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Fiscal Year 1985 MONROE COUNTY, FLORIDA FINANCIAL STATEMENTS S mTEMBER 30, 198 MONROE C Y, FLORIDA FINANCIAL STATEMENTS SEPTEMBER 30. 1985., KEW & ROSASCO CERTIFIED PUBLIC ACCOUNTANTS CONTENTS � Independent Auditors' Opinion l General Purpose Fi nancia | Statements: Combined Balance Sheet - All rund Types and Account Groups 2-3 Combined Statement of Revenues, Expenditures and Changes in rund Balances - All 3overn/nenfa | 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, Fxpansos 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 3-19 Supplemental Statements: Clerk of the Circuit Court: Ba |aice Sheet 21) Statements of Revenues and Opendifuros - Governmental Fund Tyne and Receipts and Dishursanenfs - Fiduciary Fund Type 21 Property Appraiser: Balance Sheet 22 Statement of Revenues and Fxpendifures 23 Supervisor of Elections: Sfofemen+ of Revenues and Expenditures 24 Sheriff: Balance Shoots - All Fund Types and Account Groups 25 Statements of Revenues and Expenditures - Governmental Fund Types and Receipts and Disbursements - Fiduciary Fund Types 26 Tax Collector: Balance Sheets - All Fund Types 27 Statements of Revenues and Expenditures - Governmental Fund Type and Receipts and Disbursements - Fiduciary Fund Types 2R Management Letters 29-50 Single Audit Act Compliance Lnffar 51-52 KEMP �j R[)SASCO N"do/ /owx, i' mn/.m/, 143e uEwmeo, OR #/c LuAm PLAZA e p O� u0x /529 KEY vvESr' FL 3304/'1529 ORV|Sm. KEmP' [.P.A. (305) 290258/ msmasn OF 4wER|cAw INSTITUTE v/M. 0. xBmP, C.P.A. AND PLOmoA INSTITUTE OF perEn L. RCSAscO. //` C.P.A. [snT|nsD pUsu|[ ACCOUNTANTS mAavA E. GnsEw' [RA. /OsspH W. *cwDsesOw' [.p.A Honorable Members of the Runrd of County Connissioner� Monroe County, Florida: We have examined the general purpose financial statements of Monroe County (the "County") as of September 50~ 1985 and for the year then onded° listed in the accompanying table of contents. Our examination was mode 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 30r 1995 and the rasu |fs of oparufions of such combined funds and changes in financial position o/ 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 token as u 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 gmnora| 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. � .��4./�/ � 4-~ Kemp & Rosasco Certified Public Accountants February 21 , 1986 D D _0 M - o u m - C) C) rA0 I N D O N(D 0 W 0 0 -O d (11 < N N D DO DOn O N < N w ID c c 'o c + N 0 -(D -(D m N v> (D + C 0 N O O O O c N F X F 0) 3 -• -i 01 ID N --1O 0 Z< I N ++ + 7 a 3 +01 a CD d a I CD + N N 3 0 N < - O n 3 N K +(D c N c - M = -1 (D 01 01 3 N n O O N 0 m 0 m m + D 3 + + 0 (D CD N N T N m O + c 0 N N (D N - -n N N N O"9 a' 1 N N 7 l —0 F O + 0 + CT M 1 O 7 7 (D (D 1 0) 7 01 01 N + O N - (D (D 01 + G) T 0 N x - G7< N + N O c +c + c N n o 0 0 CD D. 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C)Z @ O� WJJ00N O\ Cl 1 I I I 1 I I �m I I I I mD _ r A A co W W 'A A A A A (0 A W vN0 A A A A A O0 O N � @ Q Z - I N + N @ ,di EA EA EF EH kA 3 @ N ^ N W N VI N VI N-+ W N VI A Vl A O) 111 @'.. W J O N 10 A W N �0�O O �O A N N N J C,N W �N -• N A In In W -� 'O A A W W In A 00 In(A W VI u IN N In �A O W In J �O IN N @ J J VI OD J u A 'OJ O\O rO) Ot IN iJ LAW O 0...0 v v J @ N O d 0 0 n D (n c r @ 3 (n 3 _@ .� O•A Ol ^ N 01 t0 o W W Ol VI(0 2 W N OD J OJ IN W N A W Vt IA OI W OD J J A W MW W W N co J O W W W D\ut 'O O !1ONR01E ("0lJl,t T Y, hn'I DA NOTES fO COMP I NE[1 E l NANC I AL STA F E4EN rs NOTE 1 - GENERAL INFORMATION Description - Monroe County (the "County") is a non-chartered political suhdivision of the State of Florida and is authorized the power of self- government by the Constitution of the :Mate of Florida and Florida Statutes. The Roard of County Com& 50 aners (the "Board") is the legisla- tive and governing body of the County® A County Administrator is appointed by the Board and is responsible for administrative and budgetary control of the resources of the County maintained in the funds ,and account groups listed below® The Constitution of the Sate of Florida also provides for five Constitutional Officers with specific duties and reporting responsibilities prescribed by the Statute. The Officers are: Clerk of the Circuit Court County "roherty Appraiser Supervisor of Elections County Sheriff County Tax Collector Annual operating budgets of these: Officers are suhmitted 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 contril basis of Presentation - The County" s accounting system is organized and operated on a NEW account group basis. A fund is defined as a fiscal and accounting entity with a self-balancing scat of accounts which is segre- gated for the purpose of carrying on specific activities or attaining cer- tain objectives. Account groups are used to establish accounting cant-al and accountabi I ity for the County's general fixed assets and the unmatured principal of its general long-term debt. Under Statutes of the Stair: of Florida, the five Constitutional Officers report their annual receipts and disbursements to the appropriate division 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 statements. nts. -9- "IONROE COUNTY Fl OR I DA NOTES 10 C0,1E3 I NED F I NANC I AE STATEMENTS SEPTEMBER 30, 1985 NOTE 1 - GENERAL INFORMATION (Continued) The accounting policies of the County conform to generally accepted accounting principles as applicable to government units® This report, the accounting systems and classification of accounts conform to standards of the National Council on Governmental Accounting (NCGA) and the Municipal Finance Officers Association of the United States and Canada, WFOA) , published in "Statement 1 , Governmental accounting, .Auditing and Financial Reporting Principles" which is a restatement of "Governmental Accounting and Financial ReportingP° (GAAFR) a The County maintains the three categories of fund types and certain account groups recommended in Statement 1 as described below: Governmental Fund Types: General Fund - Used to account for general operations of the County and all transactions which are not accounte' for in other funds or account groups. The General Fund includes the operations of the five Constitutional Officers® S ec1aI Revenue Funds - Used to account for the proceeds of specific revenue sources (other than special assessments) or to finance specified 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® sec i a 1 Ass essment�Funds - Used to account for the construction of improvements or provision of .services which are to be paid for wholly or in part f rori special assessments levied against benefited property® Capital Protect Funds - Used to account for the purchase or construction of major capital facilities which are not financed by proprietary funds® Proprietary Fund Types: enterprise Funds - Used to account for the financing of services to the general public where all or most of the costs involved are paid in the fora of charges to users of such services® Enterprise operations of the County are the operations of the Card Sound Road and Bridge Toll Fac i I i ty (the "bridge") and the Municipal Services District (the "WISD1P) -9- r1 NR01 GOU"ITY Fl OR 10A [" [" /fin q[]f \ L s...p_._'._�. T"_( ['' (` NO f ES f O CVI� B I NE D I I NA C i i�L S !ATEMENTS SEP FEVIBER 30, 1985 NOTE 1 - GENERAL INFORMATION (Continued) internal Service Fund - Used to account for services and commodities fur- nished by a designated activity of tho County to other departments of the County® Internal service operations are those of the County's Workmen' s Compensation Self-Insurance Fund and Group Health Self-Insurance Fund. Fiduciary Fund Types: AyaEj Funds_ - Used to account for as3ets held in a trustee or agency capacity for other funds, governmental units and individuals® These funds include certain fiduciary oper_ t-ions 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 1 49,961 ,792 Bonds and other 1 ,365,759 Collections pursuant to court ardor 1 ,274,819 Fines and forfeits 1 ,249,314 Charges for sorvices 1 ,046,732 Licenses 498,973 State ,fury 9 witness fees 77,687 Interest 126,645 Mortgage bids y �746�988 Total Collections 56,348,610 Distribution of collections 55 775 608 Net Collections 573,002 Cash and investments, September 30, 1984 - -1 �725,360 Cash and investments, September 30, 1985 S 2,298,36 Account Groups: General Fixed Assets Croup of Accounts - Used to _account for fixed assets ------------- owned by the County which are not accountel for in the enterprise funds. General Lone-Tern Debt, `;roun of Accounts - Used to account for the long- - tF,rM-indebtness of the County other than those which are obligations of the enterprise or special assessment funds. -10- t�10^JF,OE C0 Ur1TY, FLO1 I DA NOTES fC} CONIR I NEC) F I NANC f AL STATEMENTS S EP T 11 VIB P 3Q_19S5 NOTE 1 - 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 conplies 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, oortions of the budget in the financial state- ments have been reclassified to conform with reporting classifications of actual revenues and expenditure,. ROTE 2 - SU11VIARY OF SIGNIFICANT ACCOUNTIAG 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 avenues 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. 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. Restricted Assets .:and Reserves - Assets required to be segregated pursuant to-a bond ndeentare-are-i deaf i f i ed as restricted assets. Off-setting reserves are established by charges to retrained yearnings. -11- M0NR0E COUNTY, -FLOR|-DA NOTES T0 COMBINED FINANCIAL STATEMENTS SEPTE,48ER 30, 1485 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Grants from Qovernnuent A ies - Certain grants under various Federal and State programs�are -�� n -fhe 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 fnr'ns of the grants. In addition, the County receives certain monies under revenue sharing and other Federal and State programs. These programs, as wo| | 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-Ty-stem (the "System") which covers substantially all of the County' s full-time employees, without contribution from them. The Cuuntyrs rate of contribution, based upon total salaries, is defined by the System and pension costs are recorded in the period that salaries are earned. Sea Note 6. Property d Depreciation - All property of the County is recorded in the Cenera | 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 |ondf | | 1 sites 1-110 Buildings and other improvements 10-20 Bridges and improvements other than buildings 50 Machinery and equipment 3-18 -12- !IONRDE C0UNTYL FLORIDA NOTES-TO C0MB|NEO -F|NANC|AL -5TATEVENTS SEPFEMBER 3O -|985 � � �� NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Upon the disposition of property, the related cost and accumulated depre- ciation is removod frzm the accounts with a gain or loss on disposition reflected in net income. A summary of proprietary fund type fixed assets for the year ended September 30, 1985 follows: Enterprise Funds _____ ___ Land 9 214, 105 Buildings & other Improvements 154, 181 Roads & bridges 2,512,679 Equipqenf g 337 751 Total Property 12,268,716 Less acc,mu | afed depreciation 3 675 236 Net Property 8^595,480 A summary of changes in Senera| Fixed Assets follows: 8o !onco Balance Sa f �O 1g84 Additions Deletions Sept. 30 1985 _ue Land $ 6,389v230 256^050 6v645,280 Buildings & other improvements 13,399,543 2,046,580 - 14,546,123 Equipment 9J067 961 ___l �5O9� 97 ___ 437J964 ____K} �40094 Total 2/r756�734 $ 3,812,627 $ 437,964 31 , 131 ,497 Discounts _o» BondsPDyab|-e - Discounts on bonds payable are amortized using the sfrdighf-line method over the maturities of the related bonds. Combined Financial Information - Total columns in combined financial sta- _ __ ________________ tenants �hich �re nof�d '�1em�randun Dn /y" aggregate the columnar amounts presented by fund type and account group. These total columns do not pre- sent consolidated financial information. ,IONROF ('OUIJTY FLOP I OA NOTES ro COMBINED FINANCIAL 9TATE'Imrs SEPTEMBER 30, 1985 NOTE 3 - LONG-TERM DEBT Long-term debt consists of the following: Additions 1984 (Reductions) 1985 Payable from restricted assets: Revenue Bonds, secured by reve- nues of the Bridge which are obligations solely of that fund, payable September 1 , 1997, bearing interest at 5.75% payable semi-annually c 1 ,265,000 (440,000) 325,000 Less unamortized discount 7,808 1 247 192 (432,435) 814,757 Improvement Bonds, secured by revenues of IMSD which are obli- gations solely of that fund, payable in installments 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 7,865,000 (55,000) 7,310,000 Less unamortized discount 18 7 688 778 (48 222) 7,640 556 Total payable from restricted assets -14- MON�OF COUMTY FLOR|D� �� NOTE_S__TO C0MR|-NED -F |NANC|-AL-STATEqENTS 5EPFEMBBl 30 1985 NOTE 3 - LONG-TERM DEBT (Continued) Other long-term debt: Additions General Obligation Bonds, y984 (Reductions) y935___ secured by tax levies which represent obligations of the County as a whole and not its individual constituent funds, bearing interest at rates from 3° 50 to 4.25% payable semiannually, redeemed in full during the year from res- tricted funds 690*000 (690,000) Refunding Improvements Revenue Bonds, secured by Race Track and Jai Alai Fronton Revenues received by the County under Florida Statutes, payable in installments of various amounts from July 1 , 1984 until July 1 , 2011 , bearing interest at rakes from 7.40 to 9.25% payable semiannually 2» 110*000 (25*000) 2» 105,000 Lease obligations, secured by equipment with purchase costs of $ 17,356, payable in monthly installments totalling $ 447, including interest imputed at 10.75%. 15,995 (5,428) 10,567 Lease obligation, secured by equip- ment with purchase cost of $233,860* payable in semi-annual installments of $13, 187, includ- ing interest imputed at 10%* due November, 1990 - 150»000 150,000 Accrued annual leave 453*018 (6,060) 446,958 Note payable to bank, unsecured, payable May 1 , 1985 with interest of 6.910 ______l7700 �� 3p466JJ[5 $ (753.488) � 2 [2 ��i� �� / -15- MONROE COUNTY ��FLOR|DA NOTE� T0 COMBINED FINANCIAL STATEMENTS SEPTPIBE� �U l�85 ___________ NOTE 3 - LONG-TERM DE0T (Continued) Additions 1�84 (Reductions) 1985 Balance Brought Forward S 3,446*013 753,488) 2,712°525 Note payable to bank, unsecured, payable in monthly installments of $4,533 including interest at 6°9%, due May, 1986. Total a- mount of borrowing was $120,018 ____________ ____ 80�)L6 _ 8O926 Total other long-term debt ]��6�U[} (6725��) 2 7A3 451 �� Tax anticipation notes: Note payable to bank, secured by fox anticipation warrant, payable in installments of $20,000 due September 12, 1986 - 1993 from special assessment funds, bearing in- terest at 7% 180,000 (20°000) 160,000 Note payable to bank, secured by tax anticipation warrant, payable on October 1 , 1985 from capital project funds, bearing interest at 7~25% 400,000 (400,000) - Notes payable to bank, secured by tax anticipation warrants, payable on or before July 10, 1986 from special assessment funds, bearing interest at 7°5% � 144 500 144 5UO Total tax anticipation notes 580 OOU (27� 5OO) 304 500 Total long-term debt, net of related discounts $ 12,981 ,983 ( 1 ,428,719) $11 °553,264 -16- MONROE COUNTY, -FLOR I DA NOTES TO COMBINED FINANCIAL STATFMENTS S EPTEMBER 0 1985 NOTE 3 ®- LONG-TERM DEBT (Continued) The annual requirements to amortize outstanding bonded debt is as follows: Payable from September Restricted Tax Antici- 30 Total Assets Other ation Notes 1986 $ 1 ,934,570 $ 918,933 $ 791 , 137 164,500 1987 1 ,307,866 1 ,032,667 255, 199 20,000 1988 1 ,287,829 1 ,025,839 241 ,990 20,000 1989 1 ,279,875 1 ,022,885 236,990 20,000 1990 1 ,268,584 1 ,014,370 234,214 20,000 1991-1995 6, 146,299 5,010,907 1 ,075,392 60,000 1996-2000 5,752,905 4,686,961 1 ,065,944 - 2001-2005 4,434,262 3,376,798 1 ,057,464 - 2006-2010 2,607,325 1 ,550,250 1 ,057,075 - 2011-2015 5�669 262 1t!687 207 575 - 31 ,688,777 25, 161 ,297 6,222,980 304,500 Less: Unamortized discount 179,687 179,687 - Interest 119p955j1336 16,526,297 _3J4291_52�11 Total at present value 11 ,553,254 8,455,313 $ 2,793,451 $ 304,500 Under the terms of the revenue bond issues, the Card Sound Bridge and MSD are required among other things, to establish rates and collect fees and charges which will be sufficient at all times to pay the cost of maintaining and operating related assets, pay the principal and interest requirements of the outstanding revenue bonds and create and maintain specified reserves for such purposes® NOTE 4 ® SUBSEQUENT EVENT, ADVANCE REFUNDING OF REVENUE BONDS By resolution adopted December 6, 1985, the County provided for the advance refunding of the MSD Improvement Revenue Bonds in the principal amount of $7,810,000 by the sale. of Nonroe County "lunicipal Service District Refunding Improvement Revenue Bonds, Series 1985. All of the principal amount of the Series 1985 issue will be used to advance refund the refunded bonds® -17- MONROE COUNTY FLORIDA NOTES TO COMBINED FINANCIAL STATEMENTS SEPTEMBER 3O 1985 NOTE 5 - SELF INSURANCE PROGRAM The County is self-insured for Workmen's Compensation claims up to $ 125r000 for each occurancm, and maintains coverage for c|mlns in excess of those amounts to a limit of ID 5,000,000 per occurance with independent insurance carriers. The liability for Workmen's Compensafion claims, which is considered adequate by management, represents the estimate for all claims. The County is also self-insured for health insurance claims up to $ 25,000 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. As of September 30, 1985 there was no | iabl | 7fy for outstanding claims. NOTE 6 - PENSION PLAN The County participates in the Florida Retirement System (the "System") which covers substantially all of the Counfy'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° 1985p as required and defined by the System, approximated $ 1 °573p000. 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 $6.5 billion as of July 1 ° 1983p the |afasf valuation data 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 | |abi | |fy will arise from any such aud /fs- -l8- M0NQOE COUNTY FLOR|DA NOTES TO COMBINED FINANCIAL STATEMENTS SEPTEMBER 30 1985 NOTE 7 - CONTINGENCIES AND COMMITMENTS (Continued) 4 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 Counfyvs financial position or results of operations. NOTE 8 - SCHEDULE OF FEDERAL ASSISTANCE P C�f�|o N R E � d |f r /~rz��a* \'�T�/��_«�� Revenues x Direct Criminal Justice Other $ 1 ,033,745 $ 1 ,033°745 Federal Revenue Sharing 21. 300 658,805 658,605 Airport Development Aid Program 20. 106 7,845 - Airport Improvement program 20. 106 632 �47 628 077 Total Direct Federal Assistance 2'332,842 2,320*427 Indirect Transportation 13.633 79,607 $ 79v607 Senior Community Services 17.235 212,582 203,051 Homemakers 13.633 111 ,466 111 °966 Nutrition 13°635 239v230 239°230 Community Care for the Elderly 13°833 300,268 300,268 Job Training Partnership Act 17.246 54.725 50 596 Total Indirect Federal Assistance $ 998,378 $ 984,718 -19- MONROE COUNTY, FLORIDA CLERK OF THE CIRCUIT COURT SUPPLEMENTAL BALANCE SHEET - AGENCY FUND SEPTEMBER 301985 Assets: Cash $ 1 ,283,864 Accounts receivable 69765 Total Assets $ IP29OR629 Liabilities: Due to Board of County Commissioners $ 129,239 Due to other governments 408,016 Due to others 7539374 Total Liabilities $ 1 ,290,629 -20- MONROE COUNTY_, FLORIDA CLERK OF THE CIRCUIT COURT SUPPLEMENTAL STATEMENTS OF REVENUES/RECEIPTS AND EXPENDITURES/DISBURSEMENTS FOR THE YEAR ENDED SEPTEMBER 30, 1985 GOVERNMENTAL FIDUCIARY FUND TYPE FUND TYPE TRUST AND GENERAL AGENCY Revenues/Receipts: Taxes 3,498,466 Court orders m 1 ,274,819 Fines and forfeitures 1 ,29,31 Mortgage bids 76,988 Charges for services 661 ,727 Other m 24,434 State of Florida m 77,687 Interest 36,507 Licenses 25,900 Board of County Commissioners 1626,974 Total Revenues/Receipts 1 ,626,974 7,815,842 Expenditures/Disbursements: Personal services 1 ,256,564 Equipment rental 32,041 Operating expenditures 306, 182 Capital outlay 32,167 Trust and agency disbursements 7,170,203 Total Expenditures/Disbursements 1 ,626,974 7,170,203 Excess of Revenues/Receipts over Expenditures/Disbursements -0- 645,639 -21® MONROE COUNTY FLOR|OA PROPERTY APPRAISER SUPPLEMENTAL BALANCE SHEET - GENERAL FUND SEPTEMBER 30 1985 Assets ~ Cush $ 46,306 Liabilities and Fund Balance: Liabilities - Due to other governments $ 70758 Fund Balance 38.548 Total Liabilities and Fund Balance $ 46,306 -22- MONROE COUNTY FLOR|DA PROPERTY APPRAISER SUPPLEMENTAL STATEMENT OF REVENUES AND EXPENDITURES - GENERAL FUND FOR THE YEAR ENDED SEPTEM0ER 30 1985 Revenues: Board of County Commissioners 803°713 Other taxing districts 161 248 Total Revenues 964 961 Expenditures: Personal services 702,336 Data processing services 66v750 Rental 9°218 Operating expenditures 150°396 Capital Outlay 13 491 Total Expenditures 942 lQ I Excess Of Revenues Over Expenditures 220,770 -23- MONROE COUNTY FLORIDA SUPERVISOR OF ELECTIONS SUPPLEMENTAL STATEMENT OF REVENUES AND EXPENDITURES - GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30 1985 Revenues - Board of County Commissioners $ 346 853 Expenditures: Personal services 204*743 Operating expenditures 81 *768 Capital outlay 60.342 Total Expenditures 346 853 Excess of Revenues Over (Under) Expenditures $ -O- 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. -24- M0NRDE COUNTY FL0RiDA S_HER|_FF __ _ SUPPLEMENTAL BALANCE SHEETS SEPTEMBER ]O 1985 FIDUCIARY GOVERNMENTAL FUND TYPES FUND TYPES ACCOUNT GROUPS SPECIAL TRUST GENERAL LONG- GENERAL REVENUE AND AGENCY FIXED ASSETS TERM DEBT Assets: Cash $ 46,371 $ 13* 126 409*706 $ $ - Other Current Assets - 1 ,850 - - ~ Property - - - 20716,662 - Amount to be Provided - - - - 381 962 Total Assets $ 46°371 $ 14,976 $ 409,706 $ 2 716 662 $ 381 ,962 Liabilities: Due to the Board of County Commissioners $ 322521 $ - $ ]4,0]8 $ $ - Due to Others - 3,515 375,668 � Long-term Debt - - - 381 A62 Total Liabilities 32 521 ] 515 409,706 - 381 .962 Fund Equity: Investment in General Fixed Assets - - 2,716*662 Fund Balance 13 850 11 461 ~ Total Fund Equity I] 850 1_1 461 - 2 716 862 - Total Liabilities and Fund Equity $ 46 37l $ 14 976 $ 409,706 $ 2 716 662 $ 381,962 -25- MQNROE COUNTY FLORIDA SHERIFF SUPPLEMENTAL STATEMENTS OF REVENUES/RECEIPTS AND EXPENDITURES/DISBURSEMENTS FOR THE YEAR ENDED SEPTEMBER 30 1985 GOVERNMENTAL FIDUCIARY FUND TYpES FUND TYPE SPECIAL GENERAL REVENUE AGENCY Revenues/Receipts: Board of County Commissioners $ 7,627,522 $ - $ � Charges for services - 54°793 - Cash bonds - - 076°820 Interest 61 ,654 - 1 °102 Other 28 105 - 244 5O5 Total Revenues/Reoeipfs 7 7l7 381 5_4 7g3 1 122 427 Expenditures/Disbursements: Personal services 5°012,001 � Rental and leases 44°502 - - Operating expenditures 1 ,980,039 51 ,931 � Capital outlay 635°580 � Trust and agency distributions - - 1 107 976 Total Expenditures/Disbursements 7 G72 122 51 931 1 107 976 Excess of Revenues/Receipts Over (Under) Expenditures/Disbursements 45°239 2,862 14°451 Other Financing Uses - Operating transfers out 66,511 - - Excess of Revenues/Receipts Over (Under) Expenditures/Disbursements and Other Uses $ (21 ,272) 2,862 $ 14,451 -26- MDNR0E COUNTY, FLORIDA TAX COLLErTOR SUPPLEMENTAL BALANCE SHEETS SEPTEMBER 3O 1985 GOVERNMENTAL FIDUCIARY FUND TYPE FUND TYPE Assets: Cash $ 20,863 $ 2700355 Investments 420 424 334 437 Total Assets $ 441 ,287 $ 604,792 Liabilities- Due to Other Governments $ 441 ^287 $ 598^362 Due to Others - 6,430 Total Liabilities $ 441 .4287 $ 604^792 -27- MONRDE COUNTY FLORIDA TAX COLLECTOR SUPPLEMENTAL STATEMENTS OF REVENUES/RECEIPTS AND EXPENDITURES/DISBURSEMENTS FOR THE YEAR ENDED SEPTEMBER 30 1985 GOVERNMENTAL FIDUCIARY FUND TYPE FUND TYPE GENERAL AGENCY FUND FUNDS Revenues/Receipts: Board of County Commissioners $ 858,094 Taxes - 44'431 ,947 Tax sale redemptions - 2»O31 °379 Licenses and permits - 472°973 Charges for services 4150256 3850005 Interest 26, 164 890037 Other 186,408 - Total Revenues/Receipts 1 485 922 47 410 341 Expenditures/Disbursements: Personal services 733»029 - Contractual services 116, 154 ~ Equipment rental 4»872 - Capital outlay 36,218 - Operating expenditures 154,583 - Trust and agency disbursements - 47 4A7 42A Total Expenditures/Disbursements 1 O44 656 47 4A7 429 Excess of Revenues/Receipts Over (Under) Expenditures/Disbursements 441 °266 (87»088) Other Financing Uses - Transfer of excess fees 441 ,266 - Excess of Revenues/Receipts Over (Under) Expenditures/Disbursements and Other Uses $ ~O- $ (87.9088) -28- KEMP F-1 ROSASC{) �er/ifietl yob//r A' oxntan/s 1438 KENNEDv DR. #/2 LVAN| PLAZA 9 p� 0. BOX /529 KEY vVE5T' R 33041 )52n ORV|SAA. KE/NP' C.P.A. (305) 294'2581 MEMBER OF A/NERiCAN |w5JOUTE VVM. 0. uEkxP' C.P.A. AND FLORIDA INSTITUTE OF PETER L. ROSAg[O' Jr., C.P.A. CERTIFIED PUBLIC ACCOUNTANTS /NARVA E. GREEN' C.P.A. JOSEPH W. HENDER5ON' C.P.A. February 21 » 1986 Mr. Donny L. Ko|hage Clerk Ex Offic|o Board 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° 1985, and have issued our report thereon dated February 21 ° 1986° As part of our examination,, we made o study and evaluation of the Counfy'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 on opinion on the Cuunfy's financial statements. Our study and evo| uofTun was more limited than would be necessary to express on opinion on the system of internal accounting control taken as o whole. The observations reported herein should be considered in the context of the responsibility of management for establishing and maintaining o system of internal accounting ounfro| ° the objectives of and inherent limitations on such o system, and the definition of o material weakness for purposes of this report, which are described in the Appendix to this report. For the purpose of this report, we have classified the significant internal accounting controls in the following categories: - General Accounting and Statutory Provisions - Cash on Hand - Cosh in Banks - Cosh Disbursements - Cush Receipts and Revenues - Investments - Property and Equipment -29- Mr. Danny L. Kolhage, Clerk Ex Officio Board of County Commissioners Page 2 (Categories Continued: ) - Interfund and Intergovernmental Transfers - Accounts Payable, Expenditures and Encumbrances ® Purchasing and Contracting - Payrolls - Other Current Liabilities - Bonds Payable ® Surety Bonds and Insurance Our study included all of the control categories listed above® 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. Municipal Service District Cash Receipts Records Observation: We were not able to trace a day's series of receipt forms issued for waste charges to a deposit, due to the format of the "daily re-cap". Although daily procedures are functioning well and provide effective controls, they do not provide a sufficient audit trail ® Recommendation: The "daily re-cap" should be modified to include the receipt numbers issued and the series of validated transaction numbers used which relate to a bank deposit® Board of County Commissioners Old Outstanding Checks Observation: Old outstanding checks are not removed from the bank recon- ciliations to make reconciliation procedures more efficient® Procedures should be implemented to remove such checks on a routine basis. Recommendation: The payees of these checks should be contacted when possible to determine why the check has not been cashed® If necessary, the old check should be voided and a new check issued. If this procedure does not resolve the problem, the old outstanding checks should be treated as unclaimed funds and recorded as a liability® Records should be maintained such that there is a detail of to whom and what amount is owed. In order to relieve the liabi- lity, you should consult with your attorney as to the proper legal procecures® -30- Mr. Danny L. Kohlage Clerk Ex Officic, Board of County Commissioners Page 3 Account Analysis Observation: Various balance sheet and revenue accounts which are susceptible to analysis and cross check are reconciled to details or other supporting documentation on an annual basis. Recommendation: The appropriate level of management should periodically review or prepare sufficient workpapers to determine that account balances are correctly stated on a routine basis, preferably monthly® Inactive Bank Accounts Observation: An inactive bank account has not been closed. Recommendation: All accounts with zero balances should be closed if management's intent is that they no longer be used. Regulatory Reporting Re quirements We have reviewed the financial report filed with the Department of Banking and Finance for the year ended September 30, 1985, 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 21 , 1986. 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, the Auditor General the cognizant audit agency and any other federal audit agencies and should not be used for any other purpose® We 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, V" Kemp & Rosasco Certified Public Accountants -31- 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 principles® 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® -32- KEMP & ROSASCO Certified Public Accountants 1438 KENNEDY DR. #12 LUANI PLAZA * P. O. BOX 1529 KEY WEST, FL 33041-1529 ORVIS M. KEMP, C.P.A. (305) 294-2581 MEMBER OF AMERICAN INSTITUTE WM. O. KEMP, C.P.A. AND FLORIDA INSTITUTE OF PETER L. ROSASCO, Jr., C.P.A. CERTIFIED PUBLIC ACCOUNTANTS MARVA E. GREEN, C.P.A. JOSEPH W. HENDERSON, C.P.A. February 21 , 1986 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, 1985, and have issued our report thereon dated February 21 , 1986. 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 night be taken® -33® Mr. Danny L. Kolhage Clerk of the Circuit Court Page 2 Inactive Bank Accounts Observation: An inactive bank account has not been closed® Recommendation: All accounts with zero balances should be closed if managment's intent is that they no longer be used® Reconciliation Procedures Observation: Cash-bond and unclaimed funds bank reconcilations are not matched against the detail records® This has resulted in transactions not being posted to the detail ® Recommendation: As part of the monthly procedures, the bank balance should be compared to the detail records and any differences should be resolved® computer Programs Observation: The daily register summary does not agree with the daily com- puter summary due to the way voided transactions are read by the computer® Voided transactions are deleted from the register summary but not from the computer summary report, which renders them out of balance® In addition, if the void key is accidentally hit, the next transaction is voided even though it is a valid transaction® Recommendation: In order to reduce manual reconciliation procedures, programs should be modified such that voided transactions are handled consistently for the register and daily summaries® In addition., the procedure for voiding a transaction should be made a two step process to safeguard against accidental voids® Observation: The computer system is not designed to accept late charges on traffic receipts® These charges are still recorded manually. Recommendation: The program should be expanded to include all charges collected by the Clerk to enhance accountability for all receipts® -34- Mr. Danny L. Kolhage Clerk of the Circuit Court Page 3 22julato We have reviewed the financial report filed with the Department of Banking and Finance for the year ended September 30, 1985, 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 21 , 1986. 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 examina- tion. We would be pleased to discuss these matters further with you at your convenience. Sincerely, Kemp 1 Rosasco Certified Public Accountants -35- 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 principles® 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® -36- KEMP �d ROSASCO Certified Public Accountants 1438 KENNEDY D . #12 LUANI PLAZA * P. O. BOX 1529 KEY WEST, FL 33041-1529 ORVIS M. KEMP, C.P.A. (305) 294-2581 MEMBER OF AMERICAN INSTITUTE WM. 0. KEMP, C.P.A. AND FLORIDA INSTITUTE OF PETER L. ROSASCO, Jr., C.P.A. CERTIFIED PUBLIC ACCOUNTANTS MA VA E. GREEN, C.P.A. JOSEPH W. HENDERSON, C.P.A. February 21 , 1986 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, 1985, and have issued our report thereon dated February 21 , 1986. 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. -37- Mr. Harry F. Knight Tax Collector Page 2 Old Outstanding Checks Observation: Old outstanding checks are not removed from the bank recon- ciliations to make reconciliation procedures more efficient. Procedures should be implemented to remove such checks on a routine basis. Recommendation: The payees of these checks should be contacted when possible to determine why the check has not been cashed. If necessary, the old check should be voided and a new check issued. If this procedure does not resolve the problem, the old outstanding checks should be treated as unclaimed funds and recorded as a liability. Records should be maintained such that there is a detail of to whom and what amount is owed. In order to relieve the liabi- lity, you should consult with your attorney as to the proper legal procedures. Regulatory Reporting Requirements We have reviewed the financial report filed with the Department of Banking and Finance for the year ended September 30, 1985, 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 21 , 1986. 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 examina- tion. We would be pleased to discuss these matters further with you at your convenience. Sincerely, Kemp & Rosasco Certified Public Accountants -38- 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 principles. 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. -39- KEMP FJ ROSASCO Certified Public Accountants 1438 KENNEDY D . #12 LUANI PLAZA * P. 0. BOX 1529 KEY WEST, FL 33041-1529 ORVIS M. KEMP, C.P.A. (305) 294-2581 MEMBER OF AMERICAN INSTITUTE WM. 0. KEMP, C.P.A. AND FLORIDA INSTITUTE OF PETER L. ROSASCO, Jr., C.P.A. CERTIFIED PUBLIC ACCOUNTANTS MARVA E. GREEN, C.P.A. JOSEPH W. HENDERSON, C.P.A. February 21 , 1986 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, 1985, and have issued our report thereon dated February 21, 1986. 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. -40- Honorable William A. Freeman, Jr. Sheriff Page 2 Civil Process Receipts Observation: Activity in this area has increased such that additional controls should be implemented and procedures mechanized to increase the speed and accuracy of the recording function. Recommendation: Cash registers should be installed® Receipts should be reconciled to the bank deposit on a daily basis® Inmate Commissar Observation: Evidence of receipt of purchases by Sheriff employees was not consistently documented. Recommendation: All invoices for goods should be signed by the employee at the time of delivery® Observation: The detail of inmate accounts does not agree to the total funds available® Recommendation: The appropriate level of management should be responsible for reviewing the detail and resolving any differences® Interest Income Observation: Interest earned on Sheriff funds is not recorded in the books of account. Recommendation: All funds available to or earned by the Sheriff should be appropriately recorded. Regulatory RepoELI n Requirements I�L!�eme�_ We have reviewed the financial report filed with the Department of Banking and Finance for the year ended September 30, 1985, pursuant to Section 116.03, 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 21 , 1986. -41- Honorable William A. Freeman, Jr. Sheriff Page 3 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 examina- tion. We would be pleased to discuss these matters further with you at your convenience. Sincerely, VI Kemp & Rosasco Certified Public Accountants -42- 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 m ®® 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 principles® 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® - 3® KEMP �1 ROSASCO Certifkd Pxb//r Awnnxtamts 1438 KFNNEDv DR. #12 LUAN| PLAZA w P. 0. BOX 1529 KEY vVBJ' FL 33041-1529 O0V|3kn. uEN^P' [.P.A. (305) 294-2581 MEMBER OF AMER|[AN INSTITUTE vVM. 0. KBMP, C,p& AND FLORIDA INSTITUTE Of PETER L. ROSAS[O' Jr., C.P.A. CERTIFIED PUBLIC ACCOUNTANTS &A40VA E. GREEN' C.P.A. JOSEp* W. *ENDERsOw' C.P.A. February 21 , 1486 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» 1485» and have issued our report thereon doted February 21 » 1486° As part of our examinotiun» we made o study and evaluation of the Counfyvs 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 on 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 token as a whole. The observations reported herein should be considered in the context of the responsibility of management for establishing and maintaining o 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. -44- Mr. Ervin A. Higgs Property Appraiser Page 2 Observation: We noted delays in the deposit of money received, ranging from four to fifteen days. Recommendation: Deposits should be made in a timely manner to prevent loss. Aproval of Time Cards Observation: Supervisors are required to review and approve employee time cards. We found no evidence that this procedure is performed. Recommendation: Supervisors should initial or sign time cards to document their review and approval . Purchase Orders Observation: The system requires that purchase orders be completed and approved for purchases that are nVnrVut|ne. This policy is not consistently followed. Recommendation: This policy should be consistently enforced to maintain mana- gement control over expenditures. Computer income Observation: Fees for the use of the property appraiser's computer have pre- viously been netted against the cost of the related computer expenses. The amount of the fees has become large enough that they should be recorded separately to provide more informative disclosure of activities. Recommendation: These fees should be budgeted and recorded as income. Correspondingly, the amount of computer expenses budgeted and recorded should be the amount expended for this purpose. We have reviewed the financial report filed with the Department of Banking and Finance for the year ended September 30, 1985r 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 21 , 1986~ -45- Mr. Ervin A. Higgs Property Appraiser Page 3 Regulatory Departing Requirements (Continued) 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 examina- tion® We would be pleased to discuss these matters further with you at your convenience. Sincerely, Kemp & Rosasco Certified Public Accountants -46- 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 s ® ® 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 principles® 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® m7® KEMP 8 ROSASCO Certified Public A(b(,ountants 1438 KENNEDY DR. #12 LUANI PLAZA * P. O. BOX 1529 KEY WEST, FL 33041-1529 ORVIS M. KEMP, C.P.A. (305) 294-2561 MEMBER OF AMERICAN INSTITUTE WM. O. EMP, C.P.A. AND FLORIDA INSTITUTE OF PETER L. RCSASCO, Jr., C.P.A. CERTIFIED PUBLIC ACCOUNTANTS MARVA E. GREEN, C.P.A. JOSEPH W. HENDERSON, C.P.A. February 21 , 1986 Mr. Robert Brown 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, 1985, and have issued our report thereon dated February 21 , 1986. 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. -48® Mr~ Robert Brown Supervisor of Elections Page 2 We have reviewed the financial report filed with the Department of Banking and Finance for the year ended September 30, 1985, pursuant to Section 218°36, Florida Statutes, and have found the amounts reported therein to be in agreement with the amounts included /n the financial statements on which we have issued our report dated February 21 , 1986. 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 examina- tion. We would ba pleased to discuss these matters further with you of your convenience. Sincerely, . / Kemp & Rosasoo Certified Public Accountants -49- 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 e 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 principles. Limitations Because of inherent limitations in any system of internal accounting control , errors or irregularities nevertheless may occur and not be defected~ 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 (ow 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 o 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" -50- KEMP 8 ROSASCO ('ertified Public Ac(onularits 1438 KENNEDY DR. #12 LUANI PLAZA e P. O. BOX 1529 KEY WEST, FL 33041 1529 ORVIS M. KEMP, C.P.A. (305) 294-2581 MEMBER OF AMERICAN INSTITUTE WM, O. KEMP, C.P.A. AND FLORIDA INSTITUTE OF PETER L. ROSASCO, Jr., C.P.A. CERTIFIED PUBLIC ACCOUNTANTS MARVA E. GREEN, C.P.A. JOSEPH W. HENDERSON, C.P-A. February 21, 1986 Mr. Danny L. Kolhage Clerk Ex Officio Board of County Commissioners Monroe County, Florida Key West, Florida 33040 Dear Sir: We have examined the combined financial statements of Monroe County, Florida as of and for the year ended September 30, 1985, and have issued our report thereon dated February 21 , 1986. Our examination, was made in accordance with generally accepted auditing standards; the provisions of S-tandards for Audit of Governmental Organizations, Programs, Activities and Functions, promulgated by the U.S. comptroller general , which pertain to financial and compliance audits; the Office of Management and Budget's (OMB) Compliance Supplement for .S_�Ie Audits of State and Local Governments (the approved compliance supplement) ; and the Single Audit Act of 1984 and the Guidelines for Financial and Compliance Audits of Federally Assisted Programs (guidelines) ; and, accordingly, included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances® The Single Audit Act requires that the examination include a determination of whether the federal financial reports ( including financial status reports, cash reports and claims for advances and reimbursements) prepared by Monroe County, Florida, contain accurate and reliable financial data® We have been informed that OMB interprets the phrase accurate and reliable financial data t r7o mean that the federal financial reports present—the underlying financial data of the grants within limits that are reasonable and practicable to attain under the circumstances. In our opinion, Monroe County, Florida, complied with the material terms and conditions of its federal grants, contracts and agreements, and the tested federal financial reports present the underlying financial data of the grants within the limits described in the preceding paragraph. Further, nothing came to our attention, to indicate that t4onroe County, Florida, had not complied with the compliance matters referred to above. Additionally, nothing came to our attention to indicate that the federal financial reports do not present the underlying financial data of the grants within the limits—described in the preceding paragraph. -51- r. Danny L. Kolhage Clerk Ex Officlo Board of County Commissioners Page 2 This report is intended solely for the use of Monroe County, Florida, and the cognizant audit agency and other federal audit agencies and should not be used for any other purpose. Kemp & Rosasco Certified Public Accountants - -