVENUE AGENCY ASSETS
Assets:
Cash $ 21,317 272,905Investments 18,485 -
Property - - 1,4992195
Total Assets 39,802 - 272,905 $ 1,499,195
Liabilities Fund Balance:
Liabilities - Due to Others - 272, -
Fund Equity - Investment In
General Fixed Assets - - 1 ,499,195
Fund Balance 39,802 - -
Total Liabilities and
Fund Balance 39,802 - 272,905 1 19,499,195
-2 -
MONROE COUNTY, FLORIDA
S&I ER 11::1"
SUPPLEMENTAL, STATEMENT'S OF REVENUEVREMP'rS AND EXPENDITURESMISBURSEMENTS
FOR THE YEAR ENDED SEPTEMBER 301- 1983
GOVERNMENTAL FIDUCIARY
FUND TYPES FUND TYPE
SPECIAL
GENERAL REVENUE AGENCY'
Revenues/Receipts:
Board of County Commissioners S 6,511,351 $ -
Cash Bonds - - 945,656
Other 68.108 - 9 t 090
Total Reve nay es/Recelpts - 9549,746
Expenditures/Disbursements:
Personal services 4,180,421 - -
Rental and leases 75,346 -
Operating expenditures 1,785,286 -
Capital outlay 502,914 -
Trust and agency distributions - - 1457' 433
Total Expenditures/Disbut-sements 6,543,,967 - 957 433,
Excess Of Revenues/lRecelpts Over, (Under)
Expenditures/Disbursements 35,492 - (2,687)
Other Financing Uses -
Operat Ing transfers out ( I 1.0 , LO') 14j 318)
Excess, of Revenues/Recelpts Over (Under)
Expenditures/Disburserrients avid Other Uses $ (74,828) $ ( 14,318) $ (2,687)
-24-
MONROE COUNTY, FLORIDA
TAX COLLECTOR
SUPPLEMENTAL BALANCE SHEETS
SEPTEMBER 30, 1983
GOVERNMENTAL FIDUCIARY
FUND TYPE FUND TYPE
GENERAL AGENCY
FUND FUNDS
Assets:
Cash $ (35,770) $ 826,081
Investments 237,394 -
Total Assets $ 201,624 $ 826,081
Liabilities And Fund Balance:
Due to Other Governments 43, 121 805, 143
Due to Others 124 20,938
Fund Balance 158,379 -
Total Liabilities and Fund balance $ 201,624 $ 826,081
-25-
MONROE COUNTY, FLORIDA
TAX COLLECTOR
SUPPLEMENTAL STATEMENTS OF REVENUES/RECEIPTS AND EXPENDITURES/DISBURSEMENTS
F 11R T,4E YEAR ENDED SEPTEMBER 30, 1983
GOVERNMENTAL FIDUCIARY
FUND TYPE FUND TYPE
GENERAL AGENCY
-FUND FUNDS
Revenues/Receipts:
Board of County Commissioners $ 592,988 $ -
Taxes - 34,549,426
Tax sale redemptions 882,065
Licenses and permits - 447,020
Charges for services 308,044 46,453
Interest - 76,837
Other 189,235 -
Total Revenues/Receipts 1 ,090,267 36,001 ,801
Expenditures/Disbursements:
Personal services 684,716 -
Contractual services 85, 182 -
Equipment rental 3,871 -
Capital outlay 37, 107 -
Operating expenditures 149,947 -
Trust and agency disbursements - 36, 169,218,
Total Expenditures/Disbursements 960,823 36, 169,218
Excess of Revenues/Receipts Over (Under)
Expenditures/Disbursements 129,444 ( 167,417)
Other Financing Uses - Transfer of excess
fees to and of County Commissioners 161,027
Excess of Revenues/Receipts Over (Under)
Expenditures/Disbursements and Other Uses $ (31,583) $ ( 167,417)
-26-
KEMP I& ROSASCO
Certified Public Accountants
ORVIS M. KEMP, C.P.A. 1438 KENNEDY DR. MEMBER OF AMERICAN INSTITUTE
WM. 0. KEMP, C.P.A. #12 LUAMP LAZA * P. 0. BOX 309 AND FLORIDA INSTITUTE
(305) OF
PETER L. ROSASCO, Jr., C.P.A. KEY WEST, FL 33041-0309 CERTIFIED PUBLIC ACCOUNTANTS
294-2581
MAA E. GREEN, C.P.A.
February 10, 1984
Mr, Danny L. Kolhage
Clerk Ex Officlo
and of County Commissioners
Monroe County, Florida
Key West, Florida 33040
Dear Sir:
We have examined the financial statements of Monroe County, Florida for the
year ended September 30, 1983, and have issued our report thereon dated
February 10, 1984. As part of our examination, we made a study and evaluation
of the County's system of Internal accounting control to the extent we con-
sidered necessary to evaluate the system as required by generally accepted
auditing standards® The purpose of our study and evaluation was to determine
the nature, timing, and extent of the auditing procedures necessary for
expressing an opinion of the County's financial statements. Our study and
evaluation was more limited than would be necessary to express an opinion on
the system of internal accounting control taken as a whole®
The observations reported herein should be considered In the context of the
reponsibility of management for establishing and maintaining a system of
internal accounting control , the objectives of and Inherent limitations on
such a system, and the definition of a material weakness for purposes of this
report, which are described In the Appendix to this report®
Our study and evaluation made for the limited purpose described in the first
paragraph would not necessarily disclose all material weaknesses In the
system® Accordingly, we do not express an opinion on the system of internal
accounting control of Monroe County, Florida taken as a whole. However, our
study and evaluation disclosed no condition that we believe Is a material
weakness®
Our examination did, however, disclose the following conditions that, although
not considered by us to be material weaknesses, are weaknesses in Internal
accounting control for which corrective action might be taken®
-27-
Mr. Danny L. Kolhage
Clerk Ex Offlcloffl Board of County Commissioners
Page 2
Municipal Service District
Solid Waste Penalties
Observation: The management of the Municipal Service District will waive or
reduce solid waste penalties in circumstances such as an error In the tax
roll . The office of the Tax Collector is then notified in order that they may
collect the correct amount of taxes from the appropriate taxpayer. However,
there is no documentation of the decision and the reasons therefore and it
appears that errors were made in the collection of solid waste fees.
Recommendation: We recommend that records of those taxpayers upon whom
penalties have been reduced or waived and the extent of the reduction or
waiver be documented. Such records should also indicate approval of the
change in the assessment by the appropriate level of management.
Compliance with Band Covenants
Observation: We reviewed section 15E of Resolution No. 215 - 1980 which, as
strictly Interpreted, requires the MSD to make assessments at certain minimum
levels based on, among other things, the cost of operations and maintenance.
However, there appears to be a conflict between Section 15E, Resolution 215 -
1980 and Resolution 78 - 1981 which Is an amendment to Resolution 215 - 1980.
Resolution 78 - 1981 allows pledged funds remaining In the Revenue Fund to be
used for any lawful purpose, which includes operations.
Recommendation: The County should obtain an opinion from bond counsel In
order to resolve this apparent inconsistency. We further recommend that you
discuss this matter with the consulting engineers and take appropriate action.
We have reviewed the financial report filed with the Department of Banking and
Finance for the year ended September 30, 1983, pursuant to Section 218.36,
Florida Statutes, and have found the amounts reported therein to be In
agreement with the amounts included In the financial statements on which we
have Issued our report dated February 10, 1984.
The Rules of the Auditor General , State of Florida, require that this letter
be filed with the Auditor General along with audited financial statements.
This report Is Intended solely for the use of management and the Auditor
General and should not be used for any other purpose.
-28-
r. Danny L. Kolhage
Clerk Ex Officlo, Board of County Commissioners
Page
e appreciate the cooperation extended to us during the course of our examina-
tion. We would be pleased to discuss these matters further with you at your
convenience.
Sincerely,
Kemp b Rosasco
-29-
APPENDIX
MANAGEMENT'S RESPONSIBILITY FOR, AU THE OBJECTIVES AND LIMITATIONS O ,
INTERNAL ACCOUNTING CONTROL AND THE DEFINITION OF A MATERIAL WEAKNESS
The following comments concerning management's responsibility for internal
accounting control , the objectives of and the inherent limitations on a system
of internal accounting control , and the definition of a material weakness are
excerpts from Statements on Auditing Standards of the American Institute of
Certified Public Accountants.
Management's Responsibility
Management . .. is responsible for establishing and maintaining a system of
Internal accounting control . In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected benefits and
related costs of control procedures.
Objectives
The objectives of a system are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from unauthorized
use or disposition, and that transactions are executed in accordance with
management's authorization and recorded properly to permit the preparation o
financial statements in accordance with generally accepted accounting prin-
ciples.
Limitations
Because of inherent limitations in any system of internal accounting control ,
errors or irregularities nevertheless may occur and not be detected. Also,
projection of any evaluation of the system to future periods is subject to the
risk that procedures may become inadequate because of changes in conditions or
that the degree of compliance with procedures may deteriorate.
Material Weakness
A material weakness (for the auditor's purpose) is a condition in which the
specific control procedures, or the degree of compliance with them, do not ( in
the auditor's judgement) reduce to a relatively low level the risk that errors
or irregularities in amounts that would be material In relation to thefinan-
cial statements being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned unc-
tions. These criteria may be broader than those that may be appropriate for
evaluating weaknesses In accounting control for management or other purposes.
-30-
KEMP & ROSASCO
Certified Public Accountants
ORVIS M. KEMP, C.P.A. 1438 KENNEDY DR. MEMBER OF AMERICA N INSTITUTE
WM. 0. KEMP, C.P.A. #12 LUANI PLAZA 0 P. 0. BOX 309 AND FLORIDA INSTITUTE OF
PETER L. ROSASCO, Jr., C.P.A. KEY WEST, FL 33041-0309 CERTIFIED PUBLIC ACCOUNTANTS
(305) 294-2581
MARVA E. GREEN, C.P.A.
February 10, 1984
Mr. Danny L. Kolhage
Clerk of the Circuit Court
Monroe County, Florida
Key West, Florida 33040
Dear Sir:
We have examined the financial statements of Monroe County, Florida for the
year ended September 30, 1983, and have Issued our report thereon dated
February 10, 1984. As part of our examination, we made a study and evaluation
of the County's system of internal accounting control to the extent we con-
sidered necessary to evaluate the system as required by generally accepted
auditing standards. The purpose of our study and evaluation was to determine
the nature, timing, and extent of the auditing procedures necessary for
expressing an opinion on the County's financial statements. Our study and
evaluation was more limited that would be necessary to express an opinion on
the system of internal accounting control taken as a whole.
The observations reported herein should be considered In the context of the
responsibility of management for establishing and maintaining a system of
Internal accounting control , the objectives of and Inherent limitations on
such a system, and the definition of a material weakness for purposes of this
report, which are described In the Appendix to this report.
Our study and evaluation made for the limited purpose described In the first
paragraph would not necessarily disclose all material weaknesses In the
system. Accordingly, we do not express an opinion on the system of Internal
accounting control of Monroe County, Florida taken as a whole. However, our
study and evaluation disclosed no condition that we believe Is a material
weakness.
Our examination did disclose the following conditions that, although not con-
sidered by us to be material weaknesses, are weaknesses In Internal accounting
control for which corrective action might be taken.
-31-
Mr. Danny L. Kolhage
Clerk of the Circuit Court
Page 2
Access to S1222iELL62ie_
Observation: Access to the Clerk's signature plate for check signing pur-
poses Is not confined to a single Individual .
Recommendation: This weakness is mitigated by effective segregation of
duties and by the fact that keys are required to use the plate. The Clerk has
since taken action to limit access to the signature plate. However, access to
the signature plate should be limited to the appropriate level of management
to Insure that management Is aware when It is In use.
Inactive Bank Accounts
Observation: Bank accounts were noted which have carried zero balances per
the accounting records since September- 30, 1982 but which have contained
balances of $ 1 ,000 - $ 2,000 per bank stet tints for the same length of time
due to outstanding checks.
Recommendation: Appropriate action should be taken to close these accounts.
Computerized Assa2LEI_asim
Observation: Cash register transaction codes for various types of receipts
vary between the three Clerk's offices.
Recommendation: The transaction codes should be made uniform for all offices
to provide consistency and comparability.
Regulatory Reportin9l -Requirements
We have reviewed the financial report filed with the Department of Banking and
Finance for the year ended September 30, 1983, pursuant to Section 218.36,
Florida Statutes, and have found the amounts reported therein to be In
agreement with the amounts Included In "the financial statements on which we
have Issued our report dated February 10, 1984.
The Rules of the Auditor General, State of Florida, require •that this letter
be filed with the Auditor General along with audited financial statements.
This report, Is Intended solely for the use of management and the Auditor
General and should not be used for any other purpose.
-32-
r. Danny L. Kolhage
Clerk of the Circuit Court
Page
e appreciate the cooperation extended to us during the course of our exin -
tion. We would be pleased to discuss these matters further with you at your
convenience.
Sincerely,
Kemp & Rosasco
- -
APPENDIX
MANAGEMENT'S RESPONSIBILITY FOR, AND THE OBJECTIVES AND LIMITATIONS OF,
INTERNAL ACCOUNTING CONTROL AND THE DEFINITION OF A MATERIAL WEAKNESS
The following comments concerning management's responsibility for Internal
accounting control , the objectives of and the Inherent limitations on a system
of Internal accounting control , and the definition of a material weakness are
excerpts from Statements on Auditing Standards of the American Institute of
Certified Public Accountants®
Management's Responsibility
Management , ® ® Is responsible for establishing and maintaining a system of
Internal accounting controls In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected benefits and
related costs of control procedures.
Objectives
The objectives of a system are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from unauthorized
use or disposition, and that transactions are executed In accordance with
management's authorization and recorded properly to permit the preparation of
financial statements In accordance with generally accepted accounting prin-
ciples.
Limitations
Because of Inherent limitations In any system of Internal accounting control ,
errors or Irregularities nevertheless may occur and not be detected® Also,
projection of any evaluation of the system to future periods Is subject to the
risk that procedures may become inadequate because of changes In conditions or
that the degree of compliance with procedures may deteriorate®
Material Weakness
A material weakness (for the auditor's purpose) Is a condition In which the
specific control procedures, or the degree of compliance with them, do not ( in
the auditor's judgement) reduce to a relatively low level the risk that errors
or Irregularities in amounts that would be material In relation to the finan-
cial statements being audited may occur and not be detected within a timely
period by employees In the normal course of performing their assigned func-
tions. These criteria may be broader than those that may be appropriate for
evaluating weaknesses In accounting control for management or other purposes,
- ®
KEMP V-4 ROSASCO
Certified Public Accountants
1438 KENNEDY D . MEMBER OF AMERICAN INSTITUTE
ORVIS M. KEMP, C.P.A. #12 LUANI PLAZA 0 P. O. BOX 309 AND FLORIDA INSTITUTE OF
WM. O. KEMP, C.P.A. KEY WEST, FL 33041-0309 CERTIFIED PUBLIC ACCOUNTANTS
PETER L. ROSASCO, Jr., C.P.A. (305) 294-2581
MARVA E. GREEN, C.P.A.
February 10, 1984
Mr. Harry F. Knight
Tax Collector
Monroe County, Florida
Key West, Florida 33040
Dear Sir:
We have examined the financial statements of Monroe County, Florida for the
year ended September 30, 1983, and have Issued our report thereon dated
February 10, 1984. As part of our examination, we made a study and evaluation
of the County's system of Internal accounting control to the extent we con-
sidered necessary to evaluate the system as required by generally accepted
auditing standards. The purpose of our study and evaluation was to determine
the nature, timing, and extent of the auditing procedures necessary for
expressing an opinion on the County's financial statements. Our study and
evaluation was more limited than would be necessary to express an opinion on
the system of Internal accounting control taken as a whole.
The observations reported herein should be considered In the context of the
responsibility of management for establishing and maintaining a system of
Internal accounting control , the objectives of and Inherent limitations on
such a system and the definition of a material weakness for purposes of this
report, which are described In the Appendix to this report.
Our study and evaluation made for the limited purpose described In the first
paragraph would not necessarily disclose all material weaknesses In the
system. Accordingly, we do not express an opinion on the system of Internal
accounting control of Monroe County, Florida taken as a whole. However, our
study and evaluation disclosed no condition that we believe Is a material
weakness.
Our examination did disclose the following conditions that, although not con-
sidered by us to be material weaknesses, are weaknesses In Internal accounting
control for which corrective action might be taken.
-35-
r. Harry F. Knight
Tax Collector
Page 2
Trust n ncy trtutn
Observation: Distributions of Interest Income werenot made for the fiscal
year ended September 30, 1983. Florida Statute219.075 requires hdistribu-
tion of Interest Income on a pro-rata basisleast quarterly.
Recommendation: The appropriatelevel f management should review iriu-
tions on a periodic basis to Insure compliance with the applicablestatutes.
Observation: Distribution of delinquentreal property tax collections has not
been made sinceFebruary, 1983. Florida Statute197.016 requires iri-
bution of real and personal property taxes to be made at least monthly.
Recommendation: The appropriatelevel f management should review iriu-
in n a periodic basis to Insure compliance with the applicablestatutes.
Social Security Tax WithholLin2s
Observation: cl 1 security Is not withheld on temporary or probationary
employees Is required y Federal law on any employee from the first date of
employment.
Recommendation: recommend that Social Security taxes be withhelds
appropriate. I recommend that the applicablepayroll returns be
reviewed and amended as necessary In compliance with Federal ilin
requirements.
Employee Entry D to into Retirement Plan
Observation: Employees are not enrolled as members of theFlorida Retirement
Systemuntil they have completed probationary period. The Florid
Retirement System states that membershipIs mandatory from first day of
employment. In addition, It states that temporary employees filling a regu-
larly lI h o i i n shall be enrolled.
Recommendation: e recommend that henceforth l yenrolled as
required y the Florida RetirementSystem, and that past contribution reports
be reviewed nd amended as necessary to be In compliance with the appropriate
provisions.
Commission R c I
Observation: urin c r, the first month of the fiscal year, commission
revenues ar netted againstremittance du r f County
Commissioners n recorded n reimbursements. This causes n ,
commission revenues an remittances to the Boar understated for the
month of October In each fiscal year.
-3 -
r. Harry F. Knight
Tax Collector
Page
Recommendation: The amount of commission revenue recognized In October should
be the entire amount to which the Tax Collector Is entitled. We also recom-
mend that the check sent to the Board Indicate the total amount due to the
Board, less the amount retained as commission revenue, to equal the amount o
the check. This will provide the information necessary for the Board to
record the transactions properly In Its records.
Inactive Bank Account
Observation: A checking account at Florida National Bank, trust and agency
general ledger account 1010, was noted as having a credit balance and noac-
tivity for the entire fiscal year. Per our discussions with the head
bookkeeper, the bank no longer sends statements on this account.
Recommendation: Appropriate action should be taken to close this account and
eliminate its balance from the accounting records.
Personal Business
Observation: During our test count of cash at Plantation Key, we observed cash
and checks on the supervisor's desk which we did not count as she claimed she
was preparing a deposit for funds belonging to her church. This represents a
use of county time to conduct personal business. More importantly, this ro-
vides the possibility that personal funds could be comingled with county
funds.
Recommendation: The appropriate level of management should communicate to all
employees the policy regarding the segregation of personal and county funds
and the conduct of personal business on county time.
nosied Funds
Observation: During our test count of cash at Plantation Key, we found
approximately $1600 In checks that were undeposited for various reasons. The
checks were contained In folders and there were no control records as to the
payor, why the checks were being held, or the total amount undeposited.
Although we did observe undeposited checks at Marathon, they were batched on
prenumbered forms and were to be sent to Key West for processing.
Recommendation: All checks should be deposited as quickly as possible or
returned to the payor in the event that the amount Is Incorrect. Records
should be kept of errors In payment If the related check has been deposited and
such errors should be resolved.
-37-
Mr. Harry F . Knight
Tax Collector
Page 4
REGULATORY REPORTING REQUIREMENTS
We have reviewed the financial report filed with the Department of Banking and
Finance for the year ended September }U' 1983 pursuant to Section 218°36°
Florida Statutes, ano nave found the amounts reported therein to be in
agreement with the amounts included in the financial statements on which we
nave Issued our report dated February 10" 1984~
The rules of the Auditor General , State of Florida, require that this \eTfer
be filed with the Auditor General along with audited financial statements.
This report /s intended solely for the use of management and the Auditor
General and should not be used for any other purpose.
* * * *
We appreciate the cooperation extended us during the course of our examina-
tion. we would be pleased to discuss these matters further with you at your
convenience~
Sincerely,
-�8~
APPENDIX
MANAGEMENT'S RESPONSIBILITY FOR, AND THE OBJECTIVES AND LIMITATIONS OF,
INTERNAL ACCOUNTING CONTROL AND THE DEFINITION OF A MATERIAL WEAKNESS
The following comments concerning management's responsibility for Internal
accounting control , the objectives of and the Inherent limitations on a system
of internal accounting control , and the definition of a material weakness are
excerpts from Statements on Auditing Standards of the American Institute of
Certified Public Accountants.
Management's Responsibility
Management . . . is responsible for establishing and maintaining a system of
internal accounting control . In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected benefits and
related costs of control procedures.
Objectives
The objectives of a system are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from unauthorized
use or disposition, and that transactions are executed in accordance with
management's authorization and recorded properly to permit the preparation of
financial statements In accordance with generally accepted accounting prin-
ciples.
Limitations
Because of inherent limitations In any system of Internal accounting control ,
errors or irregularities nevertheless may occur and not be detected. Also,
projection of any evaluation of the system to future periods is subject to the
risk that procedures may become inadequate because of changes In conditions or
that the degree of compliance with procedures may deteriorate.
Material Weakness
A material weakness (for the auditor's purpose) Is a condition In which the
specific control procedures, or the degree of compliance with them, do not ( in
the auditores judgement) reduce to a relatively low level the risk that errors
or irregularities In amounts that would be material in relation to the finan-
cial statements being audited may occur and not be detected within a timely
period by employees In the normal course of performing their assigned func-
tions. These criteria may be broader than those that may be appropriate for
evaluating weaknesses in accounting control for management or other purposes.
_3g®
KEMP F� ROSASCO
Certified Public Accountants
ORVIS M. KEMP, C.P.A. 1438 KENNEDY D . MEMBER OF AMERICAN INSTITUTE
M. O. KEMP, C.P.A. #12 LUANI PLAZA e P. 0. BOX 309 AND FLORIDA INSTITUTE O
(305) F
PETER L. ROSASCO, Jr., C.P.A. KEY WEST, FL294-2581 33041-0309 CERTIFIED PUBLIC ACCOUNTANTS
MARVA E. GREEN, C.P.A.
February 10, 1984
Honorable William A. Freeman, Jr.
Sheriff
Monroe County, Florida
Key West, Florida 33040
Dear Sir:
We have examined the financial statements of Monroe County, Florida for the
year ended September 30, 1983, and have Issued our report thereon dated
February 10, 1984. As part of our examination, we made a study and evaluation
of the County 's system of Internal accounting control to the extent we con-
sidered necessary to evaluate the system as required by generally accepted
auditing standards® The purpose of our study and evaluation was to determine
the nature, timing, and extent of the auditing procedures necessary for
expressing an opinion on the County 's financial statements. Our study and
evaluation was more limited that would be necessary to express an opinion on
the system of Internal accounting control taken as a whole®
The observations reported herein should be considered In the context of the
responsibility of management for establishing and maintaining a system of
Internal accounting control , the objectives of and Inherent limitations on
such a system, and the definition of a material weakness for purposes of this
report, which are described In the Appendix to this report.
Our study and evaluation made for the limited purpose described In the first
paragraph would not necessarily disclose all material weaknesses In the
system® Accordingly , we do not express such an opinion on the system of
Internal accounting control of Monroe County, Florida taken as a whole®
However, our study and evaluation disclosed no condition that we believe Is a
material weakness.
-40-
Honorable William A. Freeman, Jr.
Sheriff
Page 2
REGULATORY REPORTING REQUIREMENTS
We have reviewed the financial report filed with the Department of Banking and
Finance for the year ended September 30, 1983 pursuant to Section 11 .03,
Florida Statutes, and have found the amounts reported therein to be in
agreement with the amounts Included in the financial statements on which we
have issued our report dated February 10, 1984.
The rules Of the Auditor General , State of Florida, require that this letter
be filed with the Auditor General along with audited financial statements.
This report Is Intended solely for the use of management and the Auditor
General and should not be used for any other purpose.
We appreciate the cooperation extended us during the course of our examina-
tion. We would be pleased to discuss these matters further with you at your
convenience.
Sincerely,
Kemp 8 Rosasco
-41-
APPENDIX
MANAGEMENT'S RESPONSIBILITY FOR, AND THE OBJECTIVES AND LIMITATIONS OF,
INTERNAL ACCOUNTING CONTROL AND THE DEFINITION OF A MATERIAL WEAKNESS
The following comments concerning management's responsibility for internal
accounting control , the objectives of and the inherent limitations on a system
of Internal accounting control , and the definition of a material weakness are
excerpts from Statements on Auditing Standards of the American Institute of
Certified Public Accountants.
Management's Responsibility
Management . . . Is responsible for establishing and maintaining a system o
Internal accounting control ® In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected benefits and
related costs of control procedures.
Objectives
The objectives of a system are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from unauthorized
use or disposition, and that transactions are executed In accordance with
management's authorization and recorded properly to permit the preparation o
financial statements In accordance with generally accepted accounting prin-
ciples.
Limitations
Because of Inherent limitations In any system of internal accounting control ,
errors or irregularities nevertheless may occur and not be detected. Also,
projection of any evaluation of the system to future periods Is subject to the
risk that procedures may become Inadequate because of changes In conditions or
that the degree of compliance with procedures may deteriorate.
aterial . eakness
A material weakness (for the auditor's purpose) Is a condition In which the
specific control procedures, or the degree of compliance with them, do not ( in
the auditor's judgement) reduce to a relatively low level the risk that errors
or Irregularities In amounts that would be material In relation to the finan-
cial statements being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned unc-
tions. These criteria may be broader than those that may be appropriate for
evaluating weaknesses In accounting control for management or other purposes®
®42®
KEMP F� ROSASCO
Certified Public Accountants
ORVIS M. KEMP, C.P.A. 1438 KENNEDY DR. MEMBER OF AMERICA N INSTITUTE
WM. 0. KEMP, C.P.A. #12 LUANI PLAZA 9 P. 0. BOX 309 AND FLORIDA INSTITUTE OF
KEY WEST, FL 33041-0309
PETER L. ROSASCO, Jr., C.P. (305) 294-2581 CERTIFIED PUBLIC ACCOUNTANTS
MARVA E. GREEN, C.P.A.
February 10, 1984
Mr. Ervin A. Higgs
Property Appraiser
Monroe County, Florida
Key West, Florida 33040
Dear Sir:
We have examined the financial statements of Monroe County, Florida for the
year ended September 30, 1983, and have Issued our report thereon dated
February 10, 1984. As part of our examination, we made a study and evaluation
of the County's system of Internal accounting control to the extent we con-
sidered necessary to evaluate the system as required by generally accepted
auditing standards. The purpose of our study and evaluation was to determine
the nature, timing, and extent of the auditing procedures necessary for expre-
ssing an opinion on the County 's financial statements. Our study and eva-
luation was more limited than would be necessary to express an opinion on the
system of Internal accounting control taken as a whole.
The observations reported herein should be considered In the context of the
responsibility of management for establishing and maintaining a system of
Internal accounting control , the objectives of and Inherent limitations on
such a system and the definition of a material weakness for purposes of this
report, which are described In the Appendix to this report.
Our study and evaluation made for the limited purpose described In the first
paragraph would not necessarily disclose all material weaknesses In the
system. Accordingly, we do not express an opinion on the system of Internal
accounting control of Monroe County, Florida taken as a whole. However, our
study and evaluation disclosed no condition that we believe Is a material
weakness.
Our examination did disclose the following conditions that, although not con-
sidered by us to be material weaknesses, are weaknesses In Internal accounting
control for which corrective action might be taken.
-43-
Mr. Ervin A. Higgs
Property Appraiser
Page 2
Segregation of Duties
Observation: [wring the course of our tests, It was noted that the bookkeeper
prepares and malls cheeks, records receipts, prepares the bank deposit and
reconciles the checking account. The effect of this combination of respon-
sibilities Is to create a situation In which errors or Irregularities could be
perpetrated and concealed®
Recommendation: In carder to strengthen Internal control , we recommend that
Mr. Higgs' secretary prepare all bank deposits. We further recommend that she
be responsible for mailing checks after Mr. Higgs has signed them® These
two procedures reduce the possibility that errors could be made and concealed.
Procedures have since been Implemented by the Property Appraiser to segregate
accounting functions®
Signature Stamp
Observation: Several checks selected for our tests were signed by a signature
stamp such as that used for farm letters. The signature stamp Is In the
bookkeeper's possession®
Recommendation: The signature stamp Is not authorized for check signing pur-
poses and Mr. Higgs should personally sign all checks. In view of the
booeeper's duties as outlined above, we recommend that Mr. Higgs° secretary
have custody of the signature stamp® Procedures have since been Implemented
by the Property Appraiser to control the use of the signature stamp®
REGULATORY REPORT I NG PEQUIRLMENTS
We have reviewed the financial report filed with the Department of Banking and
Finance for the year ended September 30, 1983 pursuant to Section 218.36,
Florida Statutes, and have found the amounts reported therein to be In
agreement with the amounts Included in the financial statements on which we
have issued our report dated February 10, 1984.
The rules of the Auditor General , State of Florida, require that this letter
be filed with the Auditor General along with audited financial statements.
This report Is Intended solely for the use of management and the Auditor
General and should not be used for any other purpose®
® m
r. Ervin A. Higgs
Property Appraiser
Page 3
e appreciate the cooperation extended us during the course of our examina-
tion. We would be pleased to discuss these matters further with you at your
convenience.
Sincerely,
4;10 ea-�
Kemp & Rosasco
-45-
APPENDIX
MANAGEMENT'S RESPONSIBILITY FOR, AND THE OBJECTIVES AND LIMITATIONS OF,
INTERNAL ACCOUNTING CONTROL AND THE DEFINITION OF A MATERIAL WEAKNESS
The following comments concerning management's responsibility for internal
accounting control , the objectives of and the Inherent limitations on a system
of Internal accounting control , and the definition of a material weakness are
excerpts from Statements on Auditing Standards of the American Institute of
Certified Public Accountants.
Management's Responsibility
Management . .. Is responsible for establishing and maintaining a system o
Internal accounting control . In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected benefits and
related costs of control procedures.
Objectives
The objectives of a system are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from unauthorized
use or disposition, and that transactions are executed In accordance with
management's authorization and recorded properly to permit the preparation of
financial statements In accordance with generally accepted accounting prin-
ciples.
Limitations
Because of Inherent limitations In any system of Internal accounting control ,
errors or Irregularities nevertheless may occur and not be detected. Also,
projection of any evaluation of the system to future periods Is subject to the
risk that procedures may become Inadequate because of changes In conditions or
that the degree of compliance with procedures may deteriorate.
Material Weakness
A material weakness (for the auditor's purpose) Is a condition In which the
specific control procedures, or the degree of compliance with them, do not (in
the auditor's judgement) reduce to a relatively low level the risk that errors
or irregularities In amounts that would be material In relation to the finan-
cial statements being audited may occur and not be detected within a timely
period by employees In the normal course of performing their assigned func-
tions. These criteria may be broader than those that may be appropriate for
evaluating weaknesses In accounting control for management or other purposes.
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KEMP & ROSASCO
Certified Public Accountants
1438 KENNEDY D .
ORVIS M. KEMP, C.P.A. #12 LUANI PLAZA - P. 0. BOX 309 MEMBER OF AMERICAN INSTITUTE
M. 0. KEMP, C.P.A. KEY WEST, FL 33041-0309 AND FLORIDA INSTITUTE OF
PETER L. ROSASCO, Jr., C.P.A. (305) 294-2581 CERTIFIED PUBLIC ACCOUNTANTS
MARVA E. GREEN, C.P.A.
February 10, 1984
Mr. William (Bill ) Freeman
Supervisor of Elections
Monroe County, Florida
Key West, Florida 33040
Dear Sir:
We have examined the financial statements of Monroe County, Florida for the
year ended September 30, 1983, and have Issued our report thereon dated
February 10, 1984. As part of our examination, we made a study and evaluation
of the County 's system of Internal accounting control to the extent we con-
sidered necessary to evaluate the system as required by generally accepted
auditing standards. The purpose of our study and evaluation was to determine
the nature, timing, and extent of the auditing procedures necessary for
expressing an opinion on the County's financial statements. Our study and
evaluation was more limited than would be necessary to express an opinion on
the system of Internal accounting control taken as a whole.
The observations reported herein should be considered In the context of
responsibility of management for establishing and maintaining a system of
Internal accounting control , the objectives of and Inherent limitations on
such a system, and the definition of a material weakness for purposes of this
report, which are described In the Appendix to this report.
Our study and evaluation made for the limited purpose described In the first
paragraph would not necessarily disclose all material weaknesses In the
system. Accordingly, we do not express an opinion on the system of Internal
accounting control of Monroe County, Florida taken as a whole. However, our
study and evaluation disclosed no condition that we believe Is a material
weakness.
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r. William (Bill ) Freeman
Supervisor of Elections
Page 2
Regulatory Reporting Requirements
We
have reviewed the financial report filed with the Department of Bankingand
Finance for the year ended September 30, 1983, pursuant to Section 218.36,
Florida Statutes, and have found the amounts reported therein to be In
agreement with the amounts included In the financial statements on which we
have Issued our report dated February 10, 1984.
The Rules of the Auditor General , State of Florida, require that this letter
be filed with the Auditor General along with audited financial statements.
This report Is Intended solely for the use of management and the Auditor
General and should not be used for any other purpose.
We appreciate the cooperation extended to us during the course of our min -
lon. We would be pleased to discuss these matters further with you at your
convenience.
Sincerely,
Kemp & Rosasco
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APPENDIX
MANAGEMENT'S RESPONSIBILITY FOR, AND THE OBJECTIVES AND LIMITATIONS OF,
INTERNAL ACCOUNTING CONTROL AND THE DEFINITION OF A MATERIAL WEAKNESS
The following comments concerning management's responsibility for Internal
accounting control , the objectives of and the Inherent limitations on a system
of internal accounting control , and the definition of a material weakness are
excerpts from Statements on Auditing Standards of the American Institute o
Certified Public Accountants.
Management's Responsibility
Management . .. Is responsible for establishing and maintaining a system o
Internal accounting control . In fulfilling this responsibility, estimates and
judgements by management are required to assess the expected benefits and
related costs of control procedures.
Objectives
The objectives of a system are to provide management with reasonable, but not
absolute, assurance that assets are safeguarded against loss from unauthorized
use or disposition, and that transactions are executed In accordance with
management's authorization and recorded properly to permit the preparation of
financial statements In accordance with generally accepted accounting prin-
ciples.
Limitations
Because of Inherent limitations In any system of Internal accounting control ,
errors or Irregularities nevertheless may occur and not be detected. Also,
projection of any evaluation of the system to future periods Is subject to the
risk that procedures may become Inadequate because of changes In conditions or
that the degree of compliance with procedures may deteriorate.
Material Weakness
A material weakness (for the auditor's purpose) is a condition In which the
specific control procedures, or the degree of compliance with them, do not ( in
the auditor's judgement) reduce to a relatively low level the risk that errors
or Irregularities In amounts that would be material In relation to the finan-
cial statements being audited may occur and not be detected within a timely
period by employees in the normal course of performing their assigned unc-
tions. These criteria may be broader than those that may be appropriate for
evaluating weaknesses In accounting control for management or other purposes.
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