CALER, DONTEN, LEVINE, COHEN, PORTER & VEIL, P.A.

Transcription

1 CALER, DONTEN, LEVINE, COHEN, PORTER & VEIL, P.A. CERTIFIED PUBLIC ACCOUNTANTS WILLIAM K CALER, JR, CPA LOUIS M COHEN, CPA JOHN C COURTNEY, CPA, JD DAVID S DONTEN, CPA JAMES B HUTCHISON, CPA JOEL H LEVINE, CPA JAMES F MULLEN, IV, CPA THOMAS A PENCE, JR, CPA SCOTT L PORTER, CPA MARK D VEIL, CPA 505 SOUTH FLAGLER DRIVE, SUITE 900 WEST PALM BEACH, FL TELEPHONE (561) FAX (561) info@cdlcpa com Communication with Those Charged with Governance MEMBERS AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS FLORIDA INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS To the Honorable Mayor and We have audited the financial statements of the governmental activities, the business-type activities, each major fund and the aggregate remaining fund information of the (the Town ), for the year ended September 30, Professional standards require that we provide you with information about our responsibilities under U.S. Generally accepted auditing standards and Government Auditing Standards, issued by the Comptroller General of the United States, as well as certain information related to the planned scope and timing of the audit. We have communicated such information to you in our engagement letter dated August 20, Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Town are described in Note A to the financial As described in Note A to the financial statements, the Town adopted three new pronouncements of the Governmental Accounting Standards Board (GASB) during the fiscal year ended September 30, 2014, as follows: GASB Statement No. 66, Technical Corrections 2012 An Amendment of GASB Statements No. 10 and 62, amends Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues. GASB Statement No. 67, Financial Reporting for Pension Plans An Amendment of GASB Statement No. 25. GASB Statement No. 70, Accounting and Financial Reporting For Nonexchange Financial Guarantees. These pronouncements had no significant impact on the Town s financial statements, except for providing additional disclosures regarding the Municipal Police Officers Retirement Trust in the notes to the financial statements for GASB Statement No. 67. We noted no transactions entered into by the Town during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period. Accounting estimates are an integral part of the financial statements prepared by management and are based on management s knowledge and experience about past and current events and assumptions about

2 Page Two future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the Town s financial statements were: Management s estimate of the fair value of investments at September 30, We evaluated the key factors and assumptions used to estimate the fair value of investments and related investment earnings in determining that the amounts are reasonable in relation to the financial statements taken as a whole. Management s estimate of the net realizable value of accounts receivable and notes receivable at September 30, We evaluated the key factors and assumptions used to estimate the net realizable value of receivables and the related allowance for doubtful accounts in determining that the amounts are reasonable in relation to the financial statements taken as a whole. Management s estimate of the remaining service lives of property and equipment at September 30, We evaluated the key factors and assumptions used to estimate the useful service lives and related depreciation expense in determining that the amounts are reasonable in relation to the financial statements taken as a whole. Management s estimate of the obligations for the Town s pension and other postemployment benefits (OPEB) as of September 30, We evaluated the key factors and assumptions used to estimate the amount of the Town s net pension asset and OPEB obligation. We read and compared these estimates to the actuarial reports provided by the Town s actuaries in determining that the amounts are reasonable in relation to the financial statements taken as a whole. Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were: The disclosures related to cash, cash equivalents and investments in Note B to the financial The disclosures related to notes receivable in Note D to the financial The disclosures related to the Town s noncurrent liabilities in Note F to the financial The disclosures related to the Town s employee retirement plans in Note I to the financial The disclosures related to the Town s other postemployment benefits in Note J to the financial The disclosures related to commitments and contingencies in Note L to the financial The disclosures in the financial statements are neutral, consistent and clear. Difficulties Encountered in Performing the Audit We encountered no difficulties in performing and completing our audit.

3 Page Three Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. We proposed and management made adjusting entries related to debt issuance costs, accounts payable/accrued expenses, fund balance, and expenses. The attached Summary of Unadjusted Audit Differences summarizes the uncorrected misstatements of the financial Management has determined that the effects are immaterial, both individually and in the aggregate, to the financial statements as a whole. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated March 27, Management Consultations with other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a second opinion on certain situations. If a consultation involves application of an accounting principle to the Town s financial statements or a determination of the type of auditor s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Internal Control Related Matters In planning and performing our audit of the Town s financial statements we considered the Town s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the Towns financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town s internal control. Accordingly, we did not express an opinion on the effectiveness of the Town s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance Related Matters As part of obtaining reasonable assurance about whether the financial statements of the Town are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,

4 Page Four contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we did not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Other Audit Findings or Issues We have reported certain additional matters in our management letter that are required to be reported by Chapter , Rules of the Florida Auditor General, and other matters that we wish to bring to the attention of those charged with governance, which were not considered to be material weaknesses or significant deficiencies in internal control or compliance matters required to be reported under Government Auditing Standards. We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Town s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters Other Information in the Comprehensive Annual Financial Report (CAFR) U.S. generally accepted accounting principles require that management s discussion and analysis and the budgetary comparison schedules for the General Fund and major special revenue fund be included as required supplementary information to supplement the basic financial Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with U.S. generally accepted auditing standards, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial We did not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The introductory section, the combining fund financial statements and individual fund budgetary comparison schedules, and the statistical section as listed in the table of contents are presented as supplementary information accompanying the basic financial statements for purposes of additional analysis and are not a required part of the basic financial The combining fund financial statements and individual fund budgetary comparison schedules are the responsibility of management and were derived from and directly related to the underlying accounting and other records used to prepare the financial The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with U.S. generally accepted auditing standards. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole.

5 Page Five The introductory section and statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. This report is intended solely for the information and use of the Town Council, Audit Committee and management of the, and the Auditor General of the State of Florida and is not intended to be and should not be used by anyone other than these specified parties. West Palm Beach, Florida March 27, 2015

6 Summary of Unadjusted Audit Differences Client: Audit date: September 30, 2014 No. W/P ref. Account (Audit differences are recorded as journal entries including a description of the entry) Assets and Deferred Outflows - Governmental Assets and Deferred Outflows - Business-type Analysis of audit differences Debit/(Credit) Liabilities and Liabilities and Deferred Inflows Deferred Income/Expenses - Governmental Inflows Business-type Fund Balance Net Position Govt-Wide Fund Basis Govt-Wide Fund Basis Govt-Wide Fund Basis Bus-Type Fund Basis Govt-Wide Bus-Type Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) Unrecorded Audit Differences - Errors Doubtful Accounts 9,859 9,859 Allowance for Doubtful Accounts (9,859) (9,859) To adjust allowance for doubtful accounts to aging schedule Regular Salaries 15,854 15,854 Accrued Wages Payable (15,854) (15,854) To adjust accrued wages payable at September 30, Due from the State of Florida 425, ,761 Fund Balance (405,830) (405,830) State Shared Proceeds (19,931) (19,931) To adjust for 2014 accrual of Half Cent Sales Tax revenue a Accounts Receivable 445,475 Charges for Services - Water Revenue 99,763 Net Position - Unrestricted (545,238) To adjust for unbilled accounts receivable and revenue Professional expenses 50,000 50,000 Accrued settlement costs (50,000) (50,000) To record insurance deductibles paid for Wade and Estep cases settled after that should be accrued. 6 Inspector General fees 67,500 67,500 67,500 Accrued expenses (67,500) (67,500) (67,500) To accrue estimated Inspector General fees due for 2011 to 2014 pursuant to lawsuit judgment. Judgmental Difference Doubtful Accounts 133, ,175 Allowance for Doubtful Accounts (133,175) (133,175) To adjust the allowance for the BioTech loan receivable Balance sheet totals 266, , ,475 (117,500) (117,500) (67,500) 256, , ,263 (405,830) (405,830) (545,238) Financial statement amounts 150,702,728 63,429, ,672,128 (32,163,328) (15,227,420) (40,131,261) (48,202,469) (118,539,400) (249,540,867) Effect of unrecorded audit differences on F/S amounts 0.18% 0.42% 0.15% 0.37% 0.77% 0.17% 0.84% 0.34% 0.22% Income effect of unrecorded audit differences 256, , ,263 Cumulative effect of unrecorded audit differences before turn-around effect 256, , ,263 Turn-around effect of prior-period unrecorded audit differences 6,017 (68,371) (236,217) Cumulative effect of unrecorded audit differences, after turn-around effect 262, ,086 (68,954) Current year change in net position GW Basis -2.93% (8,951,530) N/A (13,895,444) 0.50% Current year change in fund balances Fund Basis -8.34% N/A (2,254,865) (13,895,444) 0.50%

7 Governmental Activities Governmental Funds Business-type Activities CDL Summary of Audit Differences (Continued) Prior Year Current Year Prior Year Current Year Prior Year Current Year Income Effect Reversal Income Effect Reversal Income Effect Reversal Prior Year Audit Differences Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) Debit/(Credit) 1 To record due from state amount (37,194) 37,194 37,194 (37,194) To adjust allowance for doubtful accounts 15,052 (15,052) 15,052 (15,052) To record income effect of unbilled water charges ,217 (236,217) 4 To adjust wages payable at year end 16,125 (16,125) 16,125 (16,125) 0 0 Net Prior Year Errors (6,017) 6,017 68,371 (68,371) (236217)