Manatee County, Florida Sheriff s Office

Transcription

1 AUDITED FINANCIAL STATEMENTS September 30, 2018

2 Sheriff's Office Table of Contents September 30, 2018 TAB: REPORT Independent Auditors Report 1 TAB: FINANCIAL STATEMENTS Balance Sheet Governmental Funds 4 Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental Funds 5 Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund 6 Statement of Assets and Liabilities Agency Fund 7 Notes to Financial Statements 8 Supplementary Information Statement of Changes in Assets and Liabilities Agency Fund 18 Additional Reports Independent Auditors Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 19 Independent Accountants Report 21 Management Letter 22

3 REPORT

4 INDEPENDENT AUDITORS REPORT To the Honorable Rick Wells Sheriff Report on the Financial Statements We have audited the accompanying financial statements of each major fund and the aggregate remaining fund information of the, (the Sheriff ), as of and for the fiscal year ended September 30, 2018, and the related notes to the financial statements, which collectively comprise the Sheriff s financial statements, as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions

5 Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each major fund and the aggregate remaining fund information of the Sheriff as of September 30, 2018, and the changes in financial position and budgetary comparison for the general fund thereof for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1 to the financial statements, the financial statements referred to above were prepared solely for the purpose of complying with the Rules of the Auditor General of the State of Florida. In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position of each major fund, and the aggregate remaining fund information, only for that portion of the major funds, and the aggregate remaining fund information, of Manatee County that is attributable to the Sheriff. They do not purport to, and do not, present fairly the financial position of Manatee County as of September 30, 2018, and the changes in its financial position for the fiscal year then ended in conformity with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Management has omitted the management s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not 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 operation, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Sheriff s financial statements. The Statement of Changes in Assets and Liabilities Agency Funds, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the financial statements. The Statement of Changes in Assets and Liabilities Agency Funds is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. Such 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 auditing standards generally accepted in the United States of America. In our - 2 -

6 opinion, the Statement of Changes in Assets and Liabilities Agency Funds is fairly stated in all material respects in relation to the financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated March 29, 2019, on our consideration of the Sheriff's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, rules, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Sheriff s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Sheriff s internal control over financial reporting and compliance. Carr, Riggs, & Ingram, LLC Bradenton, Florida March 29,

7 FINANCIAL STATEMENTS

8 FINANCIAL STATEMENTS

9 Balance Sheet Governmental Funds Special September 30, 2018 General Revenue Total Assets Cash $ 12,746,326 $ 1,363,938 $ 14,110,264 Accounts receivable 60,408 87, ,167 Due from Board of County Commissioners 572, ,503 Due from other governmental units 946, ,066 Prepaid items 1,248,357-1,248,357 Inventory 174, ,138 Total assets $ 15,747,798 $ 1,451,697 $ 17,199,495 Liabilities and Fund Balances Liabilities: Accounts payable $ 201,271 $ - $ 201,271 Wages and benefits payable 4,621,047-4,621,047 Due to Board of County Commissioners 1,142,097-1,142,097 Due to Board of County Commissioners return of excess appropriations 1,318,650-1,318,650 Total liabilities 7,283,065-7,283,065 Fund balance: Nonspendable: Inventory 174, ,138 Prepaid items 1,248,357-1,248,357 Restricted: Donations 27,568-27,568 Restricted for inmate welfare - 1,384,818 1,384,818 Committed for encumbrances 140, ,787 Assigned for encumbrances 6,873,883 66,879 6,940,762 Total fund balance 8,464,733 1,451,697 9,916,430 Total liabilities and fund balance $ 15,747,798 $ 1,451,697 $ 17,199,495 See accompanying notes to financial statements

10 Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds Special For the year ended September 30, 2018 General Revenue Total Revenues: Intergovernmental revenue $ 5,747,294 $ - $ 5,747,294 Charges for services - 1,028,316 1,028,316 Total revenue 5,747,294 1,028,316 6,775,610 Expenditures: General government Personal services 5,340,206-5,340,206 Operating 17,477-17,477 Total general government 5,357,683-5,357,683 Public safety Personal services 100,732, ,732,658 Operating 12,885, ,517 13,499,031 Capital outlay 9,777,547-9,777,547 Total public safety 123,395, , ,009,236 Total expenditures 128,753, , ,366,919 Excess of revenue over expenditures (123,006,108) 414,799 (122,591,309) Other financing sources (uses) Appropriations from Board of County Commissioners 124,538, ,538,229 Distribution of excess appropriations to the Board of County Commissioners (1,318,650) - (1,318,650) Excess of revenues and other financiing sources over expenditures 213, , ,270 Fund balance, October 1 8,251,262 1,036,898 9,288,160 Fund balance, September 30 $ 8,464,733 $ 1,451,697 $ 9,916,430 See accompanying notes to financial statements

11 Statement of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual General Fund Variance Budget Amounts Positive For the year ended September 30, 2018 Original Final Actual (Negative) Revenues: Intergovernmental revenue $ - $ 5,849,949 $ 5,747,294 $ (102,655) Total revenue - 5,849,949 5,747,294 (102,655) Expenditures: Current General government Personal services 5,366,758 5,366,758 5,340,206 26,552 Operating 31,995 33,291 17,477 15,814 Total general government 5,398,753 5,400,049 5,357,683 42,366 Public safety Personal services 99,262, ,870, ,732,658 3,137,786 Operating 13,411,337 14,717,617 12,885,514 1,832,103 Capital outlay 1,808,927 13,066,373 9,777,547 3,288,826 Total public safety 114,483, ,654, ,395,719 8,258,715 Total expenditures 119,881, ,054, ,753,402 8,301,081 Excess of revenue over expenditures (119,881,879) (131,204,534) (123,006,108) 8,198,426 Other financing sources (uses) Appropriations from the Board of County Commissioners $ 119,881,879 $ 131,204, ,538,229 (6,666,305) Distribution of excess appropriations to the Board of County Commissioners - - (1,318,650) (1,318,650) Excess of revenues and other financing sources over expenditures , ,471 Fund balance, October 1 8,251,262 8,251,262 8,251,262 - Fund balance, September 30 $ 8,251,262 $ 8,251,262 $ 8,464,733 $ 213,471 See accompanying notes to financial statements

12 Statement of Assets and Liabilities Agency Fund September 30, 2018 Assets Cash $ 1,223,027 Liabilities Due to Board of County Commissioners $ 17,425 Due to other fund 53,863 Due to individuals 1,151,739 Total liabilities $ 1,223,027 See accompanying notes to financial statements

13 Notes to Financial Statements NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity The, (the Sheriff) is a separate constitutional officer as provided by the laws of the State of Florida. For financial reporting purposes the Sheriff is deemed to be an agency of Manatee County (the County ) which represents only a portion of the County government. The Sheriff s financial statements include only the funds of the Sheriff s office. There are no separate legal entities (component units) for which the Sheriff is considered to be financially accountable. Basis of Presentation The Sheriff s financial statements have been prepared solely for the purpose of complying the Rules of the Auditor General of the State of Florida (the Rules ). These financial statements are the fund financial statements required by generally accepted accounting principles. However, these fund financial statements do not constitute a complete presentation because, in conformity with the Rules, the Sheriff has not presented the government-wide financial statements, reconciliations to the government-wide financial statements, management s discussion and analysis, or the pension or other post-employment benefit related required supplementary information. Also, certain notes to the financial statements may supplement rather than duplicate the notes included in the County s countywide financial statements. In conformity with the Rules, the accompanying financial statements are intended to present the financial position and changes in financial position, where applicable of the maupdatejor fund, only for the portion of the major fund of, that is attributable to the Sheriff. They do not purport to, and do not, present fairly the financial position of as of September 30, 2018, and the changes in its financial position, for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America. The financial activities of the Sheriff, as a constitutional officer, are included in the Manatee County, Florida Comprehensive Annual Financial Report. These fund financial statements report detailed information about the Sheriff. The focus of governmental fund financial statements is on major funds rather than reporting funds by type. Each major fund is reported in a separate column. The following are reported as a major governmental fund: General Fund The General Fund is used to account for all revenues and expenditures applicable to the general operations of the Sheriff that are not required either legally, or by generally accepted accounting principles, to be accounted for in another fund. Special Revenue Fund The Special Revenue Fund is used to account for the purchase and sale of items to inmates, such as snack and toiletry articles, at the jail's commissary. The revenue generated by inmate sales and jail telephone commissions is used to fund the purchase of goods and services for the benefit of the inmates

14 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Sheriff also reports the following fiduciary fund type: Notes to Financial Statements Agency Fund The Agency Fund is a fiduciary fund used to account for the assets held by the Sheriff as an agent for individuals, private organizations, other governments, or other funds as required by legal or regulatory policies. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. Basis of Accounting Basis of accounting refers to when revenue and expenditures are recognized in the accounts and reported in the basic financial statements. Basis of accounting refers to the timing of the measurements made, regardless of the measurement focus applied. The modified accrual basis of accounting is followed by the governmental funds. Under the modified accrual basis of accounting, revenues are recognized when they become both measurable and available to finance expenditures of the current period. The Sheriff considers revenues available if they are collected within sixty days after year-end. Expenditures are recorded when the liability is incurred, except for accumulated sick and vacation pay, which are not recorded until paid. The agency funds are accounted for using the accrual basis of accounting. Budgetary Requirement Florida Statutes govern the preparation, adoption, and administration of the Sheriff s annual budget. The general fund budgeted revenues and expenditures in the accompanying basic financial statements reflect all approved amendments. A budget was not formally adopted for the special revenue fund. Expenditures may not legally exceed appropriations at the fund level. Appropriations lapse at yearend. Budget control is maintained at the departmental major object expenditure level. Budgetary changes within major object expenditure categories are made at the discretion of the Sheriff. The original budget is the first complete appropriated budget. The final budget is the original budget adjusted by all reserves, transfers, allocations, supplemental appropriations, and other legally authorized changes applicable to the fiscal year, whenever legally authorized. Refund of Excess Fees Florida Statutes stipulate that any excess general fund revenues held by the Sheriff at the end of the fiscal year are to be paid to the Board of County Commissioners. The County funds a portion or, in certain instances, all of the operating budgets of the Constitutional Officers. Payments of excess fees to the County are recorded as other financing uses on the basic financial statements of the Constitutional Officers

15 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Notes to Financial Statements Investments The Sheriff has no formal investment policy and thereby is required to follow chapter , Florida Statutes, which authorizes the Sheriff to invest surplus funds in the following: The Local Government Surplus Funds Trust Fund (SBA), or any intergovernmental investment pool authorized pursuant to the Florida Inter-local Cooperation Act, as provided in the Florida Statutes ; Securities and Exchange Commission registered money market funds with the highest credit quality rating from a nationally recognized rating agency; Interest-bearing time deposits or savings accounts in qualified public depositories, as defined in Florida Statutes ; Direct obligations of the U.S. Treasury. Inventory Inventory consists of uniforms and supplies. The consumption method is used in accounting for inventory. Inventory is stated at the lower of cost or market. The Sheriff reports these as non-spendable within the fund balances of the governmental fund types. Prepaid Items Prepaid items are recorded using the consumption method of accounting. Under the consumption method, services paid for in advance are reported as an asset until the period in which the services are actually consumed. The Sheriff reports these as non-spendable within the fund balances of the governmental fund types. Capital Assets Tangible personal property used in the Sheriff s operations is recorded as expenditures in the general fund at the time of purchase. Purchased assets are capitalized at historical cost in the government-wide financial statements of the County. The Sheriff maintains custodial responsibility for these capital assets. Compensated Absences The Sheriff s policy permits the payment of accrued vacation and sick leave upon separation of employment. The maximum payout of accumulated vacation is 516 hours for 86-hour employees and 480 hours for 80-hour employees. Employees that have 10 years or more of continuous service are eligible for a payout of one/half of their accumulated sick leave. The maximum payout of sick leave is 1,032 hours for 86-hour employees and 960 hours for 80 hour employees. The Sheriff does not, nor is legally required to accumulate expendable financial resources for these obligations. Accordingly, the liability for compensated absences is not reported in the Sheriff s basic financial statements, but rather is recorded as a long-term liability in the government-wide financial statements of the County

16 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Notes to Financial Statements Fund Balance Governmental funds report fund balances that are classified either as nonspendable, or as spendable. Spendable fund balances are further classified based on the extent to which there are external and internal constraints on the spending of these fund balances. These classifications are described as follows: Nonspendable Fund Balance Amounts that cannot be spent because they are not in spendable form or legally or contractually required to be maintained intact. Restricted Fund Balance Amounts that are constrained for specific purposes which are externally imposed by creditors, grantors, contributors, or laws or regulations or imposed by laws through constitutional provisions or enabling legislation. The Sheriff is reporting restricted fund balances in General Fund and the Special Revenue Fund. Committed Fund Balance Amounts that are constrained for specific purposes imposed by the Sheriff s formal action of highest level of decision making authority. The Sheriff is reporting committed fund balances in the General Fund. Assigned Fund Balance Includes spendable fund balances intended to be used for specific purposes, but which are neither restricted nor committed. The Sheriff is reporting assigned fund balances in the General Fund and Special Revenue Fund. Unassigned Fund Balance Represents the residual positive fund balance within the General Fund, which has not been assigned to other funds and has not been restricted, committed, or assigned. In funds other than the General Fund, unassigned fund balances are limited to negative residual balances. Use of Estimates The preparation of the basic financial statements in conformity with generally accepted accounting principles, as applicable to governmental units, requires management to make use of estimates that affect the reported amounts in the basic financial statements. Actual results could differ from estimates. NOTE 2: CASH AND INVESTMENTS At September 30, 2018, the bank balance of the Sheriff s deposits (including agency) was $15,834,861 and the book balance was $15,315,739. The difference between the Sheriff s book amount and bank amount is due to outstanding checks and transfers, and deposits in transit in its demand accounts. Bank balances in excess of the Federal Depository Insurance Corporation are fully collateralized in accordance with Florida Statute 280, which establishes the multiple financial institution collateral pool

17 Notes to Financial Statements NOTE 2: CASH (Continued) Investment pool information is available through the Clerk of Circuit Court and Comptroller of Manatee County and follows the investment policy established by the Manatee County Board of County Commissioners under Florida Statute, Section 218. An investment portfolio and statement of earnings is provided to the Board of County Commissioners on a yearly basis and investments are included in the County s yearly external audit with appropriate reports to the State Treasurer for Chapter 280 Public Depositors. The pool is maintained on an economic resource basis and accruals for fiscal year-end include all entries necessary to properly record and reflect investments at amortized cost. At September 30, 2018, the Sheriff had no investment balances, but during the year, maintained surplus funds in the pool. Credit Risk Custodial credit risk is the risk that a government will not be able to recover deposits or the value of investments in the event of the failure of a depository financial institution or a third party holding the investment securities. The demand deposits of $15,834,861 are fully insured by the Federal Depository Insurance Corporation or collateralized by the multiple financial institution collateral pool, established by Florida Statute 280. Credit quality risk results from potential default of investments that are not financially sound. The Sheriff does not have a formal written investment policy and thereby is required to follow Chapter , Florida Statutes. Interest Risk Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The Sheriff does not have a formal investment policy that limits investment maturities nor is one contained in Chapter , Florida Statutes. NOTE 3: RETIREMENT PLAN Substantially all full-time Sheriff employees are participants in the Florida Retirement System ("the System"). The System, a multiple-employer, cost-sharing public retirement system, which is controlled by the State Legislature and administered by the State of Florida, Department of Management Services, Division of Retirement, covers approximately 643,000 full-time employees of various governmental units within the State of Florida. The Sheriff is a participant in the Florida Retirement System Pension Plan (FRS Pension Plan) and the Retiree Health Insurance Subsidy Program (HIS Program) both of which are defined benefit plans. The Sheriff also participates in the Florida Retirement System Investment Plan (FRS Investment Plan), a defined contribution plan administered by the State Board of Administration

18 Notes to Financial Statements NOTE 3: RETIREMENT PLAN (Continued) For employees enrolled prior to July 1, 2011, the FRS Pension Plan provides for vesting of benefits after 6 years of creditable service. Normal retirement benefits are available to employees who retire at or after age 62 with 6 or more years of service. Early retirement is available after 6 years of service with a 5% reduction of benefits for each year prior to the normal retirement age. Retirement benefits are based upon age, average compensation and years-of-service credit where average compensation is computed as the average of an individual's five highest years of earnings. For employees enrolled in the FRS Pension Plan on or after July 1, 2011, vesting of benefits begins after 8 years of creditable service. Normal retirement benefits are available to these employees who retire at or after age 65 with 8 or more years of service with a 5% reduction of benefits for each year prior to the normal retirement age. Retirement benefits are based upon age, average compensation and years-of-service credit where average compensation is computed as the average of an individual's eight highest years of earnings. Beginning July 1, 2011, all employees are required to contribute 3% of their salary to this retirement system. The HIS Program provides a monthly benefit to assist retirees in paying their health insurance costs and is administered by the Florida Department of Management Services, Division of Retirement. Eligible retirees and beneficiaries receive a monthly health insurance subsidy payment of $5 for each year of credible service, with a minimum payment of $30 and a maximum payment of $150 per month. To be eligible to receive a HIS Program benefit, a retiree under one of the FRS plans must provide proof of health insurance coverage, which may include Medicare. Any regular member not in the Deferred Retirement Option Program (DROP) may elect to participate in the FRS Investment Plan rather than the FRS Pension Plan. Employer contributions are made to the FRS Investment Plan, which holds the contributions in individual investment accounts for each participating employee. The employee directs the investments in their account among the investment funds available through the Plan. These investment accounts vest to the employee after 1 year of service and may be withdrawn by the employee 90 days after termination or retirement from a participating employer in the System. Alternately, the funds may remain in the investment account until the employee reaches normal retirement age or some earlier date, at the employee s choosing. Beginning July 1, 2011, enrolled employees are required to contribute 3% of their salary to the FRS Investment Plan. The Sheriff has no responsibility to the System other than to make the periodic payments required by state statutes. The Florida Division of Retirement issues a publicly available financial report that includes financial statements and required supplementary information for the System. The report may be obtained online at or by writing to Department of Management Services, Division of Retirement, Research and Education Section, P.O. Box 9000, Tallahassee, FL

19 Notes to Financial Statements NOTE 3: RETIREMENT PLAN (Continued) Participating employer contributions are based upon statewide rates established by the State of Florida. These rates are applied to employee salaries as follows (7/16 to 6/17 and 7/17 to 6/18 respectively): regular employees, 7.92%/8.26%; high risk employees, 23.27%/24.50%; elected officials, 45.50%/48.70%; senior management, 22.77%/24.06%; and drop employees, 13.26%/14.03%. The Sheriff s contributions made during the years ended September 30, 2018, 2017, and 2016 were $14,074,622, $13,238,934, and $12,264,756, respectively, equal to the actuarially determined contribution requirements for each year. Employee contributions made during the years ended September, 30, 2018, 2017 and 2016 were $2,012,251, $1,936,139, and $1,865,651, respectively. The Sheriff is not legally required to and does not accumulate expendable available resources to liquidate the retirement obligation related to its employees. Accordingly, detailed information about the County s proportionate share of the FRS Pension Plan and HIS Program net pension liabilities, deferred outflows/inflows of resources and pension expenses are reported in the government-wide statements of the County. NOTE 4: COMPENSATED ABSENCES The long-term portion of compensated absences is recorded and reported in the government-wide financial statements of the County. The following is a summary of changes in the long-term compensated absences liability during fiscal year 2018: Beginning Balance, October 1, 2017 $ 15,444,415 Additions 10,747,035 Deductions (10,536,648) Ending Balance, September 30, 2018 $ 15,654,802 NOTE 5: POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS In accordance with Section of the Florida Statutes, the Sheriff participates with Manatee County in providing retirees the opportunity to participate in the County s group insurance and healthcare plan. The participating retirees, or the retirees surviving spouses, pay 50% to 100% (employer and employee portion) of the premium cost applicable to an active employee. In accordance with Governmental Accounting Standards Board Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, liabilities and activities related to these benefits are reported in the government-wide financial statement of the County

20 Notes to Financial Statements NOTE 6: RISK MANAGEMENT The, Board of County Commissioners maintains self insurance internal service funds to administer insurance activities relating to certain group medical coverage, property, general, automobile, public officials liability, workers compensation and auto physical damage. The Sheriff participates in the County wide self insurance program for all activities. For liability insurance the Board of County Commissioners pays substantially all of the respective premiums on behalf of the Sheriff and absorbs losses related to these programs up to an aggregate annual limit. Excess and other specific coverage is purchased from third party carriers. Charges to participants are based upon amounts believed by management of the program to meet the required annual payouts during the fiscal year and to pay for the estimated operating cost of the program. NOTE 7: LEASES Rental expenditures under operating leases for the year ending September 30, 2018 amounted to $1,059,485. The future minimum lease payments under non-cancellable long-term operating lease agreements as of September 30, 2018 are as follows: Year Ending September 30 Amount 2019 $ 897, , , , ,244 Thereafter 482,834 Total commitments $ 3,856,501 NOTE 8: CAPITAL ASSETS The Sheriff s capital assets include buildings, improvements, furniture, equipment, computer equipment, vehicles and software. The Sheriff, pursuant to Florida Statutes, records no capital assets for which the Sheriff is custodian. The threshold for capitalizing all capital assets, except software, is $1,000, and $75,000 for software. Capital assets are recorded at cost, or estimated historical cost. Contributed assets are recorded at estimated fair value at the time received. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets

21 Notes to Financial Statements NOTE 8: CAPITAL ASSETS (Continued) Detailed information concerning capital assets is recorded and reported in the government-wide financial statements of the County. The following is a summary of the changes in capital assets during fiscal year 2018: Capital Assets October 1 Additions Deductions September 30 Capital assets not depreciated: Construction in progress $ 330,204 $ 827,300 $ 303,770 $ 853,734 Capital assets depreciated: Leasehold improvements 113,882-6, ,032 Equipment 32,944,318 7,187,953 3,273,995 36,858,276 Vehicles 21,877,307 2,848,078 1,167,139 23,558,246 Total assets depreciated 54,935,507 10,036,031 4,447,984 60,523,554 Less accumulated depreciation: Leasehold improvements 36,899 17,283 4,694 49,488 Equipment 22,458,491 2,631,099 2,978,840 22,110,750 Vehicles 16,451,764 2,488,322 1,147,035 17,793,051 Total accumulated depreciation 38,947,154 5,136,704 4,130,569 39,953,289 Total depreciable capital assets, net 15,988,353 4,899, ,415 20,570,265 Total governmental activities Capital assets, net $ 16,318,557 $ 5,726,627 $ 621,185 $ 21,423,999 NOTE 9: INTERGOVERNMENTAL REVENUE Intergovernmental revenue consists of the following grants and other revenue sources: Child Protection Services Funding $ 5,102,485 Impact Fees 397,842 West Coast Inland Navigation District Grant 71,722 Coverdell Grant 28,684 Law Enforcement Trust Fund 102,557 Restricted Donations 27,568 Homeland Security 16,436 $ 5,747,

22 Notes to Financial Statements NOTE 10: COMMITMENTS AND CONTINGENCIES Litigation The Sheriff is involved as defendant in certain litigation and claims arising from the ordinary course of operations. In the opinion of legal counsel, the range of potential liabilities will not materially affect the Sheriff s operations or the financial position of Manatee County, which would be required to fund any claim payments. Grants The Sheriff is the recipient of grants that are subject to special compliance requirements and audits by the grantor agencies that may result in disallowed amounts. These amounts constitute a contingent liability of the Sheriff. The Sheriff does not believe any contingent liabilities, if any, to be material to the financial statements. Encumbrances The Sheriff has encumbered amounts that will be honored in the subsequent year and are reported as commitments and assignments of fund balance. The Sheriff had significant encumbrances for the following: General Fund Assigned: Stingray Chevrolet Vehicles $2,073,399 Alan Jay Chevrolet Inc. Vehicles $2,235,875 Manatee County Radios $773,510 Non-major government Assigned: Raytex Fabrics Parts/Supplies $29,

23 SUPPLEMENTARY INFORMATION

24 Statement of Changes in Assets and Liabilities Agency Fund For the year ended September 30, 2018 Balance October 1 Additions Deductions Balance September 30 Assets Cash $ 1,580,239 $ 3,554,815 $ 3,912,027 $ 1,223,027 Liabilities Due to Board of County Commissioners $ 21,738 $ 310,271 $ 314,584 $ 17,425 Due to other fund 25,708 53,863 25,708 53,863 Due to individuals 1,532,793 3,190,681 3,571,735 1,151,739 Total liabilities $ 1,580,239 $ 3,554,815 $ 3,912,027 $ 1,223,

25 ADDITIONAL REPORTS

26 INDEPENDENT AUDITORS REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Honorable Rick Wells Sheriff We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of each major fund and the aggregate remaining fund information of the, Sheriff s Office (the Sheriff ), as of and for the year ended September 30, 2018, and the related notes to the financial statements, which collectively comprise the Sheriff s financial statements, and have issued our report thereon dated March 29, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Sheriff 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 financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Sheriff s internal control. Accordingly, we do not express an opinion on the effectiveness of the Sheriff s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified

27 Compliance and Other Matters As part of obtaining reasonable assurance about whether the Sheriff's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Carr, Riggs, & Ingram, LLC Bradenton, Florida March 29,

28 INDEPENDENT ACCOUNTANTS REPORT To the Honorable Rick Wells Sheriff We have examined the, (the Sheriff ) compliance with Section , Florida Statutes, regarding the investment of public funds, during the year ended September 30, Management of the Sheriff is responsible for the Sheriff s compliance with the specified requirements. Our responsibility is to express an opinion on the Sheriff s compliance with the specified requirements based on our examination. Our examination was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. Those standards require that we plan and perform the examination to obtain reasonable assurance about whether the Sheriff complied, in all material respects, with the specified requirements referenced above. An examination involves performing procedures to obtain evidence about whether the Sheriff complied with the specified requirements. The nature, timing, and extent of the procedures selected depend on our judgment, including an assessment of the risks of material noncompliance, whether due to fraud or error. We believe that the evidence we obtained is sufficient and appropriate to provide a reasonable basis for our opinion. Our examination does not provide a legal determination on the Sheriff s compliance with specified requirements. In our opinion, the Sheriff complied, in all material respects, with Section , Florida Statutes, regarding the investment of public funds during the year ended September 30, This report is intended solely for the information and use of the Florida Auditor General, Manatee County, Florida, Board of County Commissioners, the Sheriff, and management, and is not intended to be and should not be used by anyone other than these specified parties. Carr, Riggs, & Ingram, LLC Bradenton, Florida March 29,

29 MANAGEMENT LETTER To the Honorable Rick Wells Sheriff Report on the Financial Statements We have audited the financial statements of the, (the Sheriff ), as of and for the fiscal year ended September 30, 2018, and have issued our report thereon dated March 29, Auditor s Responsibility We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and Chapter , Rules of the Auditor General. Other Reporting Requirements We have issued our Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Financial Statements Performed in Accordance with Government Auditing Standards; and Independent Accountant s Report on an examination conducted in accordance with AICPA Professional Standards, AT-C Section 315, regarding compliance requirements in accordance with Chapter , Rules of the Auditor General. Disclosures in those reports, which are dated March 29, 2019, should be considered in conjunction with this management letter. Prior Audit Findings Section (1)(i)1., Rules of the Auditor General, requires that we determine whether or not corrective actions have been taken to address findings and recommendations made in the preceding annual financial audit report. There were no such recommendations made in the preceding annual financial audit report. Official Title and Legal Authority Section (1)(i)4., Rules of the Auditor General, requires that the name or official title and legal authority for the primary government and each component unit of the reporting entity be disclosed in this management letter, unless disclosed in the notes to the financial statements. This information is disclosed in the notes to the financial statements. There are no component units related to the Sheriff

30 Financial Management Section (1)(i)2., Rules of the Auditor General, requires that we communicate in the management letter any recommendations to improve financial management. In connection with our audit, we did not have any such matters. Additional Matters Section (1)(i)3., Rules of the Auditor General, requires that we communicate noncompliance with provisions of contracts or grant agreements, or abuse, that have occurred, or are likely to have occurred, that have an effect on the financial statements that is less than material but which warrants the attention of those charged with governance. In connection with our audit, we did not have any such findings. Purpose of this Letter Our management letter is intended solely for the information and use of the Legislative Auditing Committee, members of the Florida Senate and the Florida House of Representatives, the Florida Auditor General, Federal and other granting agencies,, Board of County Commissioners, the Sheriff, and management, and is not intended to be and should not be used by anyone other than these specified parties. Carr, Riggs, & Ingram, LLC Bradenton, Florida March 29,